IOB Mudra Loan

Features of Indian Overseas Bank Mudra Loan

Enterprises are broadly categorized into two by the bank:

• Enterprises which are engaged in production of goods (This can involve goods for any industry.)
• Enterprises which provide services.

As a small business you may not have collateral that many banks require of you. Indian Overseas bank however, does not need enterprisers to provide collateral security for micro and small sector up to the loan amount of Rs.10 lakhs.

The classification of Micro Small & Medium Enterprises depends on the original investment in machinery and plant. This is in respect to the original investment in equipment with regard to services units and manufacture/production units.

Following are the application forms needed for Micro Small & Medium Enterprises Sector loans:

1. Indian Overseas Bank is a member of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
   1. Credit facilities over Rs. 200 lacs: SME 8
   2. Credit facilities over Rs. 50 lacs and up to Rs. 200 lacs: SME 7
   3. Credit facilities up to Rs.10 lacs: SME 5
   4. Credit facilities over Rs.10 lacs and up to Rs. 50 lacs: SME 6
2. Depending on the financial position of the SME units and a good track record, the bank could increase the limit of dispensation of third party guarantee/ collateral requirement for loans up to Rs.100 lacs. This is however, assuming that the same is covered under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
3. SME Loans which are given out without third party guarantee or collateral security is eligible for cover under CGTMSE scheme.
4. Indian Overseas Bank is approving loans under CGTMSE schemeHere are some of the features of CGTMSE scheme:
   1. Working Capital/ Term Loan or both may be considered under the scheme
   2. Maximum credit for the CGTMSE is Rs.100 lacs
   3. Services and Manufacturing Sectors are eligible for the scheme.
   4. Maximum amount of guarantee cover available is Rs.62.50 lacs.
   5. Maximum of 75% of advance is available as guarantee cover.
5. In order to cover loans under CGTMSE scheme, the customer will need to pay 1% of loan as one time guarantee fee for loans which are up to Rs.5 lacs. For loans which are above Rs. 5 lacs, 1.5% will need to be paid.
6. Annual Service Fee for loans up to Rs.5 lacs is 0.50% and for loans above Rs.5 lacs is 0.75%.

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