RESERVE BANK OF INDIA
    Rural Planning & Credit Department
    CENTRAL OFFICE
    Central Office Building, 13th Floor, Mumbai-400001.

    RPCD/PLNFS/No.BC.58/06.02.80/2001-02

    23 January 2002

    All Scheduled Commercial banks
    (Including RRBs)

    Dear Sir

    Collateral free loans - Small Scale Industries.

    1. Please refer to our circular RPCD/PLNFS/No.BC.65/06.02.31/99-2000 dated 3 March 2000, in terms which the exemption limit of borrowal accounts for obtention of collateral securities was raised from Rs.1 lakh to Rs.5 lakh for the tiny sector.


    2. It has now been decided to extend the benefit under the increased limit of Rs.5 lakh to all SSI units so as to ensure flow of credit to this sector.


    3. We shall be glad if you will please implement the above decision and issue necessary instructions to your controlling offices/branches in the matter for appropriate action.


    4. Please acknowledge receipt.


    Yours faithfully,
          Sd-
    (Varughese John)
    General Manager
    Reserve Bank of India

    Endt.RPCD/PLNFS/No.1011/06.02.80/2001-02 of date.



    RESERVE BANK OF INDIA
    Rural Planning & Credit Department
    CENTRAL OFFICE
    Central Office Building, 13th Floor, Mumbai-400001.

    RPCD/PLNFS/BC.No.90/06.02.80/2001-02

    April 29, 2002


    All Scheduled Commercial banks (including RRBs & Local area Banks)

    Dear Sir,

    Credit Facilities for Small Scale Industries.
    Collateral free lans.

    1. Please refer to paragraph 76 of the Governor’s statement on Monetary and Credit policy for the year 2002-03 forwarded with circular No. MPD. BC.214/07.01.279/2001-02 dated April 29, 2002.


    2. Recognising the requirement of providing collateral as a bottle neck in the flow of bank credit to very small units, RBI in annual Policy statement of April 2000, announced dispensation of collateral requirement for loans up to Rs.5 lakh for tiny sector. This dispensation was extended subsequently to all small scale industrial (SSI) units vide our circular RPCD/PLNFS/No.BC.58/06.02.80/2001-02 dated January 23, 2002.


    3. In order to further improve the flow of credit to SSIs, it has been decided that banks may, on the basis of good track record of the units, and the financial position of the units, increase the limit of dispensation of collateral requirement for loans from the existing level of Rs.5 lakh to Rs.15 lakh.


    4. We shall be glad if you will please implement the above decision and issue necessary instructions to your controlling offices/ branches in the matter for appropriate action.


    5. Please acknowledge receipt.

    Yours faithfully,
    (Varughese John)
    General Manager
    Reserve Bank of India