Item No.

13/52
SIDBI RiMC No.33/2019-20

MEMORANDUM TO THE RISK MANAGEMENT COMMITTEE

Introduction of Overdraft (OD) variant under

the Working Capital (WC) Scheme

Vertical Head: Shri Vivek Kumar Malhotra

1. Issue under Consideration
To seek approval for introduction of new Overdraft Product (OD) i.e.
‘Scheme to Provide Operating Capital to Small Businesses’ (STOCS) under
Working Capital (WC) Scheme.

2. Background
• The Working Capital Scheme under SIDBI–IDBI Working Capital
Arrangement duly approved by Reserve Bank of India (RBI) is
operational in SIDBI since June 2007. The Bank has been able to
provide timely and adequate WC assistance at competitive pricing
to eligible MSME customers for meeting their WC requirements.
SIDBI-WC arrangement was solely with IDBI Bank till FY 2018 until
the Bank extended the WC platform with the addition of two more
Banks viz. City Union Bank (CUB) & Yes Bank Limited (YBL) vide
MoU dated May 30, 2018 & June 05, 2018 respectively in
compliance to RBI observations for alternative platforms under WC
arrangement. Both CUB & YBL offer better customer onboarding,
internet banking facility and sophisticated Application Programming
Interface for smoother reconciliation and system driven instruction
execution.
• The progress under the WC Scheme indicating FY wise Outstanding
& number of accounts is as under:
(` crore)
S.No Financial Year No. of accounts as Outstanding as
on March 31st on March 31st
1 FY 2007-2008 73 29
2 FY 2008-2009 178 113
3 FY 2009-2010 248 176
4 FY 2010-2011 348 283
5 FY 2011-2012 433 430
6 FY 2012-2013 490 459
7 FY 2013-2014 509 539
 SIDBI RiMC.No.33/2019-20 Introduction of Overdraft (OD) variant under the
Working Capital (WC) Scheme

S.No Financial Year No. of accounts as Outstanding as

on March 31st on March 31st
8 FY 2014-2015 474 543
9 FY 2015-2016 441 522
10 FY 2016-2017 453 591
11 FY 2017-2018 453 636
12 FY 2018-2019 438 640
13 FY 2019-2020 534 630
(as on 31/12/2019)

• The portfolio has grown from about Rs.29 crore (FY2008) to about
Rs.640 crore (FY2019). The increase in the number of accounts is
nearly 500 customers over the last 12 years.

• As on December 31, 2019, the aggregate sanctioned limit is respect

of operative accounts were ` 924 cr and DP released is ` 797 cr. The
Bank has been able to contain the NPAs in the scheme with the
gross and net NPA in FY 2019 being 3.3% and 1% respectively. The
portfolio has witnessed steady and sustainable growth for the last
12 years.

• It may be mentioned that the Bank has also taken adequate steps
to train its officers through specialised trainings on working capital.
The Bank is regularly issuing and updating guidelines to the
operating officers to make them adept at handling the WC
operations. Thus, the operational offices are suitable equipped by
way of trainings /instructions for strict compliance of the processes
and effective monitoring of WC accounts.

3. Rationale for OD Product

• In view of the rich experience gained for more than a decade and to
address the present-day needs of MSME customers, it is felt that it
is an apt time to augment the scheme with similar optimum
products.

• In this connection, it may be noted that enlarging the ambit of the

WC Scheme vis-a-vis standalone Term Loan Assistance offers better
customer connect as it affords better monitoring & control over the
accounts. There is also lesser possibility of take-over by other Banks
as WC assistance is sanctioned under Composite Facility with the
major mortgaged security with SIDBI and SIDBI is able to meet all
the financial needs of the borrower under one roof.
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SIDBI RiMC.No.33/2019-20 Introduction of Overdraft (OD) variant under the
Working Capital (WC) Scheme

• The distribution of clients as on December 31, 2019 based on the

sanctioned limit has been tabulated below:

`in crore
WC Limit Size No.of Aggregate Aggregate
Customers Sanctioned DP
Amount
Upto 100 lakh 282 166.18 147.02
>100 <=200 lakh 119 190.61 159.54
>200 <=500 lakh 107 361.03 300.16
>500 <=1000 lakh 21 144.00 130.65
>1000<=1200 lakh 3 34.00 32.00
>1200<=1500 lakh 2 28.50 27.50
Total 534 924.32 796.87

• The average size of WC limit in SIDBI is rather small at `170 lakh.

Many customers face issues related to various compliances under
small sized limits viz. Monthly submission of monthly stock & book
debt statement, QIS, Stock Audits etc. and hence there is a need for
a simplified product under the Scheme.

• As the approval obtained from RBI at the time of inception of WC

Scheme under IDBI arrangement in 2007 was solely for WC Scheme,
approval for introduction of Overdraft product under the ambit of
WC Scheme was obtained from RBI vide letter dated December 05,
2019 (Annexure I). The aforesaid RBI approval entails continuance
of WC facility scheme and further provides that any product variant
under the scheme may be taken care of by SIDBI’s Board subject to
the following conditions:

(i) The partner Banks i.e City Union Bank & Yes Bank should
share the Suspicious Transaction Report (STR), if any, with
SIDBI.
(ii) SIDBI should approach us after one year for a review of the
Scheme.

 The submission of review to RBI in December 2020 would be taken

care of by DCV and matter has also been taken up with our partner
banks to obtain STRs.

 PIRC, vide its 108th meeting held on January 13, 2020 has
recommended the Overdraft Product and approved the formats for
application, appraisal note, stock & book debt statement, etc. The

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 SIDBI RiMC.No.33/2019-20 Introduction of Overdraft (OD) variant under the
Working Capital (WC) Scheme

minutes are placed at Annexure II along with compliance thereof at

Annexure III.

 The interest rate structure under STOCS has also been approved by
ALCO vide its 292nd meeting held on January 17, 2020.

4. Salient Features of the Scheme

• The assistance shall be utilised for meeting short-term financing
needs of the borrower viz. working capital requirement,
administrative /selling expenses, etc.

• The minimum and maximum quantum of assistance has been

pegged at `25 lakh and `200 lakh respectively.

• The limit shall be assessed based on Fixed Asset Coverage Ratio

(FACR), after providing suitable margin. However, the eligible OD
limit shall remain within 20% of the sales turnover as per latest
available balance sheet of last FY, as defined under the Scheme.

• Minimum Prudential/Combined Rating is S6/C5 (not relaxable)

• The frequency of submission of stock and book debt statement shall

be quarterly basis (as at end of every quarter). There will be no
requirement of submission of CA certified stock & book debt
statement and submission of QIS statements. There shall be no
requirement of carrying out stock audit.

• Regular monitoring of transactions in the ODTA shall be done by

BOs.

• The Scheme guidelines for STOCS with detailed product features

are placed at Annexure IV.

5. Conclusion & Recommendations:

• STOCS is a product variant under Working Capital Scheme designed

to offer timely and adequate assistance in the form of overdraft at
competitive pricing to eligible MSME customers for meeting their
business requirements.

• The product is designed on the lines of WC scheme barring few

exceptions along with various simplified features to address the
diversified demands of MSMEs and to make it simpler for BOs to

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SIDBI RiMC.No.33/2019-20 Introduction of Overdraft (OD) variant under the
Working Capital (WC) Scheme

market the product and effectuate the Bank’s targets for non-SMILE
funding.

• In terms of the extant Enterprise Risk Management Policy and in

conformity with RBI’s approval, the proposal for introduction of
Overdraft Variant under the Working Capital Scheme is proposed to
be considered by Risk Management Committee (RiMC) for approval
and reported to the Board.

• Accordingly, RiMC is requested to kindly accord its approval for

Introduction of Overdraft Product (OD) under Working Capital
Scheme viz. ‘Scheme to Provide Operating Capital to Small
Businesses’ (STOCS) as mentioned above and pass the following
resolutions:

“RESOLVED that the proposal for introduction of Overdraft

Product (OD) under Working Capital Scheme viz, ‘Scheme to Provide
Operating Capital to Small Businesses’ (STOCS) as contained in the
Memorandum SIDBI RiMC.No.33/2019-20 dated January 24, 2020 be
and is hereby approved.

FURTHER RESOLVED that in terms of extant delegation of

powers, CGM, DCV acting in consultation with CGM, RiMV, wherever
required, be and is hereby authorised to approve any need-based
variation / modification in the product / arrangement, depending
upon market conditions / emergent requirements.”
Submitted by

Small Industries Development Bank of India [Vivek Kumar Malhotra]

Dated: January 24, 2020 General Manager

Recommended by

(Manoj Mittal)
Dy. Managing Director

Page 5
 Annexure III

Compliance to Conditions as per PIRC minutes Meeting no.108 dated January 13, 2020

Conditions as per PIRC Minutes for recommending STOCS to RiMC and compliance thereof is
tabulated as under:

S.no Conditions DCV Compliance

1 Guidance note along with the The same has been incorporated in the Guidance
product should also include Note as below-
need to review the quarterly BO to review the quarterly stock/book debt position
stock/book debt position from from the point of view of any consistent downward
the point of view of any trends and to take appropriate action accordingly
consistent downward trends regarding continuation/reduction/closure of limit. In
and to take appropriate action case there is a decline in stock /book debts & sales
accordingly regarding turnover, BO to take up with the borrower to
continuation/reduction/closure analyse the reasons thereof to gain understanding
of limit. on the reasons viz, nature of industry, business
cycle, seasonal demand, etc. BO to also discuss
future course of action /timelines for achieving
projected sales turnover. BO to sensitize the
Borrower for corrective actions, if any, closely
monitor the account & review to reduce the OD limit
at the time of next renewal, as per scheme
parameters.
2 Relaxation in eligibility norms The same has been incorporated in the Scheme
under the product shall be Guidelines as below-
allowed up to a maximum of Relaxation in eligibility norms under the product
two out of four eligibility norms shall be allowed up to a maximum of two out of
only. three eligibility norms only. No relaxation permitted
in FACR /ACR criteria.
3 Minimum Prudential Rating The same has been incorporated in the Scheme
should be made uniform for Guidelines as below-
both new and existing Minimum Prudential/Combined Rating under STOCS
customers as S6 with no is S6/C5 (not relaxable)
relaxation Further, there shall be no discretionary power for
relaxation of interest rate in terms of ALCO approval
for interest rate structure under STOCS.
***
 Annexure IV- Scheme Modalities: STOCS

S.no Particulars Details

1 Name of the Product STOCS ‘Scheme to Provide Operating Capital to Small Businesses’
2 Objective To provide timely and adequate assistance in the form of overdraft at
competitive rates of interest to eligible MSMEs for meeting business
requirements.
3 Banking Platforms City Union Bank (CUB)/Yes Bank Limited (YBL) Arrangement only
4 Purpose of Assistance •The assistance shall be utilised for meeting short-term financing
needs of the borrower viz. working capital requirement,
administrative /selling expenses etc.
•The facility shall not be utilised for financing of overrun / take over
and similar such purposes. It will also exclude expenditure for
speculative purposes viz. investment in stock markets, commodity
trading, real estate activity etc.
5 Eligibility Criteria
(a) Existing Customers#of SIDBI not availing working capital facility.
(i) Eligible borrowers
(However, existing working capital customers of SIDBI would be
allowed to switch over to OD at the time of next renewal of the WC
limit.)
(b) New customers for Composite Facility (TL +OD) subject to the
condition that it is not enjoying Working Capital/Overdraft facility
from any other bank. However, in case, any customer is enjoying
working capital/ OD facility from any other bank, it may also approach
SIDBI for sanction of OD facility subject to closure of existing facility
with other bank prior to operationalisation of the OD limit.
A customer can avail only one of the two facilities: working capital or
overdraft assistance viz. STOCS.
(#who have completed one year association with SIDBI from the date
of first disbursement)
(ii) Quantum of assistance Minimum: `25 lakh Maximum - `200 lakh
(iii) Nature of assistance and Rupee assistance only.
Margin The limit shall be assessed based on FACR, after providing suitable
margin. However, the eligible OD limit shall remain within 20% of the
sales turnover as per latest available balance sheet of last FY, as
defined under the Scheme.
6 Norms
Profitability criteria The target customers should have net profit in last three full years of
(i)
operations.
Sales should show an increasing trend and in case, there is a decline,
it should not be more than 10%. However, such decline would be
restricted to one FY only (out of last two FYs).
(ii) Repayment Track Record Existing Customers (who have New Customer
completed one year association with
SIDBI from the date of first
disbursement)
i. Satisfactory payment track i. Minimum 3 years of
record as per RiMV guideline satisfactory banking credit
in last one year. track record as per the
ii. Should not have moved to commercial report of CIBIL.
SMA1/SMA2 category during ii. Should not have moved in
the preceding one year. SMA1/SMA2 category during
The unit should not be in the the preceding two year as per
caution list / restricted list of
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 Annexure IV- Scheme Modalities: STOCS

S.no Particulars Details

industries specified in the Loan the commercial report of
Policy / intimated by HO from CIBIL.
time to time. The unit should not be in the
caution list / restricted list of
industries specified in the Loan
Policy and other instructions
from HO from time to time.
(iii) Minimum S6/C5 (not relaxable)
Prudential/Combined Rating under STOCS is to be carried out in RAM as applicable for WC
Rating cases
(iv) Minimum CIBIL MSME As per extant guidelines for Working Capital Limits.
Rank
(v) CIBIL TransUnion Score As per extant guidelines for Working Capital Limits.
(vi) Other Eligibility Norms The following eligibility norms would be applicable for sanction of
fresh limits, renewal & enhancement of limits:
S.No. Parameters Eligibility norms Relaxation cap
for New &
Existing#
Customers
1 Total Outside Liabilities / 4:1 6:1
Tangible Net worth
(TOL/TNW)
2 Current Ratio 1.25 0.90
3 Interest Coverage Ratio 1.25 1.10
(EBDIT / interest
expenses)
4 Fixed Asset Coverage Ratio (FACR) $ / Asset Coverage
Ratio (ACR) (kept at higher level as against 0.75:1
(relaxable up to 0.65:1) in the working capital scheme
a Offering immovable 1.25^ No relaxation
property and /or plant &
machinery as security.

b Offering fixed 1.00^ No relaxation

deposit/cash collateral
as security
^Immovable property /cash collateral should be atleast 60% of
total security.
Relaxation in eligibility norms under the product shall be allowed
up to a maximum of two out of three eligibility norms only. No
relaxation permitted in FACR /ACR criteria.
#who have completed one year association with SIDBI from the
date of first disbursement
$-- For acceptance of security the following may be taken care of;
i. While first charge on current assets may be considered,
however during pilot phase, we may not factor the same for
computation of security margin.
ii. Open plot/land and agricultural plot may NOT be accepted as
security for computation of FACR.
iii. At the time of renewal / sanctioning of ToD facility, FACR to be
maintained at 1.25. In case of shortfall, additional security to be
obtained from the customer.
iv. While taking immovable property as security, especially
industrial property (either from Government authorities or
private owners), its saleability / enforceability should be
examined. Further, approval for acceptance of such industrial
property as security shall be obtained from RO In-charge.

2
 Annexure IV- Scheme Modalities: STOCS

S.no Particulars Details

(vii) Availability of Audited (i) (a) For Appraisals done during April-October of an FY:
accounts Availability of audited accounts for last FY should be ensured. In case,
audited accounts are not available, then, provisional financials (CA
Certified, preferably by Statutory Auditor) for the same period to be
obtained.
OD facility sanctioned based on the assessment of CA certified
(preferably by statutory auditor) accounts will be subject to review
pursuant to receipt of Annual Audited Accounts for the same period.
OR
(b) For Appraisals done after October of an FY, audited balance sheet
of the last FY is mandatory.
OR
(c) For units which do not qualify for audit and which have not
prepared audited balance sheets, the following documents may be
obtained in lieu of audited financial statements:
o Self-attested copy of ITR-4
o Self-attested financial statements (key figures to be matched
with ITR-4)
Copy of GST returns (for last completed FY & latest available)
(ii)For Appraisals done after September of an FY, self-certified
provisional accounts till last month supported by latest available GST
returns should also be obtained.

7 Other norms/ features

(i) Rate of Interest (As Prudential Rating Rate of Interest (to be reset at time of
approved by ALCO) renewal)
From S1 to S4 25 bps above the existing rate for WC
scheme
From S5 & S6 50 bps above the existing rate for WC
scheme
There shall be no discretionary power for relaxation of interest rate.
Interest on delayed Guidelines of working capital scheme would be applicable mutatis
(ii) payment (of mutandis, except as under;
interest/penal interest) Levy of penal charges for the following cases,
and Penal Interest (a) Delay in Renewal data- 1% p.a.
(b) Overdrawal- 2% p.a.
(c) Delay in submission of Quarterly Statement (i. GST return, ii.
Quarterly Stock/book debt Statement)-1% p.a.
(iii) Mode of payment of Interest /Penal interest shall be debited monthly with value date of
Interest / Penal Interest first day of the succeeding month.
Under CUB/YBL arrangement., interest / penal interest may be
recovered through ToD, if required, as the interest is debited without
enhancing the SL under CUB/YBL arrangement.
BO shall advise the borrower in advance to maintain sufficient
balance in the Overdraft Transaction Account (ODTA) to meet the
monthly interest obligation.
(iv) DoP As per the extant DoP for Working Capital Limits.
(v) Takeover of OD limit Not allowed at present.
(vi) Monitoring of facility (i)Regular monitoring of transactions in the ODTA shall be done by
BOs.
(ii) Sample verification of the stocks (as mentioned in the) quarterly
stock & book debt statement may be carried out to the satisfaction of
visiting officer
(iii)Quarterly visit to be undertaken.
Refer Guidance Note for Operational Offices (Page-5)

3
 Annexure IV- Scheme Modalities: STOCS

S.no Particulars Details

(vii) Processing fee i. Non-refundable and non-adjustable processing fee of:
a) 1.00% (plus GST and cess if any)) of the limit sanctioned to
be collected at the time of sanction of the limit.
b) 0.50% (plus GST and cess if any) of limit at subsequent
renewal / review or period of one year whichever is earlier.
The sanctioning authority may accept reduced fee based on
market conditions.
Other guidelines of processing fee like reduction etc (subject to a floor
rate of 0.25% (plus GST and cess if any) shall be governed by the
extant DCS guidelines.
(viii) Review of the OD facility SIDBI shall, be entitled to review the operations of the limit from time
to time. Based on this, SIDBI shall have the right to reduce or suspend
the limit at any time at its sole and absolute discretion without
assigning any reason thereof.
Valid Insurance to be taken for the assets hypothecated/mortgaged
(ix) Insurance Risks on stock
covering the risks as under:
& RIV clause i. The ‘Standard Fire & Special Perils’ policy covering the risks of
fire, riot, strike, malicious damage, storm, typhoon, flood and
inundation. Earthquake shall also be included as add - on risk
in respect of units located in earthquake zones up to category
III.
ii. Theft / Burglary.
(x) Operationalisation of Full SL shall be set & released in CUB/YBL at the time of
Sanctioned OD Limit operationalisation of sanctioned OD. However, there shall not be any
technological /nomenclature change in CUB/YBL
platforms/instructions and operations in OD accounts shall be in line
with Working Capital arrangement. Accordingly, instructions from
SIDBI shall be forwarded with the terms “Sanctioned Limit (SL)” and
“Drawing Power (DP)”, where DP shall always be equal to SL, once
the limit is operationalised.
(xi) Visits Pre -Sanction & Pre-Operationalisation Visits needs to be undertaken
as per extant Working Capital guidelines.
(xii) Renewal, Temporary Renewal & Temporary Extension shall be in line with Working Capital
Extension, and ToD scheme.
/Adhoc facility. ToD /Adhoc facility shall not be available under OD scheme.
(xiii) Operations in NPA Operations in NPA accounts shall be as per the extant guidelines of
accounts working capital. However, the overdrawn account shall be
immediately marked debit freeze in the system.
(xiv) Method of Assessment Assessment of OD limit shall be done based on FACR, after providing
the suitable margin. However, this eligible OD limit will be within 20%
of the sales as per latest available balance sheet of last FY, as defined
under the Scheme.
In case any entity has demonstrated growth* in current FY, duly
backed by GST returns, then the sanctioning authority may consider
enhancement to the extent of 10%- 20% eligible amount based on
last annual audited accounts.
(*Growth may be considered in case ‘figures of total sales of previous
FY’ is achieved on or before ‘December 31 of current FY’).
OD facility sanctioned based on the assessment of CA certified
(preferably by statutory auditor) accounts will be subject to review
pursuant to receipt of Annual Audited Accounts for the same period.
For financial analysis working capital excel sheet shall be used.
However, assessment shall not be done as per excel sheet.

4
 Annexure IV- Scheme Modalities: STOCS

S.no Particulars Details

(xv) Process for foreclosure of The operational guidelines and Pre-payment charges for foreclosure
OD account and pre- /closure of OD limits shall be same as per extant guidelines under the
payment interest Working Capital Scheme.
(xvi) Guidelines i/r/o units Extant guidelines for units operating from leased premises are
operating from leased applicable to the proposed scheme.
premises may be Guidelines i/r/o units operating from leased premises may be referred
clarified. as per extant guidelines on leased / rented premises.
(xvii) Operations in other Extant guidelines of Working Capital regarding operations in current
current account account are applicable to the proposed scheme.
8 Operational modalities In line with Working Capital, except the following major changes;
i. The frequency of submission of stock and book debt
statement shall be quarterly basis (as at end of every
quarter). There will be no requirement of submission of CA
certified stock & book debt statement and submission of QIS
statements. There shall be no stock audit.
ii. Apart from quarterly Self- certified stock & book debt
statement, GST returns for the quarter shall also be required
to obtained on quarterly basis for monitoring purpose.
Such certificate/documents shall also be required to be obtained at
the time of renewal.
Operational requirements (like account opening, operations under
DFS platform, flow of instructions etc) shall remain same as that for
Working Capital Scheme. OD shall be operationalised only under CUB
/YBL arrangement & NOT under IDBI Arrangement.

5
 Annexure IV- Scheme Modalities: STOCS

Guidance Note – For operations in Overdraft Transaction Account (ODTA)

1. A customer can avail only one of the two facilities: working capital or overdraft assistance viz.
STOCS. Operational requirements (like account opening, operations under DFS platform, flow of
instructions etc) shall remain same as that for Working Capital Scheme. However, OD shall be
operationalised only under CUB /YBL arrangement & NOT under IDBI Arrangement.
2. Full Sanctioned limit (SL) shall be set & released in CUB/YBL at the time of operationalisation of
sanctioned OD. However, there shall not be any technological /nomenclature change in CUB/YBL
platforms/instructions and operations in OD accounts shall be in line with Working Capital
arrangement. Instructions from SIDBI shall be forwarded with the terms “Sanction Limit (SL)”
and “Drawing Power(DP)”, where DP shall always be equal to SL.
3. The frequency of submission of stock and book debt statement shall be quarterly basis (as at
end of every quarter). There will be no requirement of submission of CA certified stock & book
debt statement and submission of QIS statements. There shall be no requirement of carrying out
stock audit.
4. Monitoring of facility:
a) Quarterly Self- certified stock & book debt statement to be obtained.
b) GST returns for the quarter to be obtained.
c) Penal interest shall be charged at the rate of 1% p.a on delay in submission of Quarterly
Statements (Stock/book debt Statement and GST return). BO to enter the details in DFS, failing
which the system shall start charging penal interest.
d) BO shall monitor the transactions in the account on regular basis and take-up the matter with
customer for corrective action, in case of any irregularity. Further, BO to match the credit
summation with sales data as per GST returns.
e) BO to review the quarterly stock/book debt position from the point of view of any consistent
downward trends and to take appropriate action accordingly regarding
continuation/reduction/closure of limit: In case there is a decline in stock /book debts & sales
turnover, BO to take up with the borrower to analyse the reasons thereof to gain understanding
on the reasons viz.nature of industry, business cycle, seasonal demand, etc. BO to also discuss
future course of action /timelines for achieving projected sales turnover. BO to sensitize the
Borrower for corrective actions, if any, closely monitor the account & review to reduce the OD
limit at the time of next renewal, as per scheme parameters.
f) Quarterly visit to be undertaken and sample verification of the stocks (as mentioned in the
quarterly stock & book debt statement) may be carried out to the satisfaction of visiting officer.
Such visits shall be carried out at the end of every quarter and preferably after obtaining
quarterly statements.
g) Self- certified stock & book debt statement and GST return for the quarter shall also be required
to be obtained at the time of renewal.

5. There is a provision for auto alerts for BOs for below mentioned transactions;
a) High value transaction alert in case any transaction exceeds 10% of Sanctioned Limit (SL).
b) All transactions in which key word viz.‘Cash’ is appearing.

6. The SL shall be reduced /enhanced or retained at existing level, based on the position of stock
& book debt statement at the time of renewal.

7. ToD facility /Adhoc facility is NOT available under OD.

8. Further, with a view to ensure strict compliance of the operational guidelines, some of the
critical / guiding factors for the operating offices are listed below:
a) Segregate slow moving / obsolete stock in the quarterly stock statement.
b) Ensure Adequacy of Valid Insurance.
c) Verify the movement in stock / book debt position with previous quarter position / visit reports
& other financial statements.
d) Monitor the overdue OD accounts closely on daily basis and ensure that the overdue balance is
brought down within the approved SL at the earliest.
e) Advise the borrower in advance to (i) bring down the outstanding, wherever there is reduction
in SL proposed due to renewal and (ii) maintain sufficient balance in the WCTA to meet the
monthly interest obligation.
f) ensure to update the system with the receipt date, as and when, statements are submitted by
the borrowers, to ensure correct calculation of penal interest, where ever applicable.
***