(online facility for submission and etracking of the progress of the application)

This 'Online MSE Loan Application and e-Tracking System' will allow MSE Sector Customers / Prospective borrowers of Vijaya Bank to apply and e-track the status of their MSE Loan Application at various Stages of Loan Processing. However, it should be noted that, applying online for the MSE Loan is not commitment on part of the Bank to Sanction the Loan.

After applying online, applicant has to visit the identified Branch with required documents and any other information sought by the Branch.

 Rate of Interest applicable to MSME Advances

Micro Medium and Small Enterprises(MSME)
( A) Micro Manufacturing Enterprises
Sanctioned Limit Rate of Interest
Loans upto Rs.50000/- BR+0.55=10.20
Above Rs.50000 upto Rs.2 lakh BR+1.05=10.70
Above Rs.2 lakh upto Rs.25 lakh BR+1.80=11.45
Above Rs.25 lakh upto Rs.50 lakh BR+2.05=11.70
Above Rs.50 lakh BR+2.80=12.45
(B) Micro Service Enterprises :
Sanctioned Limit Rate of Interest
Loans upto Rs.50000/- BR+1.05=10.70
Above Rs.50000 upto Rs.2 lakh BR+1.55=11.20
Above Rs.2 lakh upto Rs.25 lakh BR+2.05=11.70
Above Rs.25 lakh BR+2.80=12.45
(c) Small Manufacturing Enterprises :
Sanctioned Limit Rate of Interest
Loans upto Rs.50000/- BR+1.30=10.95
Above Rs.50000 upto Rs.2 lakh BR+1.80=11.45
Above Rs.2 lakh upto Rs.25 lakh BR+2.55=12.20 
Above Rs.25 lakh upto Rs.50 lakh BR+2.80=12.45
Above Rs.50 lakh upto Rs.1 crore BR+3.05=12.70
Above Rs.1 crore BR+3.55=13.20
(D) Small Service Enterprises :
Sanctioned Limit Rate of Interest
Loans upto Rs.50000/- BR+1.80=11.45
Above Rs.50000 upto Rs.2 lakh BR+2.30=11.95
Above Rs.2 lakh upto Rs.25 lakh BR+3.05=12.70
Above Rs.25 lakh upto Rs.50 lakh BR+3.55=13.20
Above Rs.50 lakh BR+3.80=13.45
(E) Medium Manufacturing and Service Enterprises :
Sanctioned Limit Rate of Interest
Loans upto Rs.1 crore BR+3.55=13.20
Above Rs.1 crore and upto Rs.5 crore BR+3.80=13.45
Above Rs.5 crore BR+4.05=13.70

Salient features of lending to Micro, Small & Medium Enterprises (MSMEs):

1 Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 The MSMED Act 2006, which came into force w.e.f. 02/10/2006, defines the Micro, Small, and Medium Enterprises. As per the Act, the activities are classified into Manufacturing and Service Category. The limits for investment in plant and machinery/equipment for manufacturing / service enterprise, as notified by Ministry of Micro, Small and Medium Enterprises, vide S.O.1642 E) dated September 9, 2006 are as under:-

Manufacturing Sector
Enterprises Investment in plant and machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed five crore rupees<
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Service Sector<
Enterprises Investment in equipment
Micro Enterprises Does not exceed ten lakh rupees
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five crore rupees

2 Margin norms :
The margin norms followed by the Bank, as per RBI’s directives, are as follows:

Sl.No. Loan amount Margin norms
1 Upto Rs.25,000/= No margin
2 Above Rs.25,000/= 15% to 25%

3 Security norms for MSE loans The security norms followed by the Bank, as per RBI’s directives, are as follows:

Sl.No. Loan amount Security norms
1 Upto Rs.10 lakh No collateral security but with coverage of CGTMSE guarantee
2 Above Rs.10 lakh and upto Rs.100 lakh No collateral security subject to the good track record / financials of the unit in case covered under CGTMSE.
3 Above Rs.100 lakh Suitable collateral security and /or third party guarantee obtained.

4 Rating of MSME units:

Bank is adopting a multidimensional risk-rating model for SME advances to rationalise the cost of loans to MSME sector. There are three risk-rating models adopted at present. Bank also encourages rating of MSME units by approved rating agencies. The bank has signed a Memorandum of Understanding with Small and Medium Rating Agency (SMERA), CRISIL & ICRA to enable independent third-party assessment of the MSME units.

The rating fee payable to various agencies for getting the MSME units rated is based on the size of the enterprise. SMERA, CRISIL, & ICRA have been empanelled as agencies eligible for subsidy towards the rating fee charged from Micro & Small Enterprises units operated through the National Small Industries Corporation Ltd (NSIC) by the Government of India, Ministry of Small Scale Industries. Under the scheme, 75% of the rating fee payable by eligible Micro & Small Enterprises units is subsidized and the units are required to pay only the balance 25%.

  • Model for exposures ranging from Rs.2 lacs to below Rs.1 crore
  • Model for exposures ranging from Rs.1 crore to below Rs.3 crore
  • Model with segmented approach for exposure of Rs.3 crore and above.

5 The bank is also implementing the Rural Employment Generation Scheme (PMEGP Scheme), Credit linked Capital Subsidy Scheme, Technology Up gradation Fund Scheme.


Recovery through VIJAYA ADALAT A special drive for stepping up recovery in NPA and AUC accounts through One Time Settlement (OTS) by organizing VIJAYA ADALAT has been formulated commencing from 01.06.2006.

Under the Scheme, the borrowers shall be brought to the negotiating table during the VIJAYA ADALATS to be organized by the branches & regional Offices or by the cluster of branches covering maximum number of borrowers and the accounts are settled then and there.

It shall be the endeavor of every Regional Office to ensure that the branches falling under their jurisdiction participate in the special drive in a big way. The dates finalized for organizing Vijaya Adalats shall be informed to Credit (R&R) Dept, HO well in advance to enable the participation by the Executives from Head Office.

Regional Offices shall oversee the follow up done by the branches to ensure that proper steps are initiated to bring the eligible accounts to logical conclusion. ROs shall depute Nodal Officers to assist the branches before finalizing the date and venue for smooth conduct. Branches/ ROs should give wide publicity in the locality/ press release/ release in the electronic media about the event. The Regional Manager or in his absence an Executive having delegated financial powers should invariably attend the Vijaya Adalat.

Branches should desist from pushing in cases coming within their delegated powers to be decided in this forum and should optimally use to settle cases coming within the delegated powers of the Executive visiting.

Rehabilitation of sick MSMEs

1 Follow up of Sick Units – Viable and Non-Viable:-

  • A SME unit is considered as sick when any of the borrowal account of the unit remains substandard for more than 6 months or there is erosion in the networth due to accumulated losses to the extent of 50% of its networth during the previous accounting year and unit has been in commercial production for atleast two years.
  • It is important to identify incipient sickness so as to avert a Unit becoming sick. In this behalf the responsibility to identify such sickness lies with the operating staff handling the concerned files to ensure that the said task is accomplished. The responsibility in identifying the incipient sickness rests with the Branch Head as well as the dealing Officer.
  • Some of the glaring symptoms of sickness have been listed hereunder. It could be one or more or combination of symptoms of rendering a Unit as sick :
  • 1 Continuous irregularity in cash credit a/c. 15. Longer credit on sales and large discount on sales.
    2 Non-submission of stock statements. 16. Failure to honour commitments under L/Cs and BGs.
    3 Outstanding in the a/c remaining continuously at the maximum. 17. Frequent request for excess drawings.
    4 Diversion of sale proceeds to the detriment of the unit. 18. Drawing Bills and cheques in round sums.
    5 Non payment of installments and/ or interest in term loans. 19. Increasing rate of rejections of produces of the unit.
    6 Steep decline in production. 20. Adverse remarks by auditors.
    7 Mis- utilization of funds. 21. Erosion in net Tangible Net-Worth
    8 Arrears of statutory dues like power, water, taxes etc., 22. Discrepancy in stocks and machinery.
    9 Downward trend in credit summations. 23. Unplanned expansion of the business / unit leading to requirement of additional funds.
    10 Downward trend in Sales and fall in profits. 24. Frequent breakdown of plant and machinery.
    11 Frequent return of cheques / bills. 25. Frequent labour problems.
    12 Larger and longer outstanding in Bills account. 26. High level of creditors
    13 Rising level of inventories. 27. Unable to realize debtors for long periods.
    14 Increase in the level of Sundry Debtors. 28. Default in payment of statutory dues such as Income-Tax / Sales Tax / P F dues etc.,
  • 1.4 Whenever any symptoms of sickness are noticed, the same should be immediately discussed with the borrowers firstly to ascertain the reasons / facts and find ways/means to set right / overcome the difficulties faced by the unit. It is only through such timely efforts that a unit can be saved from becoming sick.
  • Once a unit becomes sick beyond the efforts of the borrower/Bank, a detailed viability study has to be conducted and a Nursing programme has to be chalked out/implemented in case of all potentially viable units without delay.
  • In case of sick units that are to be placed under nursing programme or in cases of sick units where nursing programme is already implemented but the progress thereof is slow / tardy / not up to expectations, remedial measures must be taken up on a war footing with the aim of upgrading such units to standard category within the stipulated time. This can be achieved only through concerted monitoring of the sick units.
  • In cases where rehabilitation/rephasement schemes are formulated and implemented in case of potentially viable units, branches should critically review such packages on an on going basis based on submission of various controlling statements submitted by such units as well as through frequent site visits/inspections. They should invariably undertake a comprehensive Annual Review to assess the efficacy of the packages implemented.
  • Importantly, Branches/ROs should ensure proper documentation in respect of the facilities granted/availed, charge registration in respect of all borrowers. Whenever incipient sickness is noticed in any loan account, branches should once again review thoroughly the documents and rectify any deficiencies, if any. Some of the common deficiencies noticed are incomplete loan documentation; non availability of personal guarantee to the limits availed etc.
  • Before any rehabilitation/rephasement exercise is taken, the consent of the CGTMSE/ECGCI is to be obtained.

2 Relief and concessions that can be provided to the Sick Units which are put under Nursing Programme / Rescheduled / Restructured Accounts :

  • The viability and the rehabilitation of a sick SME unit would depend primarily on the unit’s ability to continue to service its repayment obligations including the past restructured debts. It is therefore essential to ensure that ordinarily there is no write – off or scaling down of debt such as by reduction in rate of interest with retrospective effect to the extent indicated in the guidelines.
  • Guidelines on various parameters on reliefs and concessions are given below:-

    If penal rates of interest or damages have been charged, such charges should be waived from the accounting year of the unit in which it started incurring cash losses continuously. After this is done, the unpaid interest on term loans and cash credits during this period should be segregated from the total liability and funded as Funded Interest Term Loan (FITL). No interest should be charged on funded interest term loan and repayment of such funded interest term loan should be made within a period of not exceeding three years from the date of commencement of implementation of the rehabilitation programme.

  • Unadjusted Interest Dues :

    Unadjusted interest dues such as interest charged between the date upto which rehabilitation package was prepared and the date from which actually implemented may also be funded on the same terms mentioned under 2.2.1.

  • Term Loans :

    The rate of interest on Term Loans may be reduced wherever considered necessary, by 3% in case of Micro / decentralized sector units and by 2% for SME units below the prevailing rate applicable for the MSME units.

  • Working Capital Term Loans :

    After the unadjusted interest portion of the Cash Credit account is segregated as stated above 2.2.1 and 2.2.2 above, the balance representing the principal dues may be treated as irregular to the extent it exceeds drawing power. This amount may be funded as Working Capital Term Loan (WCTL) with repayment schedule not exceeding 5 years. Interest on such WCTL, for the Micro / decentralized sector units at 3% below and for the SME units interest 2% below the prevailing rate applicable to MSME units may be charged.

  • Working Capital Limits : Interest on working capital may be charged at Base rate plus 2.85 % wherever applicable. Additional working capital limits may be extended at a rate not exceeding Base rate plus 4.35%.
  • Non Viable Units:-

    • After the completion of the viability study if the Bank comes to the conclusion that the Unit is non viable and that the available securities are inadequate, after adjusting CGTMSE / ECGC claim amount, the possibility of One Time Settlement (OTS) as per Bank’s Policy should be explored and all out efforts should be made to recover the dues without the intervention of the Court. In cases where the OTS appears bleak and other non-legal recovery measures have failed, then a recovery suit has to be filed immediately at the Civil Court/DRT, as applicable.


    • Other guidelines pertaining to rehabilitation / restructuring of MSME units as issued from the Reserve Bank of India from time to time will also be followed.
    • General Manager in charge of the Sick Unit Cell at Head Office is the competent authority to deal with the issues / to clarify / to issue operational guidelines on the provisions contained in this part

Technology Upgradation Fund Scheme for Textile and Jute Industry

Our Bank is designated as nodal bank for implementing Technology Upgradation Fund Scheme for Textile and Jute Industry: Scope of the Scheme: The Scheme is available for modernization / expansion of existing units and for setting up of new units with benchmarked level of technology in textile and jute industry. The present plan of the scheme is RR-TUFs from 01.04.2012 to 31.03.2017. The scheme will provide Interest Reimbursement/Capital subsidy/Margin Money Subsidy based on the eligible machinery installed. Under the scheme only the loans sanctioned after 01.04.2012 are eligible. Application should be submitted to MoT within one year from the loan sanction date.

Eligible list of machinery and certificates for determining the eligibility are available in Benefit is available for TUFS benchmarked machinery covering the following activities:

  • Cotton ginning and pressing
  • Silk reeling and twisting
  • Wool scouring, combing and carpet industry
  • Synthetic filament yarn texturing, crimping and twisting
  • Spinning
  • Viscose Staple Fiber(VSF) and Viscose Filament Yarn (VFY)
  • Weaving, knitting and fabric embroidery
  • Technical Textiles including non wovens
  • Garment/design studio/made-up manufacturing
  • Processing of fibers, yarns. Fabrics, garments and made ups
  • Production activities of Jute Industry

Brief about the certificates for determining eligibility criteria:

  • RR 1 – Format for examination of eligibility of the project / term loan for interest / margin money subsidy under Revised Restructured TUFS to the Nodal Agency
  • RR 2 – Format for submitting actual TUFS-related specifications of the plant and machinery / equipment proposed under the projects
  • RR 5, RR 6,RR 7, RR 8 – for seeking eligibility clearance for additional incentive in the form of 10% capital subsidy under various segments.
  • Technical Textile units availing 10% Capital Subsidy will have to obtain a registration number from Office of the Textile Commissioner.
  • In case of imported second hand machinery, a certificate from Chartered Engineer of the exporting country certifying the vintage and residual life with duly countersigned by an Indian Embassy / Consulate in the exporting country must be furnished by the unit.




Name of the Nodal officer of the bank for MSME Complaints and queries



Asst. General Manager

Credit – Retail & MSME


CLICK HERE FOR Application for MSME Loan

MSME Clusters

Specialised MSME branches

Self Employment Training Institute

MSME Quarterly Data

Rehabiliation of SICK MSE Units

Rehabiliation of SICK MSE Units  (For Karnataka State)