Micro, Small and Medium Enterprises

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The Micro, Small & Medium Enterprises [MSME] sector has been recognized as the engine of growth. SME in India contributes to 40% of gross industrial output and 45% of total exports and is second largest employer after agriculture. The development of SME has been assigned an important role in national plans. Commercial Banks are advised from time to time by GOI and RBI to finance liberally to MSMEs. Lending to Micro & Small Enterprises qualifies for PSA.

As per the provisions of Micro, Small and Medium Enterprises Development [MSMED] Act 2006, MSME are classified into two classes.

Manufacturing Enterprises:

The enterprises engaged in production of goods pertaining to any industry. These are defined in terms of investment in plant & machinery.

Service Enterprises:

Enterprises engaged in rendering services and are defined in terms of investment in equipment.

CategoryInvestment ceiling on original cost
Manufacturing Sector 
Micro [mfg] EnterprisesDoes not Exceed Rs.25 lakhs [in plant & machinery]
Small [mfg] Enterprises> 25 lakhs < = Rs.5 Cr.( [in plant & machinery]
Medium [mfg] Enterprises> 5 Cr. < = 10 Cr. [in plant & machinery]
Service Sector 
Micro [Service Enterprises] sectorDoes not exceed Rs.10 lakhs [in equipment]
Small [Ser] Enterprises>10 lakhs < = 2 Cr. [in equipment]
Medium [Ser] Enterprises> 2 Cr. < = 5 Cr. [in equipment]


Bank has designed simple MSME loan Application and the Checklist for submission of details /documents by the customer along with the application. In case of Advances under Agri & Rural Banking (A & RB) unit, customers may also submit Annexure-1 in addition to the loan application.
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