MANUAL ON SCORING MODELS FOR MSME ADVANCES "PNB SCORE SME"

 
 
(For Internal Circulation only)




    MANUAL

      ON

SCORING MODELS

     FOR

MSME ADVANCES

“PNB SCORE SME”



       -i-
S.NO                       CONTENTS                PAGE NO.




1.       “PNB SCORE SME”                               1-3

2.       OPERATING GUIDELINES FOR USING CREDIT        4-28
         SCORING MODEL SOFTWARE “PNB SCORE
                                      SCORE-
         SME”

3.       CODE OF BANK’S COMMITMENT TO MICRO AND       29-33
         SMALL ENTERPRISES (MSEs) - SHARING OF
         RATING PARAMETERS

4.       GUIDELINES FOR USING SCORING MODEL           34-65
         “PNB SCORE SME” :

     4.1 GENERAL GUIDELINES                           34-35

     4.2 MSME MANUFACTURING UNIT (NEW CASE            36-42
         INCLUDING TAKEOVER) - ABOVE ` 10 LAKH
         UPTO ` 50 LAKH.

     4.3 MSME SERVICE UNIT (NEW CASE INCLUDING        43-48
         TAKEOVER) - ABOVE ` 10 LAKH UPTO ` 50
         LAKH.
     4.4 MSME MANUFACTURING AND SERVICE UNIT          49-54
         (NEW CASES INCLUDING TAKEOVER) - ` 10
         LAKH AND BELOW.

     4.5 MSME MANUFACTURING AND SERVICE UNIT          5-60
         (RENEWAL / ENHANCEMENT) - ABOVE ` 10
         LAKH UPTO ` 50 LAKH.

     4.6 MSME MANUFACTURING AND SERVICE UNIT          61-65
         (RENEWAL / ENHANCEMENT) - ` 10 LAKH AND
         BELOW.




                               -ii-
1.    “PNB SCORE SME”

In order to supplement the prepre-sanction
                                  sanction appraisal process and to adopt a
comprehensive structured approach for evaluating loan proposal (New
/Renewal/Enhancement/Take          over)   under   MSME     (Manufacturing
/Service) category up to limits of ` 50 lakh, bank has developed following
five Credit Scoring Models :-

       I.   MSME Manufacturing (New Cases including takeover) - Above `
            10 lakh upto ` 50 lakh.

      II.   MSME Service (New Cases including takeover) - Above ` 10 lakh
            upto ` 50 lakh.

     III.   MSME Manufacturing an     andd Service   (New   Cases   including
            takeover) - ` 10 lakh and below.

     IV.    MSME Manufacturing and Service (Renewal / Enhancement) -
            Above ` 10 lakh upto ` 50 lakh.

     V.     MSME Manufacturing and Service (Renewal / Enhancement) - `
            10 lakh and below.

      These Credit Scoring models have been placed on the server of
      the bank and are available on Finacle home page as “PNB SCORE
      SME”

The characteristics of various MSME (Manufacturing/Service) lending
schemes /activities have been put together to arrive at risk profile of MSME
segment.
  gment. The various MSME schemes/ activities covered are as under:

MSME (Manufacturing)                                   MSME (Service)
Sarthak Udhami                               Training Institutes
SME Sahyog Scheme                            Education Institutions
PNB Vikas Udyami                             Trading in new medical
                                             instruments
PNB Pragti Udyami                            Nursing homes/Clinics
PNB Artisan Credit Card                      X-Ray Clinic
PNB Laghu Udhami Credit Card                 Legal Services
Loans for setting
              ing up Industrial Estates      Advertising Agency
PNB Kushal Udyami                            Advances to Transport Sector
PNB Vikas Udyami                             Advances to professionals &
Financing Industry related small enterprises self employed
                                             Seed grading Services
                                             Courier services
                                             Architecture
                                               chitecture Designers
                                             Events Management
                                             Catering
                                             Retail Trade
                                     -1-
Auto repair and service Center
                                               Desktop Publishing
                                               Xeroxing
                                               Typing Centers
                                               Industrial Photography
                                               Internet browsing setting
                                                                   se      up
                                               Cyber Cafe
                                               X-Ray Clinic
                                               Tailoring, boutique etc
                                               Photographic Lab
                                               Beauty Parlors & crèches
The above list is indicative only.

In addition to above models there is another scoring model of Retail Assets
Division (RAD) available on Finacle home page as “PNB SCORE” and MSME
activities like Retail trade (New cases & Renewal/Enhancement), advances
to Qualified Medical Practitioners & Gramin Chikitsak shall continue to
be scored under this model.

Exempted Categories: Advances to Transport Sector (including         ng loan for
taxi, station wagon etc.) and documentary films (on themes like family
planning, social forestry, energy conservation and commercial advertising)
are exempted from scoring as the models for these activities are yet to be
developed. For such activities
                         ivities the guidelines for credit risk rating issued by
IRMD (Systems & Models), HO shall be applicable.

All branches are to use the relevant models for MSME advances w.e.f
01.01.2011 and use the scores secured by borrowers to take decision
regarding sanction
               ion of the loan application.

The score generated by models will facilitate the sanction & rejection of the
loan application as per following scoring / coloring scheme:
                                                     scheme:-

S. No      Score Range           Color                 Implication
                                Scheme
1             Up to 40          Red Zone     Application        cannot     be
                                             considered for sanction.
2        Above 40 up to 50     Yellow Zone   Application can be considered
                                             by next higher Authority for
                                             sanction         with     proper
                                             justifications.
3        Above 50 up to 75     Green Zone    Application can be considered
4            Above 75          Blue Zone     for sanction at branches as per
                                             their vested
                                                      sted loaning powers.

Now the use of scoring model “PNB SCORE SME” / “PNB SCORE” is
mandatory for MSME loans up to ` 50 Lakh (except loans to the activities
mentioned as above and such proposals will not be rated through PNB Trac.

                                      -2-
The mapping of scores of the five MSME models with the risk rating category
of PNB Trac is as under:-

    S.No Score as per Scoring Model for Rating             Category    as
         MSME                           per PNB            Trac
    1                 0-30
                        30                                  D
    2             Above 30
                         30-40                              C
    3             Above 40
                         40-50                              B
    4             Above 50
                         50-60                              BB
    5             Above 60
                         60-70                              A
    6             Above 70
                         70-80                              AA
    7               Above 80                               AAA

On the basis of above table, applicable interest rate would be ascertained for
advances above ` 20 lakh.

It may be noted that scoring models supplement the credit appraisal; it is
not substitute for credit appraisal as the mathematical formulae/
calculations in credit risk rating are good for measuring the risk and not for
anticipating it.

There is a Maker–Checker
                 Checker concept in “PNB SCORE SME” meaning thereby
that maker (appraising official) will enter the desired data in respective
scoring model and generate the score sheet. The score sheet so prepared by
the maker will be checked and authorised by the checking official
(checker)/sanctioning authority.

The Score card Id generated by the model in the score sheet shall b
                                                                  be noted
and same must be assigned in CBS in “Free Text 6” field in ‘V – MIS
Details’ in all the eligible MSME advances (Manufacturing /Service)
sanctioned up to the limit of Rs.50 lakh.




                              ****************




                                     -3-
2.  OPERATING GUIDELINES FOR USING
  CREDIT SCORING
               G MODEL SOFTWARE “PNB SCORE SME”


STEPS FOR RUNNING THE APPLICATION “PNB SCORE SME”

1 This software can be accessed through Finacle home page using the link
  “PNB Score SME”




  For the first time it may prompt you to install the compatible Oracle
  Jinitiator 1.3.1.22 that will be automatically downloaded from the server.
  It may take 2 to 5 minutes. It can be installed directly from the CD
  provided to branches/downloaded
                          /downloaded fro from PNB eCirculars->Knowledge
                                                                 Knowledge
  Repository->Downloads->Oracle
                           >Oracle Jinit.

  In case of difficulty in accessing the application please check whether you
  are able to ping the CSM server using the following command on Run
  window:

  Ping 10.192.15.201 –t

  In case of No reply from server you may call HO: ITD (011-23356506
                                                            23356506) for
  help


                                    -4-
2 This application
              ation can also be accessible through internet browser
  “Internet explorer” using the following U
                                          URL:

    http://10.192.15.201/forms/frmservlet?config=pnbsme

    After you access the application the following Login Screen will
    appear:

      Login Screen




3   Creation off Shortcut for PNB SCORE SME:




                                 -5-
In your desktop Right click from mouse
                                 mouse-> click New -> Shortcut




You will get the following screen.




                                     -6-
Click Browse & then Click C Drive (C:):




   Click Program files




                                    -7-
Then click Internet Explorer
                       lorer




Then click IExplore




 After the …….\IExplore.exe”
               IExplore.exe” give a space then type the following url
(address)
http://10.192.15.201/forms/frmservlet?config=pnbsme

                                  -8-
Click Next




Type name (PNB Score SME) and then Finish




                      SME




                              -9-
Double Click the PNB Score SME shortcut for accessing the application




4   Operational Instruction:

    Enter the “User Name” and ““Password” in the login Screen and then
    click on the    “Login”” button or si
                                        simply
                                          mply press “Enter” on your keyboard
    to proceed.
         roceed. System will check for correct combination of “User Name” and
    “Password”. The “User Name” will be the PF Number of the users and
    Password will be provided by the MSME HO/ITD HO for Circle
    Offices and Circle Offices
                           fices in turn provide ID No./Name
                                                         Name and Password
    for Branches. If the “User Name” and “Password” are found correct, it
    will show the Main screen as under:




                                    -10-
The screen will show the Main Menus horizontally on the top of screen.
                                                                 screen

  The Main Menu options are as under:

        1.   User Master.
        2.   Master.
        3.   Transactions.
        4.   Reports.
        5.   Logout.
        6.   Help.
        7.   Window.

4.1   Initially “User Master”” has to be performed at HO and Circle Offices
      and as such the option is available to HO and Circle Office users
      having related privileges. The page is displ
                                             displayed as under:

                                  User Master




                                   -11-
On selecting user creation following screen will be displayed:




a) User Master menu will be used by the Circle Offices to add
users at the Branches,
              ranches, who will work on this MSME Score Model
                                                        Model.




                              -12-
b) Following Buttons
                        ns are available on this page:

      i      Insert:     This   Button is to be used for Adding a New Record.
      ii     Update:     This   button is to be used for Modifying Record.
      iii    Search:     This   button is to be used for Searching Record.
      iv     Save:       This   button is to be used for Saving the Record.
                                butto
      v      Cancel:     This   button is to be used for Cancelling the Entry.
      vi     Exit:       This   Button is to be used for Exiting from the Form

  c) After selecting appropriate button the following details are to be filled
     on this page
                ge for Creation /Modification of User.

            1.    User ID.

            2.    User Name.

            3.    Branch Code. Can be entered by (ctrl +H) also.

            4.     Branch Name.
            5.    Password. These are Alphanumeric (Six characters long).

            6.    User Type: There are three types of users.

                 Ø Normal User: Users at branches. (Maker)

                 Ø Super User: Users at HO level

                 Ø Administrator: Users at Circles/ branches (Checker).

  d) The Credit Scoring Models are based on Makers
                                            Makers-Checkers
                                                   Checkers concept. All
     the officers/Dy. Manager/Manager at hub/branches processing the
     loan applications shall bbe the “Normal User”.    The sanctioning
     authority i.e., Manager/Senior Manager & above shall be the
     “Authorizing Official"..

  e) The Circle Offices shall ensure that sufficient user ID’s
                                                            ’s are created at
     the Branches, so that there is always at least one maker and one
     checker in the branches. This may be done by way of creating multiple
     user ID for the maker and checker in the Branches subject to the
     condition that the making and checking officials are not the same in a
     branch.

4.2    “Transaction” menu is to be used by the branch user, where the
       scoring is to be done actually.




                                           -13-
This is selected by left clicking the “Transaction” option at Main Menu
as under:




Here, entries will be made by Normal user (i.e., the maker)
                                                     maker).

a) The available option for feeding of deta
                                       details
                                            ils for credit scoring is
   “Scheme Selection”, which opens as under:
                                         under:-




                                -14-
Industry type” “Manufacturing Unit”” or “Service
   Select the “Industry                                          “
   Industry”” options using the button provided for the purpose. For
   selecting the Activity/scheme you have to press “List” bu
                                                          button
                                                             tton and all
   schemes are shown in the window and you have to select the
   Activity/scheme from window and press button OK.




b) If facility is being considered for the first time by the branch, then
   “Whether our existing Borrower: choose option “No” using radio
   button as under:

         Whether our existing Borrowe
                              Borrower              Yes       No.


   Further selection “New Unit/ Business” or “Takeover” shall be made
   whether the unit is new unit/business or take over case.

                                                             Yes” is to be
   In case of renewal/ enhancement of ffacility, the option “Yes
   selected.

   The loan amount of the proposal under consideration shall be entered
   facility wise & amount for facilities has to be entered. Lastly press
   “OK” to move to next screen.

c) Internally the MSMESME accounts have be been
                                             en segregated in following
   categories for the purpose of scoring:
                                 scoring:-

   1. MSME Manufacturing (New Case including takeover) - Above ` 10
      lakh up to ` 50 lakh.


                                 -15-
2. MSME Service (New Case including takeover) - Above ` 10 lakh up
     to ` 50 lakh.

  3. MSME Manufacturing and S
                            Service
                              ervice (New Cases including takeover) -
     ` 10 lakh and below.

  4. MSME Manufacturing and Service (Renewal / Enhancement) -
     Above ` 10 lakh upto ` 50 lakh.

  5. MSME Manufacturing and Service (Renewal / Enhancement) - ` 10
     lakh and below.
  For each category there iis a separate scoring model.

d) Then the form/screen pertaining to that scoring model opens.

                                    model- service sector above ` 10 lakh
  One of the screens (for scoring model
  upto ` 50 lakh) is placed for reference as under:




  Other models may be attem
                         attempted
                              pted on the same lines as the functionality
  of the models is similar.

e) Information if required to be filled in 5 different screens with page
   numbers 1,2,3,4 and 5, and the last page gives us the score. The

                                -16-
navigation through the pages is provided using the “Next” and
     “Previous” options provided at the bottom of the pages.

5 Illustration – Model 2- M
                          MSME
                           SME Service (New Case including takeover) -
  Above ` 10 lakh up to ` 50 lakh:

  Let us consider an illustration of new borrower to the bank but an
  existing unit in service sector
                           sector, carrying on the business of advertising
  agency requesting for working capital limit of ` 12 lakh.

  User in branch shall select Scheme selection option in transaction menu
  and fill the details in the Activity/Scheme Select
                                              Selection
                                                     ion page as per proposal
  as under:




  After filing the information in all fields, user shall press “OK” button.
  Then
   hen following page shall open:




                                    -17-
Page 1




This page is used for filling the following details:
                                            details:-

   1. Unit
       nit details like name of the un unit,
                                         it, address, constitution, type of
      unit/project (existing unit or new project
                                         project).

   2. The promoter’s details like name, date of birth, educational
      qualifications, PAN number etc.

   3. In case of past relationship with the bank, details like A/C since
      and average balance
                   alance in last six months are also accepted.

   4. List of options are provided for selecting the credit history, in case
      the CIBIL score is available
                         available/ not available.

   5. Options for “Ownership of current residence on record” and
      “Ownership of manufacturing unit
                                  unit/factory
                                       /factory premises” are provided.

   6. Space is provided for filling up of distance of factory from financing
      branch and options are provided to select attributes whether the
      unit and financing branch are in same city/center or not if the
      distance is > 25 Kms
                       Kms.

After filing the information in all fields, user shall press “OK” button.
                                                                  button
Then
 hen following page shall open:




                                   -18-
Page2




This page is used for filling the following details:
                                            details:-

a.   Facility required (Working
                         Working Capital
                                   Capital, Term Loan, Non fund based).
     Proposed facilities are marked ‘‘√’  √’ in the specified space with
     amounts according to the limits filled initially. The rate of interest is
     to be filled in along with the repayment period in months in case of
     term loan.

b.   “Value of fixed assets to be financed” shall contain the invoice value
     of the fixed assets purchased out of term loan, if any.

c.   A list has been provided for ““Purpose of Loan”,
                                                   ”, one of which has to
     be selected.

d.                                        cover.. If “Yes” is selected
     Whether borrower agreed to CGTMSE cover
     then the system shall not a
                               accept
                                 ccept the Guarantors’ and collateral
     security details.

e.   “Accepted projected profit after tax (PAT)” and “Accepted Projected
     Cash profit” are to be filled.

f.   Income Tax Assessee : Proper choice is made by selecting Yes/No.

g.   Client type is selected from th
                                  the list provided.


                                   -19-
h.   The details of guarantors are also filled in which include name of
     guarantors, guarantors’ net worth, date of CR, PAN number and
     amount offered as collateral. The navigation inside the table is
     provided through ‘Tab’ key and it is accept
                                          accepted
                                                 ed only when the proposal
     does not fall under CGTMSE
                         CGTMSE.

After filing the information in all fields, user shall press “OK” button.
                                                                  button

Then
 hen following page shall open:

Page3




This page is used for filling the following details which are related to
Liabilities side of balance sheet of a Unit
                                       Unit:-

a. Capital

b. Quasi Capital (In case of Prop./Partnership)

c. Reserve & Surplus.

d. Long Term Borrowing from Banks/Fin. Institutions. (Loan type,
   outstanding, amount repayable in & rate of interest).

e. Unsecured Loans/others.
                    thers.

f. Short term bank borrowings/other short term loans.

                                  -20-
g. Trade creditors and other current liabilities.

After filing the information in all fields, user shall press “OK” button.
                                                                  button

Then
 hen following page shall open:

Page4




This page is used for filling
                        lling the following details which are related to
Assets side of balance sheet of a Unit Unit:-

   a. Fixed Assets

   b. Accumulated depreciation

   c. Noncurrent assets

   d. Inventories

   e. Receivables (Debtors)

   f. Loan & advances

   g. Cash & bank balances

                                   -21-
h. Other current assets


   i. Value of IP in net worth in case of Partnership/Proprietorship/
      Individual/HUF

After filing the information in all fields, user shall press “OK” button.

Then following page shall open:

Page5




“Submit” has to be pressed if everything is filled correctly
                                                    correctly.. It shall
provide the Score Card ID and Total score. If the same proposal is
assessed using the PNB TRAC then, its score should also be mentioned,
through which the ratings shall be generated. Selecting “Save” shall
generate the report for record. (Now as per IRMD Cir. No. 17/2011
dated 28.06.2011 advances under MSME schemes   schemes, for which
separate Credit Scoring models are available
                                      available, are exempted from
credit risk rating).


                                  -22-
6 Modification: In case any modification is required to be made in the
  Score Card, separate
                  arate option is provided in the “Transaction” menu:




Clicking on the option “Modification
                        Modification” shall open the following screen:-
                                                               screen




                                 -23-
The Score Card ID should be selected from the “List” provided for the
   purpose. Similar pages shall appear as in case of data e
                                                          entry,
                                                            ntry, wherein
   the changes can be made and saved through the option at the end of
   5th page.

7 Authorization: The authorizer (checker) will login in the software by
  entering his user name and password. He/she shall use the following
  screen for the purpose:




Clicking on the option “Authorization” shall open the following screen for
the authorizer:-




                                 -24-
Now the authorizer will click on the button “List” in front of Score Card
     ID and screen will appear depicting all the details of the Score Card in
     same sequence.
                 ence. The checker is authorized to make changes also.
     “Submit” button is clicked at page no.5. The authorizer then asked to
     authorize. This completes the process.

8 REPORT GENERATION

     Two types of reports are generated by the system for the user
     (BO/CO/HO):

        1. Scoring Report.
        2. MIS Report.

     Reports for Branch User:

     The “report”” option is selected as under:
                                         under:-




1.    Scoring Report




                                       -25-
Scoring Report (Detailed Score report) can also be prepared by selecting
the Score Card ID by using the help menu and des desired
                                                    ired format (html/ pdf)
and clicking on the “Generate Report button .The report screen will
appear. Print of this report is to be obtained. This completes the process
of scoring.

Reports for Circle User/ HO User




                                 -26-
1.   Scoring Report




CO/HO users can also generate score card report pertaining to its
branches.

2.   MIS Report

MIS REPORT option is available to all the users in Circle office/ HO.
Circle office shall take the printout of the above mentioned reports
related to the branches under its cont
                                    control
                                        rol & use these reports for closely
monitoring and ensuring that all MSME loan proposals (Fresh/
Renewals/ Enhancements) with proposed facilities upto ` 50 Lakh  La     are
scored on the relevant models and these guidelines are complied with
meticulously by all branches.
                         anches. The users at HO shall view and take
printout of the reports for monitoring.




                                 -27-
In addition, HO user can also generate Audit Trail report based on different
criteria’s:

   ·   Audit   Trail   report   for   Branch Master
   ·   Audit   Trail   report   for   User Master
   ·   Audit
         dit   Trail   report   for   Scheme Master
   ·   Audit   Trail   report   for   Loan Detail Master
   ·   Audit   Trail   report   for   Loan Header Master
   ·   Audit   Trail   report   for   Loan Score Header
   ·   Audit   Trail   report   for   Balance Shee
                                              Sheet




                                         *******************




                                              -28-
3.  CODE OF BANK’S COMMITMENT TO MICRO AND SMALL
  ENTERPRISES (MSEs) - SHARING OF RATING PARAMETERS



 Banking Codes & Standards Board of India ((BCSBI)) has come out with the
 Code of Bank’s Commitment to Micro and Small Enterprises (MSEs). Our
 Bank has adopted the code as re-circulated vide MSME  SME Circular No.
 01/2011 dated 01.01.2011.

 As per the BCSBI Code, the banks are required to share the parameters of
 scoring model (not the methodology of scoring). Sharing of parameters of
 different credit scoring models will give the borrowers an insigh
                                                            insightt in the areas
 they are required to focus for getting a better credit scoring from the bank.
 Keeping in view the requirement of BCSBI code and stand already taken by
 the bank for sharing of rating parameters in respect of MSE borrowers, it
 has been decided to disclose the general parameters of our following rating
 models as well:

 PNB Score MSME Models:

   I.   MSME Manufacturing (New Cases including takeover) - Above ` 10
        lakh upto ` 50 lakh.

  II.   MSME Service (New Cases including takeover) - Above ` 10 lakh upto
        ` 50 lakh.

 III.   MSME Manufacturing and Service (New Cases including takeover) - `
        10 lakh and below.

 IV.    MSME Manufacturing and Service (Renewal / Enhancement) - Above
        ` 10 lakh upto ` 50 lakh.

  V.    MSME Manufacturing and Service (Renewal / Enhancement) - ` 10
        lakh and below.

 PNB Score Retail Models:

 VI.    Doctors’ Loan Scheme

VII.    Traders’ Loan Scheme (New cases)

VIII.   Traders’ Loan Scheme (Renewal Cases




                                      -29-
The general parameters applicable to above models, which can be shared
with MSE customers without disclosing the methodol
                                            methodologies
                                                     ogies and scoring
pattern, are as under:

PNB MSME Score Model

I. MSME Manufacturing (New Cases including takeover) - Above ` 10
   lakh upto ` 50 lakh.

Parameters

  a.   Constitution of the proposed unit
  b.   Education & Experience of the promoter
  c.   Past relationship
                     hip with the Bank
  d.   Credit History
  e.   Marketing of the product
  f.   Ownership of current residence on record
  g.   Ownership of Manufacturing unit/ Factory Premises/business
       premises
  h.   Distance of factory/business location from the financing branch
  i.   Type of collateral propo
                          proposed
  j.   Ratio of value of collateral to Loan Amount
  k.   Guarantor's Net worth
  l.   Ratio of Borrower’s net worth to loan amount
  m.   TOL /TNW
  n.   Working Capital Cycle
  o.   Repayment Period
  p.   Ratio of cash profit to repayment obligation.
  q.   CAGR- Gross Sales last 3 years
  r.   Cash Profit Position
  s.   Ratio of Credit summation to Gross Sales
  t.   Variability in availment

II. MSME Service (New Cases including takeover) - Above ` 10 lakh upto
    ` 50 lakh

Parameters

  a.    Constitution of the proposed unit
  b.    Income Tax Payee Status
  c.    Education & Experience of the pr promoter
  d.    Past relationship with the Bank
  e.    Credit History
  f.    Type of service/ clientele and location of the unit
  g.    Purpose of Loan
  h.    Ownership of current residence on record
  i.    Ownership of main business Premises
  j.    Distance of main business location from the financing b
                                                              branch
                                                                ranch
  k.    Type of collateral proposed
                                    -30-
l.    Ratio of value of collateral to Loan Amount
  m.    Guarantor's Net worth
  n.    Ratio of Borrowers' net worth to loan amount
  o.    TOL /TNW
  p.    Repayment Period
  q.    Ratio of cash profit to repayment obligation.
  r.    Loan to Value ratio
  s.    CAGR - Gross Sales last 3 years
  t.    Cash profit position
  u.    Ratio of Credit summation to Gross Sales
  v.    Variability in availment

III. MSME Manufacturing and Service (New Cases including takeover) -
    ` 10 lakh and below.

Parameters

  a.    Constitution of the proposed unit
  b.    Education and experience
                          perience of the promoter
  c.    Past relationship with the Bank
  d.    Credit History
  e.    Purpose of Loan
  f.    Ownership of current residence
  g.    Ownership of Manufacturing unit/ Factory Premises/business
        premises
  h.    Distance of factory/business location from the financing branch
  i.    Age
  j.    Assessed for Income Tax
  k.    No. of Dependents
  l.    Ratio of Borrowers' net worth to loan amount
  m.    Loan to Value ratio
  n.    Repayment Period
  o.    Ratio of cash profit to repayment
  p.    Gross Sales Growth
  q.    Profit Growth


IV. MSME Manufacturing and Service (Renewal / Enhancement) - Above
   ` 10 lakh upto ` 50 lakh.

Parameters

  a.    Experience in Business/Family Business
  b.    Credit History
  c.    Ownership of current residence
  d.    Ownership of Manufacturing unit/ Factory Premises/business
        premises


                                  -31-
e.    Distance of main premises of manufacturing unit/ Factory/
        business
          siness from the financing Branch
  f.    Gross - Sales last 3 years
  g.    Achievement of sales target in last year
  h.    Achievement of Profit target in last year
  i.    Cash profit position
  j.    Ratio of Debtors to Sales
  k.    Ratio of value of collateral to Loan Amount
  l.    Guarantor's Net worth
  m.    Ratio of Borrower’s Net worth to Loan Amount
  n.    TOL /TNW
  o.    Conduct of the account
  p.    Ratio of Credit summation to Sales
  q.    Variability in availment

V. MSME Manufacturing and Service (Renewal / Enhancement) - ` 10
   lakh and below

Parameters

  a.    Experience in Business/Fami
                        Business/Family Business
  b.    Credit History
  c.    Ownership of current residence
  d.    Ownership of Manufacturing unit/ Factory Premises/business
        premises
  e.    Distance of main premises of manufacturing unit/ Factory/
        business from the financing branch
  f.    Achievement of sales target in last year
  g.    Achievement of Profit target in last year
  h.    Ratio of cash profit / Projected surplus to repayment obligation
  i.    Ratio of Borrower’s Net worth to Loan Amount
  j.    TOL /TNW
  k.    Conduct of the account
  l.    Ratio of Credit summation to Sales
  m.    Variability in availment.

PNB Score Models (Retail):

VI. Doctors’ Loan Scheme

Parameters

  a.    Age
  b.    Education
  c.    Relation with PNB
                                   -32-
d.    Place of residence from the financing branch
  e.    Residence Ownership
  f.    Category of the borrower
  g.    Ratio of Net worth to loan amount
  h.    Work Experience
  i.    Repayment Period
  j.    Margin
  k.    Value
           lue of collateral to Loan Amount
  l.    Ratio of net monthly income to EMI
  m.    Guarantor's Net worth to Loan Amount

VII. Traders’ Loan Scheme (New cases)

Parameters

  a.    Experience in Business/Family Business
  b.    Ownership of Shop / Place of Business
  c.    Past relationship with th
                                the Bank
  d.    IT Assessee
  e.    Sales last 3 years
  f.    TOL /TNW
  g.    Ratio of Debtors to Sales
  h.    Profit position
  i.    Value of collateral to Loan Amount
  j.    Credit History
  k.    Guarantor's Net worth
  l.    Purpose of Loan

VIII. Traders’ Loan Scheme (Renewal Cases)

Parameters

  a.    Experience in Business/Fa
                        Business/Family Business
  b.    Ownership of Shop / Place of Business
  c.    Past relationship with the Bank
  d.    IT Assessee
  e.    Sales last 3 years
  f.    TOL /TNW
  g.    Ratio of Debtors to Sales
  h.    Profit Position
  i.    Value of collateral to Loan Amount
  j.    Conduct of the account
  k.    Ratio of Credit summation to Sal
                                      Sales
  l.    Whether dealing with other bank
  m.    Whether documents provided on time
  n.    Succession Plan

                                 *****************
                                  -33-
4.     GUIDELINES FOR USING SCORING MODEL
                      “PNB SCORE SME”


4.1   GENERAL GUIDELINES


  Before using the web based scoring model software, all the Branches
  are advised to take utmost care to ensure the following:

  1. The applicant fulfils all the eligibility criteria prescribed in the
     Circulars/ Book of instructions etc. and amendments made therein
     from time to time.


  2. The name of the borrower/co
                     borrower/co-borrower/
                                 borrower/ guarantor does not appear in
     CIBIL/ECGC /RBI/Other Bank’s/Financial Companies defaulter’s list.



  3. The borrower has no outstanding statutory dues like Income tax,
     Sales tax, Wealth tax, Service tax, PF, ESI etc., if so then reasons
     should be ascertained.


  4. The information provided by the borrower/co
                                       borrower/co-borrower/guarantor
                                                    borrower/guarantor in
     the application form has been entered in the score model by spokes on
     the basis of original documents provided and the same is to be
     checked/verified
       ecked/verified from the original documents, spot verification,
     personal visits, and market reports by the concerned officer at
     branches.

  5. All the parameters of applicable scoring models are evaluated and no
     parameter should be left out in the scoring model software “PNB
     SCORE-SME”.
              SME”. In other words, the attributes in each of the risk
     parameters are to be selected and clicked.


  6. Each      attribute     is   to     be    selected     after     careful
     evaluation/analysis/calculation on the basis of the guidelines given in
     the scoring model
                     del software so that the score truly reflects the credit
     risk attached to the borrower.




                                   -34-
7. Utmost care should be taken to ensure that the scoring has been done
   objectively and accurately as per the guidelines given in the manual of
   scoring model software.


8. In order to maintain the secrecy of the scoring models and prevent its
   misuse, it is advised not to hand over any exercise under scoring
   model to the borrower or any other banks and it should be marked
   and kept as confidential document
                              document.



9. Scoring sheets off the sanctioned loans/proposals at the branch
   with the signature of the maker & checker shall be kept with the
   original documents of the loan applicant.




                          ******************




                                 -35-
4.2 MSME Manufacturing Unit (New
                             New Case including takeover) - Above
       ` 10 lakh upto ` 50 lakh
                            akh

Constitution of the unit: The constitution of the unit indicates the risk
associated in financing the unit, their financial strength, type of
management etc. The constitution of the unit should be carefully selected
out of the available options
                          ns from the ““List” as given under.

   1   Cooperative Society
   2   HUF
   3   Proprietorship
   4   Individual
   5   Partnership
   6   Pvt. Ltd. Company
   7   Public Ltd Company
   8   Limited Liability Partnership
   9   Trust

Type of Unit/Project: One of the available options from “Existing Unit” or
the “New Project”
           roject” is to be selected. Option “Existing Unit” shall be selected
even if the proposal is new for us if the units are already established and
running. “New Project” is to be selected only when the project is yet to
commence the operations.

Promoter/Partner/Karta
                  er/Karta description
                               description: Age, education qualification,
experience of promoters have bearing on the working and the management
of the unit, therefore information of all the promoters which may be
Partners, Karta, Directors, Sole proprietor etc. have to be e
                                                            entered.
                                                              ntered. ‘Tab’
                                                                      ‘     key
is used to navigate through the fields and side bar is to be used to enter
details of partners if they are more than 4 in number.

Past Relationship with Bank
                         Bank:: The past relationship of the borrower with
the bank captures the loyalty of th
                                 thee applicant and the likely behavior of the
loan in the future. The relevance of this parameter lies in capturing the
conduct of the account and banking habit of the loan applicant.

 Out of the three options provided ““Deposit Customer”, “New  New Customer”
                                                                    Customer
and “Existing Borrower”,  ”, one radio button has to be clicked. In case of
Deposit customer, it shall ask for information like ““A/C Since”,”, wherein the
date of first deposit account (SF/CA/FD) opened either in the name of firm
or in the name of promoters (Proprie
                               (Proprietor,
                                       tor, Partner, Karta etc.) with the bank
may be provided. Similarly the average balance in last 6 months of all the
                                                             Average balance
promoter’s deposit accounts combined may be provided in ““Average
for last 6 months”.


                                       -36-
Credit history:: The past repayment behavior of aany
                                                   ny borrower is an indicator
of his future behavior. The credentials of the applicant can only be known if
he is our earlier borrower as his past data is available with us otherwise we
have to depend only on the market reports/other institutions feedback. T  This
problem was resolved with the establishment of credit bureaus like CIBIL
which provides the credit history of the borrower and it is converted by them
statistically into a score. The CIBIL score is a statistically significant
                          ow well the applicant will repay the debt/loan. The
predicative indicator of how
higher the score, the lower is the risk.

The Credit Information Report (CIRs) on the borrowers, co co-obligators,
                                                             obligators,
guarantors should be generated from CIBIL Database with CIBIL Score,
                                                              Score as
per the instructions contained in L&A Circular No. 138/09 dated
31.10.2009 & MISD Circular No. 8/11 dated 31.05.11.
                                               31.05.11.The
                                                         The minimum
score among the applicant/s, partners, directors, guarantors should be
considered and based on the information collected by the appraiser
                                                             appraiser,
enter “credit history” by selecting one out of the following options
from the List:-

 i.    CIBIL score below 600 or no CIBIL data available but availed loan
       from the banks/institutions and account was NPA and adjusted
       through compromise/write
               compromise/write-off.

 ii.   CIBIL score
                re between 600 and 659 or No CIBIL data available and
       account became NPA but fully adjusted without any loss.

iii.   CIBIL score between 660 and 719 or No CIBIL data available but
       availed earlier loan/loans from us/any bank and account remained
       irregular more thanan 2 times but the account was not NPA and the
       account was fully adjusted without any loss to the bank.

iv.    CIBIL score between 720 and 799 or No CIBIL data available but
       availed earlier loan/loans from us/any bank and account remained
       occasionally (one to two
                              o times) irregular but repaid all the installments
       within the stipulated period.

 v.    CIBIL score between 800 and 900 or No CIBIL data available but
       availed Earlier loan/loans and repaid all the installments and/interest
       within the stipulated period.

vi.    No CIBILIL data available and availed no loan/loans from any financial
       institution.


                                      -37-
Ownership of current residence
                          residence: The relevance of the parameter lies in
capturing stability of stay at the current place and likelihood to stay at the
same place in future, which a  also
                                lso reflects the financial strength of the loan
applicant.

The residence ownership refers to ownership of the present house occupied
by the key Promoter/ Managing Partner/Managing Director Director.. Thus in
case of partnership concerns and companies the ““Managing        Managing
Partner/Managing Director” is selected among the partners/directors with
reasonable care on the basis of stake involved.

 After verification of residence ownership of the key Promoter/ Managing
Partner/Managing Director from the supporting documents the
appropriate
   propriate risk attribute may be selected from the drop box.




                Risk Parameter      Risk Attributes

                Ownership      of Owned by Self/Spouse
                current residence Owned by parents
                                  Rented and others


The verification may be done through:
 i)    Title deed of the proper
                         property.
 ii)   Rent agreement.
 iii)  Electricity bill/Water bill or any other document acceptable to the
       Bank.
 iv)   Spot verification and report taken from the neighbors.

Ownership of the Manufacturing Unit/Factory PremisesPremises: The relevance of
the parameter lies in capturing sta
                                 stability
                                    bility of the business at the current place
and likelihood to keep working at the same place in future also. This
parameter also reflects the financial strength of the loan applicant.

The parameter captures the ownership of the unit. In case of multiple u
                                                                      units
ownership of the main unit is to be considered. If the owner ship of
main unit is of main Promoter/Managing Partner/Managing Director,
the risk attribute “Owned by self/spouse” is to be selected and if the
owner ship of main unit is of Other Promoter/
                                         Promoter/Other
                                                    Other Partner/Other
Director, the risk attribute “Owned by other family member” is to be
selected.


                                     -38-
After verification of ownership of Manufacturing unit/ Factory Premises from
suitable documents the appropriate risk attribute may be selected from the
drop box.


         Risk               Risk Attributes
         Parameter

         Ownership of       Leased accommodation with lease period
         Manufacturing      covering loan duration
         unit/ Business     Owned by other family member
         Premises           Owned by self/spouse
                            Owned by the firm/company
                            Rented/Leased with shshorter
                                                   orter period but
                            with a clause to renew till the currency
                            of the loan

The verification may be done through:
     I. Title deed of the manufacturing unit.
    II. Rent agreement/Lease deed.
   III. Balance Sheet.
   IV. Electricity bill/Water bill or any other document acceptabl
                                                          acceptable to the
        Bank.
    V. Spot verification and report taken from the neighbors

Distance of the factory from the financing branch
                                                branch: The relevance of this
parameter lies in better monitoring of the loan account and reducing cost of
monitoring through easy security veri
                                  verification.

Distance in Kilometers from the Branch to the place of manufacturing
unit/factory premises shall be mentioned here (After making spot
verification by the branch official) and in case it is more than 25 km it
shall also recorded whether it is localocated
                                          ted in the same city or different
city centre.

In case the manufacturing unit is located at more than one place, the
distance of the main unit from the financing branch should be
considered.

Facility Required: The information regarding applicable rates of interest for
the facilities applied (In case two different facilities of working capital
facilities are attracting different rate of interests, the weighted average of the
interest rates be entered) and repayment period of term loan in months
under the proposal
                 posal should be entered. It has to be ensured that at the
beginning of scoring, the total amount of all the proposed term loans should

                                      -39-
be entered in rupees in the term loan box and similarly total of all working
capital facilities and non fund based limits in rupees should be entered in
the respected boxes.

Value of the fixed assets to be financed
                                    financed: It is the total cost of the assets
against which term loan from the bank has been requested, like the cost of
land, estimates of construction of building, cost o off plant and machinery to
be installed etc. It should be greater than amount of Term Loan entered
                          option.. The amount should be entered in rupees
under “Facility required” option
only.

Marketing of the Product:: Market analysis is crucial for providing the
information
      ation needed for making investment decisions and especially for
securing loan. Therefore to analyze the market of the product, the market
arrangements of the product to be manufactured are to be studied properly
and one out of the given options has to be s
                                           selected.
                                             elected. The options are:-
                                                                  are:

   a) Confirmed orders in hand from more than one buyer

   b) Confirmed orders in hand from one buyer only

   c) Informal tie up arrangements
   d) No marketing arrangements but product freely tradable

   e) Others

   f) Tie up arrangement
                    ment in operation with terms and condition properly
      defined with more than one buyer

   g) Tie up arrangement in operation with terms and condition properly
      defined with one buyer only.

Technology: The selection be made according to the technology used in
manufacturing process is imported or available in India.

Working Capital cycle: The working capital cycle of the unit in months, as
accepted by the bank should be entered in the space provided for.

Normally financing is made as per Nayak Committee recomm
                                                       recommendations
                                                               endations as
such working capital cycle should be taken as 3 months i.e. equivalent to
25% of accepted Projected Sales. In case financing is made under traditional
method, the projected & accepted working capital cycle is taken.




                                     -40-
Whether borrower agreed fo   for CGTMSE cover: If the CGTMSE cover is
available, “YES” option should be selected otherwise select option “NO”.

Accepted Projected profit after tax (PAT)
                                    (PAT): It is the PAT (profit after tax) in
rupees as projected and accepted by the bank in the financial yea    year in
which the borrowing unit has full year of operations.

Accepted Projected Cash profit
                            profit: It is PAT (Profit after tax) plus any all
other cash accrual items i.e., depreciation, preliminary expenses written off
during the year etc.

Guarantor Details: The system will allow entering guarantor details
only if CGTMSE cover is not available

Third party guarantors have a contractual obligation to act as a substitute
for the primary borrower, if he defaults on his payment obligation. Thus the
guarantor has to fulfill
                     lfill the obligation of defaulting borrower. The relevance
of this parameter lies in risk mitigation in case the borrower defaults.

Net worth of guarantor = Total assets of the guarantor – Total liabilities of
the guarantor

The Net worth of guarantor/s iis verified through:

   a. Documents supporting the statement of assets and liability of the
      Guarantor.

   b. Spot verification by the branch officer.

   c. Latest CR/s of the guarantor/s.

Name of guarantors including Directors as guarantors, Net worth in rupees,
                                                                     rupees
Date of CR, PAN number, Value of IP/liquid security offered (if any) as
collateral security by guarantor/s. have to be entered. ‘Tab’ key is used to
navigate through the fields and side bar is to be used to enter details of
guarantors if they are more than 4 in n
                                      number.

Details of Liabilities of firm/company
                              firm/company: All the liabilities of the
concern/firm/company should be ascertained from the balance sheets and
incorporated in the relevant table in rupees. It should be ensured that all
the items of Liabilities are filled in & all statutory liabilities and all
outstanding such as taxes payable, outstanding against immovable
properties have been incorporated in the details of Liabilities.




                                     -41-
Details Assets of the firm/company
                         firm/company: This net of assets and liabilities of
any firm/company
             mpany captures the financial strength of the borrower vis  vis-à-vis
the loan amount and Collateral serves to control the borrower’s risk taking
propensity and increase recoveries under default. These are assets that the
lender seizes and sells if the borrower fails to perform his debt obligation. All
the    movable    and      Immovable     assets    in   the    name     of    the
concern/firm/company as shown in their balance sheet after due
verification (as advised in Book of Instructions on Loans and Advances)
should be incorporated in thehe model. Similarly the liquid assets of the firm/
                                                                           firm
company should be entered in the relevant table of the model by navigating
as above. The amount is to be entered in rupees only.

The system will allow ticking collateral security only if CGTMSE cover
is not available

Before pressing the submit button, the user should ensure that all the
entries/selections are made correctly. If not, press previous to modify
the same. Then press “submit” to generate the score.

Radio button for YES/NO has been provided to sel  select
                                                     ect option “Has the unit
has been rated under er PNB TRAC” If Yes is selected then score is required to
be filled at appropriate space.

In case certain changes are warranted due to the change in the input
received at a later stage, such modifications can be m
                                                     made
                                                       ade by pressing the
modification button in the beginning and then selecting the Score Card
number to be modified for carrying out the necessary changes and
proceeding as above.




                               ******************




                                      -42-
4.3 MSME Service Unit ((NewNew Case including takeover) -
    Above ` 10 lakh upto ` 50 lakh

Constitution of the unit: The constitution of the unit indicates the risk
associated in financing the unit, their financial strength, type of
management etc. The constitution of the unit should be carefully selected
out of the
         he available options from the ““List” as given under, as the
constitution once selected cannot be modified subsequently:
                                               subsequently:-

   1   Cooperative Society
   2   HUF
   3   Proprietorship
   4   Individual
   5   Partnership
   6   Pvt. Ltd. Company
   7   Public Ltd Company
   8   Limited Liability Partnership
   9   Trust

Type of Unit/Project: One of the available options from “Existing Unit” or
the “New Project” is to be selected. Option “Existing Unit” shall be selected
even if the proposal is new for us if the units are already established and
running. “New Project” is to be selected only when the project is yet to
commence the operations.

Promoter/Partner/Karta description
                               description: Age, education qualification,
experience of promoters have bearing on the working and the management
of the unit, therefore information of all tthe  he promoters which may be
Partners, Karta, Directors, Sole proprietor etc. have to be entered. ‘‘Tab’ key
is used to navigate through the fields and side bar is to be used to enter
details of partners if they are more than 4 in number.

Past Relationship with
                     th Bank
                         Bank:: The past relationship of the borrower with
the bank captures the loyalty of the applicant and the likely behavior of the
loan in the future. The relevance of this parameter lies in capturing the
conduct of the account and banking habit of the loa
                                                loan applicant.

 Out of the three options provided ““Deposit Customer”, “New New Customer”
                                                                  Customer
and “Existing Borrower”,  ”, one radio button has to be clicked. In case of
Deposit customer, it shall ask for information like ““A/C Since”,
                                                               ”, wherein the
date of first deposit account
                        count (SF/CA/FD) opened either in the name of firm
or in the name of promoters (Proprietor, Partner, Karta etc.) with the bank
may be provided. Similarly the average balance in last 6 months of all the
                                                            Average balance
promoter’s deposit accounts combined may be provided iin “Average
for last 6 months”.
                                     -43-
Credit history:: The past repayment behavior of any borrower is an indicator
of his future behavior. The credentials of the applicant can only be known if
he is our earlier borrower as his past data is available with u
                                                              uss otherwise we
have to depend only on the market reports/other institutions feedback. This
problem was resolved with the establishment of credit bureaus like CIBIL
which provides the credit history of the borrower and it is converted by them
statistically into a score. The CIBIL score is a statistically significant
predicative indicator of how well the applicant will repay the debt/loan. The
higher the score, the lower is the risk.

The Credit Information Report (CIRs) on the borrowers, co co-oblig
                                                             obligators,
guarantors should be generated from CIBIL Database with CIBIL Score,
                                                              Score as
per the instructions contained in L&A Circular No. 138/09 dated
31.10.2009 & MISD Circular No. 8/11 dated 31.05.11. The minimum
score among the applicant/s, partners, directors, guarantors should be
considered and based on the information collected by the appraiser,
enter “credit history” by selecting one out of the following options
from the List:-

  i.    CIBIL score below 600 or no CIBIL data available but availed loan
       from the banks/institutions
                     ks/institutions and account was NPA and adjusted
       through compromise/write
               compromise/write-off.

 ii.   CIBIL score between 600 and 659 or No CIBIL data available and
       account became NPA but fully adjusted without any loss.

iii.   CIBIL score between 660 and 719 or No CIBIL data availab available but
       availed earlier loan/loans from us/any bank and account remained
       irregular more than 2 times but the account was not NPA and the
       account was fully adjusted without any loss to the bank.
iv.    CIBIL score between 720 and 799 or No CIBIL data available but
       availed Earlier loan/loans from us/any bank and account remained
       occasionally

 v.    (one to two times)irregular but repaid all the installments within the
       stipulated period .

vi.    CIBIL score between 800 and 900 or No CIBIL data available but
       availed Earlier loan/loans
                           /loans and repaid all the installments and/interest
       within the stipulated period.

vii.   No CIBIL data available and availed no loan/loans from any financial
       institution.
                                     -44-
Ownership of current residence
                          residence: The relevance of the parameter lies in
capturing stability of stay at the current place and likelihood to stay at the
same place in future, which also reflects the financial strength of the loan
applicant.

The residence ownership refers to ownership of the present house occupied
by the key Promoter/ Managing Par    Partner/Managing Director.. Thus in
case of partnership concerns and companies the ““Managing       Managing
Partner/Managing Director” is selected among the partners/directors with
reasonable care on the basis of stake involved.

 After verification of residence ownership of the key Promoter/ Managing
Partner/Managing Director from the supporting documents the
appropriate risk attribute may be selected from the drop box.



               Risk Parameter      Risk Attributes

               Ownership      of Owned by Self/Spouse
               current residence Owned by parents
                                 Rented and others


The verification may be done through:
 i)    Title deed of the property.
 ii)   Rent agreement.
 iii)  Electricity bill/Water bill or any other document acceptable to the
       Bank.
 iv)   Spot verification and report taken from the neighbors.

Ownership of the Business ness Premises
                                Premises: The parameter captures the
ownership of the business premises. In case of multiple units ownership of
the main unit is to be considered. If the owner ship of main unit is of
main promoter/managing partner/managing director the risk attribute
“Owned by self/spouse” is to be selected and if the owner ship of main
unit is of other promoter/other partner/other director the risk
attribute “Owned by other family member” is to be selected.




                                    -45-
After verification of ownership of Business Premises from suitable
documents the appropriate risk attribute may be selected from the drop box.


               Risk          Risk Attributes
            Parameter

          Ownership of       Leased accommodation with lease period
          Manufacturing      covering loan duration
          unit/ Business     Owned by other family mmember
          Premises           Owned by self/spouse
                             Owned by the firm/company
                             Rented/Leased with shorter period but
                             with a clause to renew till the currency
                             of the loan

The verification may be done through:
     I. Title deed of the manufacturing unit.
    II. Rent agreement/Lease se deed.
   III. Balance Sheet.
   IV. Electricity bill/Water bill or any other document acceptable to the
        Bank.
    V. Spot verification and report taken from the neighbors

Distance of the Business premises from the financing branch       branch: The
relevance of this parameter lies in bet
                                    better
                                        ter monitoring of the loan account and
reducing cost of monitoring through easy security verification.

Distance in Kilometers from the Branch to the place of business premises
shall be mentioned here (After making spot verification by the branch
official) and in case it is more than 25 km it shall also recorded whether
it is located in the same city or different city centre.

In case the business unit is located at more than one place, the distance of
the main unit from the financing branch should be conside
                                                      considered.

Facility Required: The information regarding applicable rates of interest for
the facilities applied (In case two different facilities of working capital
facilities are attracting different rate of interests, the weighted average of the
interest rates be entered) and repayment period of term loan in months
under the proposal should be entered. It has to be ensured that at the
beginning of scoring, the total amount of all the proposed term loans should
be entered in rupees in the term loan box and simil  similarly
                                                           arly total of all working
capital facilities and non fund based limits in rupees should be entered in
the respected boxes.

                                       -46-
Value of Equipment to be financed
                         financed: It is the total cost of the assets against
which term loan from the bank has been requested, like cost of
equipment to be purchased etc. It should be greater than amount of Term
                                         option.. The amount should be
Loan entered under “Facility required” option
entered in rupees only.

Income Tax Assessee:: Amount of Income Tax paid by a Firm/company or
the promoters indicates
                 ndicates the financial strength of the Firm/company or the
promoters. In case the unit is new and if the promoters are income tax
assesses the option ”YES” should be selected otherwise option “No” be
selected. In case of existing unit who is not availing a
                                                       any
                                                         ny facility from us, the
income tax paid by the firm /company in the last year should be considered
for selecting this option. On selecting the “YES” option the system asks for
the actual income tax paid, which should be filled in rupees only.

Whether borrower
               ower agreed for CGTMSE cover cover: If the CGTMSE cover is
available, “YES” option should be selected otherwise select option “NO”.

Accepted Projected profit after tax (PAT)
                                    (PAT): It is the PAT (profit after tax) in
rupees as projected and accepted by the bank in the financial year in
which the borrowing unit has full year of operations.

Accepted Projected Cash profit
                            profit: It is PAT (Profit after tax) plus any all
other cash accrual items i.e., depreciation, preliminary expenses written off
during the year etc.

Guarantor Details:: The system will allow entering guarantor details
only if CGTMSE cover is not available.

Third party guarantors have a contractual obligation to act as a substitute
for the primary borrower, if he defaults on his payment obligation. Thus the
guarantor
     antor has to fulfill the obligation of defaulting borrower. The relevance
of this parameter lies in risk mitigation in case the borrower defaults.

Net worth of guarantor = Total assets of the guarantor – Total liabilities of
the guarantor

The Net worth off guarantor/s is verified through:

   a. Documents supporting the statement of assets and liability of the
      Guarantor.

   b. Spot verification by the branch officer.

   c. Latest CR/s of the guarantor/s.


                                      -47-
Name of guarantors including Directors as guarantors, Net worth in rupees,
                                                                     r
Date of CR, PAN number, Value of IP/liquid security offered (if any) as
collateral security by guarantor/s. have to be entered. ‘Tab’ key is used to
navigate through the fields and side bar is to be used to enter details of
guarantors if they are more
                         ore than 4 in number.

Details of Liabilities of firm/company
                              firm/company: All the liabilities of the
concern/firm/company should be ascertained from the balance sheets and
incorporated in the relevant table in rupees. It should be ensured that all
the items of Liabilities
                     ties are filled in & all statutory liabilities and all
outstanding such as taxes payable, outstanding against immovable
properties have been incorporated in the details of Liabilities.

Details Assets of the firm/company
                         firm/company: This net of assets and liabilities of
any firm/company captures the financial strength of the borrower vis    vis-à-vis
the loan amount and Collateral serves to control the borrower’s risk taking
propensity and increase recoveries under default. These are assets that the
lender seizes and sells if the borrower fails to perform his debt obligation. All
the    movable     and     Immovable     assets    in   the    name     of    the
concern/firm/company as shown in their balance sheet after due
verification (as advised in Book of Instructions on Loans and Advances)
should be incorporated
               orporated in the model. Similarly the liquid assets of the firm/
                                                                           firm
company should be entered in the relevant table of the model by navigating
as above. The amount is to be entered in rupees only.

The system will allow ticking collateral security only if CGTM
                                                          CGTMSE cover
is not available.

Before pressing the submit button, the user should ensure that all the
entries/selections are made correctly. If not, press previous to modify
the same. Then press “submit” to generate the score.

Radio button for YES/NO has been provided to select option “Has the unit
has been rated underr PNB TRAC” If Yes is selected then score is required to
be filled at appropriate space.

In case certain changes are warranted due to the change in the input
received at a later stage, such modific
                                modifications
                                        ations can be made by pressing the
modification button in the beginning and then selecting the Score Card
number to be modified for carrying out the necessary changes and
proceeding as above.



                               ******************

                                      -48-
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