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

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

MANUAL SCORING MODELS MSME ADVANCES “PNB SCORE SME” -i- (For Internal Circulation only) MANUAL ON SCORING MODELS FOR MSME ADVANCES “PNB SCORE SME” (For Internal Circulation only) SCORING MODELS MSME ADVANCES “PNB SCORE SME”

S.NO 1. “PNB SCORE SME” 2. OPERATING GUIDELINES FOR USING CREDIT SCORING MODEL SOFTWARE “PNB SCORE SME” 3. CODE OF BANK’S COMMITMENT TO MICRO AND SMALL ENTERPRISES (MSEs) RATING PARAMETERS 4. GUIDELINES FOR USING SCORING MODEL “PNB SCORE SME” : 4.1 GENERAL GUIDELINES 4.2 MSME MANUFACTURING UNIT (NEW CASE INCLUDING TAKEOVER) UPTO ` 50 LAKH.

4.3 MSME SERVICE UNIT (NEW CASE INCLUDING TAKEOVER) - ABOVE LAKH. 4.4 MSME MANUFACTURING AND SERVICE UNIT (NEW CASES INCLUDING TAKEOVER) LAKH AND BELOW.

4.5 MSME MANUFACTURING AND SERVICE UNIT (RENEWAL / ENHANCEMENT) LAKH UPTO ` 50 LAKH. 4.6 MSME MANUFACTURING AND SERVICE UNIT (RENEWAL / ENHANCEMENT) BELOW. -ii- CONTENTS PAGE NO. “PNB SCORE SME” OPERATING GUIDELINES FOR USING CREDIT SCORING MODEL SOFTWARE “PNB SCORE- CODE OF BANK’S COMMITMENT TO MICRO AND SMALL ENTERPRISES (MSEs) - SHARING OF RATING PARAMETERS GUIDELINES FOR USING SCORING MODEL “PNB SCORE SME” : GENERAL GUIDELINES MSME MANUFACTURING UNIT (NEW CASE INCLUDING TAKEOVER) - ABOVE ` 10 LAKH UNIT (NEW CASE INCLUDING ABOVE ` 10 LAKH UPTO ` 50 MSME MANUFACTURING AND SERVICE UNIT (NEW CASES INCLUDING TAKEOVER ` 10 AND BELOW.

MSME MANUFACTURING AND SERVICE UNIT (RENEWAL / ENHANCEMENT) - ABOVE ` 10 50 LAKH. MSME MANUFACTURING AND SERVICE UNIT (RENEWAL / ENHANCEMENT ` 10 LAKH AND PAGE NO. 1-3 4-28 29-33 34-65 34-35 36-42 43-48 49-54 5-60 61-65

1. In order to supplement the pre comprehensive structured approach for evaluating loan proposal (New /Renewal/Enhancement/Take over) under /Service) category up to limits of five Credit Scoring Models :- I. MSME Manufacturing (New Cases including takeover) 10 lakh upto ` 50 lakh. II. MSME Service (New Cases including takeover) upto ` 50 lakh.

III. MSME Manufacturing an takeover ` 10 lakh and below. IV. MSME Manufacturing and Service (Renewal / Enhancement) Above ` 10 lakh upto V. MSME Manufacturing and Service (Renewal / Enhancement) 10 lakh and below.

These Credit Scoring 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. The various MSME schemes/ activities covered are as under: MSME (Manufacturing) MSME (Service) Sarthak Udhami SME Sahyog Scheme PNB Vikas Udyami PNB Pragti Udyami PNB Artisan Credit Card PNB Laghu Udhami Credit Card Loans for setting up Industrial Estates PNB Kushal Udyami PNB Vikas Udyami Financing Industry related small enterprises self employed -1- “PNB SCORE SME” In order to supplement the pre-sanction appraisal process and to adopt a comprehensive structured approach for evaluating loan proposal (New /Renewal/Enhancement/Take over) under MSME (Manufacturing category up to limits of ` 50 lakh, bank has developed following MSME Manufacturing (New Cases including takeover) - 50 lakh.

MSME Service (New Cases including takeover) - Above ` MSME Manufacturing and Service (New Cases including 10 lakh and below. MSME Manufacturing and Service (Renewal / Enhancement) 10 lakh upto ` 50 lakh. 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 The characteristics of various MSME (Manufacturing/Service) lending schemes /activities have been put together to arrive at risk profile of MSME gment. The various MSME schemes/ activities covered are as under: MSME (Manufacturing) MSME (Service) Sarthak Udhami Training Institutes Education Institutions Trading in new medical instruments Nursing homes/Clinics X-Ray Clinic Card Legal Services ing up Industrial Estates Advertising Agency Advances to Transport Sector Advances to professionals & Financing Industry related small enterprises self employed Seed grading Services Courier services Architecture Designers Events Management Catering Retail Trade sanction appraisal process and to adopt a comprehensive structured approach for evaluating loan proposal (New (Manufacturing 50 lakh, bank has developed following - Above ` ` 10 lakh d Service (New Cases including MSME Manufacturing and Service (Renewal / Enhancement) - MSME Manufacturing and Service (Renewal / Enhancement) - ` models have been placed on the server of the bank and are available on Finacle home page as “PNB SCORE The characteristics of various MSME (Manufacturing/Service) lending schemes /activities have been put together to arrive at risk profile of MSME gment.

The various MSME schemes/ activities covered are as under: MSME (Manufacturing) MSME (Service) Education Institutions Trading in new medical Nursing homes/Clinics Advances to Transport Sector Advances to professionals & Seed grading Services chitecture Designers

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 activities like Retail trade (New cases & Renewal/Enhancement), advances to Qualified Medical Practitioners be scored under this model. Exempted Categories: Advances to 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 developed. For such activities the guidelines for credit risk rating issued by IRMD (Systems & Models), HO 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 of the loan application.

The score generated by models will facilitate the sanction & rejection of the loan application as per following scoring / coloring scheme: S. No Score Range 1 Up to 40 2 Above 40 up to 50 3 Above 50 up to 75 4 Above 75 Now the use of scoring model mandatory for MSME loans up to mentioned as above and such proposals will not be rated through PNB Trac. -2- Auto repair and service Center Desktop Publishing Xeroxing Typing Centers Industrial Photography Internet browsing se 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 (New cases & Renewal/Enhancement), advances Qualified Medical Practitioners & Gramin Chikitsak shall continue to Advances to Transport Sector (including loan for taxi, station wagon etc.) and documentary films (on themes like family planning, social forestry, energy conservation and commercial advertising) as the models for these activities are yet to be 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 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:- Color Scheme Implication Red Zone Application cannot be considered for sanction. Yellow Zone Application can be considered by next higher Authority for sanction with proper justifications. Green Zone Application can be considered for sanction at branches as per their vested loaning powers. Blue Zone Now the use of scoring model “PNB SCORE SME” / “PNB SCORE” mandatory for MSME loans up to ` 50 Lakh (except loans to the activities such proposals will not be rated through PNB Trac.

Auto repair and service Center Industrial Photography Internet browsing setting up Tailoring, boutique etc Beauty Parlors & crèches In addition to above models there is another scoring model of Retail Assets and MSME (New cases & Renewal/Enhancement), advances shall continue to ng loan for taxi, station wagon etc.) and documentary films (on themes like family planning, social forestry, energy conservation and commercial advertising) models for these activities are yet to be ivities the guidelines for credit risk rating issued by 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 The score generated by models will facilitate the sanction & rejection of the Application cannot be considered for sanction.

Application can be considered by next higher Authority for sanction with proper Application can be considered for sanction at branches as per sted loaning powers.

“PNB SCORE SME” / “PNB SCORE” is 50 Lakh (except loans to the activities such proposals will not be rated through PNB Trac.

The mapping of scores of the of PNB Trac is as under:- S.No Score as per Scoring Model for MSME 1 0-30 2 Above 30 3 Above 40 4 Above 50 5 Above 60 6 Above 70 7 Above 80 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 calculations in credit risk rating are good for measuring the risk and not for anticipating it.

There is a Maker–Checker concept in “PNB SCORE SME” meaning thereby that maker (appraising official) will enter the desired data 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 and same must be assigned Details’ in all the eligible MSME advances (Manufacturing /Service) sanctioned up to the limit of Rs.50 lakh. -3- The mapping of scores of the five MSME models with the risk rating category Score as per Scoring Model for Rating Category as per PNB Trac 30 D Above 30-40 C Above 40-50 B Above 50-60 BB Above 60-70 A Above 70-80 AA Above 80 AAA On the basis of above table, applicable interest rate would be ascertained for 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 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 must be assigned in CBS in “Free Text 6” field in ‘V Details’ in all the eligible MSME advances (Manufacturing /Service) sanctioned up to the limit of Rs.50 lakh. * * models with the risk rating category Rating Category as On the basis of above table, applicable interest rate would be ascertained for It may be noted that scoring models supplement the credit appraisal; it is as the mathematical formulae/ calculations in credit risk rating are good for measuring the risk and not for Checker concept in “PNB SCORE SME” meaning thereby 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 The Score card Id generated by the model in the score sheet shall be noted field in ‘V – MIS Details’ in all the eligible MSME advances (Manufacturing /Service)

2. OPERATING GUIDELINES FOR USING CREDIT SCORING 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 Jinitiator 1.3.1.22 that will be automatically downloaded from the server. It may take 2 to 5 minutes. provided to branches/downloaded fro Repository->Downloads->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 help -4- OPERATING GUIDELINES FOR USING G MODEL SOFTWARE “PNB SCORE SME STEPS FOR RUNNING THE APPLICATION “PNB SCORE SME” This software can be accessed through Finacle home page using the link For the first time it may prompt you to install the compatible that will be automatically downloaded from the server.

It may take 2 to 5 minutes. It can be installed directly from the CD /downloaded from PNB eCirculars->Knowledge >Oracle Jinit.

of difficulty in accessing the application please check whether you are able to ping the CSM server using the following command on Run In case of No reply from server you may call HO: ITD (011-23356506 G MODEL SOFTWARE “PNB SCORE SME” This software can be accessed through Finacle home page using the link For the first time it may prompt you to install the compatible Oracle that will be automatically downloaded from the server. directly from the CD Knowledge of difficulty in accessing the application please check whether you are able to ping the CSM server using the following command on Run 23356506) for

2 This application can also be accessible through internet browser “Internet explorer” using the following U http://10.192.15.201/forms/frmservlet?config=pnbsme After you access the application the following Login Screen will appear: Login Screen 3 Creation of Shortcut for PNB SCORE -5- ation can also be accessible through internet browser “Internet explorer” using the following URL: http://10.192.15.201/forms/frmservlet?config=pnbsme After you access the application the following Login Screen will f Shortcut for PNB SCORE SME: ation can also be accessible through internet browser After you access the application the following Login Screen will

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