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

In your desktop Right click from mouse You will get the following screen. -6- In your desktop Right click from mouse-> click New -> Shortcut You will get the following screen.

Click Browse & then Click C Drive (C:): Click Program files -7- Click C Drive (C:):

Then click Internet Explorer Then click IExplore After the …….\IExplore.exe” give a space then type the following url (address) http://10.192.15.201/forms/frmservlet?config=pnbsme -8- lorer IExplore.exe” give a space then type the following url http://10.192.15.201/forms/frmservlet?config=pnbsme IExplore.exe” give a space then type the following url

Click Next Type name (PNB Score SME) and then Finish SME -9- Type name (PNB Score SME) and then Finish SME

Double Click the PNB Score SME shortcut for accessing the application 4 Operational Instruction: Enter the “User Name” and “ click on the “Login” button or si to proceed. 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 Offices and Circle Offices in turn provide for Branches. If the “User Name” and “Password” are found correct, it will show the Main screen as under: -10- Click the PNB Score SME shortcut for accessing the application Operational Instruction: and “Password” in the login Screen and then ” button or simply press “Enter” on your keyboard 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 fices in turn provide ID No./Name and Password If the “User Name” and “Password” are found correct, it will show the Main screen as under: Click the PNB Score SME shortcut for accessing the application in the login Screen and then mply press “Enter” on your keyboard roceed. System will check for correct combination of “User Name” and “Password”. The “User Name” will be the PF Number of the users and for Circle Name and Password If the “User Name” and “Password” are found correct, it

The screen will show the Main Menus horizontally The Main Menu options are as 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 -11- The screen will show the Main Menus horizontally on the top of screen The Main Menu options are as under: ” 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 displayed as under: User Master of screen. ” has to be performed at HO and Circle Offices and as such the option is available to HO and Circle Office users

On selecting user creation following screen will be displayed: a) User Master menu will users at the Branches, who will work on this MSME Score Model -12- user creation following screen will be displayed: User Master menu will be used by the Circle Offices to add ranches, who will work on this MSME Score Model to add ranches, who will work on this MSME Score Model.

b) Following Buttons are available on this page: i Insert: This Button is to be used ii Update: This button is to be used for iii Search: This button is to be used for iv Save: This butto v Cancel: This button is to be used for vi Exit: This Button is to be used for c) After selecting appropriate button the following details are to be filled on this page 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. Ø Super User: Users at HO level Ø Administrator: Users at Circles/ branches d) The Credit Scoring Models are based on Makers the officers/Dy. Manager/Manager at hub/branches processing the loan applications shall b authority i.e., Manager/Senior Manager & above shall be the “Authorizing Official".

e) The Circle Offices shall ensure that sufficient user the Branches, so that there is always at least one maker 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 branch. 4.2 “Transaction” menu is scoring is to be done actually. -13- ns are available on this page: This Button is to be used for Adding a New Record. This button is to be used for Modifying Record. This button is to be used for Searching Record. This button is to be used for Saving the Record.

This button is to be used for Cancelling the Entry. This Button is to be used for Exiting from the Form c) After selecting appropriate button the following details are to be filled ge for Creation /Modification of User.

Branch Code. Can be entered by (ctrl +H) also. Password. These are Alphanumeric (Six characters long). There are three types of users. Normal User: Users at branches. (Maker) Super User: Users at HO level Administrator: Users at Circles/ branches (Checker). The Credit Scoring Models are based on Makers-Checkers concept. All the officers/Dy. Manager/Manager at hub/branches processing the loan applications shall be the “Normal User”. The sanctioning authority i.e., Manager/Senior Manager & above shall be the .

The Circle Offices shall ensure that sufficient user ID’s are created at so that there is always at least one maker checker in the branches.

This may be done by way of creating multiple for the maker and checker in the Branches subject to the condition that the making and checking officials are not the same in menu is to be used by the branch user, where the actually. a New Record. the Entry. from the Form c) After selecting appropriate button the following details are to be filled Password. These are Alphanumeric (Six characters long). Checkers concept. All the officers/Dy. Manager/Manager at hub/branches processing the The sanctioning authority i.e., Manager/Senior Manager & above shall be the ’s are created at and one checker in the branches.

This may be done by way of creating multiple for the maker and checker in the Branches subject to the condition that the making and checking officials are not the same in a by the branch user, where the

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) a) The available option for feeding of deta “Scheme Selection”, which opens as under: -14- This is selected by left clicking the “Transaction” option at Main Menu Here, entries will be made by Normal user (i.e., the maker). The available option for feeding of details for credit scoring is “Scheme Selection”, which opens as under:- This is selected by left clicking the “Transaction” option at Main Menu ils for credit scoring is

Select the “Industry type” Industry” options using the button provided for the purpose.

For selecting the Activity/scheme you have to press “List” bu 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 “Whether our existing Borrower: button as under: Whether our existing Borrowe Further selection “New Unit/ Business” or “Takeover” whether the unit is new unit/business or take over case. In case of renewal/ enhancement of f 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 MSME accounts have be categories for the purpose of scoring: 1. MSME Manufacturing (New Case including takeover) lakh up to ` 50 lakh. -15- Industry type” “Manufacturing Unit” or “ ” options using the button provided for the purpose. For selecting the Activity/scheme you have to press “List” button and all schemes are shown in the window and you have to select the Activity/scheme from window and press button OK.

considered for the first time by the branch, then “Whether our existing Borrower: choose option “No” using Whether our existing Borrower Yes No.

“New Unit/ Business” or “Takeover” shall be made whether the unit is new unit/business or take over case. case of renewal/ enhancement of facility, the option “Yes The loan amount of the proposal under consideration shall be entered facility wise & amount for facilities has to be entered. Lastly press to move to next screen. SME accounts have been segregated in following categories for the purpose of scoring:- MSME Manufacturing (New Case including takeover) - Above 50 lakh.

” or “Service ” options using the button provided for the purpose. For tton and all schemes are shown in the window and you have to select the for the first time by the branch, then using radio Yes No.

shall be made Yes” is to be The loan amount of the proposal under consideration shall be entered facility wise & amount for facilities has to be entered. Lastly press en segregated in following Above ` 10

2. MSME Service (New Case including takeover) to ` 50 lakh. 3. MSME Manufacturing and S ` 10 lakh and below. 4. MSME Manufacturing and Service (Renewal / Enhancement) Above ` 10 lakh upto 5. MSME Manufacturing and Service (Renewal / Enhancement) lakh and below. For each category there i d) Then the form/screen pertaining One of the screens (for scoring model upto ` 50 lakh) is placed Other models may be attem of the models is similar. e) Information if required to be filled in 5 different numbers 1,2,3,4 and 5, and the last page gives us the score. The -16- MSME Service (New Case including takeover) - Above ` 10 lakh up MSME Manufacturing and Service (New Cases including takeover) 10 lakh and below.

MSME Manufacturing and Service (Renewal / Enhancement) 10 lakh upto ` 50 lakh. MSME Manufacturing and Service (Renewal / Enhancement) there is a separate scoring model. pertaining to that scoring model opens. screens (for scoring model- service sector above ` placed for reference as under: Other models may be attempted on the same lines as the functionality of the models is similar. 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 10 lakh up ervice (New Cases including takeover) - MSME Manufacturing and Service (Renewal / Enhancement) - MSME Manufacturing and Service (Renewal / Enhancement ` 10 opens.

` 10 lakh pted on the same lines as the functionality with page numbers 1,2,3,4 and 5, and the last page gives us the score. The

navigation through the pages is provided using “Previous” options provided at the bottom of the pages. 5 Illustration – Model 2- M Above ` 10 lakh up to ` 50 Let us consider an illustration of new existing unit in service sector agency requesting for working capital limit of User in branch shall select Scheme selection option in transaction and fill the details in the Activity/Scheme Select as under: After filing the information in all Then following page shall open: -17- navigation through the pages is provided using the “Next” and “Previous” options provided at the bottom of the pages.

MSME Service (New Case including takeover) 50 lakh: Let us consider an illustration of new borrower to the bank but an in service 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 and fill the details in the Activity/Scheme Selection page as per proposal After filing the information in all fields, user shall press “OK” button. hen following page shall open: the “Next” and SME Service (New Case including takeover) - to the bank but an carrying on the business of advertising User in branch shall select Scheme selection option in transaction menu ion page as per proposal button.

Page 1 This page is used for filling the following details: 1. Unit details like name of the un unit/project (existing unit or new 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 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 5. Options for “Ownership of current residence on record” and “Ownership of manufacturing unit 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 distance is > 25 Kms After filing the information in all Then following page shall open: -18- This page is used for filling the following details:- nit details like name of the unit, address, constitution, type of unit/project (existing unit or new project).

The promoter’s details like name, date of birth, educational qualifications, PAN number etc. In case of past relationship with the bank, details like A/C since alance in last six months are also accepted. List of options are provided for selecting the credit history, in case the CIBIL score is available/ not available. Options for “Ownership of current residence on record” and “Ownership of manufacturing unit/factory premises” are provided. 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 distance is > 25 Kms.

After filing the information in all fields, user shall press “OK” button hen following page shall open: it, address, constitution, type of The promoter’s details like name, date of birth, educational In case of past relationship with the bank, details like A/C since alance in last six months are also accepted. List of options are provided for selecting the credit history, in case Options for “Ownership of current residence on record” and /factory premises” are provided.

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 button.

Page2 This page is used for filling the following details: a. Facility required (Working Capital Proposed facilities are marked ‘ 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 of the fixed assets purchased out of term loan, if any. c. A list has been provided for “ be selected. d. Whether borrower agreed to CGTMSE cover then the system shall not a 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 -19- This page is used for filling the following details:- Working Capital, Term Loan, Non fund based). 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 “Value of fixed assets to be financed” shall contain the invoice value of the fixed assets purchased out of term loan, if any.

A list has been provided for “Purpose of Loan”, one of which has to Whether borrower agreed to CGTMSE cover. If “Yes” is selected then the system shall not accept the Guarantors’ and collateral “Accepted projected profit after tax (PAT)” and “Accepted Projected Cash profit” are to be filled. Income Tax Assessee : Proper choice is made by selecting Yes/No. Client type is selected from the list provided. Loan, Non fund based). √’ 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 contain the invoice value ”, one of which has to .

If “Yes” is selected ccept the Guarantors’ and collateral “Accepted projected profit after tax (PAT)” and “Accepted Projected Income Tax Assessee : Proper choice is made by selecting Yes/No.

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 does not fall under CGTMSE After filing the information in all Then following page shall open: Page3 This page is used for filling the following details which are related Liabilities side of balance sheet of a 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. f. Short term bank borrowings/other short term loans. -20- 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 accepted only when the proposal CGTMSE. After filing the information in all fields, user shall press “OK” button hen following page shall open: This page is used for filling the following details which are related Liabilities side of balance sheet of a Unit:- Quasi Capital (In case of Prop./Partnership) Long Term Borrowing from Banks/Fin.

Institutions. (Loan type, outstanding, amount repayable in & rate of interest). thers.

Short term bank borrowings/other short term loans. 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 ed only when the proposal button. This page is used for filling the following details which are related to Long Term Borrowing from Banks/Fin. Institutions. (Loan type,

g. Trade creditors and other current liabilities. After filing the information in all Then following page shall open: Page4 This page is used for filling the following details which are related to Assets side of balance sheet of a Unit a.

Fixed Assets b. Accumulated depreciation c. Noncurrent assets d. Inventories e. Receivables (Debtors) f. Loan & advances g. Cash & bank balances -21- Trade creditors and other current liabilities. After filing the information in all fields, user shall press “OK” button hen following page shall open: lling the following details which are related to side of balance sheet of a Unit:- Accumulated depreciation Receivables (Debtors) Cash & bank balances button.

lling the following details which are related to

h. Other current assets i. Value of IP in net worth in case of Partnership/Proprietorship/ Individual/HUF After filing the information in all Then following page shall open: Page5 “Submit” has to be pressed if everything is filled correctly provide the Score Card 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. dated 28.06.2011 advances under MSME schemes separate Credit Scoring models are available credit risk rating).

-22- Other current assets of IP in net worth in case of Partnership/Proprietorship/ After filing the information in all fields, user shall press “OK” button. following page shall open: has to be pressed if everything is filled correctly. It shall 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, for which separate Credit Scoring models are available, are exempted from of IP in net worth in case of Partnership/Proprietorship/ button.

. It shall 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 per IRMD Cir. No. 17/2011 for which are exempted from

6 Modification: In case any modification is required to be made in the Score Card, separate option is provided in the “Transaction” menu: Clicking on the option “Modification -23- In case any modification is required to be made in the arate option is provided in the “Transaction” menu: Modification” shall open the following screen In case any modification is required to be made in the arate option is provided in the “Transaction” menu: the following screen:-

The Score Card ID should be selected from the “List” provided for the purpose. Similar pages shall appear as in case of data e 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” the authorizer:- -24- should be selected from the “List” provided for the purpose. Similar pages shall appear as in case of data entry, wherein the changes can be made and saved through the option at the end of 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: “Authorization” shall open the following screen for should be selected from the “List” provided for the ntry, wherein the changes can be made and saved through the option at the end of The authorizer (checker) will login in the software by entering his user name and password. He/she shall use the following shall open the following screen for

Now the authorizer will click on the button ID and screen will appear depicting all the details of the same sequence. 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: 1. Scoring Report -25- Now the authorizer will click on the button “List” in front of Score and screen will appear depicting all the details of the Score Card ence.

The checker is authorized to make changes also. button is clicked at page no.5. The authorizer then asked to authorize. This completes the process.

Two types of reports are generated by the system for the user Reports for Branch User: ” option is selected as under:- Score Card Score Card in ence. The checker is authorized to make changes also. button is clicked at page no.5. The authorizer then asked to Two types of reports are generated by the system for the user

Scoring Report (Detailed Score report) can also be prepared by selecting the Score Card ID by using the help menu and des 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- Scoring Report (Detailed Score report) can also be prepared by selecting the Score Card ID by using the help menu and desired 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 Reports for Circle User/ HO User Scoring Report (Detailed Score report) can also be prepared by selecting 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

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 monitoring and ensuring that all MSME loan proposals (Fresh/ Renewals/ Enhancements) with proposed facilities upto scored on the relevant models and these guidelines are complied with meticulously by all branches. The users at HO shall view and take printout of the reports for monitoring.

-27- also generate score card report pertaining to its 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 control & use these reports for closely monitoring and ensuring that all MSME loan proposals (Fresh/ Renewals/ Enhancements) with proposed facilities upto ` 50 La scored on the relevant models and these guidelines are complied with anches. The users at HO shall view and take printout of the reports for monitoring. also generate score card report pertaining to its MIS REPORT option is available to all the users in Circle office/ HO. Circle office shall take the printout of the above mentioned reports rol & use these reports for closely monitoring and ensuring that all MSME loan proposals (Fresh/ 50 Lakh are scored on the relevant models and these guidelines are complied with anches.

The users at HO shall view and take

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 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 -28- In addition, HO user can also generate Audit Trail report based on different Audit Trail report for Branch Master Audit Trail report for User Master 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 Sheet * * In addition, HO user can also generate Audit Trail report based on different

3. CODE OF BANK’S COMMITMENT TO ENTERPRISES (MSEs) - Banking Codes & Standards Board of India ( Code of Bank’s Commitment to Micro and Small Enterprises (MSEs). Our Bank has adopted the code as 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 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) lakh upto ` 50 lakh.

II. MSME Service (New Cases including takeover) ` 50 lakh. III. MSME Manufacturing and Service (New Cases including takeover) 10 lakh and below. IV. MSME Manufacturing and Service (Renewal / Enhancement) ` 10 lakh upto ` 50 lakh. V. MSME Manufacturing and Service (Renewal / Enhancement) lakh and below. PNB Score Retail Models: VI. Doctors’ Loan Scheme VII. Traders’ Loan Scheme (New cases) VIII. Traders’ Loan Scheme (Renewal Cases -29- CODE OF BANK’S COMMITMENT TO MICRO AND SMALL - 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 Circular No. 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 insight 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 to disclose the general parameters of our following rating MSME Manufacturing (New Cases including takeover) - Above MSME Service (New Cases including takeover) - Above ` 10 lakh upto MSME Manufacturing and Service (New Cases including takeover) MSME Manufacturing and Service (Renewal / Enhancement) 50 lakh.

MSME Manufacturing and Service (Renewal / Enhancement) Traders’ Loan Scheme (New cases) Traders’ Loan Scheme (Renewal Cases MICRO AND SMALL SHARING OF RATING PARAMETERS ) has come out with the Code of Bank’s Commitment to Micro and Small Enterprises (MSEs). Our SME Circular No. 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 t 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 to disclose the general parameters of our following rating Above ` 10 10 lakh upto MSME Manufacturing and Service (New Cases including takeover) - ` MSME Manufacturing and Service (Renewal / Enhancement) - Above MSME Manufacturing and Service (Renewal / Enhancement ` 10

The general parameters applicable to above models, which can be shared with MSE customers without disclosing the methodol pattern, are as under: PNB MSME Score Model I. MSME Manufacturing (New Cases including takeover) lakh upto ` 50 lakh. Parameters a. Constitution of the proposed unit b. Education & Experience of the promoter c. Past relationship 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 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) ` 50 lakh Parameters a. Constitution of the proposed unit b. Income Tax Payee Status c. Education & Experience of the pr 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 k. Type of collateral proposed -30- The general parameters applicable to above models, which can be shared without disclosing the methodologies and scoring MSME Manufacturing (New Cases including takeover) - Above Constitution of the proposed unit Education & Experience of the promoter hip with the Bank Marketing of the product Ownership of current residence on record Ownership of Manufacturing unit/ Factory Premises/business Distance of factory/business location from the financing branch Type of collateral proposed Ratio of value of collateral to Loan Amount Guarantor's Net worth Ratio of Borrower’s net worth to loan amount Working Capital Cycle Ratio of cash profit to repayment obligation.

Gross Sales last 3 years Ratio of Credit summation to Gross Sales Variability in availment Service (New Cases including takeover) - Above ` 10 lakh upto Constitution of the proposed unit Income Tax Payee Status Education & Experience of the promoter Past relationship with the Bank Type of service/ clientele and location of the unit Ownership of current residence on record Ownership of main business Premises Distance of main business location from the financing branch Type of collateral proposed The general parameters applicable to above models, which can be shared ogies and scoring Above ` 10 Ownership of Manufacturing unit/ Factory Premises/business Distance of factory/business location from the financing branch 10 lakh upto ranch

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 t. Cash profit position u. Ratio of Credit summation to Gross Sales v. Variability in availment III. MSME Manufacturing and Service (New Cases ` 10 lakh and below. Parameters a. Constitution of the proposed unit b. Education and experience 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) ` 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- Ratio of value of collateral to Loan Amount Guarantor's Net worth Ratio of Borrowers' net worth to loan amount Ratio of cash profit to repayment obligation. Gross Sales last 3 years Ratio of Credit summation to Gross Sales Variability in availment MSME Manufacturing and Service (New Cases including takeover) Constitution of the proposed unit perience of the promoter Past relationship with the Bank Ownership of current residence Ownership of Manufacturing unit/ Factory Premises/business Distance of factory/business location from the financing branch Assessed for Income Tax Ratio of Borrowers' net worth to loan amount Ratio of cash profit to repayment MSME Manufacturing and Service (Renewal / Enhancement) 50 lakh.

Experience in Business/Family Business Ownership of current residence Ownership of Manufacturing unit/ Factory Premises/business takeover) - Ownership of Manufacturing unit/ Factory Premises/business Distance of factory/business location from the financing branch MSME Manufacturing and Service (Renewal / Enhancement) - Above Ownership of Manufacturing unit/ Factory Premises/business

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