UCO Bank Subsidy Linked Schemes for MSMEs

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UCO Bank Subsidy Linked Schemes for MSME Loans

UCO Bank offers one Subsidy Linked Schemes to MSMEs, viz. Prime Minister Employment Generation Programme (PMEGP)

We look at it in some detail.

Prime Minister Employment Generation Programme (PMEGP)

Features of Prime Minister Employment Generation Programme (PMEGP)

This scheme provides subsidy to MSME units involved in Manufacturing and Services sectors sanctioned under PMEGP. The Prime Minister Employment Generation Programme (PMEGP) is a loan scheme designed to help small businesses and generate employment in rural as well as urban areas.

Why this Scheme?

  • The borrower can enjoy subsidies on loans for Capital Expenditure; i.e. loans used for setting up of projects in the Manufacturing and Services sectors
  • There is no income ceiling for assistance for setting up MSME projects under the PMEGP scheme
  • This scheme is reserved for new projects sanctioned under PMEGP
  • The beneficiaries are identified and selected at the district level by a Task Force consisting of representatives from KVIC, State KVIB, State DICs and Banks, and headed by the District Magistrate, Deputy Commissioner or Collector concerned

Loan Amount

  • The maximum loan amount sanctioned by UCO Bank for this loan is 90% of the total project cost for beneficiaries in the General category and 95% of the total project cost for beneficiaries in the Other categories
  • The total project cost cannot exceed Rs. 25 lakh for units in the manufacturing sector and Rs. 10 lakh for service sector

Interest & Subsidy

  • The interest rate charged by the bank for this loan scheme is the sum of UCO Float Rate and a factor of 1.55%. As of now, UCO Float Rate is 6.90% which brings the effective interest rate to 8.45%
  • The subsidy offered by the bank (of total project cost) for PMEGP is General category (Urban) 15%, General category (Rural) 25%, Special category (Urban) 25%, Special category (Rural) 35%

Repayment

  • These loans need to be repaid in 3 to 7 years

Security Needed

  • Eligible units must be covered under CGTMSE

Eligibility

  • The borrower should be above the age of 18 years
  • The beneficiary who wants to set up projects costing more than Rs. 10 lakh in the Manufacturing and Rs. 5 lakh in Service sector must have an education qualification of passing Class VIII
  • Only new projects sanctioned under PGMEP can avail this scheme
  • Self-help Groups including those under BPL who have not availed subsidies under other schemes are also eligible

Borrower Contribution to Total Cost (Margin Money)

  • The borrower may have to cover 15% to 35% of the project cost depending on the location of the project/unit

Note: Margin money refers to the amount the borrower contributes to the overall amount required. The bank will cover the rest.

Other features to Know

  • This is a term loan
  • Negative list of activities is not permitted
  • There is no income ceiling for assistance for setting up projects under PMEGP
  • The applicant must have received approval under PMEGP for the project before applying for this scheme

Documents Needed for Individuals

  • Loan Application Form duly filled and signed by the applicant and co-applicant, if any
  • Two Passport Size Photographs of applicant and co-applicant
  • Personal ID Proof: Aadhaar Card, PAN Card, Passport or Driving License. PAN Card / PAN Card Issuing Letter is must
  • Signature Proof: PAN Card, Banker’s Verification, Driving License or Passport
  • Residential Address Proof (Any One): Aadhaar Card, Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income/Banking Proof: Last 6 months Bank Account Statement of applicant and co-applicant, Loan Statement of Running Loans, Latest Closed Loan NOC, Net Worth of the applicant and co-applicant
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report

Documents Needed for Proprietorship and Partnership Firms

  • Loan Application Form duly filled and signed
  • Partnership Deed and Partnership Registration Certificate
  • ID Proof of the Firm: Firm PAN Card or PAN Issuing Letter
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income Proof: CMA Data and Project Report, Debtors and Creditors Certificate, GST Return, Last 3 years ITR of applicant and co-applicant, Audited or CA Certified Computation of Income/Trading Account/Profit and Loss Account/Balance Sheet, Annual Audit Report and Tax Audit Report if audited, Form 16A if applicable, Net Worth of applicants, co-applicants and guarantors
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Partnership’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References

Documents Needed for Private Limited and Public Limited Companies

  • Application Form duly filled and signed
  • Company ID Proof: Company’s PAN Card
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Business Proof: AOA and MOA, Company Incorporation Certificate, Business Commencement Certificate, Board Resolution, CA/CS verified Share Holding Pattern, ROC Annual Return, DIN Certificate, List of Directors on Company Letter Head, GST Number, Form 32 in case of Director Change
  • Income Proof: CMA Data and Project Report, Last 3 Years ITR Acknowledgement copy of Company and all Directors, Last 3 Years Annual Credit Report or Tax Audit Report with Article 3CB, Article 2D, Article 3CD, TDS Certificate/Form 16A, Net Worth Certificate
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Company’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References

Reference Facts

  • UCO Bank Website: www.ucobank.com and www.ucobanking.com (net banking)
  • Headquarters: Kolkata, West Bengal
  • Call Centre Toll-Free Number: 1800 274 0123