Definition of SME
" A small scale industrial unit is defined
as an undertaking in which investment in plant
and machinery, does not exceed Rs.1 crore, except
in respect of certain specified items under hosiery,
hand tools, drugs and pharmaceuticals, stationery
items and sports goods, where this investment
limit has been enhanced to Rs. 5 crore. Units
with investment in plant and machinery in excess
of SSI limit and up to Rs. 10 crore may be treated
as Medium Enterprises (ME).“ (RPCD Circular
No. RPCD.PLFNS.BC. 31/ 06.02.31/ 2005-06 dated
August 19, 2005)
Eligibility criteria
Debt Restructuring guidelines would be applicable
to the following entities, which are viable or
potentially viable:
a. All non-corporate SMEs irrespective
of the level of dues to banks.
b. All corporate SMEs, which are enjoying
banking facilities from a single bank, irrespective
of the level of
dues to the bank.
c. All corporate SMEs, which have funded
and non-funded outstanding up to Rs.10 crore under
multiple/
consortium banking arrangement.
Accounts where recovery suits have been filed
or action under SARFAESI Act has been initiated
will generally not be considered eligible for
restructuring under DRM for SMEs. However, in
exceptional cases, GM Zone/SAMD, HO may permit
admittance for restructuring in such cases.
In respect of BIFR cases, branch should ensure
completion of all formalities in seeking approval
from BIFR before implementing the package. All
statutory guidelines / procedures should be followed
meticulously.
Companies indulging in fraud and
malfeasance and accounts classified as loss assets
will not be eligible for restructuring under these
guidelines. Accounts classified as willful defaulters,
may be admitted for restructuring only by approval
of the Board of Directors of the bank after review
of the classification as willful defaulter.
Enterprises indulging in frauds
and malfeasance will continue to remain ineligible
under DRM for SMEs.
Legal Basis
The borrowers requesting for restructuring shall
have to sign a Debtor Creditor agreement.
6 a Viability Criteria
