1. Appraisal and Monitoring
of SME Credits
Financing services available for Small
and medium enterprises
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2. Introduction
Punjab National Bank(PNB) is one of the well-
renowned banks of India.Mr.K.R.KAMATH is the Chairperson of PNB bank.
Punjab National Bank (PNB) was registered on May 19, 1894 under the
Indian Companies Act with its office in Anarkali Bazaar Lahore.PNB had
authorized 175 branches for handling foreign exchange Businesses. Bank has
its Corporate Office at New Delhi and supervises 67 Circle Offices under
which the branches function.It has opened International Service Branch at
Delhi.There are 5675 branches under PNB. PNB has 1064 approved banks
worldwide to facilitate trade transactions of its clients. It has also set up 11
specialized International Banking Branches (IBBs) at important centers for
providing services to its exporter/ importer clients. 2

3. Introduction to SME credits
SME credit services are the special services to
meet the specific needs of Small and Medium Enterprises and thus enhance
their development.Small and Medium enterprises play a very significant role
in strengthening Indian economy. SMEs constitute the dominant form of
business organization, accounting for over 95% and up to 99% of enterprises
depending on the country. They are responsible for between 60-70% net job
creations in Developing countries. Small businesses are particularly important
for bringing innovative products or techniques to the market.
Classification Investment Ceiling for Plant, Machinery or
Equipments
Manufacturing Service
Enterprises Enterprises
Micro Upto Rs.25 lakh Upto Rs.10 lakh
Small Above Rs.25 lakh Above Rs.10 lakh
& upto Rs.5crore & upto Rs.2crore
Medium Above Rs.5 crore Above Rs.2 crore
& upto Rs.10 & upto Rs.5crore 3
crore

4. Objectives of the Study
 To know about the various SME financing schemes of PNB and their
usage.
 To know the scope of SME credits ,in future, for PNB.
 To know the effectiveness of various SME financing schemes provided by
Punjab National Bank.
 To know the problems faced by SMEs in getting credits.
 To know the benefits of SME financing schemes to the Punjab national
bank.
 To check the satisfaction level of Small and Medium enterprises regarding
SME financing schemes provided by PNB.
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5. Research Methodology
Research Design
A type of conclusive research, which has as its major Objective the
description of something-usually market characteristics or functions.In other
words descriptive research is a research where in researcher has no control
over variable.It just presents the picture, which has already studied.
Tools Used:
Tables-This tool was used to present the data in tabular form.
Bar Graphs and Pie Charts- These tools were used for analysis of data
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6. Data Collection
Information has been collected from:
Secondary sources of data collection-Secondary sources-Secondary data
are those, which have already been collected by someone else, which already
had been passed through the statistical process . Secondary data had been
collected through websites, newspapers and journals.
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7. Analysis and Discussion
 Medical Sector
Bank PNB HDFC
Interest rate < Rs.2 0 lakh - 17.50% to 22.00%
10.50%
>Rs.20 lakh -
11.25%
Service charge < Rs.20 lakh - NIL 2% of loan amount
>Rs.20 lakh - 0.60 %
Loan amount Need based maximum of 80% of the quotation
value
Repayment 10 years 12 - 84 months
Collateral <Rs.10 lakh - no Collaterals are not mandatory
collateral.
>Rs.10 lakh - two
third party
guarantees is to be
obtained.
Eligibility Qualified To be eligible for a Healthcare loan
registered you must belong to one of the
medical following categories:
practicing with Speciality Hospital , Nursing
minimum Home ,Diagnostic Centre ,
qualification of Pathology Lab , Speciality Clinics
MBBS.
(like Skin and Dental
Clinics) ,Dialysis Centre , Endoscopy
Centre , IVF Centre , Educational
Institute , Med ical/Paramedical
College, Dental College
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8.  Business Sector
Bank PNB HDFC
working capital 17.50% to
Interest rate < Rs.5 cr ore - 10.5%+4.25% 22.00%
> Rs.5 cr ore - 10.5+4.50
Others
Rs.5crore 10.5%+4.25% +0.50
%
< Rs.2 lakh - NIL 2 .50 % of
Service charge >Rs.20 lakh - 0.60% +ST of loan loan amount
amount.
Loan amount Need based 50,000/ - to
Rs. 15,
00,000/ -
Repayment 5 - 7 years 12 - 36
months
12 - 60 for
professional
s.
Collateral <Rs.10 lakh - no collateral. Collaterals
>Rs.10 and <Rs.25 lakh – good are not
track record and financial mandatory
position.
Eligibility Micro Minimum
Enterprises: Enterprises Turnover of
engaged in the Manufacturing Rs. 40
or Pro duction upto Rs. 25 lakh. Lakhs.
Small
Enterprises: Enterprises
engaged in the Manufacturing
or Production, Processing
above 25 lakh upto 500 lakh.
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9.  Construction Sector
Bank PNB HDFC
Interest working capital 17.50% to 22.00%
rate <Rs.5crore10.5%+4.25%
>Rs.5crore - 10.5+4.50
Others
Rs.5crore10.5%+4.25%+0.50%
Service < Rs.2 lakh and upto Rs.5 crore 2% of loan amount
charge - 1%
>Rs. 5 crore and upto Rs.50
crore - 0.75 %
Loan Need based Upto Rs.15 lakhs.
amount
Repayment 8/10 years 12 - 36 months
Collateral V alid mortgage of land, Collaterals are not
buildings and other immovable mandatory
assets of the entrepreneurs
Eligibility Cooperative Societies, Self Employed ( Private
partnership firms and joint stock Ltd. Co. and Partnership
companies who have sponsored Firms) include Private
projects for establishing Companies and
economically viable industrial Partnership firms in the
estates and have the necessary Business of
approval of State Directorate of Manufacturing, Trading
Industries and local authorities. or Services.
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10.  AutomobileSector
Bank PNB HDFC
working capital 17.50% to 22.00%
Interest rate <Rs.5crore10.5%+4.25%
>Rs.5crore- 0.5+4.50
1
Others
Rs.5crore10.5%+4.25%+0.50%
1.00% of the loan amount 2%of loan amount
Servicecharge Or Rs.5000 which is
lowest.
Loan amount Need based 80% of invoice
value
Repayment 5-7 years Upto 48 months
Or 1-7 years
Collateral <Rs.10 lakh- o collateral.
0 n Collaterals are not
>Rs.10 lakh –
0 third party mandatory
guarantee is
required.
Eligibility Small Scale Service Units
including those which go in for -
modernisation / technology
upgradation.
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11. Summary and Conclusions
From the above comparison between SME plans provided by PNB and
HDFC bank it can be judged that for a SME belonging to a particular sector
which bank is providing a better SME plan. It can be tabulated as follows:
Sector Public Sector Bank (PNB) Private Sector Bank
(HDFC Bank)
Medical
Transport
Business
Construction
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12. Recommendations
 Customer feedback should be taken regarding services so that
improvements can be done.
 New products should be provided in particular sectors ( garments,gems and
jewellery etc.)to provide financing services to customers.
 All kind of charges should be disclosed before giving loan to the
customers.
 Agents should be well educated and trained and able to convince
customers.
 Fastest settlement of customer’s problems should be carried out.
 Programme like customer awareness should be organized so that more and
more people attract towards the SME sevices offered by bank.
 Special offers should be launched periodically to attract customers and
agents.
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