This 'Online MSE Loan Application and e-Tracking System' will allow MSE Sector Customers / Prospective borrowers of Vijaya Bank to apply and e-track the status of their MSE Loan Application at various Stages of Loan Processing. However, it should be noted that, applying online for the MSE Loan is not commitment on part of the Bank to Sanction the Loan. After applying online, applicant has to visit the identified Branch with required documents and any other information sought by the Branch.

Rate of Interest applicable to MSME Advances:

Salient features of lending to Micro, Small & Medium Enterprises (MSMEs):

1 Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 The MSMED Act 2006, which came into force w.e.f. 02/10/2006, defines the Micro, Small, and Medium Enterprises. As per the Act, the activities are classified into Manufacturing and Service Category. The limits for investment in plant and machinery/equipment for manufacturing / service enterprise, as notified by Ministry of Micro, Small and Medium Enterprises, vide S.O.1642 E) dated September 9, 2006 are as under:-

Manufacturing Sector
Enterprises Investment in plant and machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed five crore rupees<
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Service Sector
Enterprises Investment in equipment
Micro Enterprises Does not exceed ten lakh rupees
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five crore rupees

2 Margin norms :

The margin norms followed by the Bank are as follows:

Sl. No.

Nature of security

Nature of facility / scheme





Land & Building (Excluding agriculture land, the value of which should not be reckoned for deciding security value other than in respect of agricultural advances)

Debt component not to include funding against land cost.

Overdraft (Secured)


Industries & others (Project)


Collateral for Non-fund based limits

(Security value at  125% of  unsecured portion after deducting Cash margin offered)



Vehicles (New)

Term Loan [outside V-Wheel Scheme]



Vehicles (Used and Old, not exceeding five years) subject to availability Of certificate from chartered Engineers in respect of its value and residual life

Term Loan   (Primary)


Non fund based limits (collateral)



Plant & Machinery(New)

Term Loan   (Primary)



Plant & Machinery (Used and not older than 5 years) subject to availability Of certificate from Chartered Engineers of Bank’s approved panel  in respect of its value and residual life

Non Fund based limits (Collateral)



Stock in trade

Cash Credit (Hyp.) and

Cash Credit-Pledge

Minimum 15-25%

Pre-shipment loan



Stock of Raw materials and Finished Goods in industrial units

Cash Credit (Hyp)





Stock of Semi-finished/semi-processed goods


Book debts due from all public sector and public limited companies with external rating by an accredited rating agency having rating up to BBB

(or equivalent) 

Cash Credit (Hyp.)

With age of the book debt not exceeding 150 days




Min. 25%



Book debts due from others



Cash Credit [Hyp.]

With age not exceeding 120 days


40 – 60


Supply Bills

Overdraft [Clean – against Supply Bills]




3.1 Security norms for MSE loans:

The Norms with regard to obtention of security or collateral security in respect of Micro and Small Enterprises (MSEs), except for vehicle loans mentioned in point no.2; are as under:




Loan amount

Security norms

Rs 10 lakhs (Including loans granted under PMEGP of KVIC and other Govt schemes)

No collateral security shall be insisted.


Above Rs. 10 lakhs upto Rs. 25 lakhs

If the units whose track record and financial position are good as per our bank records obtention/acceptance of collateral security may be dispensed with on case to case basis with the prior approval of one level higher than sanctioning authority.


Above Rs. 10 lakhs upto Rs. 200 lakhs  

Need not be obtained where the loans are eligible to be covered under Credit Guarantee Fund Scheme for Micro and Small enterprises (CGTMSE). If the party is not willing to be covered under CGTMSE and agreeable to offer collateral security to the extent of 100% of the limit sanctioned, in such cases collateral security stipulated as per extant guidelines shall be obtained.



 3.2 Security norms for commercial passenger/goods transport vehicles:


Loan amount

Security norms




For loans up to

Rs.10 lacs:

a.    Hypothecation Of vehicle financed

b.    To be covered under Credit guarantee scheme.


For loans above

Rs.10 lakhs up to Rs.25 lacs: 

a.   Hypothecation Of vehicle financed.

b. Suitable third party guarantee acceptable to Bank and suitable collateral security in the form of LIC policy or Fixed Deposit or Existing Vehicles (less than 5 yr old)or Property or combination of all three to the extent of 25% of the limit.


For loans above

Rs.25 lacs

a.    Hypothecation of vehicle

b.    Suitable third party guarantee acceptable to the bank and

c.    Collateral security in the form of LIC policy or Fixed Deposit or Existing Vehicles(less than 5 yr old) or Property or combination of all three collateral securities to the extent of minimum 50% of the loan.

4.Performance and Credit Rating Scheme for Micro and Small Units(MSEs)

Click Here for details on Performance and Credit Rating Scheme for Micro and Small Units(MSEs)

5 The bank is also implementing the Rural Employment Generation Scheme (PMEGP Scheme), Credit linked Capital Subsidy Scheme, Technology Up gradation Fund Scheme.


Recovery through VIJAYA ADALAT A special drive for stepping up recovery in NPA and AUC accounts through One Time Settlement (OTS) by organizing VIJAYA ADALAT has been formulated commencing from 01.06.2006.

Under the Scheme, the borrowers shall be brought to the negotiating table during the VIJAYA ADALATS to be organized by the branches & regional Offices or by the cluster of branches covering maximum number of borrowers and the accounts are settled then and there.

It shall be the endeavor of every Regional Office to ensure that the branches falling under their jurisdiction participate in the special drive in a big way. The dates finalized for organizing Vijaya Adalats shall be informed to Credit (R&R) Dept, HO well in advance to enable the participation by the Executives from Head Office.

Regional Offices shall oversee the follow up done by the branches to ensure that proper steps are initiated to bring the eligible accounts to logical conclusion. ROs shall depute Nodal Officers to assist the branches before finalizing the date and venue for smooth conduct. Branches/ ROs should give wide publicity in the locality/ press release/ release in the electronic media about the event. The Regional Manager or in his absence an Executive having delegated financial powers should invariably attend the Vijaya Adalat.

Branches should desist from pushing in cases coming within their delegated powers to be decided in this forum and should optimally use to settle cases coming within the delegated powers of the Executive visiting.

Technology Upgradation Fund Scheme for Textile and Jute Industry:

Our Bank is designated as nodal bank for implementing Technology Upgradation Fund Scheme for Textile and Jute Industry: Scope of the Scheme: The Scheme is available for modernization / expansion of existing units and for setting up of new units with benchmarked level of technology in textile and jute industry. The present plan of the scheme is RR-TUFs from 01.04.2012 to 31.03.2017. The scheme will provide Interest Reimbursement/Capital subsidy/Margin Money Subsidy based on the eligible machinery installed. Under the scheme only the loans sanctioned after 01.04.2012 are eligible. Application should be submitted to MoT within one year from the loan sanction date.

Eligible list of machinery and certificates for determining the eligibility are available in Benefit is available for TUFS benchmarked machinery covering the following activities:

  • Cotton ginning and pressing
  • Silk reeling and twisting
  • Wool scouring, combing and carpet industry
  • Synthetic filament yarn texturing, crimping and twisting
  • Spinning
  • Viscose Staple Fiber(VSF) and Viscose Filament Yarn (VFY)
  • Weaving, knitting and fabric embroidery
  • Technical Textiles including non wovens
  • Garment/design studio/made-up manufacturing
  • Processing of fibers, yarns. Fabrics, garments and made ups
  • Production activities of Jute Industry

Brief about the certificates for determining eligibility criteria:

  • RR 1 – Format for examination of eligibility of the project / term loan for interest / margin money subsidy under Revised Restructured TUFS to the Nodal Agency
  • RR 2 – Format for submitting actual TUFS-related specifications of the plant and machinery / equipment proposed under the projects
  • RR 5, RR 6,RR 7, RR 8 – for seeking eligibility clearance for additional incentive in the form of 10% capital subsidy under various segments.
  • Technical Textile units availing 10% Capital Subsidy will have to obtain a registration number from Office of the Textile Commissioner.
  • In case of imported second hand machinery, a certificate from Chartered Engineer of the exporting country certifying the vintage and residual life with duly countersigned by an Indian Embassy / Consulate in the exporting country must be furnished by the unit.




Name of the Nodal officer of the bank for MSME Complaints and queries



Asst. General Manager

Credit – Retail & MSME


CLICK HERE FOR Application for MSME Loan

MSME Clusters

Specialised MSME branches

Self Employment Training Institute

MSME Quarterly Data

Rehabiliation of SICK MSE Units

Rehabiliation of SICK MSE Units  (For Karnataka State)



  • The borrower should maintain adequate books of accounts, as per applicable accounting   practices and        standards, which should correctly reflect its financial position and scale of operations and should not radically change its accounting system without notice to the Bank. 

  • The borrower should submit to the Bank such financial statements as may be required by the Bank from time to time in addition to the set of such statements to be furnished by the borrower to the Bank as on the date of publication of the borrower’s annual accounts.

  • In Case of default in repayment of the loan/advances or in the payment of the interest thereon or any of the agreed installments of the loan on due date(s) by the borrower, the Bank and/or the RBI will have an unqualified right to disclose or publish the borrower’s name or the name of the borrower/unit and its directors/partners/ proprietors as defaulters/willful defaulters in such manner and through such medium as the Bank or RBI in their absolute discretion may think fit.

  • The Bank will have the right to share credit information as deemed appropriate with Credit Information Companies (CICs) or any other institution as approved by RBI from time to time.

  • The borrower should not induct into its Board a person whose name appears in the willful defaulters list of RBI/CICs. In case such a person is already on the Board of the borrowing company, it would take expeditious and effective steps for removal of that person from its Board. Nominee directors are excluded for this purpose.

  • In the event of default in repayment to the Bank or if cross default has occurred, the Bank will have the right to appoint its nominee on the Board of directors of the borrower to look after its interest.

  • In Stressed situation or restructuring of debt, the regulatory guidelines provide for conversion of debt to equity. The Bank shall have the right to convert loan to equity or other capital in accordance with the regulatory guidelines.

  • Bank will have the right to examine at all times the borrower’s book of accounts and to have the borrower’s factories inspected, from time to time, by the officer(s) of the Bank and/ or qualified auditors and/or technical experts and or management consultants of the Bank’s choice. Cost of such inspection shall be borne by the borrower.

  • After provision for tax and other statutory liabilities, unless expressly permitted otherwise, the Bank will have a first right on the profits of the borrower for repayment of amounts due to the Bank.

  • The borrower shall keep the Bank informed of the happening of any event likely to have a substantial effect on their profit or business; for instance, if, the monthly production or sales are substantially less than what had been indicated, the borrower shall immediately inform the Bank with explanations and the remedial steps taken and/or proposed to be taken.

  • Effect any change in the borrower’s capital structure where the shareholding of the existing promoter(s) gets diluted below current level or 51% of the controlling stake(whichever is lower), without prior permission of the Bank- for which 60 days’ prior notice shall be required. In case of limited liability partnerships and partnership firms ‘promoters’ would mean managing partners for the purpose of this covenant.

  • The borrower will utilize the funds for the purpose they have been lent. Any deviation will be dealt with as per RBI guidelines.

  • Promoter’s shares in the borrowing entity should not be pledged to any Bank/NBFC/ institution without our consent.

  • For Term Loan (> Rs.50 Crores)- Covenants [ in relation to certain(say three) agreed parameters] are to be stipulated for all term loans and these are required to be tested annually on the basis of Audited Balance Sheet (ABS). Penal interest will be charged in case of breach of (any or as mutually agreed between the Bank and the borrower) of the parameters vis-à-vis values as approved. The penal interest will apply from the day after the date of ABS, and shall continue till the breach is cured.
  • Further, it may be specifically indicated that the breach of financial covenant may be considered by lenders as an Event of Default.

  • Each of the following events will attract penal interest/charges as applicable , at rates circulated from time to time, over and above the normal interest applicable in the account:
    a)For the period of overdue interest/ installment in respect of Term Loans and over – drawing above the drawing power/limit in Fund Based Working Capital accounts on account of interest / devolvement of Letters of Credit / Bank Guarantee, insufficient stocks and receivables, etc.
    b)Delay in submission of stock statements defined as number of days as per bank specific Policy.
    c)Non-submission of Audited Balance Sheet within 8 months of closure of financial year.
    d)Non-Submission /Delayed submission of FFRs, wherever stipulated, within due date
    e)Non-submission of review/renewal data at least one month prior to due date.
    f)Non-obtention of External credit risk rating from agency approved by RBI.

    In the event of default, or where signs of inherent weakness are apparent, the Bank shall have the right to securitize the assets charged and in the event of such securitization, the Bank will suitably inform the borrower(s) and guarantor(s).
    The undernoted covenants will be subject to prior notice being given by the borrower and being agreed to by the Bank. If the Bank turns down the borrower’s request but the later still goes ahead, the Bank shall have the right to call up the facilities sanctioned.

  • Formulate any scheme of amalgamation or reconstruction.

  • Undertake any new project, implement any scheme of expansion/diversification or capital expenditure or acquired fixed assets( Except normal replacements indicated in funds flow statement submitted to and approved by the Bank) if such investment results into breach of financial covenants or diversion of working capital funds to financing of long term assets.

  • Invest by way of share capital in or lend or advance funds to or place deposits with any other concern( including group companies); normal trade credit or security deposits in the ordinary course of business or advances to employees can, however, be extended. Such investment should not result in breach of financial covenants relating to TOL/Adj. TNW and current ratio agreed at the time of sanction.

  • Enter into borrowing arrangement either secured or unsecured with any other bank, financial institution, company or otherwise or accept deposits which increases indebtedness beyond permitted limits, stipulated if any at the time of sanction.

  • Undertake any guarantee or letter of comfort in the nature of guarantee on behalf of any other company (including group companies).

  • Declare dividends for any year except out of profits relating to that year after making all due and necessary provisions and provided further that such distribution may be permitted only if no event of default/ breach in financial covenant is subsisting in any repayment obligations to the Bank.

  • Create any charge, lien or encumbrance over its undertaking or any part thereof in favour of any financial institution, bank, company, firm or persons.

  • Sell, assign, mortgage or otherwise dispose of any of the fixed assets charged to the Bank. However, fixed asset to the extent of 5 % of Gross Block may be sold in any financial year provided such sale does not dilute FACR below minimum stipulated level. (Not applicable for unsecured loan).

  • Enter into any contractual obligation of a long term nature or which, in the reasonable assessment of the Bank, is detrimental to lender’s interest, viz., acquisitions beyond the capability of borrower as determined by the present scale of operations or tangible net worth of the borrower/net means of promoters etc., leveraged buyout etc.

  • Change the practice with regard to remuneration of Directors by means of ordinary, remuneration or commission, scale of sitting of setting fees etc. except where mandated by any legal or regulatory provisions.

  • Undertake any trading activity other than the sale of products arising out of its own manufacturing operations.(Not applicable in case finance is for trading activity only).

  • Permit any transfer of the controlling interest or make any drastic change in the management set-up including resignation of promoter directors.

  • Repay monies brought in by the Promoters/Directors/ Principal Shareholders and their friends and relatives by way of deposits/loans/advances. Further, the rate of interest, if any payable on such deposits /loans/advances should be lower than the rate of interest charged by the Bank on its term loan  and payment of such interest will be subjected to regular repayment of installments to term loans granted/ deferred payment guarantees executed by the Bank or other repayment obligations, if any, due from the borrower to the Bank.

  • The borrower shall keep the Bank advised or any circumstance adversely affecting the financial position of subsidiaries/group companies or companies in which it has invested, including any action taken by any creditor against the said companies legally or otherwise.

  • The borrower shall deal with our bank/ banks under consortium/ multiple banking arrangements exclusively, shall not open current account/s with any other bank without our prior permission. The borrower’s entire business relating to their activity including deposit, remittances, bills/cheque purchase, non-fund based transactions including LCs and BGs, Forex transactions, merchant banking, any interest rate or currency hedging business etc. should be restricted only to the financing banks under consortium/multiple banking arrangements.

  • No Commission to be paid by the borrowers to the guarantors for guaranteeing the credit facilities sanctioned by the Bank to the borrowers.

  • Approach capital market for mobilizing additional resources either in the form of debt or equity.

  • Fund based Limits both in Working Capital and Term Loan, should be regulated though an Escrow Mechanism as agreed among banks to avoid any kind of diversion of funds.


  • Proof of Identity : AADHAAR Card/Voter’s ID Card / Passport / Driving License / PAN Card / Signature identification from present bankers of proprietor, partner of director ( if a company)
  • Proof of residence: Recent telephone bills, electricity bill, property tax receipt /Passport / AADHAAR Card/voter’s ID Card of Proprietor, partner of Director (if a company)
  • Proof of business Address
  • Applicant should not be defaulter in any Bank/F.I.
  • Memorandum and articles of association of the Company / Partnership Deed of partners etc.
  • Assets and liabilities statement of promoters and guarantors along with latest income tax returns.
  • Rent Agreement (if business premises on rent) and clearance from pollution control board if applicable.
  • SSI / MSME registration if applicable.
  • Last two year’s Audited balance sheets & Estimated/Projected balance sheets for the next two years in case of working capital limits and for the period of the loan in case of term loan.
  • Photocopies of lease deeds/ title deeds of all the properties being offered as primary and collateral securities.
  • Documents to establish whether the applicant belongs to SC/ST Category, Whereverapplicable.
  • Certificate of incorporation from ROC to establish whether majority stake holding inthe company is in the hands of a person who belongs to
  • SC/ST/Woman category.
  • Profile of the unit (includes names of promoters, other directors in the company, the activity being undertaken addresses of all offices and plants, shareholding pattern etc.
  • Last three years Audited balance sheets of the Associate / Group Companies (if any).
  • Project report (for the proposed project if term funding is required) containing details of the machinery to be acquired, from whom to be acquired, price, names of suppliers, financial details like capacity of machines, capacity of utilization assumed, production, sales, projected profit and loss and balance sheets for the tenor of the loan, the details of labour, staff to be hired, basis of assumption of such financial details etc.
  • Manufacturing process if applicable, major profile of executives in the company, any tie-ups, details about raw material used and their suppliers, details about the buyers, details about major-competitors and the company’s strength and weaknesses as compared to their competitors etc.
  • (The check list is only indicative and not exhaustive and depending upon the local requirements at different places addition could be made as per (necessity).