What changed
The Government of India, via Gazette Notification S.O. 1109(E) dated October 13, 2004, added seven sports goods items to the list of SSI reserved items with an enhanced investment limit of Rs.5 crore. This follows earlier enhancements for 13 stationery and 10 drugs & pharmaceutical items under Order S.O.655(E) dated June 5, 2003.
What it means for you
UCBs can now treat loans to SSI units manufacturing these seven sports goods items as priority sector advances, provided the unit's investment in plant and machinery does not exceed Rs.5 crore. This expands the scope of priority sector lending for urban cooperative banks and supports the sports goods industry.
What you must do
- Update internal priority sector lending guidelines to include the seven sports goods items with the enhanced Rs.5 crore investment limit.
- Train credit officers to correctly classify advances to these SSI units as priority sector based on the new investment ceiling.
- Maintain a list of the seven sports goods items as per the Gazette Notification for reference during loan appraisal.
- Ensure compliance with the earlier circulars for stationery and drugs & pharmaceuticals items as well.
Who it affects
All Primary (Urban) Cooperative Banks (UCBs), SSI units manufacturing sports goods, Priority sector lending portfolios of UCBs
What is the new investment limit for plant and machinery for these sports goods SSI units?
The limit has been enhanced from Rs.1 crore to Rs.5 crore for the seven specified sports goods items.
How does this affect priority sector classification for UCBs?
Advances to SSI units manufacturing these sports goods items can now be classified under priority sector, provided the unit's investment in plant and machinery is within the new Rs.5 crore ceiling.
Are there other items with similar enhanced limits?
Yes, earlier enhancements covered 13 stationery items and 10 drugs & pharmaceutical items, as per Order S.O.655(E) dated June 5, 2003.