What changed
The composite loan limit for SSIs under the Single Window scheme was increased from Rs 50 lakh to Rs 1 crore. This follows a previous enhancement from Rs 25 lakh to Rs 50 lakh in June 2003. The change was announced in the Mid-Term Review of the Annual Policy Statement for 2004-05.
What it means for you
Banks can now offer higher working capital and term loan limits under a single composite loan to SSI borrowers, reducing the need for multiple facilities. This simplifies credit access for small entrepreneurs and may increase loan demand. Lenders should update their internal lending policies and sanctioning limits accordingly.
What you must do
- Update internal circulars and loan processing systems to reflect the new Rs 1 crore composite loan limit for SSIs.
- Train branch and credit officers on the enhanced Single Window scheme limits and documentation requirements.
- Communicate the revised limit to all controlling offices and branches for immediate implementation.
- Monitor SSI loan applications to ensure smooth credit flow under the enhanced limit.
Who it affects
All Scheduled Commercial Banks including RRBs and Local Area Banks, SSI entrepreneurs and small-scale industrial units, Bank branch managers and credit officers handling SSI lending
What is the new composite loan limit for SSIs under the Single Window scheme?
The limit has been raised from Rs 50 lakh to Rs 1 crore, as per the RBI circular dated October 26, 2004.
Does this change apply to all scheduled commercial banks?
Yes, it applies to all scheduled commercial banks, including Regional Rural Banks (RRBs) and Local Area Banks.
What was the previous limit before this enhancement?
The previous limit was Rs 50 lakh, which was set in June 2003, up from Rs 25 lakh earlier.