| Schemes->Margin Money
Scheme of Khadi & Village Industries Commission (KVIC) |
MARGIN MONEY SCHEME OF KHADI & VILLAGE INDUSTRIES COMMISSION (KVIC)
Implementing Agency Khadi
& Village Industries Board(KVIB)
Official(s) to be contacted
Secretary,KVIB
KHADI AND VILLAGE INDUSTRIES COMMISSION
IRLA ROAD,VILE PARLE(WEST),
MUMBAI-400 056,
(A) THE SCHEME
The Scheme envisages that:
25% of the project cost for the projects upto Rs.10.00 lakhs will be provided as "Margin Money".
For projects above Rs. 10.00 lakhs and upto Rs. 25.00 lakhs, rate of Margin Money will be
25% of Rs. 10.00 lakhs plus 10% of the remaining cost of the project.
In the case of weaker
section beneficiary viz SC/ST/OBC/Women/Physically Handicapped/Ex-servicemen and Minority
Community beneficiary/Institution and for Hill, Border and Tribal Areas, North Eastern
Region, Sikkim, Andaman and Nicobar Islands, Lakshdweep, Margin Money grant will be at the
rate of 30 per cent of the project cost upto Rs.10.00 lakhs and above this amount upto
Rs.25 lakhs it will be 10% of the remaining cost of the project.
Project cost will
include one cycle of Working Capital.
Margin Money Scheme is
applicable for viable Village industry projects(Khadi and Polyvastra and kept out of its p
urview).
The Bank will
initially sanction 90% of the Project Cost in case of General category of
beneficiary/institution and 95% of the project cost in case of Weaker Section
beneficiary/institution and disburse full amount for setting up of the project.
(B) THE BENEFICIARIES
Individuals/Entrepreneurs for projects upto Rs. 10.00 lakhs.
Institutions/Co-operative Societies/Trusts registered with KVIC/KVIB for projects upto Rs.
25.00 lakhs.
(c) MODALITIES OF THE SCHEME FINANCED THROUGH BANKS:
(i) KVIC will place a lumpsum deposit of Margin Money in advance with the Corporate Office
of each Bank or a Nodal Branch designated by the Banks in savings Account in the name of
KVIC.
(ii) Banks will ensure that each project fulfills the criteria of "Village
Industries", Per Capital Fixed Investment", Own Contribution" and is
located in Rural Area".
(a) Village Industry means: Any industry located in
rural area which produces any goods or renders any services with or without the use of
power and in which the fixed capital investment per head of an artisan or a worker does
not exceed Rs.50,000/-.
(b) Rural Area means: An area which comprises any
village or includes an area outside the Municipal limits, the population of which does not
exceed 20,000.
(iii) Banks will appraise projects technically as well as economically and take their own
credit decision on the basis of viability of each project.
(iv) Banks must ensure investment of 'own
contribution' of the entrepreneur /individual / Co-operative Society etc. @ 10% of
the total cost of the project for General Category and 5% in the case of the Weaker
Section beneficiary/institutions viz: SC /ST /OBC /Women /Minorities /Ex-Servicemen and
Physically Handicapped persons, North Eastern Region, Sikkim, Andaman & Nicobar
Islands, Lakshdweep,Hill, Border and Tribal Areas are treated as Weaker Section areas.
(v) Once the Margin Money is released in favour of
the loanee, it should be kept in Term Deposit receipt for 2 years at branch level in the
name of the beneficiary/institution. Interest accrued on such deposit will be utilised to
service partial interest burden on the loan disbursed to the beneficiary/insrtitution.
(vi) Since 'Margin Money' is to be provided in the
form of back-ended Subsidy(Grant), it will be credited to the borrower's loan account
after 2 years from the date of first disbursement to the borrower/institution.
(In case, the Bank's advance goes "bad" before 2 years period is over, Margin
Money will be adjusted by the banks to liquidate loan liability of the borrower either in
part or full.)
(vii) In case any recovery is effected subsequently by the Bank from any source whatsoever, such recovery will be utilized by the Bank for
liquidating their outstanding dues first any surplus will be remitted to KVIC.
(viii) Margin Money will be one time assistance from KVIC. For any enhancement of Credit
Limit, the KVIC's Margin Money assistance will not be available.
FEEDBACK AND REPORTING SYSTEM:
The Banks will submit the Margin Money claim to the
Commission every quarter certifying that the criteria laid down for availing the benefits
of Margin Money Scheme have been complied with by the Banks, meticulously. Claim
Application Form-cum-Receipt is enclosed (Annexure-I).
The Bank will submit a State-wise Quarterly Progress Report to the Commission regarding
the number of units financed under the Scheme, total limit/credit sanctioned, funds
released and Margin Money placed at their disposal, utilized. A format of progress report
to be submitted to the KVIC on quarterly basis is enclosed at Annexure-II.
MARKETING LINKAGES:
There are over 15,000 sales outlets run by KVIC/KVIBs and voluntary
organizations/institutions/Societies/Trusts assisted by KVIC/KVIBs. These sales outlets
are part of the marketing support system for Khadi and V.I.products of
institutions/entrepreneurs assisted by KVIC/KVIBs/Banks.
Dated: 4th August,1997
R.K.Bhargava,IAS
CHIEF EXECUTIVE OFFICER.
ANNEXURE-1
(Application form-cum Receipt for claiming 'Margin Money' from Khadi & Village Industries Commission by beneficiary and Bank/Financial
Institution).
Place:
Date:
NO.
To
The Chief Executive Officer,
(Directorate of Bank Finance)
Khadi & Village Industries Commission
Mumbai-400 056,
(THROUGH THE BANK)
Sub: Payment of "Margin
Money" against the Bank Finance
Sanctioned
.........reg.
Sir,
I/We..............................Son/Daughter of
................................. Secretary /Chairman /President /Managing
Trustee/Proprietor of ............................................ hereby inform you
that a village industry project has been sanctioned in my/our favor under
Margin Money Scheme of KVIC by.......................... Bank...........................
Branch..............
District.....................of..........................State..................
Details of Project Cost.
Means of Finance
A) Capital Expenditure
Own Contribution
Rs.
(i) Building/Worshed
Rs.
Margin Money
Rs.
(ii)Machdinery/Equipment Rs.
Term Loan
Rs.
B) Working Capital Rs.
Cash Credit
Rs.
Total cost: Rs.
2. I/We, therefore request you to
please advise the Bank to disburse an amount ..........................................of
Rs............................................................... Rs...........................(Rupees.....................)being
the margin money sanctioned by the Commission.
The details of my/our project is as under:
1.(a) Full Name of the
beneficiary/Society/Institution/Trust.
(b)Full address
(c)
Legal Status.
(d) Registration NO.and Date,if any.
2. Location of the Unit
Village,Taluka,Dist.and State)
3. Village Industrty Activity
(Please Specify)
4. Whether the beneficiary belongs to SC/ST/Minority/OBC/Ex-Servicemen/PHC/Women or
General.
5. Per Capita Fixed Investment HBA/NE States/Sikkim/Andaman & Nicobar or Lakshadweep.
6. Employment envisaged
7. Whether own contribution has been deposited with the Bank.
Rs.
a) full time:
b) part time
c) seasonal
I/We hereby agree to
abide by the terms and conditions and instructions issued by the Commission in this behalf
from time to time and those to be issued in future with regard to Margin Money Scheme.
I/We also agree to furnish quarterly progress report
on production, sales, employment, wages paid etc. to the Bank which in turn will
send the information on quarterly basis to the Commission for record and advice to Govt.
of India. The advance stamped receipt of Margin Money amount is also attached.
Yours Faithfully,
(Signature of the
beneficiary )
FORWARDED
(Seal)
BRANCH MANAGER
Seal of the Bank/Branch.
RECEIPT
Received Rs................(Rupees........................................)from the Chief
Executive Officer, Khadi and Village Industries Commission,
Mumbai-400 056 towards the payment of "Margin Money" in respect of project for
manufacturing of............................Sanctioned for
Rs..................................by..............Bank/Financial Instituion at
...............................Branch.
{Revenue Stamp}
Signature of the Applicant.
Note : in case of a Cooperative Society/Institution, Seal has to be affixed.
(For use of the Bank/Financial Institution)
In
consideration of the project of the above beneficiary/instruction, this Bank/Office has
sanctioned a loan of Rs...........after proper appraisal of the project at this end.
As against a loan of Rs..............(C.E.
Rs......... W.C.Rs. ................ ........................................ .......
....... ....... the Bank/this office has
released first instalment/full lumpsum amount of loan of Rs........
.............on........................................................The Bank/this
Office has arranged to deposit the amount of Margin Money in Terms Deposit in
the name of the beneficiary for 2 years and interest earned
on such TDR will be utilized to service interest burden of the loan, in part of
full. The Bank is aware, that if the advance goes 'bad' before 2
years, the Commissioner's Margin Money will be adjusted to liquidate
loan liability of the beneficiary with interest and recovery, if any, effected
later will be remitted to the Commission.
(Signature)
(Designation of the Bank Official)
(Seal of the Bank/Financial Institution)
Place:
Date
ANNEXURE-II
Name of the Bank
Office Address:
STATEMENT QUARTERLY PROGRESS REPORT OF
DISBURSEMENT OF MARGIN MONEY BY THE BRANCHES FOR THE QUARTER ENDED
S.No |
State/Union Territory |
SC/ST/OBC/MIN/WMN/XSM/PHC
|
Weaker Section Areas/HBA/NER/SKM/ANI/LAK DP |
General |
Margin Money Claim/Disbursed |
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NO. |
Amt.
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No. |
Amt
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No. |
Amt.
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No. |
Amt |
NO. |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
(9) |
(10) |
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STATE |
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1. |
Andhra Pradesh |
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2. |
Arunachal Pradesh |
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3. |
Assam |
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4. |
Bihar |
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5. |
Goa |
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6. |
Gujarat |
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7. |
Haryana |
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8. |
Himachal Pradesh |
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9. |
Jammu & Kashmir |
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10. |
Karnataka |
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11. |
Kerala |
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12, |
Madhya Pradesh |
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13. |
Maharashtra |
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14. |
Manipur |
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15. |
Meghalaya |
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16. |
Mizoram |
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17. |
Nagaland |
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18. |
Orissa |
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19. |
Punjab |
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20. |
Rajasthan |
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21. |
Sikkim |
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22. |
Tamil Nadu |
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23. |
Tripura |
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24. |
Uttar Pradesh |
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25. |
West Bengal |
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UNION TERRITORY |
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1. |
Andaman & Nicobar Islands |
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2. |
Chandigarh |
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3. |
Dadra & Nagar Haveli |
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4. |
Daman & Diu |
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5. |
Delhi |
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6. |
Lakshdweep |
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7. |
Pondicherry |
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SC-SCHEDULED
CASTE ST-SCHEDULED TRIBE OBC-OTHER BACKWARD CLASSES MIN-MINORITIES WMN-WOMEN
XSM-SERVICEMEN PHC.PHYSICALLY HANDICAPPED ASNI.ANDMAN & NICOBAR ISLANDS HBA.HILL AND BORDER AREA NER.NORTH ESTERN REGION
SKM.SIKKIM LAKDP.LAKSHDWEEP
COPY
OF
RESERVE
BANK OF INDIA,RURAL PLANNING &CREDIT DEPARTMENT,CENTRAL
OFFICE, MUMBAI CIRCULAR LETTER TO THE CHAIRMAN OF ALL SCHEDULED COMMERCIAL BANKS
VIDE REF.RPCD NO.PLNFS/BC.13/ 06.06.12(D)/97-98 DATED 28TH JULY,1997
The Chairman,
All Scheduled Commercial Banks
Dear Sir,
Rural Employment Generation Programme of KVIC
A
High Power Committee on Khadi and Village Industries headed by the then Prime Minister recommended in May, 1994, among
other things, accelerated growth of rural employment generation programmes. Accordingly,
KVIC has since formulated a Scheme for financing projects with investment limits upto Rs.
25 lakhs for Rural Industrialization and
Employment Generation. Under the Scheme, 25 percent of the project cost is being provided as "Margin Money" by way of
subsidy. The scheme was discussed in the Conference of Industry Ministers of States in
August 1996. It was decided to implement the scheme throughout the country.
2. Details relating to the "
Margin Money" Scheme are being furnished to you by KVIC, the salient features thereof
are given below:
i) Eligible Projects
The Scheme is applicable to all viable
village industry projects set up in rural areas.
ii) Eligible Borrowers
The eligible agencies under the scheme are
individuals (rural artisans/entrepreneurs) for projects upto Rs. 10.00 lakhs and
institutions, Co-operative Societies, Trusts registered with K VIC/KVIB for projects upto
Rs. 25 lakhs.
iii) Margin Money
25 per cent of the project cost upto Rs. 10.00 lakhs will be provided by KVIC as Margin
Money by way of subsidy. For projects above Rs. 10.00 lakhs and upto Rs. 25.00 lakhs rate
of margin money will be 25 per cent of Rs. 10.00 lakhs plus 10 per cent of the remaining
cost of the project.
In the case of weaker section beneficiary viz. SC/ST/OBC/Women/Physically
Handicapped/Ex-Servicemen and Minority Community beneficiary/Institutions and for Hill,
Border and Tribal Areas, North Eastern Region, Sikkim, Andaman and Nicobar Islands,
Lakshdweep, Margin Money grant will be at the rate of 30 per cent of the project cost upto Rs. 10.00 lakhs and above this amount upto Rs. 25 lakhs it will be
10% of the remaining cost of the project.
iv) Borrower's Contribution
Under the Scheme, the borrower is required to provide his own contribution of at least 10
per cent of the project cost. In case of SC/ST and other weaker section borrowers, the
contribution will be 5 per cent of the project.
v) Quantum of Loan
Banks will sanction 90 per cent of the project cost in case of general category of
borrowers and 95 per cent of the project cost in case of Weaker Section
beneficiary/Institutions and disburse full amount of the loan.
vi) Adjustment of Margin Money
KVIC will place a lump-sum deposit of Margin Money in advance with the Corporate Office of
each Bank which will be available for adjustment by banks to the borrower's loan account
after a period of two years from the date of disbursement of loan. Banks should furnish
quarterly progress report of adjustment of margin money directly to KVIC.
3. Kindly issue suitable Instructions to the controlling Officers/branches immediately for
implementation of the scheme.
Yours Faithfully,
Sd/-
(R. M. Joshi)
General Manager
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