PUNJAB & SIND BANK

( ) / (A Government of India Undertaking)

.. (),5 , ,21 , -110125
HO. Priority Sector (Advances) Department, 5th Floor, Bank House, 21, Rajendra
Place, New Delhi-110125
Tel No. :011-25713026 /Fax:011- 25716801 - E-mail:ho.ps@psb.co.in
9/2014 /Date:
8.03.2014
.... /
H.O. P.S. Circulatory letter No.
/Code No.of the Department

H-9014

/Number of pages of circular

ALL BRANCHES /CONTROLLING OFFICES

Reg:Rationalisation in Rate of Interest on Micro,Small and Medium Enterprises
( MSMEs)
The detailed guidelines on rate of interest applicable on Advances have been issued in
terms of H.O:ID Circular No.1647 dated 26.09.2011.There was significant variation for
rate of interest applicable on MSMEs for advances upto Rs 10 crores and for advances
from Rs 10 crores to Rs 50 crores.
The Competent Authority has decided to rationalize the rate of interest on Micro,Small
and Medium(MSME) enterprises and following structure of rate of interest will be
applicable on MSMEs with additional concessions w.e.f. 1.04.2014:1.Funded Exposure upto Rs 25 lacs:
Quantum of Loan
Upto Rs 50000
Above Rs 50000
upto Rs 5 lacs
Above Rs 5 lacs
upto Rs 25 Lacs

Base Rate
10.25
10.25

Spread
1.75
2.00

Lending Rate
12.00
12.25

10.25

2.25

12.50

-2-

2.Funded Exposure above Rs 25 lacs:

Credit Rating
1
2
3
4
5
6
7

Base Rate
10.25
10.25
10.25
10.25
10.25
10.25
10.25

Spread
2.25
2.25
2.75
3.25
3.75
4.00
4.25

Lending Rate(BR+Spread) .
12.50
12.50
13.00
13.50
14.00
14.25
14.50

Additional Concessions:
1.Concession of 1% in ROI if collateral is 100% in all cases.
2.Concession of 0.25% in ROI if credit rating is 1 to 4 by SMERA,ICRA, ONICRA or CRISIL.
3.Concession of 0.25% if account is classified under Priority Sector Advances.

Please note that in no case chargeable rate of interest shall fall below Base Rate.
We hope that with rationalization and reduction in rate on interest on MSMEs we will be
competitive in the market and branches will substantially dispense credit to MSMEs.

(Harsh Bir Singh)

General Manager(PS)