Q.41. Can the MSE borrowers get collateral free loans from banks?

In terms of RBI circular RPCD.SME&NFS.BC.No.79/06.02.31/2009-10 dated May 6, 2010 , banks are mandated not to accept collateral security in the case of loans upto Rs 10 lakh extended to units in the MSE sector. Further, in terms of RBI circular RPCD/PLNFS/BC.No.39/06.02.80/2002-04 dated November 3, 2003 , banks may, on the basis of good track record and financial position of MSE units, increase the limit of dispensation of collateral requirement for loans up to Rs.25 lakh with the approval of the appropriate authority.All scheduled commercial banks that are public/private sector banks and RRbs/NSIC/SIDBI/NETFI are the member lending institutions. (MLI) List of banks offering loans is mentioned below;List of Bank’s MSME Care Centres1.Allahabad Bank2.Bank of Baroda3.O.B.C.4.Andhra Bank5.State Bank of Bikaner & Jaipur6.State Bank of Hyderabad7.Bank of India8.Bank of Maharashtra9.State Bank of Travancore10.Canara Bank11.Dena Bank12.Indian Bank13.I.O.B.14.Punjab & Sind Bank15.P.N.B.16.Syndicate Bank17.UCO Bank18.Union Bank of India19.United Bank of India20.Vijaya Bank21.State Bank of Mysore22.Corporation Bank23.I.D.B.I.24.State Bank of Patiala25.State Bank of India26.Central Bank of India27.State Bank of IndoreLinks of State Level Bankers’ Committees contact address1.SLBC Rajasthan2.SLBC Bihar3.SLBC U.P.4.SLBC Orissa5.SLBC Andhra Pradesh6.SLBC J&K7.SLBC Gujarat8.SLBC West Bengal9.SLBC Kerala10.SLBC Jharkhand11.SLBC Himachal PradeshFee for Guarantee:The fee payable to the Trust under the scheme is one-time guarantee fee of 1.5% and annual service fee of 0.75% on the credit facilities sanctioned. For loans up to Rs.5 lakh, the one-time guarantee fee and annual service fee is 1% and 0.5% respectively. Further, for loans in the North-East Region, the one-time guarantee fee is only 0.75%.