TO ALL OFFICES

HO: CREDIT: CIRCULAR NO: 88/2022 DATE: 27.12.2022

REG.: PM SVANIDHI- GUIDELINES FOR IMPLEMENTATION OF 3RD TRANCHE OF

PMSVANIDHI SCHEME

Attention is invited to Credit Circular No. 55/2020 dated 05.09.2020 followed by Credit Circular No.
61/2021 dated 21.09.2021 vide which detailed guidelines of PM SVANidhi Scheme were circulated.

2. Ministry of Housing & Urban Affairs (MoHUA) has issued guidelines to provide 3rd tranche of loan
of Rs. 50,000 to PM SVANidhi beneficiaries on timely repayment of earlier loan under PM SVANidhi
Scheme.

3. The detailed guidelines for 3rd tranche of loan under PM SVANidhi and clarification from MoHUA
dated 14.09.2022 are as under:

Sr. Parameter Details

No.
1 Eligibility Minimum repayment period of 6 months for 2nd loans, to be eligible for the
Criteria next cycle of loan with an enhanced limit. If the Street Vendor repays the
loan earlier, (S)he would have to wait till the minimum repayment period
fixed for the loan, before (S)he is eligible for next higher loan.
2 Loan Amount Min. Rs. 30000/- Max. Rs. 50000/-
Under 3rd
Tranche
3 Tenure The tenure for 3rd tranche of loan will be 36 months. However, Street
Vendor (SV) can pre-pay without any prepayment penalty.
4 Moratorium NIL
5 Upfront Fee/ NIL
Processing Fee
6 Margin Money NIL

7 Age of SV Should be an adult. No upper age limit envisaged in the scheme. However,
the sanctioning authority may consider taking an appropriate loan insurance,
premium of which could be payable by the Borrower.
8 Security Loan is proposed to be unsecured and guaranteed by CGTMSE without
payment of any guarantee fee as per the guidelines issued earlier. Hence, no
additional security other than Demand Promissory Note (DPN) is envisaged.
9 Credit Score Not applicable as Street Vendor (SV) has already availed and fully repaid
two loans under PM SVANidhi scheme. However, sanctioning authority
may refuse loan only if SV’s any existing loan is NPA.
10 Udyam Not required.
Registration
11 Project Proposal No other document, financial papers including project proposal is envisaged
under the scheme.

12 Regular As it is a scheme with special dispensation supported by Government of

monitoring tools India to help bring SVs to mainstream banking system, no such monitoring
like visit, stock measures including end use verification are envisaged in the scheme.
statement, end use
verification etc.
13 Insurance Not envisaged. However LI may provide insurance product commensurate
with loan amount with the consent of the Borrower.
14 Cashback for At par with first and second loan borrowers.
Transaction
15 Interest 1. The street vendors availing loans under the Scheme are eligible to get
Subsidy an Interest Subsidy @7% for all the loans i.e 1st, 2nd and 3rd loans.
Interest Subsidy claims will be paid only for Standard accounts (non-
NPA as per extant RBI guidelines) on the respective claim dates and
only for the period during which the account has remained Standard.
2. Interest Subsidy claims to be paid on half-yearly basis. Accordingly,
half yearly claims to be submitted for Interest Subsidy as on June 30
and December 31 of each Year. However, interest subsidy claim for the
period ending June 30, 2022 would be filed for quarter.

17 Credit Guarantee 1. Presently, Scheme provides for guarantee coverage for 1st and 2nd
by CGTMSE loansas following:
a. First Loss (up to 5%): 100% of default portfolio
b. Second Loss (beyond 5% & up to 15%): 75% of default
portfolio.
c. Maximum guarantee coverage is 15% of the year portfolio and
effective guarantee coverage is 12.5% of the year portfolio.

2. New Credit Guarantee Coverage: For all Fresh 1st and 2nd loans (i.e.
1st and 2nd loans disbursed on or after June 1, 2022) and all 3rd
loans, a revised guarantee coverage as indicated below will be
applicable:
Fresh 1st Loan Fresh 2nd Loan 3rd Loan
Portfolio Coverage Portfolio Coverage Portfolio Coverage
First Loss 0 to
100% 0 to 3% 100% 0 to 8% 75%
7.5%
Second Above Above
Loss 75% 75%
7.5% 3% to
to 20% 10%
 Third Loss Above
20% to 50%
50%
Maximum
Guarantee 50% 10% 8%
Cover
Effective
Guarantee 31.875% 8.25% 6%
Cover

For the loans disbursed till 31.05.2022, the present credit guarantee cover
would be applicable.
18 Scheme Lending under the PM SVANidhi Scheme is extended till December
Period 2024. Credit Guarantee and interest Subsidy claims on all loans will be paid
till March 2028.

20 Identifier to be
used for the 3
rd “3rd Tranche” has to be entered in “Free Code 10”.
tranche loans

4. Further, following modification has been made in existing scheme by Ministry of Housing & Urban
Affairs (MoHUA):

Existing Guidelines Proposed Guidelines

Eligibility The Scheme is available to all street vendors The Scheme is now available to all
of street engaged in vending in urban areasas on or before street vendors engaged in vending
vendor for March 24, 2020. activity in urban areas.
loan under
PM
SVANidhi
Scheme

5. All other guidelines pertaining to SVANidhi Scheme as circulated by bank from time to time shall
remain same. All Branch Heads, Controlling Offices & other field functionaries are advised to go
through the aforesaid instructions carefully for meticulous compliance.

6. All inspecting officials are advised to note the guidelines to ensure its compliance. In case of non-
compliance of above mentioned guidelines the issue of non-compliance may be flagged/reported to the
competent authority for taking further action in the matter.

Ravinder Kumar
(General Manager)