The Punjab National Bank (PNB) has introduced a weaver credit card scheme (PNBWMS) wherein the loans up to Rs 2 Lakhs are given to the weavers as per the scheme of Ministry of Textiles. Since the introduction of MUDRA loan under the PMMY, the Ministry of Textiles evaluated options for working capital needs of weavers under SHISHU and KISHORE Category along with the issue of MUDRA card.
PNBWMS is specifically meant to finance the working capital needs of weavers. The scheme finances up to Rs. 50000 under SHISHU and for financing above Rs.50000 and up to Rs.5 lakh under KISHORE category. The Government of India will extend financial assistance in respect of margin money subsidy, interest subsidy and credit guarantee fees.
The PNBWMS scheme intends to provide assistance to weavers – for a maximum of up to Rs 5 lakh per borrower, by way of Cash Credit or loan for requirements like investments and working capital, in both rural and urban areas.
As per the Margin conditions, the Government of India will bear a margin of 20% of the cost of the project (Working Capital) with a maximum of Rs. 10,000 while the rest of the amount will have to be borne by the borrower. The margin money subsidy will be credited to the account of the borrower after the loan sanction.
All existing Handloom Weavers with identity cards issued by the Development Commissioner for Handlooms, health card issued as a part of Health Insurance Scheme and certificate or identity cards issued by the State governments, are eligible for the loan. The applicants must not be a defaulter of any bank and must have a satisfactory report from CIBIL. All applications will be evaluated under the “PNB SCORE SME MODEL” for loans above Rs.2 Lakh and up to Rs.5 lakh. As per extant guidelines, loans up to Rs. 2 Lakh are exempted from scoring.
The Indian government supports the handloom sector with working capital loans at the rate of 6% to handloom sector. The quantum of interest subsidy to be borne by the Government will be limited to the difference between the actual rate of interest as applicable or charged by the Banks and 6% interest to be borne by the borrower.
The maximum interest subvention is capped at 7%. Interest subsidy will be provided for a maximum of 3 years from the date of the first disbursement. The interest subsidy will be credited to the account of the borrower quarterly. However, the interest subsidy will not be available from the date the loan account turns Non-Performing Asset (NPA) even within a period of 3 years.
All these accounts will be covered under the credit guarantee schemes of credit guarantee corporations.