BOI Star Aarogyam Scheme for MSME
BOI Star Aarogyam Scheme for MSME
To provide enhanced support to the healthcare sector amid the pandemic, the Bank of India (BOI) has launched the BOI Star Aarogyam Scheme. As part of this financial scheme, qualified medical practitioners can avail of loans up to Rs 100 crore for setting up Clinics/ Nursing homes/ Hospitals/ Pathology Labs/ Diagnostic centers or to import Vaccines and Covid related drugs. The BOI Star Aarogyam Scheme is valid Upto 31st March 2022. The current article briefs the procedure for applying BOI Star Aarogyam Scheme.
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The objective of the scheme
The key objective of the BOI Star Aarogyam Scheme is to provide financial support to the Healthcare Sector which is evolved in the manufacturing of medical products related to fighting against the novel Coronavirus. Bank of India also aims to provide loans to MSEs/businesses which are providing services related to COVID-19
Purpose of Star Aarogyam Scheme
The purpose of the BOI Star Aarogyam Scheme is as follows:
To finance qualified medical practitioners for setting up Clinics, Nursing homes, Hospitals, Pathology Labs and Diagnostic Centre
- For purchase of medical equipment including ancillary equipment
- For Expansion or modernization of existing hospitals, nursing homes, and clinics
- To provide finance to manufacturers of healthcare products for meeting working capital requirements and acquisition of fixed assets
- To set up Oxygen plant along with power back up for medical use
- To manufacture permitted drugs (including Covid-19 drugs), Vaccines, Ventilators, PPEs, Inhalation masks, ICU Beds, etc
- To import Vaccines and Covid related drugs
- To finance logistic firms engaged in healthcare activities
- Financing of Receivables of hospitals impaneled under AB PM-JAY
- The build-up of current assets like stocking of vaccines, medicines, consumables, etc
- For Capex LC (front-ended): For import of Capital Goods, to be liquidated on due date by debit to the Term Loan account
Eligibility for BOI Star Aarogyam Scheme
The target group of the BOI Star Aarogyam Scheme is as follows:
Hospitals/ Nursing Homes
- Manufacturers (both Medical professionals as well as non-medical Professionals) of healthcare products
- Manufacturers and suppliers of medical oxygen, Oxygen cylinders, Oxygen concentrators, Pulse Oximeters
- Manufacturers of permitted drugs (including Covid-19 drugs), Vaccines, Ventilators, PPEs, Inhalation masks, ICU Beds, etc
- Importers of vaccines and Covid related drugs
- Logistic firms engaged in critical healthcare supply
- Diagnostic Centers and Pathology Laboratories
- Eye Centers, ENT Centres, Small and Medium-size specialty clients like skin clinics, dental clinics, dialysis centers, endoscopy centers, IVF centers, polyclinics, X-ray labs, etc
Nature of Facility
Bank of India offers the following four types of assistance under the BOI Star Aarogyam Scheme:
- Term Loan
- Cash Credit
- Bank Guarantee
- Letter of Credit
Quantum of loan
The minimum amount of loan provided under the scheme is Rs. 10 Lakhs, and the maximum is up to Rs. 100 Crores
The Margin Details under the BOI Star Aarogyam Scheme is as follows:
Project Debt to Equity: 3:1
|2||Cash Credit||25% (Stocks), 40% (Receivables upto 90 days)|
|3||Bank guarantee / Letter credit||25%|
Note; Margin may be reviewed in the following cases:
- If Guarantee Cover is offered by the Government in line with Emergency Credit Line Guarantee Scheme(ECLGS)
- The hospital agrees to maintain an ESCROW account for capturing cash flow.
- The manufacturer is having a firm buying agreement from Government/hospitals and agrees to maintain the ESCROW account.
Rate of Interest
Bank of India offers an attractive interest rate on this scheme along with flexible repayment options. The sanctioning branch will provide the details once the loan is approved.
- For Internal rating grades 1 to 4:- RBLR + 2.00% p.a. presently effective 8.85% p.a.
- For Internal Rating grades 5 to 6:- RBLR + 2.50% p.a. presently effective 9.35% p.a.
The details of the collateral security provided under the scheme are as follows:
Loans up to Rs.2 Crore:
- Nil Collateral, if covered under Credit Guarantee Fund Trust for Micro and Small Enterprises(CGTMSE).
- Guarantee Fee to be borne by the borrower
- For coverage under CGTMSE, a partial collateral security model is also applicable as per extant CGTMSE guidelines.
- However, If the borrower is unwilling to pay the guarantee fee or is unwilling to cover the exposure under CGTMSE, then a Minimum 25% SARFAESI enabled collateral security needs to be obtained.
Loans above Rs.2 Crore to Rs.100 Crore:
- Minimum 25% SARFAESI enabled tangible collateral security. Requirement of Collateral can be reviewed in case:
- If Guarantee Cover is offered by the Government in line with Emergency Credit Line Guarantee Scheme (ECLGS)
- The hospital agrees to maintain an escrow account for capturing cash flow
- The manufacturer is having a firm buying agreement from Government/hospitals and agrees to maintain the escrow account
- For Cash Credit, the bank offers a Yearly Renewal option and the borrower can repay the loan on demand.
- In the case of a Term Loan, the bank offers a Maximum period of 10 years including a moratorium period.
- Maximum moratorium 18 months for construction of Hospital/ Nursing Home/Clinic (6 months in case of purchase of equipment only)
- Repayment can be equated or customized in alignment with the estimated cash accrual of the unit.
The applicant is requested to follow the below procedure to apply for the t Scheme.
- The applicant needs to access the official webpage of BOI and click on the MSME option from the home page.
- The link will redirect to the MSME scheme page. Click on the apply now option and select the apply & track MSME loan option from the drop-down list.
- On the new page, select the option “I want to apply for a new loan”.
- The application for Star Aarogyam will be displayed. Provide the following details:
- Name of the Enterprise
- Registered Office Address
- Address of Factory/Shop
- Date of Establishment/Incorporation of MSME
- Details of Proprietor/Partners/Directors of Company
- After providing the details click on Proceed and upload all mandatory documents.
- By clicking on the submit button, the application will be forwarded to the concerned branch officer.
- After scrutinizing the application, the loan will be sanctioned and credited to the applicant.