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PNB Seva

PNB Seva

PNB Seva

Punjab National Bank (PNB), one of the oldest public sector banks, offers business loans for financing MSME service units with an aim to support their businesses’ capital requirements or to expand operations. Under “PNB Seva”, the business loans can be availed for funding working capital requirements (through cash credit or overdraft facility) or taken as a term loan for non-recurring expenditures. In this article, we look at the “PNB Seva” in detail.

Purpose of the Loan

The Purpose of the “PNB Seva” is to provide adequate funding to the units engaged in processing units, thereby enabling them in meeting the working capital requirements.

Eligibility Criteria

The following are the eligibility criteria for availing business loans from the PNB.

Any individuals / Partnership / Limited Liability Partnership / Private Limited Company / Public Limited Company/ Trust and Co-operative Societies registered under any cooperative societies engaged in the rendering of service and are categorised as Micro, Small and Medium Enterprises.

Nature of Loan

The nature of advance granted by the PNB are as follows:

  • Cash Credit or overdraft is given as per the nature of the business
  • Term loan
  • Composite loan

How to Apply?

The eligible applicant who wants to apply for the PNB business loan has to approach the nearest PNB branch and collect the application form from the bank. Complete the application with the necessary details and attach the required documents. After filling the form, submit the same to the appropriate bank.

Rate of Interest

The rate of interest will be fixed as per the extant guidelines of the bank. The sanctioning branch will provide the details once the loan is approved.


The following are the securities required by the bank for lending the loan amount:

  • Primary Security: Mortgage or Hypothetical of stocks and assignment of receivables not older than three months is required.
  • Collateral Security: In respect of MSME advance, the collateral security or third party guarantee is required as per the norms mentioned below:
    • In case the land or building has been financed and mortgaged as primary security, having the realisable value of equivalent to 133% of total exposure, no additional collateral security is required. If there is any shortfall in the security, additional collateral in the form of liquid security or insolvency proceedings will be taken.
    • In case the land or building is not mortgaged with the bank (if plant & machinery are considered for the loan) the collateral security is added by way of mortgage of immovable properties or 3rd party guarantee.

Margin Contribution    

The bank offers different rates of margins based on the type of loan (cash credit/term loan), amount and end-use.

Nature of Facility Extent of Margin
Cash Credit (Hypothetical)

  •  Up to Rs. 2 lakhs


  • Above Rs. 2 lakhs and up to Rs. 5 lakhs
  •  Above Rs. 5 lakhs










 Cash Credit (Pledge) 15%
Cash Credit (Book Debts)

  • Limits up to Rs. 5 lakhs
  •  Above Rs. 5 lakhs







Bills for collection if any 25%
Overdraft facility against staff salary/wages and other such expenses 25%
Term Loan

  • Up to Rs. 2 lakhs


  • Above Rs. 2 lakhs and up to Rs. 5 lakhs  
  • Above Rs. 5 lakhs









For the purchase of old machinery or equipment not be older than 3 years.



Deferred payment guarantees 25%


The repayment period fixed for the borrower is up to 5-7 years. Also, PNB offers the option to increase this tenure to 10 years under certain circumstances.

The notification from the bank regarding the “PNB Seva” is reproduced below for reference.