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UCO Udyog Bandhu Scheme

UCO Udyog Bandhu Scheme

UCO Udyog Bandhu Scheme

UCO bank operates various schemes to help entrepreneurs in setting up businesses with various types of credit and financial services. UCO Bank has a countrywide network of more than 3000 service units which comprises specialized and computerized branches in India and overseas. As on 31 March 2012, government share-holding in the bank was 84%, making it a nationalized bank. 

UCO Udyog Bandhu

Under the UCO Udyog Bandhu scheme, term loan, cash credit, composite loan or bank guarantee limit is provided to eligible entrepreneurs. Technically qualified, talented and well trained/experienced persons/persons with entrepreneurial capability including green horn entrepreneurs who running manufacturing and service enterprise under Micro and Small Enterprise are the preferred target group of this scheme.

Loan Amount

Fund based term loan or working capital of a minimum Rs.1 lakhs and upto Rs.5 crore can be provided under the scheme. In addition, 50% of the funds can be sanctioned as non-fund based working capital with an upper limit of up to Rs. 2 crore. The total fund based and non-fund based exposure must not exceed Rs. 7 crore.

Margin & Interest

20% margin from promoters is required under the scheme. Loan of upto Rs.10 lakhs can be sanction at base rate. Loan of Rs. 10 lakhs to Rs. 1 crore is sanctioned at base rate + 1%. Loans above Rs. 1 crore are sanctioned as per the internal rating of the banks, designed especially for MSME businesses. 

For women entrepreneurs, the interest rate will be 0.50% less than effective rate of interest. Nevertheless, the effective rate of interest after permitting concession of 0.50% must not fall below the bank base rate.

Collateral Security

Hypothecation of stocks, book debts and fixed assets created out of bank’s loan must be pledged. For loan under Rs.10 lakhs, no collateral or third party guarantee is required. But, CGTMSE scheme coverage is obligatory.

For loan above Rs. 10 lakhs, collateral security in the type of mortgage of land and building (excluding agricultural land) or liquid security in the form of FD or NSC, surrender value of LIC is required. The security must be in the name of borrower or proprietor or partner or Director or Guarantor. 

Loan Repayment

The maximum tenure for loan repayment period cannot not be in excess of 108 months not including moratorium period of duration of maximum 18 months.

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