United Udyogshree Yojana

United Bank of India (UBI) is a government-owned banking company established in the year 1950. UBI Bank offers United Udyogshree Yojana to cater to the needs of the MSE category and to the dependent female family members all across the country. In this article, we look at the United Udyogshree Yojana in detail. To know about United Mahila Udhyami Yojana

Objective

The main objective of the United Udyogshree Yojana is to facilitate financing of borrowers and customers under the MSE and SSI sector as well as depositors those who are in the rural, semi-urban, urban and metropolitan area. Under this scheme, people are benefited through uninterrupted and hassle-free credit delivery for various productive activities undertaken by them in the MSE sectors. The main thrust areas are,

Village and Cottage Industries under tiny Industries sector
Small Scale Industry (SSI).
Other Self-Employment avenues under Tiny and SSI Sector.

Purpose of loan

United Udyogshree Yojana is designed to help the borrowers under MSE Sector as the bank financing for the below following activities:

For setting up of new village units and cottage industries units
Setting up of new SSI Units.
Expansion of existing SSI units
Purchase of two or four wheelers for conveyanceMarketing and transport of input and output (raw materials as well as products of SSI Sectors)
Repair, renovation, or expansion of factory shed
Marketing of products.
Also, the bank creates a platform for woman entrepreneurs and dependent female whose family members of the bank’s eligible borrowers or depositors to undertake the productive activities under tiny or SSI Sector.

Eligible Entities

All existing term loanees under SSI category who have maintained the good track of record with an average balance of Rs. 5000/- or above for last 3 years (Except Moratorium or Gestation period for the past loan)
All existing cash credit account holders under the SSI category who have maintained the good track of record for the last 3 years.
Dependent female family members of borrowers who are adults, non-defaulter to banks or financial institution and willing to undertake the productive activities in the village, cottage industries and small scale industries.
Existing depositors who have maintained the good track of record with an average balance of Rs. 5000/- or above for last 3 years of operating a tiny industry or willing to start such sectors/units and an average balance of Rs. 25,000/- or above for last 3 years running a small scale industries unit or willing to set up such sector/unit. Such depositors must not be defaulters to any Bank or any Financial Institutions.
Such depositors can also recommend any individual to the Bank for doing tiny or SSI industry activities by providing their personal guarantee.

Quantum of Loan

For existing borrowers with the credit limit up to Rs. 5 lakhs are eligible for a loan for the purchase of scooter, car, or motorcycle. The loan amount will be a cost of vehicle less margin or the amount of principal of the original loan repaid or Rs. 2 lakhs whichever is lower.
For existing cash credit borrowers the loan will be for the similar cause but the amount will be the cost of vehicle less margin of Rs. 2 lakhs whichever is lower for cash credit limit ranging from Rs. 2 lakhs to Rs. 5 lakhs
If the loanee under the category with the credit limit up to Rs. 5 lakhs wants to set up a new unit/sector or expand the existing unit, he may be allowed for higher loan limits according to the credit appraisal but in certain case reduction in rate of interest will be regarded to the extent of 1%.
In case of borrowers with cash credit limit of above Rs. 25 lakhs to Rs. 1 crore and coming under the following credit risk rating of UBI CR-2, increase in need-based credit limit will be allowed with decreased interest rate of 1%, margin by 10% and service charges by 10% are as follows: Average utilization of fund based limit is above 70% without any irregularity for the last 3 years.
Interest and instalments can be paid before or on the due dates.
In the case of borrowal accounts with good track record having cash credit limit of above Rs. 1 crore and coming under Credit Risk Rating UBI CR-2, enhancement of limit will be provided as per the credit assessment with reduction in rate of interest, margin and service charges as per Head Office Circular issued upon time to time.
Depositors with good track records and the proposed borrowers recommended by such depositors may be allowed need-based loan credit limit and the limit of above Rs. 5 lakhs to Rs. 25 lakhs must be covered under Credit Guarantee Fund Trust Scheme for Small Industries with the rebate in a rate of interest by 0.50%.