The country’s second-largest public sector bank Punjab National Bank (PNB) has launched a Weaver Credit Card Scheme commemorating the “National Handloom Day,” today on August 7 to honour the Swadeshi Movement launched by Mahatma Gandhi on this day in 1905 in Calcutta highlighting the contribution of handloom sector to the socio-economic development and status of our weavers.
The Bank has launched a beneficial weaver credit card scheme under the PNB Weaver Mudra Scheme (PNBWMS), where loans to weavers are granted as per the scheme of Ministry of Textiles – under which the maximum limit is Rs. 2 lakh. With the introduction of MUDRA loan under the PMMY, the Ministry of Textiles wanted options for working capital needs of weavers under SHISHU and KISHORE Category along with the issue of MUDRA card hence the PNBWMS.
The new product specifically seeks to finance working capital needs of weavers up to Rs.50,000 to be categorized under SHISHU and for above Rs.50000 and up to Rs.5 lakh to be categorized under KISHORE category, where the Government of India has agreed to extend financial assistance in respect of margin money subsidy, interest subsidy and credit guarantee fees.
The scheme aims to provide adequate and timely assistance to weavers up to a maximum of Rs 5 lakh per borrower, by way of Cash Credit or loan for their credit requirements such as investments and working capital flexibly and cost-effectively, 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. Margin money subsidy will be credited to the account of the borrower after sanctioning of the loan.
As per eligibility norms, all existing Handloom Weavers – with identity cards issued by the DC (Handlooms), health card issued as a part of Health Insurance Scheme and certificate or identity cards issued by the State governments – can avail the scheme. 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.
Govt support to handloom sector: To provide 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 and charged by the Banks and 6% interest to be borne by the borrower.
The maximum interest subvention would be capped at 7%. Interest subsidy as applicable 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 of the loan account turns Non-Performing Asset (NPA) even within a period of 3 years.