Are your Clients Holding Back your Funds? Reclaim your Money with the Bill Discounting Scheme

A stack of pending bill receivables is nothing new for an MSME. However, the delays in receiving such payments can sometimes affect the daily working of the enterprise. When an MSME faces such a similar situation the Bill Discounting Scheme serves as the ideal solution.

Overview

Under the Bill Discounting Scheme, if an MSME has bills raised by Public Limited Companies, State and Central Government Departments or Undertakings, the NSIC will pay them a certain bill amount, until the bills have been cleared by the respective departments.

Benefits

How does an MSME benefit from this scheme?

Through this scheme, the government offers to buy the bills from an MSME at a concessional rate. The actual rate would depend on an MSME’s NSIC Rating.

Particulars Effective Rate of Interest

(w.e.f 20/09/2011)

(i)   Units having valid SE 1A rating under

NSIC’s  Rating Scheme

12.40%
(ii)  Units having valid SE 2A rating under

NSIC’s  Rating Scheme

12.90%
 (iii) Units having valid SE 1B rating under

NSIC’s  Rating Scheme

12.90%
(iv) Other Units 13.40%

Eligibility Criteria

What is the eligibility criteria for this scheme?

  • All MSMEs registered with NSIC are eligible for the scheme
  • The bills to be discounted should not be older than 90 days

Application

How to apply for this scheme?

MSMEs that wish to apply for this scheme can fill in the application form here.

Documents Required

Which are the documents that need to be submitted with the application form?

The following list of documents must be submitted in order to apply for this scheme:

  • Bank guarantee in favour of NSIC (The guarantee should be equivalent to the value of assistance) or Bill of Exchange duly accepted by large corporate units which have been profitable for the last 3 years and have a turnover exceeding ₹ 200 crores and net-worth exceeding ₹ 50 crores; or Personal guarantee of proprietor, partners of firms and Directors of the company
  • A passport size photograph of each of the Proprietor /Directors / Partners / Society office bearers along with their proof of residential address.
  • Self-attested photocopy of SSI & Sales Tax Registration Certificate
  • Processing fee as per policy
  • Self-attested statement of personal assets and liabilities
  • In case of Pvt. Ltd. or Public Ltd. Co., a copy of Memorandum & Articles of Association along with list of Directors needs to be attached
  • In case of a partnership concern, a copy of Partnership Deed duly notarized needs to be submitted
  • For a society, a copy of By-laws & charter of society along with a list of Governing body or executive members needs to be attached
  • Documents required for authorizing the signatory to sign and to deal with NSIC in respect of financial assistance required, for and on behalf of the applicant unit, need to be submitted as follows:
    • A copy of Board Resolution in case of Pvt./Public Ltd. Co.
    • Power of Attorney in case of partnership firm
    • A Governing Body Resolution in case of Society
  • Specimen signatures of authorized signatory attested by bank
  • Copy of sanction letter for credit limit sanctioned by the bank
  • Audited/Provisional financial statements of the unit
    • Last Year’s Audited financial statements
    • Provisional current year financial statements
    • Projected financial statements for the next year

 Which are the documents that need to be submitted for the renewal of cases?

The following list of documents must be submitted for renewal of cases:

  • Request of the unit along with processing fees as per policy
  • List of Directors/Partners/Office bearers of Society, if changed, with respect to earlier declaration.
  • Audited/Provisional financial statements of the unit:
    • Last Year’s Audited financial statements.
    • Provisional current year financial statements.
    • Projected financial statements for the next year.

Important Note: Please note that processing fee and service charges are applicable.

For further details on this scheme, please click here.

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