To facilitate technology Upgradation of units in MSE sector for improving quality & quantity of production & to bring efficiency in the overall operations

Finance under this product shall be available for acquiring machinery/equipment  etc that qualifies as an embodied technology .An indicative list is as under:

a) Replacement of existing machinery /Technology with an upgraded one.
b) Expansion of existing unit using new technology keeping the original unit intact*.
c) Installation of improved packaging technology as well as anti-pollution measures, energy conservation machinery, in-house testing facilities and computerization of office records & management.

*Existing viable & functional units shall be allowed to continue with the current operations and expansion under the scheme will be for an additional production line.


Priority Sector Advance to MSE Sector.

The definition of Micro & Small enterprises shall be same as defined under MSMED ACT,2006, i.e.:

(A) MANUFACTURING ENTERPRISES (i) Micro Manufacturing Enterprises:
The investment in plant and machinery does not exceed 25 lakhs
(ii) Small Manufacturing Enterprises:
The invesetment in plant and machinery is more than twenty five lakh rupees
but does not exceed  5 crores 


(i) Micro Service Enterprises:
The investment in equipment does not exceed  10 lakhs.
(ii) Small Service Industries:
The investment in equipment is more than 10 lakhs but does not exceed  2 crores.

Technology upgradation would mean a significant step up from the present technology level to a substantially higher one involving improved productivity, and/or improvement in the quality of products/services. It would also include installation of improved packaging techniques as well as anti-pollution measures and energy conservation machinery. Further, the units in need of introducing facilities for in-house testing would qualify for finance, as the same is a case of technology upgradation. 

Replacement of existing equipment/technology with the same equipment/technology will not qualify for finance under this scheme, nor would the scheme be applicable to units upgrading with second hand machinery. 

Existing MSE units, located in J&K State, registered with the State Directorate of Industries. The units must be operational for at least 3 years as on the date of application for availing finance under this product.

  1. Existing MSE Units located in J&K State.
  2. The units must be registered with Directorate of Industries or the concerned registration authority.
  3. Units may be in the form of Sole proprietorship, partnerships, Co-operative Societies, Private & Public Limited Companies,etc.
  4. Women entrepreneurs shall be given preference
  5. Sick /non functional units shall not be eligible. Defaulters of the Bank shall also not be eligible, until & unless existing outstanding liability is cleared.
  6. Acquisition of new technology/machinery must not result in change in the status of the unit to medium sector. However, change in status from micro to small enterprise shall be allowed.
  7. Units which have availed benefits under technology upgradation schemes from Government any other institution shall not be eligible.
  8. Units under finance from JK Bank shall be eligible. Units which are not availing loan from any Bank/FI shall also be eligible. However, units availing finance (T.Loan and/or W.Capital) from other Banks/FIs shall not be eligible.

Project Finance (T.Loan) under this product shall be made available for:

a. Cost of new Machinery/Technology.
b. Removal charges of old machinery (technology) and Installation of new machinery (technology). However, these costs should not exceed 15% of the total cost of machinery/technology to be acquired under the scheme
c. Operative/Administrative expenses for the transition period (Wages, Rent, taxes, etc) wherever existing technology/machinery is replaced with a new one. However, if new machinery/technology is installed as an additional line, only normal pre-operative & preliminary expenses shall be included in the project cost.
d. Salvage value of existing machinery/technology, if any, shall be adjusted towards the margin requirement or liquidation of existing bank loan, if any. Existing machinery shall be disposed of by inviting quotations from the interested buyers or sold off as scrap.
e. In case the existing machinery is to be replaced with new one, the total finance shall also include a component equivalent to the outstanding bank finance (against existing machinery/technology), if any. This component shall be used for adjusting the existing bank finance ((against existing machinery/technology).

Moratorium period shall be comprised of maximum Implementation period of 6 months & maximum Gestation period of 6 months. Repayment period shall not exceed 8 years including the moratorium period.

  • Hypothecation of Machinery, etc acquired out of Bank Finance under this product.
  • Extension of charge in case the borrower is availing credit facility from the Bank and has provide collateral security in the form of mortgage of immovable property.
  • CGTMSE cover in cases where collateral isn’t available for existing finance or where no finance is outstanding or has been availed by the borrower (For loans upto  50 lacs).
  • Fresh NOC from lessor (SIDCO, etc) in case the unit is on leased land.
  • NOC from the concerned Banks/FIs in case the borrower isn’t availing T.Loan and /or WC facilities from our Bank.

10 % of the upgradation cost.

Comprehensive insurance of the new machinery with the usual bank Clause. In case the existing Unit/Machinery isn’t insured, same must be insured by the borrower.

  • Micro Enterprises: PLR-1.25%*
  • Small Enterprises: PLR-0.75%.*
  • In case of enterprises where the total exposure(T.L & WC) is above 20 lakhs, the above rates shall be applicable for first 2 years only after which the pricing shall be linked to Credit Rating of the Unit(Risk based pricing) to induce units to acquire better ratings and thereby to benefit from the most attractive interest rates.
  • 0.50% discount in rate of interest shall be given to women entrepreneurs.
    *Status of unit as Micro & Small enterprise shall be determined on the basis of status acquired after acquisition of new machinery/technology.