Guidelines of SIDBI Cluster Development Fund (SCDF)
Small Industries Development Bank of India (SIDBI) has formed SIDBI Cluster Development Fund (SCDF) scheme with due concurrence from Reserve Bank of India (RBI).
Government of West Bengal
Finance (Budget) Dept.
Nabanna, Howrah
Memo No. 531-FB Dated: 21st day of August, 2023
Memorandum
Small Industries Development Bank of India (SIDBI) has formed SIDBI Cluster Development Fund (SCDF) scheme with due concurrence from Reserve Bank of India (RBI). The structure of the SIDBI SCDF scheme is in line with RIDF (Rural Infrastructure Development Fund) of NABARD which offers low-cost lending window to State Government for infrastructure projects in MSME clusters and its relevant areas such as rehabilitation of existing industrial estates/park, rehabilitation maintenance & repairing, setting up new industrial estates/park, construction of new CFC/ CPCs, procurement of plant and machinery etc. Now, for the sake of operational convenience and clarity the following operational guidelines are framed for SIDBI SCDF loan:
A. Administrative departments may identify projects which are eligible to be financed under SIDBI SCDF scheme with prior consultation with SIDBI and obtain in principle approval of the same from the concerned Admin Group of Finance Department. Proposal for in-principle approval for SIDBI SCDF projects must contain Annexure-Q (Copy attached) along with the views of Financial Advisor (FA).
B. After obtaining in-principle approval, Admin Dept. shall submit technically vetted estimates/ DPRs of the project directly to SIDBI. DPR should be prepared incorporating all the information of the project including its financials and project BOQ (Bill of Quantities) according to SCDF Guideline.
C. Thereafter, SIDBI may accord final sanction of the project to the respective Administrative Department directly with the intimation to Finance Department. Admin Deptt. is authorized to accept LOI/Sanctioned letter issued by SIDBI upto the Budget Provision of concerned Head of Account of a particular financial year.
D. For speedy execution and implementation of the projects taken up under SIDBI SCDF loan, all projects which have already been accorded in principle approval by Finance Department and sanctioned by SIDBI may be accorded AAFS (within the Budgetary allocation of the Department) by Additional Chief Secretary/ Principal Secretary/ Secretary of the Administrative Departments with the concurrence of Financial Advisor.
E. Release of fund:
(i) Mobilization Advance: As per SCDF norms, up to 20% of the Approved Loan amount will be eligible to be disbursed as mobilization advance and rest of the fund will be released on reimbursement basis. Administrative Department will send the copy of the executed sanction letter issued by SIDBI, AAFS order, copy of Work Order, Statement-A etc. to Finance Department for release of mobilization advance.
(ii) Release of further Fund: As per SCDF guidelines maximum 95% of the project cost will be financed under SIDBI SCDF loan and rest 5% of the project cost will be borne from State’s budgetary allocation.
After utilizing mobilization advance, fund to be used under SCDF Head of Account first and proposal may be forwarded to FD with Utilization Certificate (UC), Statement-A, Statement -P, copy of executed sanction letter, AAFS order, copy of work order etc. for release of fund from the State Exchequer using Budgetary Resources.
(iii) Reimbursement of loan: Administrative department shall send duly authenticated Utiliziation certificate (UC), loan Drawl Application (LDA), to SIDBI authority with a copy to Group-N of Finance dept. Thereafter, SIDBI will submit draft TPN (Time Promissory Note) to Group-N Finance dept. for releasing the admissible loan amount under SCDF on reimbursement mode. Finally, SIDBI will release loan to dedicated Loan account maintained at RBI after receiving Signed copy of TPN from Finance Dept.
F. For each and every drawal, Finance Department will be the sole authority to execute Time Promissory Note (TPN) by the authorized official and request SIDBI for disbursement of SIDBI SCDF Loan.
G. Formulation of Committee: High Power Committee (HPC) currently monitoring progress of the RIDF projects of NABARD will also be entrusted with the responsibility of taking any suitable decision regarding SIDBI SCF loan.
A monitoring committee will be constituted by the Administrative Department to supervise the progress of the work under SIDBI SCDF scheme.
H. Administrative Department shall nominate a Nodal officer not below the rank of Joint Secretary as an authorized official to make all correspondence (e.g. Loan Drawl Application, Claims, Submission of utilization Certificate & other Misc Correspondences) under the SIDBI SCDF programme.
I. Administrative Department shall ensure that Preparation of DPR to be made only after obtaining ownership of Land for the Project.
J. Admin Dept. will send all disbursement related proposal in a single e-office file to avoid duplicity of release. Similarly, for according In-principal approval a single e-office file has to be maintained.
K. In case project value is less than Rs. 1 crore, district wise sub scheme to be created under AAFS and Admin dept will explore possibility to take up project having project cost not less than Rs. 5 crores under SIDBI SCDF scheme.
L. After completion of Project “A project Completion Report (PCR)” to be prepared by Nodal officer of admin dept. for onward sending to SIDBI with a copy to Finance Dept.
This procedure of SIDBI SCDF loan will be applicable with immediate effect.
Additional Chief Secretary
to the Govt. of West Bengal