Banks will appraise projects technically as well as economically and after ensuring that each project fulfills the criteria of “ Village Industry ” , “ Per Capita Fixed Investment ” , “ Own Contribution ” and “ Rural Area ” , take their own credit decision on the basis of viability of each project. In case Bank feels that the cost of the project is more according to the circumstances prevailing in the area, they can reduce the cost of the project.

Once the project is sanctioned and first instalment of the Bank Finance is released to the beneficiary, Bank will inform the State/Regional Office of the KVIC, as the case may be, for arranging EDP training to the beneficiary, if he has not already undergone such training. If he has already undergone such training either with the training centre of KVIC or KVIB or at any other training centre of repute, such beneficiary need not undergo EDP training.

After the successful completion of EDP training arranged by the KVIC, bank will release second instalment of the Bank Finance to the beneficiary.

After the release of Bank Finance either partly or fully, Bank will submit Margin Money claim on the prescribed format to the designated Nodal Branch of the State/Region where KVIC has placed lumpsum deposit of Margin Money in advance in the Savings Bank Account in the name of KVIC, for release of Margin Money. In case of projects financed by the branches of the Regional Rural Banks, the financing branches of the RRBs will have to submit the Margin Money Claim to their Head Office, who will submit the consolidated claims to the designated Nodal Branch of their sponsoring Bank. Though the margin money will be released by the designated Nodal Branch of the Bank, KVIC is the final authority to either accept the project/claim or reject, based on the parameters of the Scheme.

Once the Margin Money is released in favour of the loanee, it should be kept in the Term Deposit Receipt of 2 years at branch level in the name of the beneficiary/Institution. No interest will be paid on the TDR and no interest will be charged on loan to the corresponding amount of TDR.

Since “ Margin Money ” is to be provided in the form of middle-end Subsidy (Grant), it will be credited to the Borrowers loan account after 2 years from the date of first disbursement to the borrower/institution.

In case the Bank ’ s advance goes “ bad ” before the 2 years period is over, Margin Money will be adjusted by the Bank to liquidate the loan liability of the borrower either in part or full.

In case any recovery is effected subsequently by the Bank from any source whatsoever, such recovery will be utilized by the Bank for liquidating their outstanding dues first. Any surplus will be remitted to KVIC.

Margin Money will be one time assistance from KVIC. For any enhancement of credit limit or for expansion/modernization of the project, margin money assistance is not available.

Margin Money assistance is available only for new project sanctioned specifically under the REGP-Gramodyog Rojgar Yojana. Existing units are not eligible under the Scheme.

As per the existing guidelines of the Reserve Bank of India, beneficiary already assisted under REGP – Gramodyog Rojgar Yojana is not eligible for further assistance under another Scheme or vice-versa.

Projects financed jointly i.e. financed from two different sources, are not eligible for Margin Money assistance without the prior approval of the competent authority of the Commission.

Bank has to obtain undertaking from the beneficiary before the release of Bank Finance that in the event of objection by KVIC, he will refund the Margin Money kept in the TDR or release to him after 2 years period.

Bank has to ensure that each beneficiary prominently displays following sign-board at the main entrance of his project site:- ………………………………… ..(Unit name) Financed by ………………………… ..(Bank) Under KVIC ’ s Gramodyog Rojgar Yojana

Margin Money Claim will be submitted by the Financing Branch of the Bank to the designated Nodal Branch within 15 (fifteen) days from the date of disbursement of first instalment and the Nodal branch will have to submit to KVIC/KVIB with in another 15 days altogether within 30 days. Belated claims will be entertained only on approval by the State/Regional Office of the KVIC.

All the advances under the REGP are collateral security free advances.