Financial  assistance  under marketing activity of MSSIDC        

Small scale sector works with limited resources and with it’s limited retention capacity. The SSI units have to run from pillar to post for realization of sales proceeds after execution of the marketing orders. Considering these difficulties of the SSI units,MSSIDC evolved a financial assistance scheme for providing SSI units advance payment against corporation’s orders .under this scheme, corporation provides mobilization advances to the extent of 75% of the value of the order placed by the corporation against the submission of Bank Guarantee by the unit from the nationalized or scheduled Bank in the format prescribed by the corporation.

       On execution of the order, 80% payment is also made immediately to the unit against the proof of delivery of the ordered goods and accepted by the consignee and on production of the documentary evidence in the prescribed delivery challan format.

The salient features of the financial assistance under the marketing activity are as under:

A)    Mobilisation Advance:

      In order to ensure the units executing marketing orders of the corporation adhere to the delivery schedule, mobilization advance provision is made under this scheme. The unit desirous of availing the benefit of mobilization advance against the MSSIDC order has to apply to corporation and upon approval and sanction of the advance, has to submit a Bank Guarantee of the Nationalised or Scheduled bank .the Bank Guarantee is also required to be provided/submitted in the format prescribed by the corporation for this purpose. The advances are released in the following manner. 

Rate of Interest under various schemes of Marketing Activity

 B)    Release of 80% advance payment against Delivery Challan in the prescribed format:

Corporation release 80% of the bill amount immediately on delivery of the ordered goods and on production of delivery challan / inspection cum certificate of Acceptance (ICCA) issued by the consignee. This delivery challan has to be in the prescribed format. Corporation levies slabwise rate of interest, as above, from the date of release of such advance payment to the actual date of receipt of payment from the consignee for the corresponding deliveries effected by the unit.

Unit desirous of availing 80% advance payment are required to give an under taking in the prescribed format duly signed prior to availment of such advances along with duly notarizes indemnity Bond guaranteeing corporation that the advance payment shall be repaid along with the accured interest in the event if the purchaser consignee department fails to release the payment of the goods delivered by the unit. The validity of the Indemnity Bond is for a period of one year from the date of it’s execution. Interest rate is applicable to the schemes as above which is subject to change as per management decision.

      a) Recovering / adjustment of advances released against the bank Guarantee:

After having the advances against the Bank Guarantee and when units submit their bill supported with delivery challan cum inspection certificate, the 80% payment facility could also be extended to all the units by first recovering/adjusting the advance amount against the Bank Guarantee proportionately together with interest and the balance amount is released to the unit. The entire advance of the unit shall be subject to the condition that the advance together with interest is recovered and adjusted from the last bill of the unit and in any case prior to expiry of the validity of the Bank Guarantee.

 b)      Encashment of Bank Guarantee:

 In the event of non-execution of the order the mobilization advance issued to the unit shall be recovered by invoking the Bank Guarantee submitted by the unit along with the interest.

   c)      Recovery/ adjustment of 80% advance :

      The 80% advance payment released to the units against supply bills shall be adjustable on receipt of corresponding payment from the consignee to whom the unit has delivered the goods ordered by the corporation. While effecting the adjustment the interest shall be calculated for the period from the date of release of the payment till it’s realization from the consignee.

In the event of non-realization of the payment from the consignee department within a period of 180 days (6 months) the corporation initiates recovery action by invoking  the Indemnity Bond submitted by the unit along with legal measures. however, in any case the advances shall not be allowed to remain outstanding for a period of 270 days (9months).

MSSIDC also assists the SSI by way of extending financial assistance for the orders directly procured by the units in their name by transferring the order in the name of the corporation. Corporation also assists financially the units executing direct orders under Pledge Bill Scheme wherein the units have to produce an irrevocable letter of commitment from consignee that the payment of the pledged bills with the corporation shall be directly paid by the consignee purchaser department to MSSIDC. The units desirous of availing benefits under this facility/ scheme are also required to submit a Power of Attorney favoring the Corporation that the pledged bills payment will be released by the consignee department in favour of MSSIDC