NSIC Bill Discounting Scheme Outlines Interest Structure and Compliance Rules for Small-Scale Suppliers

Under the scheme, NSIC extends financial assistance for bills drawn by small-scale units and duly accepted by the purchasing entity. The financing is extended against a bank guarantee issued in favour of NSIC. Purchaser units seeking annual limits under the scheme are required to submit relevant information through a prescribed application form, which then undergoes assessment by NSIC for approval.

The corporation has also specified the applicable interest rates, effective from 20 September 2011, based on the performance ratings of participating units under NSIC’s rating system. Units with an SE 1A rating are eligible for financing at an interest rate of 12.40%, while those rated SE 2A or SE 1B fall under an interest category of 12.90%. All other units are subject to an interest rate of 13.40%. Assistance is offered against securities such as bank guarantees, safe deposit receipts, or fixed deposit receipts.

However, NSIC has underscored the conditional nature of concessional interest benefits. Units with favourable ratings must adhere to timely repayment schedules to continue availing reduced interest rates. Any delay exceeding 90 days disqualifies them from concessional rates, placing them under the standard 13.40% interest bracket. Additionally, delays beyond the stipulated period attract an extra 3% interest over and above the normal rate.

The scheme is open to entrepreneurs qualifying under NSIC’s requirements. Applications must be submitted in duplicate by an authorised signatory—such as a proprietor, partner, or company director—seeking sanction of limits under the Bill Discounting Scheme.

Through this structured financial support mechanism, NSIC aims to strengthen the cash flow of small-scale suppliers, improving their ability to manage operations efficiently while maintaining formal accountability in trade financing. The detailed interest and compliance framework serves both to safeguard the corporation’s financial discipline and to ensure fair credit access for responsible enterprises.