CGTMSE SCHEME PDF DOWNLOAD

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Government of India launched Credit Guarantee Scheme (CGS) so as to Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) in. As per RBI guidelines, no collateral security shall be obtained and all eligible loans shall be covered under CGTMSE without exception. ❖ For all credit facilities. CGTMSE MMS Final Summer Project - Free download as Word Doc .doc), PDF File .pdf), Text Download as DOC, PDF, TXT or read online from Scribd . Credit Guarantee Fund Trust for Micro and Small Enterprises and scheme as Credit.


Cgtmse Scheme Pdf Download

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Application Form CGTMSE - Download as Word Doc .doc), PDF File .pdf), Text CGTMSE Scheme. Uploaded by. johnrichardjasmine · cgtmse. Uploaded by. Ministry of MSME has a number of schemes and programmes to help and .. Micro and Small Enterprises (CGTMSE) to implement Credit .. computerescue.info enterprises are eligible to be covered under the scheme. and Small Enterprises (CGTMSE) to implement the Credit Guarantee Fund. Scheme.

Whether credit facility extended to self-help group can be covered under the scheme? At present, as per the Scheme, the credit facility extended to Self Help Group cannot be covered.

What is quantum of credit facility that can be covered under the Scheme? Can a credit facility of over Rs. The guarantee cover available will be restricted to credit of Rs. Presently, guarantee fee is payable is as under.

Sikkim Up to Rs. Can term loan or working capital facility alone be extended by an eligible lender and still be covered under the guarantee scheme? Yes, a lender can extend either term loan or working capital facility alone and still be eligible for a guarantee cover if it meets the other eligibility parameters.

Can a credit facility extended to a borrower against a collateral security be covered under the Guarantee Scheme, if the lending institution relinquishes its rights on the collateral security? Yes, provided the lending institution relinquishes its rights on the collateral assets and releases the same in favour of the borrower before seeking guarantee cover and subject to fulfilment of the other norms of the Scheme.

Further, in case the MLIs has to retain the collateral security for the existing credit facility, a new credit facility extended to same borrower, without taking collateral can be covered under the scheme provided, the MLI is not extending the charge on the existing collateral to new facility.

Is there any ceiling in respect of interest to be levied on the credit facility advanced to the borrower if the same is to be covered under the Scheme? The lender has to follow the guidelines issued by RBI regarding charging of interest on the credit to Micro and Small Ent.

This is exclusive of the fee payable to the Trust.

Is it possible to cover credit facilities, which have already become NPA? No, the credit facility that has already become NPA cannot be covered under the Scheme. What is the difference between primary security and collateral security?

Collateral security is any other security offered for the said credit facility. For example, hypothecation of jewellery, mortgage of house, etc. Under the Scheme, any third party guarantee obtained for the credit facilities will make them ineligible for guarantee cover. What is third party guarantee? As per the extent guidelines no third party guarantee should be obtained if the account is to be covered under the Credit Guarantee Scheme.

Personal guarantee of directors, were borrower constitution is a company would be treated as third party guarantee. Whether the incidence of annual guarantee fee be passed on by the lender to the borrower?

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The discretion is left to the MLI. Whether the rates of annual guarantee fee can be varied after the commencement of guarantee cover?

Annual Guarantee fee will not be changed with retrospective effect. Since the guarantee fee is payable only once at the time of seeking guarantee cover, so any change in rate will have only prospective effect on the future proposals to be covered under the Scheme.

Is Annual Guarantee fee is payable even after lodgement of claim? However, no claim can be lodged before the expiry of the initial lock-in period ie. What would be the annual guarantee fee that would be payable by the member-lending institution on credit facility sanctioned in excess of Rs. The annual guarantee fee payable would be on the loan amount sanctioned, subject to a maximum of Rs.

In this case, guarantee cover would be extended on Rs. How is the service fee payable for the first year?

In the first year of coverage of each guaranteed unit, the Annual Service Fee is worked out on pro-rata basis i. For calculation of Annual Service Fee, number of days in a year is taken as For subsequent years, service fee is charged for the whole year; on the credit facility guaranteed except for terminal year or closed cases where it is on pro rata basis.

In a hypothetical case, if a lender gives working capital limit of Rs. Therefore, in the first year the guarantee fee shall be paid by the lender as per applicable rate on the limit of Rs. On any further enhancement, guarantee fee is payable on the incremental enhancement i. As regards guarantee cover is concerned; guarantee will be available for a block of 5 years where working capital alone is given. What is the guarantee cover available to the lender per eligible borrower? Sikkim other than credit facility upto Rs.

When should the lender apply for the guarantee cover?

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The eligible lending institution can apply for guarantee cover in respect of credit proposals sanctioned in the quarter April-June, July-September, October-December and January-March prior to expiry of the following quarter viz. When will the guarantee cover commence for the eligible credit facility?

The guarantee cover will commence from the date on which guarantee fee proceeds are credited to bank account of the Trust. How long the guarantee cover is available for credit facilities extended to a particular borrower?

Where working capital facilities alone are extended to eligible borrowers, it would be for a period of 5 years or block of 5 years on renewal of the guarantee cover, provided MLI pays the Annual Service Fee as on March 31, latest by May 31 every year. Whether the interest on term loan and other charges can also be guaranteed by the Trust? In case of default by the borrower subject to overall guarantee cap amount, the liability of the Trust in respect of credit facility shall be as follows: i.

What is the tenure of the cover for credit relating to working capital? The tenure for coverage of working capital facilities is 5 years, where working capital alone is covered under the scheme. In case term credit and working capital both are covered under the scheme, the tenure relating to working capital facility would match the normal repayment period of term credit.

The reason for keeping a limit of 5 years wherever working capital alone are covered are that the period for which the same are extended by the lending 10 Page10 institutions are not time bound. CGTMSE welcomes any renewal of guarantee cover beyond 5 years on a payment of applicable guarantee fee. Whether the guarantee will continue to be available in respect of a particular borrower unit if there is change in management of that borrower during the period the guarantee is in force?

Under what circumstances the guarantee cover obtained by the lender in respect of particular borrower will lapse?

The guarantee cover given by the Trust to the lender in respect of credit facility to a particular borrower will lapse if - i. Annual service charge is not paid to the Trust by the specified period or such extended time limit as may be granted by the Trust, iv.

The tenure of guarantee cover has expired When can the lender invoke the guarantee given by the Trust in respect of credit facility advanced by it to the eligible borrower?

The lender shall prefer a claim on the defaulted account on recall of loan and initiation of recovery proceedings under due process of Law. The lender can, however, invoke the guarantee given by the Trust only after the lock-in period of 18 months either from the date 11 Page11 of last disbursement of credit to the borrower or from the date of the guarantee cover coming into force in respect of the particular credit facility, whichever is later. How the claim of lender Bank will be settled by the Trust in respect of defaulting account?

Under the Scheme, any third party guarantee obtained for the credit facilities will make them ineligible for guarantee cover. What is third party guarantee?

As per the extent guidelines no third party guarantee should be obtained if the account is to be covered under the Credit Guarantee Scheme. Similarly, Personal guarantee of directors, where borrower constitution is a company will not be treated as third party guarantee.

Personal guarantee of spouse, friend etc. Whether the incidence of Annual Guarantee Fee be passed on by the lender to the borrower?

The discretion is left to the MLI. Whether the rates of Annual Guarantee Fee can be varied after the commencement of guarantee cover? Any change in rate will have only prospective effect on the future proposals to be covered under the Scheme. Is service fee payable even after lodgement of claim? However, no claim can be lodged before the expiry of the initial lock-in period ie. What would be the Annual Guarantee Fee that would be payable by the member-lending institution on credit facility sanctioned in excess of lakh?

How is the Annual Guarantee fee payable for the first year? In the first year of coverage of each guaranteed unit, the Annual Guarantee Fee is calculated for 1yr. In the succeeding year, it is worked out on pro-rata basis i. For calculation of Annual Guarantee Fee, number of days in a year is taken as When will the guarantee cover commence for the eligible credit facility?

The guarantee cover will commence from the date on which guarantee fee proceeds are credited to bank account of the Trust. How long the guarantee cover is available for credit facilities extended to a particular borrower?

Where working capital facilities alone are extended to eligible borrowers, it would be for a period of 5 years or block of 5 years on renewal of the guarantee cover, provided MLI pays the Annual Service Fee due as on March 31, latest by within 60 days from the date of demand by CGTMSE. Whether the interest on term loan and other charges can also be guaranteed by the Trust? In case of default by the borrower subject to overall guarantee cap amount, the liability of the Trust in respect of credit facility shall be as follows: - Term Loan: - Defaulted amount inclusive of 1 Quarter interest.

Working capital facility: - Outstanding working capital advance inclusive of interest up to the date of NPA. What is the tenure of the cover for credit relating to working capital?

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The tenure for coverage of working capital facilities is 5 years, where working capital alone is covered under the scheme. In case term credit and working capital both are covered under the scheme, the tenure relating to working capital facility would match the normal repayment period of term credit. The reason for keeping a limit of 5 years wherever working capital alone covered are that the period for which the same are extended by the lending institutions are not time bound.

CGTMSE welcomes any renewal of guarantee cover beyond 5 years on a payment of applicable guarantee fee. Whether the guarantee will continue to be available in respect of a particular borrower unit if there is change in management of that borrower during the period the guarantee is in force?

Under what circumstances the guarantee cover obtained by the lender in respect of particular borrower will lapse? Annual service charge is not paid to the Trust by the specified period or such extended time limit as may be granted by the Trust, The tenure of guarantee cover has expired. When can the lender invoke the guarantee given by the Trust in respect of credit facility advanced by it to the eligible borrower? The lender shall prefer a claim on the defaulted account on recall of loan and initiation of recovery proceedings under due process of Law.

The lender can, however, invoke the guarantee given by the Trust only after the lock-in period of 18 months either from the date of last disbursement of credit to the borrower or from the date of the guarantee cover coming into force in respect of the particular credit facility, whichever is later. How the claim of lender will be settled by the Trust in respect of defaulting account? Whether the cash credit will continue to be covered under the scheme up to repayment of the 2nd term loan?

Guarantee cover is available for the second term loan provided the aggregate credit does not exceed lakh. Where working capital is sanctioned along with the term loan facility, the tenure of such working capital facility shall be co-terminus with that of term loan facility and shall run concurrently with the scheduled repayment period of the term loan facility.

Whether the responsibility to recover the defaulted credit is taken over by the Trust after the settlement of claim issuance of 1st Installment of claim in respect of particular borrower account? No, the lender continues to remain responsible to take all efforts in recovery of credit advanced to the borrower who had defaulted, even after the initial settlement of the claim by the Trust.

However such recovery should be remitted by the lender after adjusting towards legal expenses to CGTMSE without delay.. Any credit facility in respect of which risks are additionally covered by Government or by any general insurer or any other person or association of persons carrying on the business of insurance, guarantee or indemnity, to the extent they are so covered is not eligible for credit guarantee cover of the Trust.

Issue of notice under Lok Adalat is sufficient for invoking the guarantee and getting the first installment? Yes, for the purpose of the scheme, issue of notice under Lok Adalat is sufficient to prove the legal proceedings have initiated. Lending institution should take further action as contained in Section 13 4 of the above Act.

What is the familiar ground upon which claims from MLIs are rejected by the trust? Guarantee cover was not in force i. Account was doubtful of repayment when the cover was taken and it was obvious from the conduct of the account that it will turn NPA subsequently i. Claim application not submitted within the due date for claim lodgement. Legal Proceedings, OTS etc. What is meant by conclusion of recovery proceedings? The recovery proceedings would be stated as concluded after the decree has been enforced and recovery has been completed by the MLI and outstanding amount has been recovered by the MLI or decree to get time barred if no further recovery possible.

Can a lending institution go for one time settlement OTS in respect of defaulted cases, which are covered under the Scheme?

The lending institution is, however, required to keep the Trust informed. Initially, the legal expenses will be borne by the MLI. General How is this guarantee scheme operated by the Trust?

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The operations of this Scheme are fully computerized using B2B e-business concept to enable the Trust to deliver prompt service to the lenders. What information is required to be submitted to the Trust before starting operations under the Scheme?Guarantee cover was not in force i. The recovery proceedings would be stated as concluded after the decree has been enforced and recovery has been completed by the MLI and outstanding amount has been recovered by the MLI or decree to get time barred if no further recovery possible.

The eligible lending institution can apply for guarantee cover in respect of credit proposals sanctioned in the quarter April-June, July-September, October-December and January-March prior to expiry of the following quarter viz. Under the Scheme, applications are required to be filed by the MLIs, individually, in respect of each of the borrower. Regional rural banks that are classified by NABARD National Bank for Agricultural and Rural Development under the sustainable viable category and currently viable category with positive net worth are eligible for a guarantee cover under this scheme.

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