CGTMSE/(44)/5483                                               January 02, 2014



All the Member Lending Institutions - Regional Rural Banks



Kind Attn.: Head, SME/Priority Sector Dept.


Circular No. 72 /2013-14


Madam / Dear Sir,


Review of registration criteria as Member Lending Institution (MLI) under Credit Guarantee Scheme (CGS) of  CGTMSE


            As you are aware, as per the extant guidelines, Regional Rural Banks (RRBs) who were categorized as "Sustainably Viable" or "Currently Viable" as per NABARD classification were being registered as MLIs of CGTMSE. However, in the light of amalgamation of number of RRBs during FY 2012-13 and FY 2013-14 at the instance of Ministry of Finance, Govt. of India, needing re-registration of newly formed entities with CGTMSE as its MLI, the existing registration criteria of RRBs as MLIs of CGTMSE was reviewed. It has now been decided that in addition to the eligibility under above mentioned "Sustainably Viable" or "Currently Viable" categorization, the RRBs would need to satisfy the following additional criteria to enable CGTMSE to register/re-register it as its MLI :


Ø  CRAR of not less than 12%

Ø  Net Profit for at least previous three financial years for all the RRBs getting merged.

Ø  Net NPAs below 5% of advances

Ø  No regulatory defaults.

Ø  More than 80 marks awarded by NABARD under Composite Rating (as per the latest available review) under its Supervisory Rating Scale for RRBs.


Please note that all the RRBs, whether subjected to amalgamation or otherwise, who are satisfying revised eligibility criteria as indicated above, will be required to register/re-register with CGTMSE as its MLI. In the meanwhile, those RRBs, who are satisfying the revised eligibility criteria, may forward a copy of its audited annual accounts for last three years ended March 2013 along with schedules to enable us to initiate the process of re-registration. The duly authenticated copy of Composite Rating received from NABARD (for the latest review conducted) under its Supervisory Rating Scale for RRBs may also be submitted.


As regards pending on line applications for fresh guarantees submitted by the existing MLI - RRBs of CGTMSE till the date of this circular, a separate view is being taken with regard to its approval. Needless to mention, Guarantees already issued by CGTMSE will be honored by the Trust for all existing registered MLI - RRBs, non merged as well as merged entities (under new name) provided Annual Service Fee/ Annual Guarantee Fee is paid upto date and all other settlement criteria is complied with.


The contents of this circular may please be brought to the notice of all your Offices.


 Yours faithfully,




(S.S. Bakshee)

                                                                                                                  General Manager