CGTMSE/(44)/5622 July 21, 2017

All the Regional Rural Bank Member Lending Institutions of CGTMSE

Circular No. 131/2017-18

Dear Sir/Madam,

Review of Interest cap and other registration criteria of Regional Rural Banks (RRBs) as Member Lending Institutions (MLIs) of CGTMSE

Please refer to our letter no. CGTMSE/ (44)/3505 dated August 24, 2016 (Circular No. 114/2016-17) on the above subject (available on ) wherein, inter alia, we had indicated that the Average Base Rate (ABR) applicable to all MLI-RRBs for FY 16-17 shall remain valid till ABR for subsequent FY is advised to you. In this connection we advise that any credit facility which has been sanctioned by the lending institution with the maximum interest rate not more than 14% p.a. (including cost of guarantee cover) would be eligible for coverage under CGS. This supersedes the existing guidelines of CGTMSE on ceiling of interest rate that could be charged by MLIs on guaranteed loans. The Interest Rate for FY 2017-18 would be applicable for all loans/credit facilities sanctioned/renewed by MLI - RRBs on or after August 01, 2017 and proposed to be covered under Credit Guarantee Scheme of CGTMSE.

Please bring the contents of the letter to the notice of all your offices.

Yours faithfully,

(Rajni Sood)
General Manager