CGTSI/ (44)/830

October 22, 2002

The Head Offices of all the Member Lending Institutions of CGTSI

Circular No. 6/2002-03

Dear Sir / Madam,

Credit Guarantee Scheme (CGFSI) - Rephasement of guaranteed accounts

We have been receiving queries from the Operating Offices of our Member Lending Institutions (MLIs) to indicate the procedure to be followed in case of borrower accounts covered under CGFSI where rephasement/ reschedulement is warranted with / without sanction of additional credit facilities. The issue was examined by the Trust and it has been decided as under -

In case of accounts covered under CGFSI where rephasement/ reschedulement is required, the MLI concerned may approve the proposal and intimate to the Trust the detailed terms and conditions of rephasement. Further, if as a part of rephasement/ reschedulement sanction of additional credit facility to the borrower is granted (within the overall eligible credit limit of Rs. 25 lakh under CGFSI), the MLI is required to pay to CGTSI the guarantee fee on the additional credit facility sanctioned at the stipulated rate (presently 2.5%). However, if the account is already guaranteed for a maximum credit limit of Rs. 25 lakh, while considering rephasement / reschedulement it may be noted that no additional credit facility can be covered under CGFSI.

Please bring the above to the notice of all your Operating Offices.

Thanking you,

Yours faithfully,


  (S. N. Sadhwani)

Dy. General Manager