February 19, 2004

All Member Lending Institutions of CGTSI

Circular No. 19/2003-04

Dear Sir / Madam,

Modifications/ Cancellation of Applications Lodged for Guarantee Cover

CGTSI has been receiving requests from Member Lending Institutions (MLIs) and their Operating Offices (OOs) for modification or cancellation of the applications submitted by them and approved by CGTSI. This is mainly on account of errors committed at the time of online lodgment of applications.

It has been observed in many instances that applications have either been lodged twice or the data entered in the fields (of the application) is incorrect. While every effort is made at CGTSI's end to prevent approvals of duplicate applications, they get processed and approved due to large numbers of applications handled. Subsequently on receiving CGTSI's demand advice the MLIs /OOs realize and point out the mistakes. In some instances even guarantee fee is paid twice by the MLIs.

Regarding incorrect entry of data in fields of CGTSI's application form, examples of typical mistakes which come to notice are given in the Annexure .

MLIs and their OOs are, therefore, requested to exercise caution while lodging applications for guarantee cover under Credit Guarantee Scheme of CGTSI. Slippages on this account result in carrying out modifications and cancellation at CGTSI end involving complicated process due to high degree of automation. There is also the possibility of applications getting rejected through system generated response. Needless to add that this causes inconvenience to our MLIs and to us. With care and correct entering of data in value fields of the application form this can be avoided. Similarly with effective co-ordination between branches and OOs of MLIs duplicate lodgement of applications can be checked. We seek your co-operation in the matter and request that contents of this circular may please be brought to the notice of all concerned.

CGTSI always endeavors to render prompt service to its MLIs.


Yours faithfully,


Utpal Bajpai

Chief Executive Officer


Examples of Errors noticed in Applications lodged with CGTSI

1. Some MLIs / OOs enter the value in the amount field in Rupees Lakh whereas they are required to enter exact value in Rupees only, i. e., instead entering amount of say Rs. 10,09,000/- they enter the value as Rs. 10.09. Since the calculation of the guarantee fee is automated, the system takes the value as Rs.10.09 and accordingly calculates the guarantee fee.

2. Another common mistake occurs while entering the Project Cost, Working Capital assessed, Promoter's Contribution, NEF and other Equity values. Here, the MLIs /OOs are required to calculate the Project Cost as sum total of Term Loan sanctioned, Promoter's Contribution, NEF and Other (including Subsidy) only.

3. In field for term credit (or loan) often the subsidy amount is included whereas this field should indicate amount or value net of any subsidy.

4. Entering wrong names of borrowers, addresses and other information (state, district, etc.) are also commonly observed.