CGTSI / (44) / 908

December 01, 2005

All Member Lending Institutions of CGTSI

Circular No. 30 / 2005-06

Credit Guarantee Scheme - Changes in Guarantee fee structure -

Procedure for remittance

Please refer to CGTSI Circular dated October 03, 2005 advising, inter-alia, the changes in the guarantee fee structure (reduction from 2.5% to 1.5%) for select category of eligible borrowers in respect of credit facility sanctioned on or after October 01, 2005 and covered under the Credit Guarantee Scheme (CGS) :

i. All loans upto Rs. 2.00 lakh;

ii. All eligible women Entrepreneurs;

iii. All eligible borrowers located in the North Eastern Region (including Sikkim ) and Jammu & Kashmir."

The differential rates of guarantee fee for providing guarantee covers to the MLIs under CGS requires certain modifications / changes in the software programme. Pending necessary changes in the software programme relating to guarantee fee rate (i.e. 1.5% for the above category of borrowers), it is proposed to accept guarantee fee worked out by the operating offices of MLIs @ 1.5% of the amount sanctioned and covered under CGS. While remitting the guarantee fees (@ 1.5%), the operating offices of MLIs should invariably provide the details of CGDAN and CGPAN of the borrowers to us. Alternatively, where MLIs are paying as per the Demand Advice, the excess amount would be refunded by us.

You are requested to please advise your operating offices (Zonal / Regional Offices) about the above procedure. As soon as, the necessary changes in the software programme are undertaken by the software developer, MLIs could remit the guarantee fee as per the Demand Advice (CGDAN) raised by the Trust.

We solicit your cooperation in the matter.


Yours faithfully,


(S N Sadhwani )

Deputy General Manager