Lending Institutions - Eligibility, responsibility etc.
Credit Guarantee Schemes for Banks (CGS-I) Credit Guarantee Schemes for Banks (CGS-I)
1. Which are considered as eligible lending institutions under the Scheme?
All Scheduled Commercial Banks (either PSU, Private or Foreign Banks), selected Regional Rural Banks, selected state financial corporations , NBFCs, Small Finance Banks (SFBs), Scheduled Urban Co-operative Banks (including Non-Scheduled Urban Co-operative Banks, State Co-operative Banks and District Central Co-operative Banks), Microfinance Institutions (MFIs) or such of those institutions as may be directed by GOI can avail of guarantee cover in respect of their eligible credit facilities under the Scheme. Small Industries Development Bank of India (SIDBI), National Small Industries Corporation Ltd. (NSIC) and North Eastern Development Finance Corporation Ltd. (NEDFi) have been included as eligible institutions.
2. Can a Private sector bank or a foreign bank be eligible for guarantee cover?
Yes, provided it is a commercial bank listed in the II Schedule to the Reserve Bank of India Act, 1934.
3. Is Regional Rural Bank eligible for guarantee cover?
Yes, fulfilling the criteria of circular dated June 10, 2014 on "Review of Interest cap and other registration criteria of Regional Rural Banks (RRBs) as Member Lending Institutions (MLIs) of CGTMSE". The Trust shall cover credit facilities (Fund based and/or Non fund based) extended by select RRB(s) to a single eligible borrower in the Micro and Small Enterprises sector for credit facility not exceeding 50 lakh by way of term loan and/or working capital facilities on or after entering into an agreement with the Trust, without any collateral security and/or third party guarantees.
4. Whether SFCs, Twin Function IDCs, Scheduled Co-operative Banks, Urban Co-operative Banks and NBFCs are eligible lending institutions for availing guarantee cover under the CGTMSE?
Select SFCs , Scheduled Urban Co-operative Banks (including Non-Scheduled Urban Co-operative Banks, State Co-operative Banks and District Central Co-operative Banks), NBFCs, are being considered for inclusion as MLI, other institutions are not eligible to become a MLI.
5. When can the eligible lending institutions apply for guarantee cover in respect of eligible credit facilities under the Scheme?
The eligible lending institutions are required to enter into a "one time" agreement with CGTMSE for becoming Member Lending Institutions (MLIs) of the Trust. MLIs can then apply for guarantee cover in respect of eligible credit facility sanctioned to any eligible borrower. The MLIs can apply for guarantee cover in respect of credit proposals anytime during the tenure of Loan provided the credit facility was not restructured / remained in SMA2 status in last 1 year from the date of submission of application.
6. Whether the Trust will re-appraise the proposals sanctioned by the MLIs for approving guarantee cover?
MLIs are expected to support only viable proposals using their commercial discretion and due diligence. CGTMSE will have full trust in their credit evaluation. The Trust will not re-evaluate the proposals sanctioned by MLIs. If the proposals satisfy the basic norms laid down under the CGS, the Trust will extend guarantee cover.
7. Where the MLIs can get the details of accounts covered under CGTMSE?
Our website www.cgtmse.in has "Reports and MIS" module to enable the MLIs to generate standard reports. MLI can log on to the website-member page, using member-ID allotted and generate the reports desired by it viz. status of the application lodged, Demand for GF/ASF, monthly reports etc.