CGTSI/(44)/521

July 2, 2007

All Member Lending Institutions of CGTSI

Circular No. 37 / 2007-08

Financial Sector Plan for the North Eastern Region- Modifications in the Credit Guarantee Scheme

Based on the recommendations of the Committee on Financial Sector Plan for North Eastern Region, it has been decided as under:

i) The up front Guarantee Fee will be reduced by 50% from 1.5% to 0.75% for all loans in the North Eastern Region.

ii) The extent of guarantee cover will be raised from 75% to 80% for all loans in the North Eastern Region.

The consequential changes in the Scheme are given in the Annexure. You are requested to advise your operating offices (Zonal / Branch Offices) about the modification made to the Scheme as above. We solicit your cooperation in covering maximum proposals under the Scheme in the North Eastern Region.

Yours faithfully,

Sd/-

(P.M.Radhakrishnan)

Deputy General Manager

Annexure

Ch. No.

Original Provision

Modified Provision

8. i )

Guarantee Fee and Annual Service Fee

A one time guarantee fee at specified rate (currently 1.5 per cent) of the credit facility sanctioned, (comprising term loan and / or working capital facility) shall be paid upfront to the Trust by the eligible institution availing of the guarantee.

Guarantee Fee and Annual Service Fee

A one time guarantee fee at specified rate (currently 1.5 per cent) of the credit facility sanctioned, (comprising term loan and / or working capital facility) shall be paid upfront to the Trust by the eligible institution availing of the guarantee, with the proviso that the applicable rate for loans to borrowers in the North Eastern region shall be 0.75%. (This will be incorporated along with the amendments obtaining as per the circular No.36 dated July 2, 2007).

9.

Extent of the guarantee

The Trust shall provide guarantee cover of up to 75% of the amount in default of the credit facility extended by the lending institution to an eligible borrower, subject to a maximum guarantee cover of Rs. 18.75 lakh (Rupees eighteen lakh seventy five thousand only) per borrower

Extent of the guarantee

The Trust shall provide up to 75% of the amount in default of the credit facility extended by the lending institution to an eligible borrower, subject to a maximum guarantee cover of Rs. 37.50 lakh (Rupees thirty seven lakh fifty thousand only) with the proviso that the extent of guarantee cover will be raised to 80% for loans in the North Eastern region irrespective of amount. (This will be incorporated along with the amendments obtaining as per the circular No.36 dated July2, 2007).