CGTSI/(44)/

September 10,2007

All Member Lending Institutions of CGTSI

Circular No. 38 / 2007-08

Dear Sir/Madam,

Closure of Collecting Bank Accounts

To facilitate quick collection and provide convenience, CGTMSE had advised its MLIs to remit the GF / ASF through the branches of designated collecting banks. At present, CGTMSE is having banking arrangement with the following banks -

1) IDBI Bank Ltd.

2) HDFC Bank Ltd.

3) State Bank of India

4) Punjab National Bank

The MLIs are required to advise the details of such remittances indicating the demand advice no. (CGDAN), CGPAN NO. etc. to enable the Trust to appropriate the guarantee fee and issue guarantee cover expeditiously. Instructions to this effect have been given to MLIs through circulars and other communication, from time to time.

On several occasions the details of remittances towards guarantee fee / service fee are not furnished to CGTMSE by the Operating Offices of MLIs or to the branches of collecting banks. This comes to the notice of CGTMSE after considerable delay on receipt of bank statements and at the time of appropriation of guarantee fee. At times some of branches of collecting banks bunch all the credits received from different MLIs pertaining to CGTMSE in a day and advise a consolidated credit amount to its branch at Mumbai, where CGTMSE is operating its current account, which appears in the bank statement. The collecting banks do not provide the instrument number, name of the remitting MLI or the place of remittance in the bank statements. All this causes problems at CGTMSE's end in reconciliation of amounts credited in the accounts and appropriation of guarantee fees against the remitting MLI and the specific borrower account.

It has been decided that, the existing arrangement with collecting banks will be discontinued with effect from October 01, 2007 . MLIs are requested to remit GF / ASF by demand draft only in favour of CGTMSE, payable at Mumbai, with details of the payment and after allocation of the payment in the system.

 

Yours faithfully,

Sd/-

(P.M.Radhakrishnan)

Deputy General Manager