CGTMSE/(44)/12                                                                     April 04, 2013

           

 

All Member Lending Institutions of CGTMSE

 

 

Circular No. 63/2013-14

 

Madam / Dear Sir,

 

Procedure for collection of Fees under Credit Guarantee Scheme

 

            Please refer to our Circular No.62/2012-13 dated October 10, 2012 regarding modifications to Credit Guarantee Scheme. Subsequent to the modifications, the procedure for collection of fees under the Scheme, is being changed as under :-

 

Annual Guarantee Fee (AGF)

 

The demand on MLIs for AGF in respect of fresh guarantees would be raised upon approval of guarantee cover.  The guarantee start date (i.e. material date in terms of CGS) would be the date on which proceeds of AGF are credited to Trust's Bank account. The AGF / guarantee cover would be valid for one year from the material date i.e. Guarantee start date.  In the subsequent financial year in the month of April, demand for AGF (i.e. for 2nd AGF) would be raised for the guarantees approved in the previous financial year (till March 31st) for which the AGF has been received till March 31. Such demand would be w.e.f. the date on which previous AGF is expiring till March 31 of that year. The AGF demands for subsequent years would be on "Full Financial Year basis" excepting for the terminal year of guarantee where AGF demand would be till validity of guarantee cover. Illustrative examples are given in the Annexure for better understanding of proposed procedure.

 

Annual Service Fee (ASF)

 

For the guarantees issued upto March 31, 2013 against the credit facilities sanctioned / approved / renewed by MLIs upto December 31, 2012, the demand for ASF for the financial year FY2012-13 would be made in the first week of April 2013. As regards ASF for FY2013-14 and subsequent years, it would be demanded and collected "in advance" from the MLIs as against "on arrears" basis till FY2012-13. Accordingly, ASF demand for FY2013-14 for the ASF due for the period April 01, 2013 to March 31, 2014 would also be simultaneously made in April 2013 itself along with the demand for ASF for FY 2012-13.

 

2.         The extant guidelines with regard to period for remittance of ASF, penalties for delay in remittance of ASF beyond the stipulated due date etc. would remain unchanged. These guidelines would also be applicable for payment of AGF (excepting for the first AGF payable at the time of taking guarantee cover where existing guidelines as applicable for payment of Guarantee Fee would continue).

 

3.         We request you to kindly bring the contents of this Circular to the notice of all the operating offices / branches of your Bank / Institution.

 

 

Yours faithfully,

 

 

Sd/-

 (S.S. Bakshee)

General Manager

 

Encl : As above


 

 

Annexure

 

Illustrative examples for Procedure for collection of

Fees under Credit Guarantee Scheme

 

 

Example 1 :

 

Guarantee Approved date :    01/02/2013

Tenor : 60 months.

AGF proceeds realization date :  15/03/2013

Guarantee Start date : 15/03/2013

AGF validity : One year from Guarantee start date i.e. till 14/03/2014

Subsequent AGF demand  : In April 2013 for the period from 15/03/2014 to 31/03/2014

                                             In April 2014 : Full year

                                             In April 2015 : Full year

                                             In April 2016 : Full year

                                             In April 2017 : 01/04/2017 to 14/03/2018.

 

Note : In case of Term Loan, the guarantee will expire at the end of tenor of loan from the date of sanction of assistance by MLI as hitherto.

 

 

Example 2 :

 

Guarantee Approved date :    15/03/2013

Tenor : 60 months.

AGF proceeds realization date :  15/05/2013

Guarantee Start date : 15/05/2013

AGF validity : One year from Guarantee start date i.e. till 14/05/2014

Subsequent AGF demand  : In April 2014 for the period from 15/05/2014 to 31/03/2015

                                              In April 2015 : Full year

                                              In April 2016 : Full year

                                              In April 2017 : Full year

                                              In April 2018 : 01/04/2018 to 14/05/2018.

 

Note : In case of Term Loan, the guarantee will expire at the end of tenor of loan from the date of sanction of assistance by MLI as hitherto.

 

 

*****