CGTMSE.Ref.No.1195/ASF-AGF-44                                                                

                                                                                                                       May 08, 2014

 

All Member Lending Institutions (MLIs)

 

                                                                                 Attention: MSME/Priority Sector Head of MLIs

 

Circular No. 75/2014-15

 

Dear Sir,

 

Credit Guarantee Scheme (CGS)-

Modification in procedure of allocation of Annual Service Fee (ASF)/

Annual Guarantee Fee (AGF)

 

As you are aware, while the payments in respect of ASF/AGF demanded annually by CGTMSE is presently received through a single payment from the Head Office of the respective MLI, the allocation and appropriation for the payments so received is made by CGTMSE based on the information received from the MLIs. It has been noticed that the work of allocation and appropriation of payments is inordinately delayed on account of non-receipt/incomplete receipt of information from MLIs with regard to the payments made by them towards ASF/AGF. As a sequel, refunds, if any, to MLIs for the excess payments made gets delayed resulting in avoidable correspondence from MLIs. The present levy of Service Tax with cess on ASF/AGF has made the matter of refund even more complicated.

 

It has, therefore, been decided that the allocation for payments towards ASF/AGF proposed to be made by the MLIs in response to the demand received from CGTMSE should henceforth be made by respective controlling offices of MLIs as is done in case of Guarantee Fees.The consolidated demand shall be forwarded by CGTMSE to respective Head Offices as per the present practice. The respective controlling offices can view the demands for ASF/AGF on the CGTMSE portal and allocations can be made by them accordingly. Additional menu option is being made available to enable controlling offices to allocate the proposed payments in respective category. After the allocation, RP No. wise statement duly indicating amount allocated against each RP No. may be forwarded by the respective controlling office to its Head Office. The statement can be generated by using the following path: Reports and MIS > RP related reports > ASF allocated reports.

 

The Head Office, on its part, shall consolidate the statements received from all of its controlling offices and pass on a single payment to CGTMSE by RTGS. Please note that the payments directly received from the controlling offices will not be accepted and shall be returned, if received. The Head Offices shall invariably forward a copy of statements indicating RP.No. and amount, as received from its controlling offices, immediately upon remitting the fee amount to CGTMSE by RTGS. The payment received will not be appropriated by CGTMSE unless the statements referred above are received by it. It may please be ensured, while making a single payment to CGTMSE, that the payment so made exactly matches with the sum total of all the statements received by the Head Offices from all its controlling offices. Any payment, where allocation has not been made by the controlling offices shall not be accepted by CGTMSE. Further, since the appropriation of the payments made can be done by CGTMSE only in case the correct RP. No. and amount is indicated in the statement, the controlling offices may be advised to take due care in feeding the RP. No. and amount. The revised procedure is applicable for payment of ASF/AGF for FY 14-15, the demands for which shall be raised by CGTMSE by May 10, 2014. Please note that the supplementary demands for additional ASF/AGF, wherever applicable, may follow in the light of differential pricing structure being introduced by CGTMSE.

 

As regards closure of guaranteed accounts under CGS, we invite your attention to our Circular No. 53/2009-10 dated July 10, 2009, Circular No. 55/2009-10 dated October 20, 2009 and Circular No. 59/2009-10 dated March 11, 2010. We hope all the MLIs and their controlling offices would have made the requests for closure of accounts for the FY 2014 through the "Closure Module" in CGTMSE portal by March 31, 2014 at -

 

Member Login Area -> Guarantee Maintenance -> Request for Closure.

 

It may be mentioned that no request for closure of guarantees for FY 2014 or previous period will be considered by us in the current FY 2015 and subsequent years henceforth.

 

The contents of the circular may please brought to the notice of all your offices.

 

 

Yours faithfully,

 

 

[S.S.Bakshee]

General Manager