CGTMSE / ( 44 ) /3267                                                                      June 09 , 2014

 

 

All Member Lending Institutions of CGTMSE

 

Circular No. 78 / 2013-14

Dear Sir,

 

Credit Guarantee Scheme (CGS) -

Modification in the Guarantee Claim Settlement Process

 

As you are aware, CGTMSE has been settling guarantee claims, complete in all respects, lodged by the Member Lending Institutions (MLIs) upon receipt of Declaration and Undertaking (D & U). However, in cases where the details fed by MLIs in the claim application form are inadequate or incorrect, a communication by way of a letter / email is being sent by the Trust to the concerned MLI advising submission of additional information / feeding correct details to enable the Trust to process the claim. The process results in delays in settlement of claims besides avoidable correspondence. With a view to address this issue, we have created online module in CGTMSE portal whereby the claim application form would be reverted to the MLI duly indicating appropriate nature of deficiency/ies when the claim application form is incomplete or fed incorrectly. The intimation to that effect would be given to the respective MLID (Controlling office) by means of email (system generated) to the email address available in the records of CGTMSE. The MLI shall re-lodge the claim with the desired additional information and / or correct details particularly in respect of nature of deficiency/ies indicated, while resubmitting the claim in the CGTMSE portal using the following menu:

 

Claim Processingà Claim Formà Update Return Claim Info

 

Besides the system generated emails to MLIDs, as indicated above, consolidated MLID wise information/status of claims being returned for want of additional information, will be sent to the Head Office (SME/Priority Sector Head) of the respective MLI on monthly basis to enable them to follow up with respective MLID for early submission of information to CGTMSE. Please note that the Trust will not enter into any other correspondence in this regard.

 

Incidentally, we have noticed that many of the claims are lodged immediately after serving notice to the borrower under Sec 13(2) of SARFASI Act, 2002. We may reiterate that serving of mere notice under the SARFAESI Act cannot be construed as initiation of Legal action unless possession of the assets of the borrower is taken by MLI under Sec 13(4) of the Act. MLIs are, therefore, requested to please advise their Zonal /Regional /Branch Offices in this regard to reduce the incidence of claim return by Trust due to this reason.

 

            We request you to kindly bring the contents of this Circular to the notice of all your offices.

 

Yours faithfully,

 

 

Sd/-

(S.S. Bakshee)

General Manager