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ENTERPRISES
(Earlier CGFT for Small Industries)
1.
Credit Guarantee Fund Trust for Micro and Small Enterprises, is a Trust
formed by the Government of India (GOI) and Small Industries Development
Bank of India (SIDBI) as settlers to operate the Credit Guarantee Fund Scheme
for Micro and Small Enterprises. This aims at providing guarantees in respect of
credit facilities to the borrowers in the small scale sector without any collateral
security and/or third party guarantees.
2.
2.1
(ii)
The business or activity of the borrower for which the credit facility was
granted has not ceased and/or
(vi)
(iii)
The credit facility has not been wholly or partly utilised for adjustment
of any debts deemed bad or doubtful of recovery without obtaining a
prior consent in this regard from the Trust.
(iv)
Sick Units If the eligible borrower unit which has been covered under
the scheme subsequently becomes sick due to factors beyond the
control of the management, the assistance / credit for rehabilitation
extended by the lender could also be covered under the Scheme
provided the overall assistance is within the credit cap of Rs.50 lacs.
(v)
(ix)
2.2
(ii)
Any credit facility which has been sanctioned against collateral security
and / or third party guarantee. (However Personal Guarantee of the
promoter can be obtained).
(iii)
Any credit facility with interest rate more than 3% over the prime
lending rate.
(iv)
2.3
Guarantee Fee
A one-time guarantee fee @ 1.5% (earlier@ 2.5% Refer e-circular 1572006-07) of credit facility sanctioned comprising term loan and/or working
capital facility, and @ 1% for manufacturing units with credit facilities upto
Rs.5 lakhs (effective from 01.03.2008), shall be paid upfront to the Trust
by debit to the borrowers account within 30 days from the date of first
disbursement of credit facility or within 30 days from the date of demand
advice (CGDAN) of guarantee fee in respect of approved approval,
whichever is earlier.
For the purpose of calculation of guarantee fee, the credit facility
extended shall mean the amount of financial assistance committed by the
lending institution to the borrower, whether disbursed or not. (CGTSI
Circular No. 21 / 2004-05 dated January 20, 2005)
A one-time GF is to be paid to the Trust by debit to Banks Charges
Account. The GF is to be paid within 30 days from the date of approval of
Guarantee Application by the Trust OR from the date of first disbursement
of Credit extended by the Bank to a Borrower, whichever is later.
Credit Limits
NE Region &
Sikkim
Others
Upto Rs. 5
lacs
0.75%
1.00%
0.50%#
Above Rs. 5
lacs
0.75%
1.50%
0.75%#
2.4.2 The guarantee fee and / or annual service fee once paid by the lending
institution to the Trust is non-refundable. Guarantee Fee / Annual Service
Fee, shall not be refunded, except under certain circumstances like
a) excess remittance,
b) remittance made more than once against the same credit
application,
c) guarantee fee & / or annual service fee not due,
d) guarantee fee paid in advance but application not approved for
guarantee cover under the scheme, etc.
(CGTSI Circular No. 21 / 2004-05 dated January 20, 2005)
2.5
Extent of Guarantee
Category
Micro Enterprises
Women
entrepreneurs/
Units located in
North East Region
(incl.
Sikkim)
(other
than
credit
facility
upto Rs.5 lakh to
micro
enterprises)
All other category 75% of the amount in default
of
subject to a maximum of Rs.37.50
borrowers
lakh
The guarantee cover will commence from the date on which the fee is
credited to Trust Account and shall run through the agreed tenure of term
credit/composite credit.
Where working capital facility alone is extended, guarantee shall be for a
period of 5 years or extendable for another block of 5 years on renewal of
the guarantee cover.
The guarantee fee for additional working capital facilities extended shall
be levied on pro-rata basis for the remaining number of years in the block
of year period, considering the any part period in the year, as full year.
(CGTSI Circular No. 21 / 2004-05 dated January 20, 2005)
2.6
Invocation of Guarantee
Invocation of guarantee in respect of eligible credit facility if the following
conditions are satisfied.
5. Legal Proceedings have been initiated. Furnish the relevant details such
as date of initiation of legal action and legal authority such as DRT /
Revenue Recovery Authority / SARFAESI, etc., to which the legal
application is filed. In case of action under SARFAESI, possession of the
surety has been taken.
6. Forward the claim application form duly filled in to the Nodal Officer who
will apply on line in the CGTMSE Website.
7. The Declaration & Undertaking duly signed by Asst. General Manager is
enclosed with the Claim Application Form.
8. Details of subsidy (amount & date of credit) received after date of NPA, if
any, availed by the Borrower may also be furnished.
2.8
2.9
Balance Outstanding
Rs.10 lacs
(b)
Rs.1.50 lacs
(c)
Rs.8.50 lacs
(d)
Guaranteed portion
(75% of (c))
(e)
Uncovered portion
Rs.2.12 lacs
In case of advance covered by CGTSI guarantee becomes nonperforming, no provision needs to be made towards the guaranteed
portion. The amount outstanding in excess of the guaranteed portion
should be provided for as per extant guidelines on provisioning for nonperforming advances.
2.10
(i)
(ii)
(iii)
(iv)
(v)
2.11
(i)
(ii)
In case of proposals of Rs.10 lacs and above, the Bank shall furnish
the details of IT PAN of the concerned borrower in the application form,
while lodging the claim to the Credit Guarantee Trust. However, in
cases where credit assistance to be granted exceeds Rs.10 lacs and
the prospective borrowers dont possess IT PAN, guarantee cover may
be sought from the Trust with APPLIED FOR in the IT PAN field,
while simultaneously advising the prospective borrowers to apply for IT
(iv)
(v)
(vi)
(vii)
(viii)
(ix)