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Circ 27

The document announces changes to the guarantee fee structure under the Credit Guarantee Scheme of CGTSI. Specifically, it reduces the guarantee fee from 2.5% to 1.5% for three categories of eligible borrowers for credit facilities sanctioned on or after October 1, 2005: 1) all loans up to Rs. 2 lakh, 2) all eligible women entrepreneurs, and 3) all eligible borrowers located in North Eastern India or Jammu & Kashmir. Member Lending Institutions of CGTSI are requested to advise their offices of this modification to the Scheme and cooperate in covering maximum proposals.

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19 views

Circ 27

The document announces changes to the guarantee fee structure under the Credit Guarantee Scheme of CGTSI. Specifically, it reduces the guarantee fee from 2.5% to 1.5% for three categories of eligible borrowers for credit facilities sanctioned on or after October 1, 2005: 1) all loans up to Rs. 2 lakh, 2) all eligible women entrepreneurs, and 3) all eligible borrowers located in North Eastern India or Jammu & Kashmir. Member Lending Institutions of CGTSI are requested to advise their offices of this modification to the Scheme and cooperate in covering maximum proposals.

Uploaded by

Harsh Mehta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CGTSI/(44)/669

October 03, 2005

All Member Lending Institutions (MLIs) of CGTSI (excluding Public Sector Banks)
Circular No. 27 / 2005-06
Dear Sir / Madam,
Credit Guarantee Scheme Changes in Guarantee fee structure
As you may be aware the Credit Guarantee Scheme of CGTSI is in operation since
August 2000. In order to make the Scheme more attractive and convenient for its Member
Lending Institutions (MLIs), it has been decided to change the guarantee fee structure under
the Scheme for select category of eligible borrowers as follows in consonance with the
measures pertaining to CGTSI in the "Policy Package for stepping up credit to Small and
Medium Enterprises" as announced by the Hon'ble Finance Minister, Government of India, in
the Parliament on August 10, 2005:
Chapter III - Clause 8(i) on Guarantee Fee :
Existing Provision:
"A one time guarantee fee at specified rate (currently 2.5 per cent) of the credit
facility sanctioned, (comprising term loan and / or working capital facility) shall be paid
upfront to the Trust by the eligible institution availing of the guarantee within 30 days from the
date of first disbursement of credit facility."
Modified Provision:
Clause
8(i)
has
been
modified
as
follows:
"A one time guarantee fee at specified rate (currently 2.5 per cent) of the credit facility
sanctioned, (comprising term loan and / or working capital facility) shall be paid upfront to the
Trust by the eligible institution availing of the guarantee within 30 days from the date of first
disbursement of credit facility, with the proviso, however, that such Guarantee Fee will be at a
rate of 1.5% instead with regard to the following category of borrowers in respect of credit
facility sanctioned on or after October 01, 2005 and covered under the Scheme :
1.
2.
3.

(a) All loans upto Rs. 2.00 lakh;


(b) All eligible women Entrepreneurs;
(c) All eligible borrowers located in the North Eastern Region (including Sikkim) and
Jammu & Kashmir."

You are requested to advise your operating offices (Zonal / Branch Offices) about the
modification made to the Scheme as above. We solicit your cooperation in covering maximum
proposals under the Scheme.
Thanking you,
Yours faithfully,
Sd/(S N Sadhwani)
Dy. General Manager

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