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A. Member Lending Institutions-Eligibility, responsibility etc.

1.                  Which are considered as eligible lending institutions under the Scheme?

All Scheduled Commercial Banks (either PSU, Private or Foreign Banks), select Regional Rural Banks, or such of those institutions as may be directed by GOI can avail of guarantee cover in respect of their eligible credit facilities under the Scheme. Small Industries Development Bank of India (SIDBI), National Small Industries Corporation Ltd (NSIC) and North Eastern Development Finance Corporation Ltd (NEDFI) have been included as eligible institutions

2.       Can a Private sector bank or a foreign bank be eligible for guarantee cover?

Yes, provided it is a commercial bank listed in the II Schedule to the Reserve Bank of India Act, 1934.

3.       Is Regional Rural Bank eligible for guarantee cover?

Yes.  But only those Regional Rural Banks, which have been classified by NABARD under the  'Sustainable Viable' category and currently viable category with positive networth.The Trust shall cover credit facilities (Fund based and/or Non fund based) extended by select RRB(s) to a single eligible borrower in the Micro and Small Enterprises sector for credit facility not exceeding Rs. 50 lakh by way of term loan and/or working capital facilities on or after entering into an agreement with the Trust, without any collateral security and\or third party guarantees.

4.          Whether SFCs, Twin Function IDCs, Scheduled Co-operative Banks, Urban Co-operative Banks and NBFCs are eligible lending institutions for availing guarantee cover under the CGTMSE?

Select SFCs are being considered for inclusion as MLI, other institutions are not eligible to become a MLI.

5.       When can the eligible lending institutions apply for guarantee cover in respect of eligible credit facilities under the Scheme?

The eligible lending institutions are required to enter into an  'one time' agreement with CGTMSE for becoming Member Lending Institutions (MLIs) of the Trust. MLIs can then apply for guarantee cover in respect of eligible credit facility sanctioned to any eligible borrower. The MLIs can apply for guarantee cover in respect of credit proposals sanctioned in the quarter April-June, July-September, October-December and January-March prior to expiry of the following quarter viz. July-September, October-December, January-March and April-June respectively.

6.          Whether the Trust will re-appraise the proposals sanctioned by the MLIs for approving guarantee cover?

MLIs are expected to support only viable proposals using their commercial discretion and due diligence. CGTMSE will have full trust in their credit evaluation. The Trust will not re-evaluate the proposals sanctioned by MLIs.  If the proposals satisfy the basic norms laid down under the CGS, the Trust will extend guarantee cover.

7.       What is the facility provided to an MLI desiring to know about the details of accounts covered under guarantee cover by CGTMSE?

Our website www.cgtmse.in  or www.cgtsi.org.in  has 'Reports & MIS' module to enable the MLIs to generate standard reports .  MLI can log on to the website-member page, using member-ID allotted and generate the reports desired by it viz. status of the application lodged, Demand for GF/ASF, monthly reports etc.

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