Credit Guarantee Fund Trust For Micro & Small Enterprises

CREDIT GUARANTEE FUND TRUST FOR MICRO & SMALL ENTERPRISES (CGTMSE)
FEATURES
2
CGFTSI STARTED FROM 1.8.2000 JOINTLY BY GOVT.OF INDIA & SIDBI TO GUARANTEE THE LOANS GIVEN TO SSI BY
SCHEDULED COMMERCIAL BANKS AND RRB.
BOI ONE OF THE REGISTERED ELIGIBLE INSTITUTION
ENTERED INTO AGREEMENT WITH TRUST.
Bank of Baroda
8/12/2012
SCHEME
3
STARTED FROM 1.8.2000 TERM LOANS AND FUND BASED W/C LIKE O/D,
C/C,B/P.B/D EXTENDED TO MSE ARE ELIGIBLE. LACS.EXTENDED TO SINGLE ELIGIBLE BORROWER.
LIMIT CREDIT FACILITIES NOT EXCEEDING RS.50
Bank of Baroda
8/12/2012
FEATURES
4
COVERAGE :CREDIT FACILITIES EXTENDED WITHOUT
ANY COLLATERAL SECURITY AND OR/THIRD PARTY GUARANTEE WILL ONLY BE COVERED INTEREST : SHOULD NOT BE MORE THAN 3 % over PLR. FACILITIES SANCTIONED IN ONE QUARTER WILL BE APPLIED FOR COVER IN THE FOLLOWING QUARTER, PROVIDED : ON THE DATE OF APPLICATION THE ACCOUNT HAVE NOT BECOME B&D,ACTIVITY HAS NOT CEASED. FACILITY IS NOT WHOLLY OR PARTLY USED FOR DISCHARGE OF EARLIER B&D.
8/12/2012
Bank of Baroda
FACILITIES NOT ELIGIBLE

5
RISK COVERED IN ANY OTHER SCHEME TO THAT
EXTENT CREDIT FACILITIES WHICH DOES NOT CONFORM TO THE DIRECTIVES OF GOVT OR RBI FACILITIES ALREADY COVERED UNDER THE SCHEME OR NOT REPAID AMOUNT DUE TO TRUST. ANY FACILITY SANCTIONED AGAINST COLLATERAL OR THIRD PARTY SECURITY. FACILITY SANCTIONED WITH INTEREST RATE MORE THAN 3 % + PLR. FACILITIES SANCTIONED JOINTLY WITH ANY OTHER INSTITUTIONS.
8/12/2012
Bank of Baroda
REPHASEMENT / RESCHEDULEMENT
6
REPHASEMENT/RESCHEDULEMENT HAS TO BE
INTIMATED TO TRUST.
IF ADDITIONAL FACILTITY IS SANCTIONED AS PART
OF REPHASEMENT BANK HAS TO GIVE ADDITIONAL GUARANTEE FEE (1.5 % -FOR N.E. REGION 0.75%)IF IT IS WITHIN RS.50 LACS.
LIMIT OF RS.50 LACS THEN NO ADDITIONAL FACILTITY CAN BE COVERED UNDER THE SCHEME.
8/12/2012
IF THE ACCOUNT IS ALREADY COVERED FOR MAX
Bank of Baroda
TENURE OF THE COVER

7
ONLY FOR WORKING CAPITAL -MAXIMUM PERIOD OF
5 YEARS TERM LOAN /COMPOSITE CREDIT- SHALL RUN THROUGH THE AGREED TENURE OF THE TERM CREDIT. GUARANTEE FEE : ONE TIME UPFRONT FEE OF 1.5 %FOR N.E. REGION 0.50%- OF THE CREDIT FACILITY SANCTIONED WITH IN 30 DAYS OF FROM THE FIRST DISBURSEMENT.
Bank of Baroda
8/12/2012
TENURE OF THE COVER

8
GUARANTEE COVER WILL COMMENCE FROM THE
DATE OF PAYMENT OF GUARANTEE FEE.
ANNUAL SERVICE FEE : 0.75 % OF THE OUTSTANDING
AS ON 31ST MARCH EACH YEAR TO BE PAID WITH 60 DAYS.
COVER SHALL NOT BE AVAILABLE IF THE ANNUAL
FEE IS NOT PAID BY 31st May EVERY YEAR.
Bank of Baroda
8/12/2012
SERVICE FEE
TRUST MAY CONDONE ANY DELAY BY PAYMENT OF
9
PENAL RATE OF INTEREST 4% ABOVE BANK RATE FOR THE DELAYED PERIOD ON THE SERVICE FEE DUE UNPAID. ANNUAL SERVICE FEE TO BE PAID ON THE PRINCIPAL PORTION OF THE OUTSTANDING ONLY IN THE CASE OF WORKING CAPITAL FACILITY IT IS TO BE PAID ON THE BOOK OUTSTANDING ON LAST DAY OF MARCH . BRANCH HAS TO PAY SERVICE FEE FOR THE MAX COVER OF RS.50 LACS ONLY AS COVER IS RESTRICTED TO RS.50 LACS EVEN IF THE O/S IS ABOVE RS.50 LACS. ANY SHORT FALL DUE TO ERROR ATTRACTS PENAL RATE.
8/12/2012
Bank of Baroda
EXTENT OF COVER /PAYMENT OF CLAIM

10
75 % OF THE AMOUNT IN DEFAULT SUBJECT OF
MAXIMUM RS.37.50 LACS. COVER RAISED TO 80% FOR (I) LOANS TO MICRO ENTERPRISES UPTO RS.5.00 LACS (II) LOANS TO MSE OERATED/OWNED BY WOMEN (III) FOR ALL LOANS IN N.E. REGION. TRUST SHALL PAY 75% OF THE GUARANTEED AMOUNT WITH IN 30 DAYS SUBJECT TO THE CLAIM OTHERWISE IN ORDER AND COMPLETE IN ALL RESPECTS. 25 % BALANCE WILL BE PAID ON CONCLUSION OF THE RECOVERY PROCEEDINGS.
Bank of Baroda
8/12/2012
RESPONSIBILITIES OF BANK
11
PROPER EVALUATION OF UNITS PROPER MONITORING SAFE GUARD PRIMARY SECURITIES NOTIFY DEFAULT AND SUBMIT CLAIM
OBTAIN PRIOR PERMISSION OF THE TRUST FOR ANY
COMPROMISE SETTLEMENT OF RECOVERY WITH CLIENT. OBTAIN PERMISSION FROM THE CLIENT TO LIST THEIR NAME IN THE WEBSITE OF TRUST IN CASE OF THEIR DEFAULT.
Bank of Baroda
8/12/2012
INVOCATION OF GUARANTEE
12
GUARANTEE IN RESPECT OF CREDIT FACILITY IN
FORCE.
LOCK IN PERIOD 24 MONTHS FROM THE LAST
DISBURSEMENT OF LOAN OR DATE PAYMENT OF GUARANTEE FEE .
LOAN TO BE RECALLED AND INITIATE RECOVERY
PROCEEDINGS.
CLAIM TO BE PREFERED IN TIME.

Bank of Baroda
8/12/2012
INVOCATION OF GUARANTEE
13
CLAIM ON THE ACCOUNTS WHERE SERIOUS
DEFICIENCIES EXISTED IN APPRAISAL,MONITORING AND FOLLOW UP,RECOVERY ETC. BANK HAS TO REFUND IT WITH PENAL RATE.
IN THE EVENT OF DEFAULT BANK HAS TO TAKE OVER
THE ASSETS AND REALISE THE PROCEEDS THEREOF AND SEND THE SAME TO TRUST IN FULL.
Bank of Baroda
8/12/2012
SUBROGATION OF RIGHTS
14
NO SUBROGATION RIGHTS BY TRUST AND THE
RESPONSIBILITY OF THE TAKEOVER AND SALE OF ASSETS OF THE CLIENT REST WITH THE BANK. BORROWER WILL BE DEEMED AS PAYMENTS TOWARDS THE ACCOUNT WHICH IS GUARANTEED BY THE TRUST. PENAL INTEREST OF 4 % ABOVE BANK RATE.
PAYMENTS TOWARDS ANY FACILITY BY THE
DELAYED PAYMENTS TO TRUSTS DUE ATTRACTS
Bank of Baroda
8/12/2012
APPROPRIATION
15
ADJUST TOWARDS COST OF RECOVERY FIRST. BALANCE TOWARDS PENDING SERVICE FEE,PENAL
INTEREST AND OTHER CHARGES DUE TO TRUST.
BALANCE IF ANY WILL BE APPROPRIATED 75:25 RATIO
BETWEEN TRUST AND BANK.
Bank of Baroda
8/12/2012
PROCEDURES
16
SANCTION SUBMISSION OF APPLICATION THROUGH
REGIONAL OFFICE TO THE TRUST. RO WILL ENSURE SUBMISSION TO TRUST BY ELECTRONIC MODE (ONLINE). AFTER RECEIVING APPROVAL FROM THE TRUST BRANCHES CAN DISBURSE THE LOAN UNDER THE SCHEME. PAY THE GUARANTEE FEE (UPFRONT) WITH 30 DAYS OF FIRST DISBURSEMENT. ANNUAL SERVICE FEE TO BE PAID BEFORE 31ST MAY OF EVERY YEAR.
8/12/2012
Bank of Baroda
DOCUMENTATION
17
UNDERTAKING TO DEBIT GUARANTEE FEE AND
SERVICE FEE UNDERTAKING FOR NOT TO CREATE ANY OTHER CHARGES ON THE SECURITY HELD IN THE GUARANTEED ACCOUNT. CONSENT LETTER TO PUBLISH NAME IN THE LIST OF DEFAULTERS OF TRUST IN CASE OF DEFAULT. CONSENT LETTER FOR INSPECTION BY THE EXTERNAL AGENCY OF THE UNIT IF CONSIDERED NECESSARY BY THE TRUST. ALL THE ABOVE SHOULD BE TAKEN ALONGWITH OTHER DOCUMENTS.
8/12/2012
Bank of Baroda
RISK WEIGHT
18
ZERO RISK WEIGHT TO GUARANTEED PORTION OTHER PORTION AS DECIDED BY THE BANK NO PROVISIONING FOR THE GUARANTEED PORTION.
Bank of Baroda
8/12/2012
END NOTE
19
PRIOR APPROVAL OF TRUST IS REQUIRED FOR
GUARANTEE COVER. ONE TIME GUARANTEE FEE @ 2.5 % MONITOR THE ACCOUNT CLOSELY ANNUAL SERVICE FEE @ 0.75 % SAFE SECURITIES IN ENFORCEABLE CONDITION. THERE SHOULD NOT ANY DELAY IN NOTIFYING THE DEFAULT TO THE TRUST. HELP THE SSI SECTOR BY SANCTIONING MORE AND MORE LOAN UNDER THIS SCHEME.
Bank of Baroda
8/12/2012

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Credit Guarantee Fund Trust For Micro & Small Enterprises

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CREDIT GUARANTEE FUND TRUST FOR MICRO & SMALL ENTERPRISES (CGTMSE)

SCHEDULED COMMERCIAL BANKS AND RRB.

BOI ONE OF THE REGISTERED ELIGIBLE INSTITUTION

ENTERED INTO AGREEMENT WITH TRUST.

C/C,B/P.B/D EXTENDED TO MSE ARE ELIGIBLE. LACS.EXTENDED TO SINGLE ELIGIBLE BORROWER.

LIMIT CREDIT FACILITIES NOT EXCEEDING RS.50

COVERAGE :CREDIT FACILITIES EXTENDED WITHOUT

FACILITIES NOT ELIGIBLE

RISK COVERED IN ANY OTHER SCHEME TO THAT

IF ADDITIONAL FACILTITY IS SANCTIONED AS PART

IF THE ACCOUNT IS ALREADY COVERED FOR MAX

TENURE OF THE COVER

ONLY FOR WORKING CAPITAL -MAXIMUM PERIOD OF

TENURE OF THE COVER

GUARANTEE COVER WILL COMMENCE FROM THE

DATE OF PAYMENT OF GUARANTEE FEE.

ANNUAL SERVICE FEE : 0.75 % OF THE OUTSTANDING

AS ON 31ST MARCH EACH YEAR TO BE PAID WITH 60 DAYS.

COVER SHALL NOT BE AVAILABLE IF THE ANNUAL

FEE IS NOT PAID BY 31st May EVERY YEAR.

EXTENT OF COVER /PAYMENT OF CLAIM

75 % OF THE AMOUNT IN DEFAULT SUBJECT OF

OBTAIN PRIOR PERMISSION OF THE TRUST FOR ANY

GUARANTEE IN RESPECT OF CREDIT FACILITY IN

LOCK IN PERIOD 24 MONTHS FROM THE LAST

DISBURSEMENT OF LOAN OR DATE PAYMENT OF GUARANTEE FEE .

LOAN TO BE RECALLED AND INITIATE RECOVERY

CLAIM TO BE PREFERED IN TIME.

CLAIM ON THE ACCOUNTS WHERE SERIOUS

IN THE EVENT OF DEFAULT BANK HAS TO TAKE OVER

NO SUBROGATION RIGHTS BY TRUST AND THE

PAYMENTS TOWARDS ANY FACILITY BY THE

DELAYED PAYMENTS TO TRUSTS DUE ATTRACTS

INTEREST AND OTHER CHARGES DUE TO TRUST.

BALANCE IF ANY WILL BE APPROPRIATED 75:25 RATIO

BETWEEN TRUST AND BANK.

SANCTION SUBMISSION OF APPLICATION THROUGH

UNDERTAKING TO DEBIT GUARANTEE FEE AND

PRIOR APPROVAL OF TRUST IS REQUIRED FOR

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