Podcast
Questions and Answers
Which of the following scenarios would disqualify a credit facility from conforming to the provisions mentioned?
Which of the following scenarios would disqualify a credit facility from conforming to the provisions mentioned?
- A facility granted to a borrower with an outstanding amount due under other schemes. (correct)
- A facility that complies with all directives issued by the Reserve Bank of India.
- A facility with a blended interest rate not exceeding 18%.
- A facility sanctioned against a third-party guarantee. (correct)
What is the maximum blended interest rate allowed for MSE borrowers under the CLM arrangement?
What is the maximum blended interest rate allowed for MSE borrowers under the CLM arrangement?
- 20%
- 22%
- 18% (correct)
- 15%
Which of the following situations would be permissible under the Credit Guarantee Scheme?
Which of the following situations would be permissible under the Credit Guarantee Scheme?
- A facility partially covered under the Hybrid model of the Credit Guarantee Scheme. (correct)
- A facility secured by third-party guarantee only.
- A facility without any form of collateral security.
- A facility where the lender has not invoked the guarantee despite default.
Which type of credit facility is ineligible for coverage under the Credit Guarantee Scheme?
Which type of credit facility is ineligible for coverage under the Credit Guarantee Scheme?
What consequence follows if a borrower has availed of multiple credit facilities and defaulted on one?
What consequence follows if a borrower has availed of multiple credit facilities and defaulted on one?
What is the maximum limit for a secured credit facility under the Scheme?
What is the maximum limit for a secured credit facility under the Scheme?
Which condition must be met for a credit facility to be eligible under the Scheme?
Which condition must be met for a credit facility to be eligible under the Scheme?
What is the maximum limit for an unsecured credit facility under the Scheme?
What is the maximum limit for an unsecured credit facility under the Scheme?
What does the term 'incremental credit facilities' refer to in the context of the Scheme?
What does the term 'incremental credit facilities' refer to in the context of the Scheme?
Which type of borrower is eligible for credit facilities under the Scheme?
Which type of borrower is eligible for credit facilities under the Scheme?
Which of the following is NOT a condition for credit facilities under the Scheme?
Which of the following is NOT a condition for credit facilities under the Scheme?
What could happen if a borrower partly uses the credit facility for bad debt without consent?
What could happen if a borrower partly uses the credit facility for bad debt without consent?
How is the maximum guarantee coverage limit determined for borrowers?
How is the maximum guarantee coverage limit determined for borrowers?
What does 'Member Lending Institution(s)' (MLIs) refer to under the Scheme?
What does 'Member Lending Institution(s)' (MLIs) refer to under the Scheme?
Which entity is defined as an NBFC in the context of the Scheme?
Which entity is defined as an NBFC in the context of the Scheme?
What is meant by 'Joint Lending' in Model-1 of the Co-Lending options?
What is meant by 'Joint Lending' in Model-1 of the Co-Lending options?
What is a key feature of the 'Direct Assignment' model in co-lending?
What is a key feature of the 'Direct Assignment' model in co-lending?
Which document governs the eligibility of banks and NBFCs under this Scheme?
Which document governs the eligibility of banks and NBFCs under this Scheme?
What happens if a Member Lending Institution does not perform satisfactorily?
What happens if a Member Lending Institution does not perform satisfactorily?
Which type of bank participates in the Credit Guarantee Scheme for Co-Lending?
Which type of bank participates in the Credit Guarantee Scheme for Co-Lending?
What is the guarantee cover under Model-1 for joint lending based on?
What is the guarantee cover under Model-1 for joint lending based on?
What is the maximum unsecured part of the credit facility that can be covered under CGSCL?
What is the maximum unsecured part of the credit facility that can be covered under CGSCL?
Which of the following is NOT a requirement under the Hybrid Security product?
Which of the following is NOT a requirement under the Hybrid Security product?
What is the minimum investment grade requirement for credit guarantee approvals above ₹50 lakh?
What is the minimum investment grade requirement for credit guarantee approvals above ₹50 lakh?
Which type of credit facility is explicitly excluded from the scheme?
Which type of credit facility is explicitly excluded from the scheme?
Which condition eliminates eligibility for micro enterprises to receive guarantee coverage?
Which condition eliminates eligibility for micro enterprises to receive guarantee coverage?
What type of charge does CGTMSE hold on the collateral security provided by the borrower?
What type of charge does CGTMSE hold on the collateral security provided by the borrower?
Under the CGSCL, which credit facility is NOT eligible when insurance coverage exists?
Under the CGSCL, which credit facility is NOT eligible when insurance coverage exists?
What obligation do MLIs have under the Hybrid Security product regarding CGTMSE?
What obligation do MLIs have under the Hybrid Security product regarding CGTMSE?
What must a lending institution ensure regarding contracts related to accounts guaranteed under the Scheme?
What must a lending institution ensure regarding contracts related to accounts guaranteed under the Scheme?
What happens to rights or obligations from a guarantee once the Scheme is modified, canceled, or replaced?
What happens to rights or obligations from a guarantee once the Scheme is modified, canceled, or replaced?
What is the Trust's position on altering terms for accounts without an issued guarantee?
What is the Trust's position on altering terms for accounts without an issued guarantee?
What is required for a claim against the Trust in the event of Scheme cancellation?
What is required for a claim against the Trust in the event of Scheme cancellation?
What is the Trust's role regarding the interpretation of the Scheme's provisions?
What is the Trust's role regarding the interpretation of the Scheme's provisions?
Which of the following is a right reserved by the Trust concerning the Scheme?
Which of the following is a right reserved by the Trust concerning the Scheme?
What carries the condition that obligations arise under the Scheme must be complied with before cancellation?
What carries the condition that obligations arise under the Scheme must be complied with before cancellation?
What is the primary purpose of the Scheme according to its provisions?
What is the primary purpose of the Scheme according to its provisions?
Flashcards are hidden until you start studying
Study Notes
Credit Facilities and Eligibility Criteria
- Credit facilities must comply with laws and directives from the Central Government and RBI.
- Any borrower with outstanding amounts to the Trust from previously availed credit under similar schemes is ineligible.
- Credit facilities secured by collateral or third-party guarantees are excluded, but uncollateralized portions can be covered under the Hybrid model.
- Blended interest rates exceeding 18% on loans to MSEs disqualify credit facilities from coverage.
Member Lending Institutions (MLIs)
- MLIs consist of a Bank and an NBFC registered with CGTMSE under respective schemes.
- NBFCs must be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
- Scheduled Commercial Banks authorized by RBI for co-lending are accepted as MLIs.
- The Trust has the authority to remove non-performing lending institutions from eligibility lists.
Scheme Overview
- The Credit Guarantee Scheme for Co-Lending involves eligible banks and NBFC collaborations.
- Two operational models are available:
- Joint Lending: Both Bank and NBFC co-lend through an escrow account with both performing due diligence.
- Direct Assignment: Banks have discretion to recognize loans made by NBFCs per their agreements.
Credit Facility Limits
- Maximum coverage under CGSCL is ₹200 lakh for secured loans and ₹100 lakh for unsecured loans.
- Incremental credit facilities may be accessed as reductions in outstanding limits occur.
- Facilities must meet RBI's standards to remain eligible.
Hybrid Security Product
- MLIs can secure part of the credit facility with collateral while the rest can be unsecured up to ₹200 lakh under CGSCL.
- No formal security charge is required for CGTMSE under hybrid security agreements.
Ineligible Credit Facilities
- Facilities with overlapping coverage from other guarantee schemes or insurers are not eligible.
- Loans of up to ₹10 lakh to micro enterprises covered under the MUDRA guarantee scheme cannot also be covered under CGSCL.
- Institutional compliance with scheme conditions is mandatory.
Modifications and Exemptions
- The Trust retains rights to modify or replace the scheme without affecting guarantees issued prior to modifications.
- Changes may also apply to accounts not issued guarantees as of the modification date.
- Claims against the Trust are only valid if conditions are met before scheme cancellations.
Interpretation and Final Decisions
- The Trust's decisions on scheme interpretations are considered final.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
