Guar­an­tee Cover

Consumer Voice - - Bfsi -

Any col­lat­eral-free/third-party guar­an­tee-free credit fa­cil­ity (both fund-based and non-fund based) ex­tended by el­i­gi­ble in­sti­tu­tions, to new as well as ex­ist­ing mi­cro and small en­ter­prises in­clud­ing ser­vice en­ter­prises, with a max­i­mum credit cap of Rs 100 lakh is el­i­gi­ble to be cov­ered.

The guar­an­tee cover avail­able un­der the scheme is to the ex­tent of 75 per cent/80 per cent of the sanc­tioned amount of the credit fa­cil­ity, with a max­i­mum guar­an­tee cap of Rs 62.50 lakh/Rs 65 lakh. The ex­tent of guar­an­tee cover is 85 per cent for mi­cro en­ter­prises for credit up to Rs 5 lakh. The ex­tent of guar­an­tee cover is 80 per cent for (i) mi­cro and small en­ter­prises op­er­ated and/or owned by women; and (ii) all loans in the North-East Re­gion. In case of de­fault, the Trust set­tles the claim up to 75 per cent (or 80 per cent wher­ever ap­pli­ca­ble) of the amount in de­fault of the credit fa­cil­ity ex­tended by the lend­ing in­sti­tu­tion. For this pur­pose, the amount in de­fault is reck­oned as the prin­ci­pal amount out­stand­ing in the ac­count of the bor­rower, in re­spect of term loan, and the amount of out­stand­ing work­ing cap­i­tal fa­cil­i­ties, in­clud­ing in­ter­est, as on the date of the ac­count turn­ing non-per­form­ing as­set (NPA). The lender should cover the el­i­gi­ble credit fa­cil­i­ties as soon as they are sanc­tioned. Guar­an­tee will com­mence from the date of pay­ment of guar­an­tee fee.

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