- On assumptions if there is an increase of 1.50 of CPI in the month of Mar'22. Keeping in view on going regular rise in prices of commonly required daily needs items / commodities which is making month over month difficult to manage family budget in the present covid crises. Accordingly, on this conservative assumption, we may expect there would be an increase of 4 slabs and the total tentatively revised DA slabs would be 475 i.e. 33.25% from May'22 in terms of 11th BPS.
- On assumptions if there is an increase of 1.25 of CPI in the next both month Mar'22. On the basis of this assumption, we may expect there would be an increase of 3 slabs and the total tentatively revised DA slabs would be 474 i.e. 33.18% from May'22 in terms of 11th BPS.
- On assumptions if there is an increase of 1.00 of CPI in the next both month Mar'22. On the basis of this assumption, we may expect there would be an increase of 1 slabs and the total tentatively revised DA slabs would be 475 i.e. 33.04% from May'22 in terms of 11th BPS
- On assumptions if there is an decrease of 0.10 of CPI in the next month Mar'22. On the basis of this assumption, we may expect there would be an in decrease of 8 slabs and the total tentatively revised DA slabs would be 466 i.e. 32.66% from May'22 in terms of 11th BPS
- On assumptions if there is an increase of 0.20of CPI in the next both month Mar'22. On the basis of this assumption, we may expect there would be an decrease of 6 slabs and the total tentatively revised DA slabs would be 468 i.e. 32.76% from May'22 in terms of 11th BPS
VISITOR FROM WORLD
Thursday, March 31, 2022
Expected DA for Banker from May 2022 decreases 6 to 8 slab
Expected DA Calculation Updated on 31.03.22 on the basis of CPI for the months of Jan'22 and Feb'22. The CPI for the month of Feb'22 announced on 31.03.22, it is surprised to see that there is decrease of 0.10 points as per revised base year 2016 (base year changed from Oct 2020) with assumptions of CPI for the month Mar'22 as under:-
Wednesday, March 30, 2022
Legalized Loot: Baba Ramdev will own 80% of a 31000-crore company with no investment.
Ruchi Soya, a publicly traded corporation, declares bankruptcy. They owe PSU banks Rs. 12000 crores. Banks wrote off more than half of their liabilities, reducing their obligation to less than half.
With a jump of 8929 per cent in five months after relisting after insolvency and then a steep drop for six trading days, Baba Ramdev’s Patanjali Ayurved-acquired Ruchi Soya Industries stock movement has perplexed markets and raised questions about leeway for firms that have emerged from the insolvency process.
The Ruchi Soya share price was Rs 17 on January 27, the day the edible oil company relisted after Patanjali purchased it under the Insolvency and Bankruptcy Code. It soared over the next two months, reaching Rs 1,535 on June 29, an increase of 8929 per cent.
Last recently, the market capitalization of this lesser-known company surpassed Rs 45,000 crore. The rapid rise in Ruchi Soya’s stock price occurred when the benchmark Sensex had dropped 11% in the previous five months.
However, the stock has continuously fallen by 5% for six trading days from June 29, triggering the lower circuit — the level when trading activity in a company is banned following a severe drop in share prices — for six trading days till Monday.
The stock price has plummeted by 28% since it reached a new high on June 29. On Monday, the Bombay Stock Exchange (BSE) ended at Rs 1,108.20.
According to Ramdev, the FPO’s revenues will be used to pay off a Rs 3,300 crore term loan. He declared, “Ruchi Soya will be debt-free.”
When questioned why the price band was kept lower than current market pricing, Ramdev said it was to provide a good return for investors.
Ruchi Soya’s stock closed at Rs 897.45 on the BSE on Wednesday
After acquiring Ruchi Soya through insolvency proceedings, we turned it around,” Ramdev added. He said that the company went bankrupt due to prior management’s faults.
He explained, “We’re running the corporation with transparency, responsibility, and corporate governance.”
Patanjali Group currently owns Ruchi Soya with 98.9%. Public shareholders own about 1.1 per cent of the company’s equity.
Patanjali Group’s stake in Ruchi Soya will drop to roughly 81 per cent after the FPO, with the public retaining about 19 per cent.
After filing a draft red herring prospectus (DRHP) in June 2021, the Securities and Exchange Board of India (SEBI) approved the debut of the Ruchi Soya FPO in August 2021.
To comply with Sebi’s requirement of a minimum public shareholding of 25% in a listed business, the company is issuing a public offering. It has about three years to reduce the promoters’ stake to 75%.
The proceeds from the transaction will help Ruchi Soya expand its business by repaying outstanding loans, meeting additional working capital requirements, and achieving other general corporate goals.
Patanjali purchased Ruchi Soya, a stock exchange-listed company, for Rs 4,350 crore in an insolvency process in 2019.
Ruchi Soya primarily processes oilseeds, refines edible crude oil as cooking oil, and manufactures soya products and value-added products. The palm and soya divisions of the corporation have an integrated value chain and a farm-to-fork business model. Mahakosh, Sunrich, Ruchi Gold, and Nutrela are some of the brands available.
Adani Wilmar Ltd, the highest bidder for Ruchi Soya Industries Ltd, has opted to withdraw from the competition. Adani Wilmar, led by billionaire Gautam Adani, informed the National Company Law Tribunal (NCLT) Mumbai bench on Tuesday that it is willing to drop its proposed resolution plan to buy Ruchi Soya due to delays in the corporate bankruptcy resolution process.
However, Baba Ramdev’s Patanjali Ayurved Ltd has informed the NCLT that it is still willing to match Adani Wilmar’s bid. The second-highest bidder was Patanjali.
The Mumbai bench heard both parties of the NCLT, which was presided over by judicial member V.P. Singh and technical member Ravikumar Duraiswamy.
Melvyn Fernandes, an associate partner at law firm Vaish Associates Advocates and Patanjali’s counsel at the NCLT, confirmed the news but declined to elaborate.
An email sent to Ruchi Soya’s resolution professional, Shailendra Ajmera of EY, wentunanswered until publication.
In August, the CoC accepted Adani Wilmar’s resolution plan, but Patanjali disputed the bidding procedure, claiming it violated Section 29 (A) of the Insolvency and Bankruptcy Code.
According to the provision, a resolution applicant (the bidder) is ineligible to submit a proposal if they are related to someone who fits any ineligibility conditions. The linked party is mentioned in the definition of a connected person, including relatives.
Indore-based Ruchi Soya is on the Reserve Bank of India’s second list of 28 defaulters slated for resolution. The company was admitted for insolvency resolution under the IBC by the NCLT bench on December 2. Various entities owe the corporation more than 10,000 crores.
Ruchi Soya shares increased 1.23 per cent, or 0.10, to 8.23 per cent on the BSE on Tuesday, while the benchmark Sensex advanced 1.30 per cent, or 464.77 points, to 36,318.33 points.
Patanjali’s offer was for Rs. 4350 crores, of which banks would invest 3250 crores. The loans were secured by the same Ruchi Soya stock written down to zero as part of the banks’ debt restructuring strategy.
Ruchi Soya Industries, which the Patanjali Ayurved group controls, will relist on March 24 with a Rs 4,300-crore follow-on offer, making it the country’s largest edible oil producer and the first to do so after the bankruptcy process.
The management of Ruchi Soya, led by chairman Acharya Balakrishna and non-executive director Baba Ramdev, declared the price band for the issue on Monday, which is Rs 615-650. Patanjali, which controls 98.9% of the company, will dilute between 19% and 18% at the top end.
The business will dilute the remaining 6-7 per cent before the Sebi deadline of December 2022 to fulfil the statutory 25% public float.
Ramdev stated that the company would repay the issuer’s debt for Rs 3,300 crore, with the remaining funds going to various corporate reasons.
After the acquisition, Ruchi Soya has been transformed from a commodities business to a branded company. It is in the process of separating all of its food and non-food items into discrete verticals. The goal, according to Ramdev, is to make both Ruchi and Patanjali global food brands in the future. Branded food, nutraceuticals, edible oils, and health and wellness goods will be the group’s four business verticals.
Ruchi Soya is one of the country’s top branded edible oil companies, with its leading brand Ruchi Gold being one of the best-selling palm oil products.
Mahakosh, Sunrich, Ruchi Star, and Ruchi Sunlight are some of the company’s other well-known brands. It is also the world’s first and largest soy food producer, with a 40% market share under the Nutrela brand.
Patanjali won the bid to buy bankrupt Ruchi Soya, including its 22 edible oil facilities, edible oil brands including Mahakosh and Ruchi Gold, and soya food brand Nutrela, in December 2018.
Patanjali paid Rs 1,100 crore in equity and Rs 3,250 crore in debt to satisfy Ruchi Soya’s obligations of Rs 4,350 crore. At the request of Standard Chartered Bank and DBS Bank, the National Company Law Tribunal filed bankruptcy proceedings against Ruchi Soya, based in Indore, in December 2017.
Ruchi Soya owed financial creditors a total of Rs 9,345 crore, with the State Bank of India having the most significant exposure of Rs 1,800 crore, followed by Central Bank with an exposure of Rs 816 crore, Punjab National Bank with an exposure of Rs 743 crore, StanChart with an exposure of Rs 608 crore, and DBS with an exposure of Rs 243 crore.
As a result, the lenders will take a 60% haircut due to the deal. The book-running lead managers are SBI Caps, Axis Capital, and ICICI Securities.
Now, the banks who wrote off enormous amounts of debt are backing another loan to Patanjali to acquire the same company where they wrote off debts.
This isn’t the end of it. To ensure liquidity and minimize price manipulation, SEBI requires a 25% public shareholding listed on stock exchanges. Even though public shareholding was only 1%, NCLT went along with it and ordered listing. SEBI did not challenge the order.
The game of price manipulation begins. In the market, there were no buyers. Even the one per cent was guarded. In two years, the stock has risen from Rs.3.50 to Rs. 1053. Ruchi Soya, a company Patanjali bought in December 2019 for Rs.1000 crores of its own money, is now worth Rs.31,000 crores.
Ruchi Soya, which is now 99.5 per cent owned by Patanjali, is launching a public offering that will dilute only 20% of the company and raise Rs 4300 crores. Remember that they paid 4350 crores for the entire company. They will also use investor funds to pay off all of the debt.
Baba Ramdev wants Ruchi Soya, India’s largest edible oil maker, to become a “global brand.” On Monday, Ramdev spoke to the media to announce the company’s Rs4,300 crore follow-on public offering (FPO). Ruchi Soya and Patanjali, he said, are dedicated to India’s service.
According to Patanjali Ayurved’s founder, Ruchi Soya is no longer just a commodity enterprise. The company’s verticals, he continued, include FMCG, food, and nutraceuticals, among others.
He also stated that the company is concentrating on rural distribution in India and expanding its global reach. “We will address both the masses and the classes,” Ramdev stated. During the meeting, Ramdev also expressed his desire to make Ruchi Soya and Patanjali a global brand.
On Sunday, Ruchi Soya declared the floor price for its massive Rs4,300 crore FPO.
The auction will begin on March 24, 2022, and bidding will be available until March 28, 2022. Through this offering, Swami Ramdev’s Patanjali intends to comply with the Sebi’s minimum shareholding rules.
Ruchi Soya is currently owned by Patanjali, who owns 98.9% of the company, with the remaining shares held by public shareholders. Patanjali’s investment in the company will decrease to 81 per cent following the FPO, while public shareholding would increase to 19 per cent.
Ruchi Soya’s shares closed at Rs910.10 on the BSE today, down Rs94.35 or 9.39 per cent. The stock fluctuated between the day’s high and low of Rs948.70 per share and Rs831 per share. Due to its FPO issue, Ruchi Soya stock will be in the spotlight this week.
The bankers wrote off a few thousand crores. The bankers once again used Baba Ramdev’s securities to fund the acquisition of the same company. Small investors will purchase equity worth Rs. 4300 crores once more.
With little investment, Baba Ramdev will own 80 per cent of a 31,000-crore corporation.
With little investment, Baba Ramdev will own 80 per cent of a 31,000-crore corporation. This is taxpayers’ money being looted in a legalized way, and the innocent public is diverted to Hindu Muslim, Hijab Row, Kashmir Files etc.
Ruchi Soya, which debuted on the stock exchange on March 28, intends to raise Rs 4,300 crore through the FPO method. The deadline for submissions is March 28. The stock’s price range has been set between $615 and $650 per share. Ruchi Soya received a 12% subscription on the first day of the issue, while the case received a 30% subscription on the second day.
The individual investor’s portion garnered 34% of the bids, while the Qualified Institutional Buyers (QIB) piece received 41%. Meanwhile, non-institutional investors, who accounted for only 9% of the total subscriptions, showed no interest. The Ruchi Soya FPO received bids for 1.52 crore equity shares out of a full offer size of 4.89 crores.
Monday, March 28, 2022
Mr Gaurang Sagar A young Banker died in road accident only just mental and physical harassment by management
From heavy heart I want to inform u all that we have lost banker Mr Gaurang Sagar posted at RO Gandhinagar in @bankofbaroda in an accident.
May his soul rest in peace.
In context with the current incident in BOB I had some discussion with BOB people... It is really surprising to hear that how the pressure of BOB World get mounted by management through HR and the Union leaders also. The same campaign has been driven by HR and the Union leaders are also appealing their members to take part on this campaign.... If is it true then what can the people expect from Human Resource team who have core duty to take care of their people and make them feel better with organisation and the leader who have responsibilities to safeguard the people from unethical practices are also acting like cruel managemen
Saturday, March 26, 2022
अप्रैल में 15 दिन बंद रहेंगे बैंक, आज ही चेक करें छुट्टियों लिस्ट
देख लें छुट्टियों की लिस्ट
1 अप्रैल - बैंक खातों की सालाना क्लोजिंग- लगà¤à¤— सà¤ी राज्यों में बैंक बंद
2 अप्रैल - गुड़ी पाड़वा/उगाडी फेस्टिवल/नवरात्रि का पहला दिन/तेलुगू नववर्ष/सजिबू नोंगमपांबा (चैरोबा)- बेलापुर, बेंगलूरु, चेन्नई, हैदराबाद, इंफाल, जम्मू, मुंबई, नागपुर, पणजी और श्रीनगर में बैंक बंद
3 अप्रैल - रविवार (साप्ताहिक अवकाश)
4 अप्रैल - सरिहुल- रांची में बैंक बंद
5 अप्रैल - बाबू जगजीवन राम का जन्मदिन- हैदराबाद में बैंक बंद
9 अप्रैल - शनिवार (महीने का दूसरा शनिवार)
10 अप्रैल - रविवार (साप्ताहिक अवकाश)
14 अप्रैल - डॉ बाबासाहेब अंबेडकर जयंती/महावीर जयंती/बैशाखी/तमिल नववर्ष/चैरोबा, बिजू फेस्टिवल/बोहार बिहू- शिलांग और शिमला को छोड़ अन्य स्थानों में बैंक बंद
15 अप्रैल - गुड फ्राइडे/बंगाली नववर्ष/हिमाचल दिवस/विशू/बोहाग बिहू- जयपुर, जम्मू और श्रीनगर को छोड़ अन्य स्थानों में बैंक बंद
16 अप्रैल - बोहाग बिहू- गुवाहाटी में बैंक बंद
17 अप्रैल - रविवार (साप्ताहिक अवकाश)
21 अप्रैल - गड़िया पूजा- अगरतला में बैंक बंद
23 अप्रैल - शनिवार (महीने का चौथा शनिवार)
24 अप्रैल - रविवार (साप्ताहिक अवकाश)
29 अप्रैल - शब-ई-कद्र/जुमात-उल-विदा- जम्मू और श्रीनगर में बैंक बंद
Friday, March 25, 2022
Yogi Scandal Shows Total Collapse Of Security At National Stock Exchange
Around the National Stock Exchange of India, Chitra Ramkrishna was practically her own institution. A founding member of the bourse, she helped shape it into the world's largest derivatives exchange, opening trading to a growing middle class and serving as its first female chief. In 2016, she stepped down to high praise for her "sterling contribution."
But the reputation of the woman nicknamed "Queen of the Bourse," along with the multi-billion dollar exchange, took a shocking tumble last month. Indian authorities accused Ramkrishna of crimes ranging from evading taxes to, more bizarrely, leaking confidential information for years to an unnamed spiritual guru living in the mountains.
The strange tale of mysticism-meets-technology reveals what could be a complete breakdown of security and best practices at the nation's largest bourse. With the overhang of a messy investigation, bankers in India said the new allegations may not just delay the exchange's much-awaited initial public offering, but also hurt its growing clout in the global equity market.
Over several tumultuous weeks, the authorities arrested Ramkrishna, 59, and Anand Subramanian, her former colleague, who has also been accused of criminal misconduct. Tax authorities searched their homes. This month, Ramkrishna's successor and the exchange's current chief executive, Vikram Limaye, said he would step down when his term ends over the summer. The NSE has invited applications through March 25 for a new leader.
"Our credibility is at stake," Sanjeev Aggarwal, a judge, said this month at a court hearing in New Delhi. "Who will invest in India if scams like this happen?"
The NSE did not respond to requests for comment. In a statement, the exchange said it was cooperating with investigators and had made management changes in recent years. Lawyers for Ramkrishna and Subramanian did not return messages and calls seeking comment.
The pair have denied wrongdoing in court. Ramkrishna told regulators that nothing untoward happened with the guru, likening their conversations to "informal counsel from coaches, mentors or other seniors in this industry."
The drama intensified in February, when the Securities and Exchange Board of India released a 190-page regulatory order disclosing that Ramkrishna had sent sensitive information to an outsider described as a yogi in the Himalayas.
In an interview for that report, Ramkrishna said the figure guided her hand as chief executive, a role she served in from 2013 to 2016. The yogi was non-corporeal, she said, but corresponded using the email address rigyajursama@outlook.com, which combines the names of three religious texts. Ramkrishna referred to the guru as "thee," "swami ji" and "your lordship."
SEBI alleged that the yogi had turned Ramkrishna into a "puppet," remotely controlling finances and steering promotions. In 2013, for instance, she hired Subramanian, though, SEBI said, he had no experience in capital markets. He was later promoted to chief operating officer at the advice of the yogi, according to the report. Employees said Subramanian had enormous influence. One Indian news outlet referred to him as a "modern-day Rasputin-like figure."
The identity of the yogi has become a key pressure point, dividing the country's authorities and deepening the mystery of what happened behind closed doors.
Among the most touted theories is that Subramanian was actually the yogi and that he had duped Ramkrishna, a conclusion made by Ernst & Young, which was hired by the exchange to investigate. SEBI contested that claim, writing in the 190-page order that there was still "no conclusive evidence" linking Subramanian to the email address.
Using information from that inquiry, Indian officials have also widened another investigation potentially implicating Ramkrishna and Subramanian in facilitating unfair trading access. The incident is known locally as the "co-location scam."
Many now wonder what regulators, NSE board members and investors did to avert malpractice, and whether issues at the exchange are more systemic than they had previously seemed.
Through a lawyer, Subramanian denied this month that he was the yogi. SEBI did not return requests for comment.
Most Powerful to Most Compromised
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The National Stock Exchange was started to root out corruption among Mumbai's brokers and bankers.
In 1992, Harshad Mehta, a high-profile stockbroker nicknamed "Big Bull," was charged with funneling $2 billion from banks into equities at the Bombay Stock Exchange, which was founded in 1875 and became India's premier bourse. When the scandal came to light, India's markets tanked. Mehta died before the trial finished.
In the early 1990s, Ramkrishna, then a young employee at the Industrial Development Bank of India, was recruited to build a more modern exchange and move trading from an open-outcry ring to an electronic system. With her experience working on a blueprint for India's capital market regulatory agency, she was selected with four others to create what would become the NSE.
The team worked out of a tiny, leased office in a part of Mumbai known for its defunct textile mills. In 1994, they launched screen-based trading using a satellite, allowing instant access to prices across India.
Ramkrishna's career soared. In 2013, she took over as chief executive, becoming one of only three women in the world to run a bourse. She cultivated a reputation as a driven, visionary leader. In a 2015 interview with Bloomberg, Ramkrishna cited Mahatma Gandhi, the Indian independence leader, as a role model. One of her goals, she said, was to make stocks accessible to the middle class using an exchange-traded basket of securities known as ETFs.
"I'm sure even he would have bought my ETFs!" she said in the Bloomberg interview, referring to Gandhi.
On her first day as chief executive, she appointed Subramanian, an outsider who had previously worked in middle management at a leasing and repair service company. After just three years, Ramkrishna nearly tripled his salary to more than half a million dollars, according to the SEBI order. The pair used their own elevator. When Subramanian visited the trading floor, an entourage installed separate soap dispensers and hand towels for him in the restroom, the local news outlet Mint reported.
She was also deeply interested in spirituality, making many decisions after consulting astrological charts, according to the book "Absolute Power," a chronicle of the NSE's highs and lows written by two investigative journalists.
While in office, regulators suspected that the pair had allowed some brokers to host their servers in the same building as the NSE, providing them with faster access to the trading system. However, Ramkrishna blamed irregularities on "technical glitches," according to the Economic Times, and has successfully appealed against penalties. Some bankers accused by regulators of helping them continue to work at the bourse, Mint reported.
After Ramkrishna stepped down in 2016, Limaye, a Wall Street veteran and graduate of the Wharton School of the University of Pennsylvania, one of the world's most prestigious business schools, took over as chief executive. The exchange tried to improve stakeholder relationships and put in place new policies to reduce broker defaults.
The NSE continues to report strong results as the number of investors in Indian markets surges. For January, retail investment reached 287 billion rupees, far exceeding figures from December (112 billion rupees) and November (136 billion rupees), according to the latest available data.
Even so, the new involvement of the tax office and federal police in the investigations could derail progress, bankers in India said. Several foreign investors have pulled out. Exchange data show Citigroup Inc., Goldman Sachs Group Inc. and Norwest Venture Partners sold their entire stakes in the NSE in the year that ends March 31.
Privatisation of IDBI Bank will be opposed strongly: Bank Union
The Centre’s move to sell IDBI Bank to private players is not in the “right direction” and will be opposed “tooth and nail” by the All India Bank Officers’ Association (AIBOA) according to its General Secretary, S Nagarajan.
Speaking to BusinessLine on the rationale behind the call for bank strike on March 28 and 29, 2022, Nagarajan said the need of the hour is not privatisation; it is to strengthen the bank further, along with an exercise to recover sticky loans from wilful defaulters.
As the bank gradually overcomes its non-performing assets (NPAs) crisis, pulling down the institution is not in the right direction,’‘ he said.
It may be recalled that Finance Minister Nirmala Sitaraman had announced in the Budget speech that LIC would be directed to withdraw its 51 per cent stake in IDBI Bank in one go and the Government of India will also divest its 46 per cent stake.
Merger impact
The merger and consolidation of public sector banks is shrinking their “well-managed” customer space which is mainly engaged in the service of the common people and the poor, Nagarajan said, adding, “Private sector banks are gradually taking over the market space being vacated by public sector banks without any valid reason. Over 5,000 public sector bank branches have been closed due to mergers in the last three years.’‘
Neither banks not the government has carried out any study on the ill-effects of the merger of public sector banks on the financial system, he said.
Further demands
Privatisation of IDBI Bank will be opposed strongly: AIBOA
The other demands of the AIBOA and associations supporting its two-day bandh call are implementation of the five-day week for banks, upgradation of the pension scheme, facility of child care leave, restoration of the old pension scheme, and removal of the anomaly in dearness allowance (DA) between LIC and bank employees.
AIBOA has also extended its solidarity to central trade unions other independent federations in opposing the privatisation of PSUs and sale of their assets, among others.
Scheduled meeting
The representatives of AIBOA are scheduled to meet government officials on March 25 to discuss their demands ahead of the strike. If the talks are not conclusive, over three lakh bank employees will strike work on March 28 and 29, 2022, which could paralyse the banking system.
Thursday, March 24, 2022
Coverage of Collateral Free Loans (CGTMSE) --How can you get a loan under CGTMSE? Read full articles
1. What is quantum of credit facility that can be covered under the Scheme?
Fund and non-fund based (Letters of Credit, Bank Guarantee etc.) credit facilities up to 200 lakh per eligible borrower are covered under the guarantee scheme provided they are extended on the project viability without collateral security or third party guarantee.However, under the "Hybrid Security" product, the MLIs will be allowed to obtain collateral security for a part of the credit facility, whereas the remaining part of the credit facility, up to a maximum of 200 lakh, can be covered under Credit Guarantee Scheme of CGTMSE.
2. Can a credit facility of over 200 lakh be covered under the Scheme?
Yes, the guarantee cover available will be restricted to credit of 200 lakh even though credit extended is more than 200 lakh to an eligible borrower. In other words, maximum of credit risk borne by CGTMSE is restricted to 150 lakh i.e. 75% of amount in default.
3. What would be the guarantee / service fee that would be payable by the member-lending institution on credit facility sanctioned in excess of 200 lakh?
AGF would be charged on the outstanding loan amount instead of guaranteed amount for credit facilities sanctioned / renewed to MSEs on or after April 01, 2018. Please refer to Circular No. 139/2017-18 and Circular No.141/ 2017-18 (for Retail Trade) available in the website for more details.
4. Can term loan or working capital facility alone be extended by an eligible lender and still be covered under the guarantee scheme?
Yes, a lender can extend either term loan or working capital facility alone and still be eligible for a guarantee cover if it meets the other eligibility parameters. Needless to say, the credit facility extended to a borrower should be without any collateral security and/or third party guarantee.
5. Can a credit facility extended to a borrower against a collateral security be covered under the Guarantee Scheme, if the lending institution relinquishes its rights on the collateral security?
Yes, MLIs will be allowed to obtain collateral security for a part of the credit facility, whereas the remaining part of the credit facility, up to a maximum of 200 lakh, can be covered under Credit Guarantee Scheme of CGTMSE. CGTMSE will, however, have pari-passu charge on the primary security as well as on the collateral security provided by the borrower for the credit facility.
6. Is there any ceiling in respect of interest to be levied on the credit facility advanced to the borrower if the same is to be covered under the Scheme?
Any credit facility which has been sanctioned by the lending institution with the maximum interest rate not more than 14% p.a. and 18% p.a. including cost of guarantee cover/(Average Base Rate decided by the trust from time to time as applicable to RRBs prior to 01/08/2017.) would be eligible for coverage under CGS I and CGS II respectively.. This supersedes the existing guidelines of CGTMSE on ceiling of interest rate that could be charged by MLIs on guaranteed loans (Refer Circular no. 131) .The revised guidelines on ceiling on Interest Rate that could be charged for the guarantee covered credit facilities would be applicable also to those MLIs who would not be eligible for enhanced credit guarantee coverage from 100 lakh to 200 lakh
7. Is it possible to cover credit facilities, which have already become NPA?
No, the credit facility that has already become NPA cannot be covered under the Scheme.
8.Is CGTMSE collateral free loan?
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