Dear Sir/Madam, I had taken a CGTMSE Loan for purchase of machinery through a Pvt bank in 2016.For that loan they are charging 1% insurance on sanctioned amount. But as per my knowledge the MSME circular says the insurance amount is supposed to be charged on outstanding rather than sanctioned amount. So please advise on this and also advise how can i take it fwd if the bank has not followed the govt circular. Thanks
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As regards to Fee charged annually, it is payable on the outstanding loan amount instead of guaranteed amount for credit facilities sanctioned / renewed to MSEs on or after April 01, 2018 as per Circular No.139.
2)you can complain against bank
The Head / Registered Office -
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
1st Floor, SIDBI, Swavalamban Bhavan,
C-11, G-Block, BKC, Bandra (East), Mumbai - 400 051
Contact Nos.:- (022): 6722 1553, 6722 1438, 6722 1483
Bank is entitled to seek insurance only on outstanding dues, as outstanding decreases, the entitlement of bank over the loan also decreases with corresponding reduction in amount of insurance. You can approach MSEFC against the bank or the Arbitrator if there is property for resolution of dispute with the bank in the agreement.
Dear Client,
if the bank does not follow the government order, then you can issue a legal notice to them from the court.
The loans sanctioned and disbursed to eligible street vendors under PM SVANidhi Scheme are eligible for guarantee coverage.
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.
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.
You can complaint about the same and also approach consumer court or msme for Redressal
