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PNB Ink MoU With
CGTMSE – Committed To Development Of MSEs
New Delhi, September 04, 2008
| For implementing a new Scheme of Risk
Sharing Facility for Micro and Small Enterprises Punjab
National Bank has signed Memorandum of Understanding (MoU)
with Credit Guarantee Trust for Micro and Small
Enterprises (CGTMSE). The scheme of Risk Sharing Facility,
part of the World Bank Line of Credit, envisages providing
collateral free credit facilities to Micro and Small
Enterprises upto Rs.1 crore. |
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CGTMSE has earmarked an amount of Rs.25 crore for
implementation of the scheme on pilot basis and Punjab
National Bank is the first Bank to sign MoU with CGTMSE for
the purpose.
CGTMSE, set up by the Government of India and SIDBI, provides
guarantees to its Member Lending Institutions (MLIs)
comprising Scheduled Commercial Banks, select Regional Rural
Banks, SIDBI, NSIC & NEDFi in respect of collateral free loans
upto Rs.50 lakh extended by them to eligible Micro and Small
Enterprises.
Speaking on the occasion Dr. K.C. Chakrabarty, CMD, PNB, said
that Punjab National Bank was the first Bank to register as
Member Lending Institution of CGTMSE way back in the year
2000, and it is befitting that PNB should be the first to
support CGTMSE in implementing this path-breaking scheme of
Risk Sharing Facility. Launching of the scheme was a step in
the right direction and would result in increased credit flow
to the MSE sector.
Entrepreneurs would now come forward in large numbers to
avail the benefits under the Scheme. He said that being the
number one Nationalized Bank of the country, PNB was committed
to development of the Micro and Small Enterprises Sector and
provide impetus to the national economy.
Rajender Mohan Malla, Chairman, SIDBI said that
operationalisation of the Scheme would help in providing Micro
and Small Enterprises higher amount of credit facility without
the hassles of collateral. He stated that after the
achievement of the milestone of One lakh Guarantee Approval
recently, the launching of the scheme of Risk Sharing Facility
was another initiative of CGTMSE to encourage entrepreneurs in
the Micro and Small Enterprises sector in their endeavor to
set up ventures or expand or modernize.
Malla opined that the Credit Guarantee Scheme while being
beneficial to entrepreneurs in the MSE Sector would also be
helpful to Banks from the point of view of risk mitigation,
more so with requirement of higher risk weights / provisioning
under Basel-II norms.
O.S. Vinod, Chief Executive Officer, CGTMSE mentioned that the
number of guarantees approved under the Credit Guarantee
Scheme by the Trust have increased substantially during the
current financial year. He expressed confidence that the Trust
would achieve the enhanced target of 50,000 guarantees during
the current year.
Under the existing Credit Guarantee Scheme collateral free
credit facilities upto a maximum of Rs.50 lakh per borrower is
covered by CGTMSE to the extent of 75% of the credit facility.
Higher coverage of 80% is available to credit facilities of
upto Rs.5 lakh to micro entrepreneurs, women entrepreneurs and
units located in the North East Region. The scheme of Risk
Sharing Facility will cover collateral free credit facilities
of above Rs.50 lakh and upto Rs.100 lakh for which 50%
guarantee cover will be provided by CGTMSE and balance 50%
risk will be borne by the participating MLI.
The guarantee fee and annual service fee under the scheme
of RSF are lower at 0.75% and 0.375% respectively. This
initiative will provide a fillip to the growth and development
of the micro and small enterprises in the country.
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