Cgtmse

                                                              

 

Cgtmse

Scheme – PMSVANidhi. This is also in Question – Answer type only.  Matters related toClaims etc will be discussed in the forthcoming Issues. 

 

PM SVANidhi  

 

1.What is PM Street Vendor’s Atma Nirbhar Nidhi (PM SVANidhi) ?   

 

PM SVANidhi is a Scheme of Ministry of Housing & Urban Affairs (MoHUA) for sanction 

of working capital loan upto Rs. 10,000 to street vendors through the Lending 

Institutions.  

 

 

2. What is Credit Guarantee Scheme for PM SVANIDHI (CGS-PMS)?  

 

Credit Guarantee Scheme for PM SVANidhi is the graded guarantee scheme under which 

the credit product / loan would be guaranteed by CGTMSE.  

 

The CGS-PMS is a portfolio guarantee provided by CGTMSE to Member Lending 

Institutions (MLIs) for facilitating sanction of Working Capital (WC) loan of upto 

Rs.10,000/- to individual street vendors.  

 

 

 

 

  

 

3. What is the objective of the Scheme?  

 

To provide portfolio-based guarantee coverage to the Member Lending Institutions 

(MLIs) of CGTMSE to facilitate sanction of working capital loan up to Rs.10,000 as per 

PM SVANidhi.  

 

4. What is the amount of Initial working capital loan?  

 

The initial working capital loan is upto Rs.10,000/- (Rupees Ten Thousands only). 

 

 

5. Whether subsequent loan under PM SVANidhi is eligible ?  

 

Yes. On timely or early repayment, the vendors will be eligible for the next loan with an 

enhanced limit of a maximum of 200% of the earlier loan, subject to a ceiling of Rs 

20,000/- (Rs Twenty Thousands only). 

 

6. What will be the Tenure of the loan?  

 

Tenure of the loan will be maximum of 1 year  

 

7. Whether a new vendor can start a business under the Scheme?  

 

No. The Scheme is available to all street vendors engaged in vending in urban areas as 

on or before March 24, 2020.  

 

8. Who are the eligible vendors to avail loan under PM SVANidhi Scheme ?  

 

The eligible vendors will be identified as per following criteria:  

 

(i) Street vendors in possession of Certificate of Vending / Identity Card issued by 

Urban Local Bodies (ULBs);  

 

(ii) The vendors, who have been identified in the survey but have not been issued 

Certificate of Vending / Identity Card; 

  

(iii) Street Vendors, left out of the ULB led identification survey or who have 

started vending after completion of the survey and have been issued Letter of 

Recommendation (LoR) to that effect by the ULB / Town Vending Committee 

(TVC); and  

 

(iv) The vendors of surrounding development/ peri-urban / rural areas vending in 

the geographical limits of the ULBs and have been issued Letter of 

Recommendation (LoR) to that effect by the ULB / TVC.  

 

 

09. Whether all loans sanctioned to Street Vendors are eligible for guarantee 

coverage?  

 

No. The loans sanctioned to eligible street vendors under PM SVANidhi Scheme are 

eligible for guarantee coverage.  

 

 

10. Whether any cut-off date applicable for sanction of loan under the Guarantee 

Scheme ?  

 

All loans sanctioned on and after July 02, 2020 under PM SVANidhi Scheme are eligible.  

 

11. What is “Material Date” in case of Schemes of the Trust ? 

 

"Material date" means the date on which the portfolio has been lodged by the MLIs and 

approved by CGTMSE. 

 

12. What is the “Amount in Default” ? 

 

“Amount in Default” means the principal amount outstanding in the account(s) of the 

borrower in respect of credit facility as on the date of  the account becoming NPA, or  

the date of lodgment of claim application whichever is lower or such other date as may 

be specified by Trust for preferring any claim against the guarantee cover subject 

to a maximum of amount guaranteed. 

 

 

 

  

13. What would be Interest Rate charged for the working capital loan under PM 

SVANidhi Scheme?  

 

In case of Scheduled Commercial Banks ,the rates will be as per their prevailing rates of 

interest.  Banks using BCs for sourcing and monitoring function for the Scheme can have 

a differential interest rate structure for the Scheme, to provide for the cost towards BCs, 

subjects to any regulatory caps that may have been imposed by RBI.  

 

 

14. Whether any collateral security is required to avail the loan?  

 

No collateral security is required to avail the loan from the Member Lending Institution.  

 

15. What is the period for calculation of the year portfolio, either Calendar year or 

Financial Year?   

 

Portfolio creation would be recognised on annual basis ending with the Financial Year 

and eligibility of claim will be based on such annual portfolio.  

 

16. Whether AADHAAR No. of borrowers is required to be shared with CGTMSE for 

Guarantee coverage?  

 

Aadhaar Number of the borrower is not required for availing guarantee from CGTMSE 

and lending institution can provide PMS No. of the borrowers as the Unique 

Identification Number (PMS No. is generated at the successful submission of application 

by an eKYC verified street vendor).  

 

17. What would be the guarantee coverage available for MLIs under the Scheme?  

 

The Scheme has a provision of Graded Guarantee Cover for the loans sanctioned, as 

indicated below, which will be operated on portfolio basis:  

 

a) First Loss Default (Up to 5%): 100%  

 

b) Second Loss (beyond 5% up to 15%): 75% of default portfolio  

 

c) Maximum guarantee coverage will be 15% of the year portfolio  

  

Illustrations:  

 

(i) In an MLI covers a portfolio of Rs.100 crore and has a portfolio loss of Rs.5 

crore, 100% of the loss (Rs.5 crore) shall be covered by CGTMSE.  

 

(ii) In an MLI covers a portfolio of Rs.100 crore and has a portfolio loss of Rs.15 

crore, then CGTMSE will cover Rs.12.50 crore loss (100% of Rs.5 crore + 75% of 

Rs.10 crore).  

 

(iii) In an MLI covers a portfolio of Rs.100 crore and has a portfolio loss of more 

than Rs.15 crore, then CGTMSE coverage will be still Rs.12.50 crore.  

 

18. How to obtain the coverage, whether individual guarantee is obtained?  

 

No. The Trust issue Guarantee based on the disbursement data available on the 

PMSVANIDHI portal. CGTMSE would be issuing guarantees for all the loans sanctioned 

and disbursed under PM SVANidhi Scheme basis PMSVANIDHI portal and the MLIs will 

not be required to submit application for guarantee cover to CGTMSE.  Accordingly, 

MLIs will have to approach CGTMSE only at the time of claim lodgment, in case of 

th

default in loans, by lodging the claim on CGTMSE portal. (The Trust Cir 179 dated 27 

April,2021) 

 

19. Will any guarantee fee be charged under the Scheme by CGTMSE?  

 

No, CGTMSE will not charge any guarantee fee under the Scheme.  

 

20. Whether the unsecured loan provided under PM SVANidhi Scheme will be eligible 

for guarantee cover ?  

 

Yes. Unsecured loan provided to the borrower under this Scheme will be eligible for the 

guarantee cover from CGTMSE.   

 

21. Whether any documentation between the lender and the borrower is required for 

availing guarantee cover?  

 

No. The issue of documentation between the lender and the borrower will be sole 

prerogative of the Lending Institution and CGTMSE will not insist on any documentation 

for availing credit guarantee.  

  

22. Whether any benefit on risk weight is available on the portfolio guaranteed with 

CGTMSE?  

 

Risk weight for this portfolio will apply as per the extant RBI guidelines.  

 

 

23. What is the process for invocation of guarantee?  

 

MLIs are required to invoke the guarantee once the accounts turns into NPA. MLIs to 

pool all the accounts in a particular quarter and lodge for claim during the next quarter.  

 

 

24. Whether any limitation period is there for invoking guarantee / lodgement of 

claim?  

 

Yes. The lending institution may invoke the guarantee / lodge claim application in 

respect of credit facilities under a portfolio within a maximum period of 1 year from the 

NPA date.  

 

25. Whether initiation of legal proceedings is necessary?  

 

Initiation of legal proceedings is not necessary given the small loan size.  

 

26. If legal initiation is not necessary what is the process for submitting claims ?  

 

Lending Institutions are expected to have their own prudent recovery measures and 

may submit management certificate confirming that the amount due and payable to the 

lending institution in respect of the loan has not been paid and the dues have been 

classified by the lending institution as Non Performing Asset.  

 

27. On lodgement of claim application by the MLI, how the claims in a portfolio will be 

settled?  

 

On lodgement of claim application by MLI on quarterly basis, CGTMSE would settle the 

claim. Trust shall pay in one instalment 100% of the portfolio guaranteed amount on 

preferring of eligible claim by the lending institution within 30 days subject to the extant 

guidelines. Claim settlements would be carried out quarterly subject to maximum 

guarantee coverage of 15% of the year portfolio.

  

28. Whether MLIs are required to pass on the recoveries received after the settlement 

of claims?  

 

Any recovery made from the NPA portfolio against which claim has been settled by 

CGTMSE will be allowed to be adjusted against future claim, if any, else will be returned 

to CGTMSE by the concerned lending institutions. However, lending institutions will be 

required to file annual returns for 2 years after settlement of the last claim against a 

created portfolio in a FY about recovery made from the borrowers against which claim 

has been settled by CGTMSE. Amount payable to CGTME out of the recovery proceeds 

will be returned to CGTMSE after which accounts will be treated as finally settled and 

closed.  

 

29. Will there be inspection of cases covered under the Scheme?  

 

Yes. CGTMSE reserves the right to inspect cases covered under the Scheme at any given 

time.  

 

30.Appropriation of amount realized by the lending institution in respect of a credit 

facility after the guarantee has been invoked. 

 

Any recovery made from the NPA portfolio against which claim has been settled by 

CGTMSE will be allowed to be adjusted against future claim, if any, else will be returned 

to CGTMSE by the concerned lending institutions.