CGTMSE/( 44 )/3219 September 11, 2013
All Member Lending Institutions of CGTMSE
Madam /Dear Sir,
CGTMSE - CLAIMS SETTLEMENT - SUBMISSION OF INFORMATION
As you are aware, CGTMSE has been settling the credit guarantee claims lodged by Member Lending Institutions (MLIs) on furnishing the full information. However, majority of the claims do not contain full information and we need to request for additional information from MLIs which results in delay in settling the claims. The following are the common observations found while processing the claims:
1.Non furnishing of declaration and undertaking duly stamped and signed by an authorised officer (not below the rank of AGM) of MLI.
2. Date of NPA mentioned incorrectly when checked in the context of moratorium period as fed in the guarantee application, 1st date of disbursement, amount indicated as repayment received prior to account turning NPA.
3. Reasons for the account turning as NPA not elaborately indicated.
4. Whether the account has been classified as (i) wilful defaulter or (ii) fraud
5. Reason for initiating legal action before NPA date are not indicated
6. No suit number and date is mentioned for the legal action initiated. In case, Suit No. not allotted, legal copy is not being sent.
7. Legal action initiated under SARFAESI - date of possession of assets not given.
Further, the MLIs need to submit copies of appraisal / sanction memorandum, sanction letter evincing acceptance by borrower, recall notice, legal documents ( copies of petition filed in DRT / Civil Court) in case of credit guarantee claims of more than Rs.20 lakh for detailed verification.
In order to curtail the delay in settling the claims and improve the claim settlement mechanism, CGTMSE has designed two formats ( enclosed as Annexure - I & II ) covering all the points on which information is normally needed from MLIs whenever the initial information submitted is incomplete. MLIs are requested to furnish information as per Annexure I (duly signed by the authorised officials of MLI not below the rank of AGM) at the time of lodgement of claims together with Declaration & Undertaking in respect of guarantee claims of upto Rs.20 lakh and submit Annexure I & II for claims above Rs.20 lakh. The scanned copy of Annexure I may also be sent to specially created mail box viz. firstname.lastname@example.org. Please note that the claim will not be processed in case there is any deficient information submitted either in claim application form or in Annexure I and II.
It may be indicated that the submission of information as per Annexure I for processing the claims upto Rs.20 lakh and information as per Annexure I & II for claims above Rs.20 lakh to be submitted along with Declaration and Undertaking is mandatory without which the claim shall not be treated as received. Please note that all the columns of Annexure I would need to be compulsorily filled although the relevant information might have already been given in the claim application form. The information submitted in Annexure I would be treated as correct in case of any discrepancy in online claim application form. The proposed revision in guidelines with regard to claim submission comes into force with immediate effect. The General information sheet has also been attached for the information of MLIs.
Please bring the contents of the above circular to the notice of all your controlling offices from where the claim applications are lodged.
Encl: Annexure I & II
General Information for the benefit of MLI:
- Send us the D & U duly stamped and signed by an officer not below the rank of AGM or equivalent rank / higher rank.
- Fill details for every S No of Annxure I, wherever applicable to the a/c. In case the S No. is not applicable, indicate NA or NIL as your reply.
- The reply will not be considered as complete if any S No is left unanswered.
- For each credit facility (TC/WC), separate Annexure I is to be filled up.
- Annexure I is to be duly signed by an officer above the rank of AGM / or equivalent rank with bank seal.
- Please refer to our circular No. 61A and send us the Bank Mandate Form duly signed by AGM with bank seal. Claim Payment could not be done without the receipt of RTGS Mandate form. Please ignore, if already sent by you.
- Documents are to be sent as per Annexure II where Guaranteed amount and outstanding amount is more than `20 lakh.
Annexure I (Click here to view the contents)
1. Statement of account of borrower unit since beginning (from date of disbursement) till date.
2. SSI Regn.certificate of unit
3. Suit filed: Details indicating parties, amount claimed in the suit.
4. Copy of the final verdict, if any
5. Any other documents that can have bearing on the authenticity of the claim (i.e the projected balance sheet, P&L A/c, the income tax returns of the previous years)
6. IT PAN, Voter ID copy of promoter / Proprietor (or any other KYC details)
7. Insurance copy of primary assets, if available. If not, the reasons for the same.
8. All pre and post disbursement visit / inspection reports
9. The agreements pertaining to the loan sanctioned (Agreement of guarantee, Loan against hypothecation, etc)
10. Recovery efforts made by bank after NPA - brief note
11. Status of security (whether it is in the custody of bank. If assets are sold, provide the date of credit of sales proceeds)
12. Due diligence report signed by the authorised signatory at the time of appraisal explaining antecedents of the borrower.
13. Copy of appraisal report duly signed by the delegated authority prior to sanction.
14. Copies of all sanction letters & all the amendments to the sanction letter duly acknowledged by the borrower.
15. Compliance report on all sanction terms & conditions.
16. Staff Accountability Report, in case of quick mortality/fraud cases.
17. Specify internal rating assigned (if any) to the case (mandatory for cases above 50 lakh)