CGTMSE guarantee for credit facility covered by collateral security

The Credit Guarantee fund Trust for Micro Small Enterprises (CGTMSE) has been providing guarantee coverage to any collateral / third party guarantee free credit facilities extended by eligible institutions (Member lending institutions (MLI) like banks, financial institutions, select NBFCs and Small Finance banks etc.).  Hitherto, all activities* that come under manufacturing and service sector as…

What is Commercial Real estate

In simple words, Commercial Real Estate (CRE) can be described as any property which is used for non-residential purposes such as housing buildings, hotels, restaurants, gymnasiums, hospitals, condominiums, shopping malls, office blocks, theatres, amusement parks, cold storages, warehouses, educational institutions, industrial parks etc. In terms of Basel II definition if  the repayment primarily depends on…

Collateral free agricultural loan limit enhanced up to 1.60 lakh

Currently the banks are mandated to extend collateral-free agriculture loans up to Rs.1 lakh. This limit of Rs.1 lakh was fixed in the year 2010.In view of overall inflation and rise in agriculture input cost since 2010, Reserve Bank of India vide its circular RBI/2018-19/118 FIDD.CO.FSD.BC.No.13/05.05.010/2018-19 dated February 7, 2019 advised all the scheduled commercial…

Calculation of provisioning requirement under prudential norms

“Prudential norms” are the guidelines and general norms issued by the banking regulator (the central bank) of the country for the proper and accountable functioning of banks and financial institutions. The provisioning requirements for all types of standard assets, sub-standard assets,  Doubtful assets and Loss assets stands as below. Standard assets: Banks should make general…