Module: General Practice
Q13: Regarding the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, identify the INCORRECT statement:
✅ Correct Answer: C
Correct Option: C (The Incorrect Statement). Concept: Scope of CGTMSE Coverage.
Reasoning: Why C is Incorrect (The Answer): Retail and Wholesale Trade were explicitly brought under the ambit of the CGTMSE scheme in 2021 (Circular No.
181). They are eligible for guarantee cover (unlike the old rule where they were excluded).
Why B is Correct: The guarantee coverage limit was enhanced from ₹5 Crore to ₹10 Crore (effective April 1, 2025, per the 2025-26 Union Budget & CGTMSE Circular).
Why D is Correct: "Hybrid Security" allows banks to take partial collateral.
For example, for a ₹6 Crore loan, if the borrower gives collateral for ₹2 Crore, the remaining ₹4 Crore can be covered by CGTMSE.
Reasoning: Why C is Incorrect (The Answer): Retail and Wholesale Trade were explicitly brought under the ambit of the CGTMSE scheme in 2021 (Circular No.
181). They are eligible for guarantee cover (unlike the old rule where they were excluded).
Why B is Correct: The guarantee coverage limit was enhanced from ₹5 Crore to ₹10 Crore (effective April 1, 2025, per the 2025-26 Union Budget & CGTMSE Circular).
Why D is Correct: "Hybrid Security" allows banks to take partial collateral.
For example, for a ₹6 Crore loan, if the borrower gives collateral for ₹2 Crore, the remaining ₹4 Crore can be covered by CGTMSE.