CGTMSE does away with requirement of physical submission of D&U; MLIs can lodge claims online

New Delhi, Nov 29 (KNN) Taking a step towards improving ease of doing business environment in the country, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has decided to create an online module in CGTMSE portal whereby Member Lending Institutions (MLIs) will lodge the claim along with Declarations and Undertaking (D&U) online using the maker/checker concept.

As per the present guidelines, while the claims are lodged by the Member Lending Institutions (MLIs) electronically by using CGTMSE portal, the duly signed and sealed Declarations and Undertaking (D&U) is separately forwarded in physical form.

The Trust, on its part, treats the claim application as received only after the receipt of corresponding D&U, CGTMSE said in a circular.

Since the D&U's are separately sent by the MLIs after electronic submission of claim application form, many a time it so happen that the D&Us are either not received on time or are received in incomplete form and thus, are required to be returned to MLIs for correction and resubmission. In the meanwhile, the corresponding claims lodged remain pending for settlement, the circular added.

With a view to address the issue and further reduce the time for claim settlement, it has been decided to create an online module in CGTMSE portal whereby MLI will lodge the claim along with D&U online using the maker/checker concept.

The operational guidelines of new module contain a checklist which is required to be filled by the MLIs in respect of claims where claim eligible amount is Rs 20 lakh and above.

The checker at MLI level is expected to verify the contents of each claim along with D&U and check list, wherever applicable, for its correctness before accepting the claim forwarded by the maker, said the circular.

The online module shall be made live from December 01, 2016 onwards.

With the introduction of the new module, the requirement of physical submission of D&U has been done away with.

Further, no paper in physical form need be forwarded to CGTMSE in respect of the claim application excepting attachment of scan copy of document initiating legal action confirming the date of initiation of legal action and scan copy of possession notice in case the legal action has been initiated under SARFAESI Act.

The CGTMSE, however, reserves the right of carrying out inspections of settled claims and demand the refunds in case serious deficiencies (attributable to the internal staff of the MLI) /deviations from the Scheme parameters are observed during the course of inspections.

The physical copy of D&U shall continue to be forwarded to CGTMSE, as per the extant practice, for the claims to be lodged till November 30, 2016, CGTMSE said. (KNN Bureau)