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    Question

    Under CGTMSE, what is the general provisioning

    requirement on loans covered under guarantee in case of default?
    A 0% Correct Answer Incorrect Answer
    B 15% Correct Answer Incorrect Answer
    C 25% Correct Answer Incorrect Answer
    D 75% Correct Answer Incorrect Answer
    E 100% Correct Answer Incorrect Answer

    Solution

    Under CGTMSE, if a borrower defaults, the bank receives guarantee coverage, but is still required to make provision on the uncovered portion, and often the first 25% of the defaulted amount must be provided as per provisioning norms (subject to RBI/CGTMSE updates). Exact provisioning can vary by scheme and must follow latest CGTMSE/RBI circulars.

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