ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!

    Question

    Under the CGTMSE (Credit Guarantee Fund Trust for Micro

    and Small Enterprises) scheme, which of the following would be treated as primary security for a loan covered under the guarantee? i. Assets created out of the credit facility extended to the borrower ┬аii. Unencumbered fixed assets like land, building, plant, or machinery associated with the project ┬аiii. Personal guarantee of the proprietor or partners (in case of proprietary/partnership firm) ┬аiv. Personal guarantee of spouse of the proprietor
    A Only (i) and (ii) Correct Answer Incorrect Answer
    B Only (i) and (iii) Correct Answer Incorrect Answer
    C Only (iii) and (iv) Correct Answer Incorrect Answer
    D (i), (ii), and (iii) Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    тАв Primary security refers to assets that are directly created out of the loan facility or are associated with the borrowerтАЩs business/project. тАв Examples include: o Assets created out of loan proceeds (plant & machinery, equipment, etc.) o Unencumbered fixed assets like land/building attached to the project o Personal guarantee of proprietor/partners/directors depending on the constitution of the borrower тАв However, the personal guarantee of spouse, relatives, or friends is considered a third-party guarantee, not primary security. тАв Under CGTMSE, collateral security is not mandatory, but primary security is required for guarantee coverage.

    Practice Next
    More Accounts Questions

    Relevant for Exams:

    ask-question