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    Question

    Which of the following statements about Member Lending

    Institutions (MLIs) under CGTMSE’s Credit Guarantee Scheme–I (CGS‑I) is MOST accurate?
    A All MLIs, including NBFCs and cooperative banks, are automatically eligible under CGS‑I. Correct Answer Incorrect Answer
    B Only public sector banks and regional rural banks registered under CGS‑I can provide collateral‑free loans with guarantee cover. Correct Answer Incorrect Answer
    C Any lending institution registered under CGS‑I, whether bank or NBFC, can be a Member Lending Institution. Correct Answer Incorrect Answer
    D Only those MLIs registered under CGS‑I are eligible; NBFCs registered under CGS‑II or other schemes are excluded. Correct Answer Incorrect Answer
    E MLIs not registered under CGS‑I can also offer guarantee cover under CGTMSE if they partner with a CGS‑I registered institution. Correct Answer Incorrect Answer

    Solution

    Under CGTMSE’s first scheme, CGS‑I, only the MLIs registered under CGS‑I are eligible to give guarantee‑backed loans ([cgtmse.in][1]). NBFCs fall under CGS‑II (Credit Guarantee Scheme for NBFCs), which is a separate scheme and does not make them eligible under CGS‑I ([cgtmse.in][1]). Option A is wrong because NBFCs are not included in CGS‑I unless registered under a different scheme. Option B is too restrictive—it omits banks under CGS‑I beyond public/regional rural banks. Option C combines CGS‑I and CGS‑II institutions, which is incorrect. Option E is incorrect because only direct registration under CGS‑I qualifies; mere partnerships don’t confer eligibility. 

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