Credit Guarantee Scheme for exporters
No. CLE-HO/POL/DOC/2025
5th December 2025
Members of the Council
Sub : Credit Guarantee Scheme for exporters
Dear Member
The Union Cabinet, chaired by the Hon’ble Prime Minister, Shri Narendra Modi has approved introduction of Credit Guarantee Scheme for Exporters (CGSE) on 12th November 2025, for providing 100% credit guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs) for extending additional credit facilities upto Rs.20,000 crore to eligible exporters, including MSMEs.
The scheme would be available from the date of announcement of the Scheme till issue of guarantees for loans amounting to Rs.20,000 crore or 31.03.2026, whichever is earlier.
The highlights of the scheme are as follows.
(i) Quantum of Support, per borrower:
(a) Direct exporters: Upto 20 per cent of sanctioned export working capital limits (fund based and non-fund based).
(b) Indirect exporters: Upto 20 per cent of the sanctioned working capital limits (fund based and non-fund based)
(ii) Maximum Loan Amount: ₹50 crore per borrower (in rupee currency only). Working capital limits (i.e. Export working capital limits for Direct exporters; Domestic working capital limits for indirect exporters) existing on September 30, 2025 to be considered for the calculation of proposed facility.
(iii) For indirect exporters as defined under Para 4(d) above, in case the outstanding is lower than the sanctioned amount in the existing fund based working capital account, the lender shall first utilize such available balances before extending credit under the Scheme;
(iv) No processing fee shall be charged for sanction of this facility
(v) Guarantee Cover-100%
(vi) Tenor of the Loan – 4 years fixed, including 1 year moratorium. The loan shall be repayable in equal monthly installments after the moratorium period;
(vii) Interest rate on facility under the Scheme – 1% below interest rate on any existing working capital facility of MLI on date of issue of guidelines, capped at 10% p.a. (for Banks/FIs) and 14% p.a. (for NBFCs), subject to extant RBI guidelines
(viii) If an MLI has sanctioned only foreign-currency working capital facilities to a borrower, it shall provide support under the Scheme at an interest rate that is 1% below the rate that would have been applicable for rupee export credit to the same borrower, as per the MLI’s pricing policy and the borrower’s credit rating (subject to the cap mentioned above).
(ix) Lock in period for invocation of guarantee shall be 6 months from the date of commencement of guarantee cover; 4
(x) Invocation of guarantee – The guarantee provided under this Scheme may be invoked by the MLI on the CGSE loan account turning into NPA, provided that the said loan account was covered under CGSE at the time of the account turning NPA. NCGTC shall pay 75% of the guaranteed amount within 30 days of lodgement of claim (subject to the claim being found otherwise in order); balance 25 per cent post conclusion of recovery proceedings or settlement under OTS or upon the legal case becoming time barred, whichever is earlier.
(xi) One Time Settlement under the Scheme shall be permitted after 1 year of commencement of legal proceedings, but guarantee cover in such cases shall reduce to 90% of the amount in default; 6. Credit Facility not eligible under the Scheme The Guarantee Cover under the Scheme shall not be eligible for credit facility: (i) in respect of which risks are additionally covered under a scheme operated / administered by Reserve Bank of India or by the Central Government or by any general insurer or any other person or Association of Persons carrying on the business of insurance, guarantee or indemnity, to the extent they are so covered. (ii) which does not conform to, or is in any way inconsistent with the Scheme Guidelines or provisions of any law or any directives or instructions issued by the Central Government or the Reserve Bank of India which may, for the time being, be in force.
The scheme guidelines along with FAQs are enclosed.
For further details, kindly contact your bank.
With kind regards,
R. Selvam
Executive Director