| Scheme Name | Credit Guarantee Fund Scheme for Skill Development (CGFSSD) |
| Commencement | Came into force from the date of notification by the Government of India |
| Eligible Loans From | Skill Loans sanctioned on or after 15 July 2015 |
| Objective | To provide credit guarantee against default in eligible Skill Loans |
| Eligible Borrower | New or existing borrower of Indian nationality who meets the minimum qualification requirements for eligible skill courses |
| Eligible Courses | NSQF-aligned and Non-NSQF-aligned skill development courses |
| Training Platform | Training entities onboarded on the MSDE’s Skill India Digital Hub (SIDH) platform |
| Minimum Loan Amount | ₹5,000 |
| Maximum Loan Amount | ₹7.50 lakh |
| Collateral Security | Not required |
| Third-Party Guarantee | Not required |
| Parent/Guardian | Parents/guardians are co-borrowers |
| Minor Student | Parent(s) execute loan documents; lender obtains student’s acceptance/ratification after the student becomes major |
| Eligible Lending Institutions | Scheduled Banks – Public Sector Banks, Private Sector Banks, Foreign Banks and Small Finance Banks – and eligible NBFCs/NBFC-MFIs registered with NCGTC |
| Guarantee Trustee | National Credit Guarantee Trustee Company (NCGTC) |
| Fund | Credit Guarantee Fund for Skill Development Loans |
| Interest Rate – Scheduled Banks | Not more than 1.5% p.a. over Repo Linked Lending Rate (RLLR) as specified in the scheme |
| Interest Rate – EBLR Reference | Skill loans sanctioned with interest rate higher than 1.5% p.a. over EBLR by a Scheduled Bank are not eligible |
| Interest Rate – NBFC/NBFC-MFI | Loans with interest rate above 21% p.a. are not eligible, subject to revision by the Fund |
| Eligible Training Institutions | ITIs, Polytechnics, schools recognised by Central/State Education Boards, colleges affiliated to recognised universities, NSDC/Sector Skill Council training partners, State Skill Missions and State Skill Corporations |
| NSQF Course Duration | No minimum course duration |
| Non-NSQF Courses | Non-NSQF courses onboarded on SIDH are also covered, with no minimum course duration |
| Eligible Course Expenses | Tuition/course fee, assessment fee, examination fee, library charges, laboratory fee, caution deposit, books, equipment and instruments |
| Boarding & Lodging | May be considered on merit where necessary, based on the cost of living in the particular area |
| Course Fee Payment | Tuition/course fee is paid directly to the Training Institute by the lending institution |
| Processing Fee | Nil |
| Repayment – Loan up to ₹50,000 | Up to 3 years |
| Repayment – Above ₹50,000 to ₹1 lakh | Up to 5 years |
| Repayment – Above ₹1 lakh to ₹7.50 lakh | Up to 7 years |
| During-Course Instalment | Lender may require instalments during the course |
| Maximum Course-Period Payment | Down payment towards course fee + EMI during course should not exceed 10% of total course value |
| Moratorium – Course up to 1 year | Up to 6 months from completion of the course |
| Moratorium – Course above 1 year | Up to 12 months from completion of the course |
| Repayment Structure | Lenders may choose flat EMI, balloon payments or suitable moratorium structure |
| Prepayment | No prepayment charges |
| Course Not Completed | In case of accident, death or disability, lender may seek pro-rata reimbursement of the unfinished course amount from the training institute |
| Guarantee Fee | 0.125% per calendar quarter (0.50% p.a.) |
| Who Pays Guarantee Fee | Member Bank/Lending Institution |
| Guarantee Fee Basis | Quarter-end outstanding portfolio balance |
| Guarantee Fee Payment | Within 16 days from the end of the calendar quarter |
| Guarantee Fee Refund | Generally non-refundable, except excess remittance, duplicate remittance or fee not due |
| Guarantee Coverage – Loan ₹5,000 to ₹4 lakh | 75% of amount in default |
| Guarantee Coverage – Loan above ₹4 lakh to ₹7.50 lakh | 70% of amount in default |
| Guarantee Start | From the date of payment of guarantee fee |
| Guarantee Duration | Through the agreed tenure of the Skill Loan |
| Lock-in Period – Loan up to ₹3 lakh | 6 months |
| Lock-in Period – Loan above ₹3 lakh | 12 months |
| Lock-in Calculation | From commencement of guarantee cover or end of interest moratorium, whichever is later |
| Claim Eligibility | Guarantee must be in force, lock-in period must have elapsed, and loan dues must have become NPA |
| Claim Period | Bank may invoke guarantee within maximum 1 year from NPA, subject to scheme conditions |
| Claim Settlement | 100% of the guaranteed amount at one go, after the required recovery certificate and satisfaction of NCGTC conditions |
| Recovery Before Claim | Amount recovered from borrower/assets must first be credited as prescribed before claiming guaranteed amount |
| Bank’s Recovery Responsibility | Even after NCGTC pays the guarantee claim, the bank remains responsible for recovering the entire outstanding amount from the borrower |
| Claim Cap – FY 2024-25 & FY 2025-26 Disbursements | Claim payout capped at 20% of total loans disbursed during the relevant year |
| Claim Cap From FY 2026-27 | Reduced to 15% of total loans disbursed during the relevant year |
| Aadhaar | Bank should ensure, wherever applicable, linkage of every Skill Loan with Aadhaar |
| Credit Bureau | Borrower/co-borrower details to be registered with an appropriate credit information bureau |
| Bank Monitoring | Bank must closely monitor accounts and follow up for repayment |
| Guarantee Claim Office | Claims received directly from branches/offices other than the Retail Assets Division, Head Office will not be entertained |
| Recovery Sharing After Claim | After adjustment of applicable costs/dues, losses due to deficit recovery are shared between NCGTC and Bank in the ratio of 75:25 |
| Guarantee Termination | Guarantee may terminate if the loan is transferred/assigned and the transferee does not satisfy scheme eligibility conditions |
| Borrower Becomes Ineligible | NCGTC liability is limited to the borrower’s liability as on the date the borrower becomes ineligible, subject to scheme limits |
| Inspection | NCGTC has the right to inspect/call for books, accounts and other records of the bank and borrower |
| KYC for De-duplication | From January 2017, at least one of PAN, Voter ID, Aadhaar or Driving Licence is mandatory |
| New Guarantee File | Guarantee application for loans disbursed in a quarter must generally be submitted by the end of the following month: 31 July, 31 October, 31 January or 30 April, as applicable |
| Continuity/Renewal File | Must be submitted within the prescribed quarter after guarantee expiry |
| Lapsed Guarantee | If not renewed within the prescribed period, guarantee can be marked Lapsed |
| Closed Guarantee | A lapsed guarantee not renewed within the next two quarters can be marked Closed |
| Penalty on Lapsed Renewal | Penalty at 4% above Bank Rate on applicable lapsed-quarter guarantee fees |
| Closed Loan Account | Once reported closed, no further guarantee fee is charged |
| Fee on Closure | Fee charged for the quarter in which the account is closed is not refunded |
