CGTMSE fee: slabs, who pays and how it is charged each year

CGTMSE fee slabs for 2025-26 onwards

The CGTMSE fee is called the annual guarantee fee (AGF). It depends on the size of the business's total covered exposure. These are the standard rates in the CGS-I scheme document updated on 01-Apr-2026. They apply to guarantees approved or renewed on or after 01-Apr-2025 (CGTMSE scheme document, CGTMSE circular 221). The slabs above ₹2,00,00,000 matter only at lenders whose ceiling is higher: ₹10,00,00,000 applies at public sector, private sector and foreign banks and select financial institutions, and ₹2,00,00,000 at small finance banks, regional rural banks and co-operative banks (CGTMSE scheme document).

Three notes change the number you actually pay:

• The slab follows your total exposure, not one loan. If your business already has a covered loan, CGTMSE adds it to the new one to find the slab (CGTMSE scheme document).
• Your lender's risk grade moves the rate. The standard rate is adjusted up or down for each lender (next section).
• The fee includes GST (CGTMSE scheme document).

The Micro Credit Card, a separate CGTMSE product for Udyam-registered micro enterprises, carries its own fee of 0.55% (CGTMSE circular 259).

Why your lender's CGTMSE fee can differ from the standard rate

CGTMSE grades every lender on how its covered loans perform, using measures such as its bad-loan rate and claim rate. A lender with a better record gets a 10% discount on the standard rate. A lender with a riskier record pays a premium of 15%, 30%, 50% or up to 70% (CGTMSE scheme document). A lender that is new to CGTMSE starts at the 70% premium for at least one year (CGTMSE scheme document).

You cannot see a lender's grade yourself. CGTMSE tells each lender its own premium (CGTMSE scheme document). If a fee looks high, ask the lender which rate it is applying and why.

What changed in the CGTMSE fee structure

Many websites still show the 2023 rates. Check the date on any fee table you rely on.

Who pays the CGTMSE fee

The lender pays CGTMSE. The scheme then lets the lender recover the same amount from the borrower "at its discretion" (CGTMSE scheme document). In practice many lenders pass it on, so assume you will pay unless your lender says otherwise.

If the lender does pass it on, it is part of the cost of your loan, and RBI rules apply:

• It must be disclosed. Business term loans sanctioned on or after 01-Oct-2024 come with a Key Facts Statement (KFS), a standard summary of the loan's costs (RBI notification, 15-Apr-2024).
• It counts in the APR. The annual percentage rate in the KFS is the yearly cost of the loan including all charges, not just interest (RBI notification).
• No surprise charges. A fee not shown in the KFS cannot be charged later without your explicit consent (RBI notification).

The CGTMSE fee is a scheme charge set by CGTMSE and collected by your lender. It is not a Capnix charge. See business loan charges and fees for the other costs to compare.

Is the CGTMSE fee charged every year?

Yes. It is an annual fee for as long as the guarantee runs.

• First year: charged on the amount covered (CGTMSE scheme document).
• Later years: charged on the amount still outstanding. For term loans that is the balance on 31 December. For working capital it is the present or expected balance the lender reports (CGTMSE scheme document).
• Timing: the lender pays the first fee within 30 days of the first disbursal or of CGTMSE's demand, whichever is later. Later fees are demanded by the second week of February and paid by 30 March each year (CGTMSE scheme document).
• If the fee is not paid, the cover lapses on that loan (CGTMSE scheme document).

Because the later fees follow the balance, the yearly fee on a term loan falls as you repay.

CGTMSE fee concessions

Some businesses get a lower rate. Each concession is 10% off the standard rate, and they can stack to a maximum of 30% (CGTMSE scheme document).

Find your CGTMSE fee: worked examples

These examples come from CGTMSE's own scheme document, for a guarantee of ₹10,00,000 (CGTMSE scheme document).

In rupees, first year: at 0.38% on ₹10,00,000 covered, the first-year fee is ₹3,800 (our arithmetic on CGTMSE scheme document). At the standard 0.60% on ₹1,00,00,000 covered, it would be ₹60,000 (our arithmetic on CGTMSE scheme document). Later years apply the rate to the balance outstanding (CGTMSE scheme document), so they are lower. Your lender's sanction letter and KFS show the exact figure.

Is the CGTMSE fee refundable?

Generally no. Once paid to CGTMSE, the fee is non-refundable, except in a few cases the scheme lists (CGTMSE scheme document):

• the lender paid too much, or paid twice for the same loan;
• the fee was not due;
• the fee was paid in advance but CGTMSE did not approve the cover.

If you close the loan early, a proportionate refund is possible only if the lender marks the closure in the CGTMSE system, or asks for the refund, within 3 months of CGTMSE receiving that year's fee. After 3 months, no refund is considered (CGTMSE scheme document).

Any refund goes to the lender, because the lender paid it. The scheme document does not say whether the lender must pass it on to you. If you prepay a covered loan, ask your lender to mark the closure promptly and whether it will return any refunded fee.

Your next step

The guarantee fee is one line in the full cost of a loan. Before you compare offers, run the free loan readiness check to see how lenders are likely to read your business. The CGTMSE scheme guide explains how the cover works, and the coverage and claims guide explains what the fee buys the lender. If you are comparing with a Mudra loan, its guarantee works differently: see Mudra vs CGTMSE. Mudra loans carry a separate CGFMU fee (NCGTC CGFMU FAQ), and one loan cannot carry both covers (CGTMSE scheme document).