Bank Guarantee Charges Reimbursement Scheme

These banks charge hefty fees that pinch Scheduled Castes or Scheduled Tribes (SC/ST)-owned small firms right at the start. This scheme from the Ministry of MSME under National SC/ST Hub refunds those costs, freeing up cash for actual operations.

The Bank Guarantee Charges Reimbursement Scheme supports SC/ST micro and small enterprises by refunding bank fees paid for Performance Bank Guarantees (PBG).  Bank guarantees are commonly demanded by public sector undertakings, government departments, and large buyers as a risk safeguard. However, the charges involved can significantly increase operating costs, especially for smaller enterprises. This scheme steps in to reimburse a portion of the bank guarantee charges paid, enabling businesses to improve liquidity, compete for larger opportunities, and manage cash flows more efficiently without additional financial strain.

This program comes with the following features:

• The scheme reimburses 80% of PBG charges or ₹1 Lakh (whichever is lower), post-issuance.

• The scheme does not impose a cap on total yearly claims.

• This scheme applies to guarantees issued for business-related purposes such as performance guarantees or bid guarantees

• It covers guarantees from any scheduled commercial bank.

• It further strengthens bidding power for government/PSU orders.

The following conditions are required for an application for the Bank Guarantee Charges Reimbursement Scheme:

• The applicant must operate a registered business entity in India.

• The enterprise must fall under the MSME category as per prevailing norms.

• The bank guarantee must relate to business operations, contracts, or tenders.

• The guarantee should be issued by a scheduled commercial bank or recognised financial institution.

Gather the following documents before filing for a reimbursement under this scheme:

• Self-certified copy of Udyog Aadhaar (UAN) & GST registration (if applicable).

• Self-certified PAN card copy—for proprietorships, use SC/ST proprietor's PAN.

• Caste certificates for all promoters/owners.

• Shareholding details for partnerships/Pvt Ltd/LLPs (SC/ST holdings >51%); include Partnership Deed/Memorandum of Association (MoA)/ Articles of Association (AoA).

• Bank-attested debit statement (signature/stamp) showing PBG charges, BG number, and MSE name.

• Bank-attested/stamped copy of issued PBG.

• Cancelled cheque from the current account debited for charges.

• Supply/Purchase/Work Order from CPSE/Central/State govt entity mandating PBG.

Ensure that you submit claims within 45 days of PBG issuance. The following procedure is to be followed for applications for Bank Guarantee Charges Reimbursement Scheme. 

1. Pick up the prescribed form from the nearest NSSH Office or download from SC/ST hub portal: https://www.scsthub.in/bank-guarantee-charges-reimbursement-scheme

2. ​Complete form, submit all documents like fee proof, PBG copy, ownership papers.

3. Visit NSIC/NSSH regional office and submit in person for a stamp.

4. Local officer reviews and then calls applicant for clarifications if gaps show.

5. Then, clean files go to the NSIC Head Office screening committee.

6. Approved refunds credit via PFMS to your debited account: https://scsthub.in/sites/default/files/schemes/NSSHGuidleinesWeb-BGFee.pdf

PMKVY continues to play a crucial role in expanding India’s skilled workforce by offering structured training, industry-aligned curricula and clear pathways for growth. As more candidates gain practical capabilities across sectors, the scheme supports both individual progress and broader economic development. For those aiming to convert their skills into enterprise opportunities, accessing additional support such as an online business loan could further accelerate their journey.