Gujarat State Guarantee Redemption Fund

In order to meet with the contingent liabilities arising out of the state government guarantees, the state government has created Gujarat State Guarantee Redemption fund by renaming its earlier Gujarat State Guarantee Risk Fund vide GR dated 18th February 2002 as per the guidelines of RBI Technical Committee on State Government Guarantee.

To start with, government made a contribution of Rs. 25 Crore in the year 1999-2000 and as per the policy guarantee fees receipt is appropriated to augment the corpus of the fund which also grows with the interest earned on investments.

• Objective is to utilize the accumulation in this fund towards the payment of contingent liabilities arising out of guarantees issued by the state.
• As on 31st March, 2010 the corpus of the fund is Rs.1572 Crore.

Investment in Government Securities from GSGRF:

• The Guarantee Redemption Fund balance is invested in Central Government Securities through RBI.
• As per policy, the interest earned also has been reinvested in the Central Government securities as and when received. The corpus has attained a level sufficient to provide a desired cushion against contingent liabilities.