(1) The Government shall charge a minimum of one percent as guarantee commission which shall not be waived under any circumstance, 3 1[Provided that no Guarantee Commission shall be charged in respect of the Government Guarantees extended during the period from the first day of April, 2001 to the thirty-first day of March, 2002 for the loans granted by the Karnataka State Cooperative Apex Bank Limited and the Karnataka State Co-operative Agriculture and Rural Land Development Bank Limited for the purpose of agriculture:
Provided further that the Karnataka State Co-operative Apex Bank Limited and the Karnataka State Co-operative Agriculture and Rural Development Bank Limited shall reduce one percent interest in their lending rates for all agricultural loans which have been disbursed by them during the period from the first day of April, 2001 to the thirtyfirst day of March, 2002]1
1. Inserted by Act 15 of 2002 w.e.f. 1.4.2001
(2) Depending on the default risk of the project the Government may, by notification, specify commission at an enchanced rate.
Explanation.- For the purpose of this section 'default risk' means the probability of default by the borrower on whose behalf the Government Guarantee is given, depending on the amount borrowed, the type of industry and the economic situations.