Interest
subvention scheme for Women SHGs - Year 2015-16
I.
Interest subvention scheme
i.
All
women SHGs will be eligible for interest subvention on credit upto Rs. 3 lakhs
at 7% per annum. SHG availing capital subsidy under SGSY in their existing
credit outstanding will not be eligible for benefit under this scheme.
ii.
The
Commercial Banks and Cooperative Banks will lend to all the women SHGs in Rural
areas at the rate of 7% in the 150 districts is provided at Annexure I
iii.
All
Public Sector Banks will be subvented to the extent of difference between the
Weighted Average Interest Charged (WAIC as specified by Department of
Financial Services, Ministry of Finance for the year 2015-16 – Annexure
II) and 7% subject to the maximum limit of 5.5% for the year
2015-16. This subvention will be available to all the Banks on the condition
that they make SHG credit available at 7% p.a. in the 150 districts.
iv.
RRBs
and Cooperative Banks will be subvented to the extent of difference between the
maximum lending rates (as specified by NABARD) and 7% subject to the maximum
limit of 5.5% for the year 2015-16. This subvention will be available to all
RRBs and Cooperative Banks on the condition that they make SHG credit available
at 7% p.a. in the 150 districts. RRBs and Cooperative Banks will also get
concessional refinance from NABARD. Detailed guidelines for RRBs and
Cooperative Banks will be issued by NABARD.
v.
Further,
the SHGs will be provided with an additional 3% subvention on the prompt
repayment of loans. For the purpose of Interest Subvention of additional 3% on
prompt repayment, an SHG account will be considered prompt payee if it
satisfies the following criterion as specified by Reserve Bank of India (RBI).
a. For Cash Credit
Limit:
i.
Outstanding
balance shall not have remained in excess of the limit/drawing power
continuously for more than 30 days
ii.
There
should be regular credit and debits in the accounts. In any case there shall be
at least one customer induced credit during a month
iii.
Customer induced credit should be
sufficient to cover the interest debited during the month.
b. For the Term
loans:
A term loan account where all of the interest payments and/or instalments of
principal were paid within 30 days of the due date during the tenure of the
loan, would be considered as an account having prompt payment.
The
prompt payment guidelines would continue to be guided by RBI guidelines on the
subject in the future.
All
prompt payee SHG accounts as on the end of the reporting quarter will be
eligible for the additional interest subvention of 3%. The banks should credit
the amount of 3% interest subvention to the eligible SHG loan accounts and
thereafter seek the reimbursement.
vi.
The
scheme is limited to Women Self Help Groups in rural areas only
vii.
The
funding for the scheme will be met out of Central Allocation under NRLM
viii.
The
interest subvention scheme shall be implemented for all Public Sector Banks
through a Nodal Bank selected by the Ministry of Rural Development (MoRD). The
Nodal
Bank will operationalize the scheme through a web based platform, as advised by
MoRD. For the year 2015-16, Canara bank has been nominated as the Nodal bank by
MoRD.
ix.
For
the RRBs and Cooperative Banks the scheme will be operationalized by NABARD
similar to the short term crop loan scheme.
x.
All
Banks (including the Public Sector Banks, RRBs and Rural Cooperative Banks) who
are operating on the Core Banking Solutions (CBS) can avail the interest
subvention under the scheme.
xi.
In
order to avail the Interest Subvention on credit extended to the SHGs @ 7%,
regular subvention, all Public Sector Banks are required to upload the SHG loan
account information on the Nodal Bank’s portal as per the required technical
specification. Public Sector Banks should also submit the claims for 3%
additional subvention on the same portal. Public Sector Banks must submit the
regular claims (difference between WAIC or lending rate and 7%) and additional
claims (@ 3% on prompt repayment) on a quarterly basis as on June 30, 2015,
September 30, 2015, December 31, 2015 and March 31, 2016 by last week of the
subsequent month.
xii.
In
order to avail the interest subvention on credit extended to the SHGs @7% and
additional subvention claims of 3%, all Public Sector Banks are required to
submit claim certificate on quarterly basis to the nodal bank. The claims
submitted by any bank should be accompanied by claim certificate (in original)
certifying the claims for subvention as true and correct (Annexure-III to V).
The claims of any Bank for the quarter ending March 2016 will be settled by
MoRD only on receipt of the Statutory Audited certificate for the complete
FY15-16 from the Bank.
xiii.
In
order to avail the Interest Subvention on credit extended to the SHGs @ 7%, all
RRBs and Cooperative Banks are required submit their claims to respective
NABARD - Regional Offices on a quarterly basis as at June 30, 2015, September
30, 2015, December 31, 2015 and March 31, 2016. The claims for the last quarter
ending March 2016 should be accompanied with a Statutory Auditor’s certificate
certifying the claims for the FY 15-16 as true and correct.
xiv.
RRBs
and Cooperative Banks may submit their consolidated claims pertaining to the 3%
additional subvention on disbursements made during the entire year 2015-16 to
respective NABARD - Regional Offices latest by June 30, 2016, duly audited by
Statutory Auditors certifying the correctness.
xv.
Any
remaining claim pertaining to the disbursements made during the year 2015-16
and not included during the year, may be consolidated separately and marked as
an 'Additional Claim' and submitted to Nodal Bank by
Public Sector Banks and to NABARD Regional Offices by all RRBs and
Cooperative Banks latest by June 30, 2016, duly audited by Statutory Auditors
certifying the correctness.
xvi.
Any
corrections in claims by Banks shall be adjusted from later claims based on
auditor’s certificate. For Public Sector Banks, the corrections must be made on
the Nodal Bank’s portal accordingly.
xvii.
For
process of submission of claims by RRBs and Cooperative Banks, detailed
guidelines will be issued by NABARD.
II.
Interest subvention scheme for Category II Districts
For
category II districts, comprising of districts other than the above 150
districts, all women S.H.Gs under NRLM will continue to be eligible for
interest subvention to avail the loan facility at an interest rate of 7%. The
funding for this subvention will be provided to the State Rural Livelihoods
Missions (S.R.L.Ms) from the allocation for NRLM. In the Category II districts,
Banks will charge the SHGs as per their respective lending norms and the
difference between the lending rates and 7% subjected to a maximum limit of
5.5% for the FY15-16 will be subvented in the loan accounts of the SHGs by the
SRLM. In pursuance of the above, the salient features and the operational
guidelines in respect of the interest subvention for the category II districts,
for the year 2015-16, are as follows:
(A) Role of the
Banks:
All
banks who are operating on the Core Banking Solution (CBS) are required to
furnish the details of the Credit disbursement and Credit outstanding of the
SHGs across all districts in the desired format as suggested by the MoRD,
directly from the CBS platform, to the Ministry of Rural Development (through
FTP) and to the SRLMs. The information should be provided on a monthly
basis to facilitate the calculation and disbursement of the Interest Subvention
amount to SHGs.
(B) Role of the
State Governments:
i.
All
women SHGs, comprising of more than 70% BPL or rural poor members (rural poor
as per the Participatory Identification process) are regarded as SHGs under
NRLM. Such SHGs comprising of rural poor members from the intended NRLM target
group will be eligible for interest subvention on credit upto Rs. 3 lakhs at
the rate of 7% per annum on prompt repayment.
ii. This scheme
will be implemented by the State Rural Livelihood Missions (SRLMs). SRLMs will
provide interest subvention to the eligible SHGs who have accessed loan from
Commercial and Cooperative Banks. The funding for this subvention will be met
out of the Central Allocation and State Contribution as per the norms of
Government of India.
iii.
The
SHGs will be subvented with the extent of difference between the lending Rate
of the banks and 7% subjected to a maximum limit of 5.5% for the year 2015-16
by the SRLMs, directly on a monthly/quarterly basis. An e-transfer of
the subvention amount will be made by the SRLM to the loan accounts of the SHGs
who have repaid promptly.
iv.
For
the purpose of the Interest Subvention, an account will be considered as prompt
payee if it satisfies the following criterion as specified by RBI:
a. For Cash Credit Limit:
1.
Outstanding
balance shall not have remained in excess of the limit/drawing power
continuously for more than 30 days
2.
There
should be regular credit and debits in the accounts. In any case there shall be
at least one customer induced credit during a month
3.
Customer
induced credit should be sufficient to cover the interest debited during the
month.