To scale up the
SHGs linkage programme and make it sustainable, banks are advised to consider
lending to SHGs as part of their mainstream credit operations.
Separate Segment
under priority sector: Banks should report their lending to SHGs and NGOs (for
on-lending to SHGs or members of SHGs) under the new segment, 'Advances to
SHGs'and include it as a part of Bank’s lending to the weaker sections.
Opening of
Savings Bank A/c: The
SHGs which are engaged in promoting savings habits among their members
would be eligible to open savings bank accounts. KYC
verification of only the office bearers would be sufficient.
SHG lending to
be a part of planning process: Bank lending to SHGs should be
included in branch credit plan, block credit plan, district credit plan and
state credit plan of each bank. It should also form an integral part of the
bank’s corporate credit plan.
Margin and
Security Norms: SHGs
may be sanctioned savings linked loans (varying from a saving to loan ratio
of 1:1 to 1:4). In case of matured SHGs, loans may be given beyond the
limit as per Bank’s discretion. The flexibility allowed in respect of margin,
security norms, etc. under the pilot project shall continue.
Documentation: Banks should delegate
adequate sanctioning powers to branch managers to expedite the process. The paper
work and documents should be kept as simple as possible.
Presence of defaulters in SHGs: Default by a few
members should not come in the way of financing SHGs provided the SHG itself is
not in default. However, the loan should not be utilized for financing a
defaulter.
Capacity
Building and Training: Banks should internalize the SHGs linkage project
and organize exclusive short duration training programmes for the field level
functionaries. Awareness programmes should also be conducted for the middle level
as well as senior officers.
Monitoring
and Review of SHG Lending: Monitoring of the programme are to be made a regular
item for discussion at the SLBC and DCC meetings. It should be reviewed at the
highest corporate level on a quarterly basis. A progress report, may be sent to NABARD on a half-yearly basis, as on 30
September and 31 March each year.
Encourage
SHG Linkage: Banks
should provide adequate incentives to their branches for financing the SHGs
and establishing linkages with them. The group dynamics of working of the SHGs
may be left to themselves.
Interest rates: The interest
rate would be at the discretion of the Bank.
Total Financial
Inclusion and Credit Requirement of SHGs: Banks are to meet the entire
credit requirements of SHG members, namely,
- income generation activities,
- social needs like housing, education, marriage, etc. and
- debt swapping".
Based on RBI
Circular dt 01/07/15. Please visit www.rbi.org.in for any further clarification
if required….. Poppy
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