Banks Asked To Provide Loans To Women Self-Help Groups At 7%

The Reserve Bank of India on Thursday asked lenders to provide loans to women self-help groups (SHGs) at seven per cent per annum, as per the government’s revised guidelines for 2016-17.

“All women SHGs will be eligible for interest subvention on credit up to Rs 3 lakh at 7 per cent per annum (under Deendayal Antyodaya Yojana-National Rural Livelihoods Mission). SHGs availing capital subsidy under SGSY in their existing credit outstanding will not be eligible for benefit under this scheme,” the RBI said in a notification.

The banks will lend to all the women SHGs in rural areas at seven per cent in 250 districts, it said.
All banks will be subvented to the extent of difference between the weighted average interest charged and 7 per cent, subject to the maximum limit of 5.5 per cent for 2016-17, it said.

This subvention will be available to all the banks on the condition that they make SHG credit available at 7 per cent annually in the 250 districts, it added.

“Further, the SHGs will be provided with an additional 3 per cent subvention on the prompt repayment of loans. For the purpose of interest subvention of additional 3 per cent on prompt repayment, an SHG account will be considered prompt payee if it satisfies the following criterion as specified by RBI,” it added.

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