RBI asks banks to provide loans to women SHGs at 7% interest rate

Reserve Bank of India (RBI) on Thursday asked banks to extend loans to women self-help groups (SHGs) at 7% interest rate per annum, as per the government’s revised guidelines for 2016-17. The loan should be extended under the National Rural Livelihood Mission (NRLM) – Aajeevika Scheme during 2015-16.

All women SHGs will be eligible for interest subvention on credit up to Rs 3 lakh at 7% per annum (under Deendayal Antyodaya Yojana-National Rural Livelihoods Mission).

RBI asks banks to provide loans to women SHGs at 7% interest rate
RBI asks banks to provide loans to women SHGs at 7% interest rate

Key highlights :

  • The revised guidelines on interest subvention scheme under NRLM have been issued after approval from the Union Ministry of Rural Development.
  • SHGs availing capital subsidy under SGSY in their existing credit outstanding will not be eligible for benefit under this scheme.
  • An interest subvention on credit upto Rs 3 lakh at 7 percent per annum will be provided. All women SHGs will be eligible for it.
  • The banks will lend to all the women SHGs in rural areas at 7% in 250 districts, RBI said in a notification.
  • SHGs will be provided with an additional 3% subvention on the prompt repayment of loans under this scheme.
  • All banks will be subvented to the extent of difference between the weighted average interest charged and 7%, subject to the maximum limit of 5.5% for 2016-17.
  • This subvention will be available to all the banks on the condition that they make SHG credit available at 7% annually in the 250 districts, it added.

 

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