Master Circular on SHG-Bank Linkage Programme
The Reserve Bank of India has issued a master circular on the SHG-Bank Linkage Programme, outlining guidelines for banks to report their lending to Self-Help Groups (SHGs).
Key Highlights:
SHG lending will be reported under the ‘Advances to SHGs’ category, regardless of the loan purpose, and will be included in lending to weaker sections.
Banks are encouraged to open savings bank accounts for SHGs and include SHG lending in their planning process.
Margin and security norms, documentation, and presence of defaulters in SHGs are also addressed in the circular.
Capacity building and training, monitoring and review of SHG lending, and encouragement of SHG linkage are emphasized.
Interest rates and service/processing charges for SHG lending are also outlined in the circular.
The circular aims to promote total financial inclusion and credit requirements for SHGs.
Chat with the Master Circular: