Master Circular on SHG-Bank Linkage Programme
The Reserve Bank of India has issued a master circular on the SHG-Bank Linkage Programme, which outlines guidelines for banks to promote financial inclusion and credit to Self-Help Groups (SHGs).
Key Features:
The circular emphasizes the importance of treating SHG lending as a separate segment under priority sector lending, and encourages banks to open savings bank accounts for SHGs.
It also outlines margin and security norms, documentation requirements, and guidelines for dealing with defaulters in SHGs.
The circular stresses the need for capacity building and training for bank staff, as well as regular monitoring and review of SHG lending.
Additionally, it encourages banks to promote SHG linkage and provides guidelines on interest rates, service charges, and total financial inclusion and credit requirements for SHGs.
The circular consolidates 16 circulars issued earlier on the subject and provides an appendix with a list of these circulars.
Chat with the Master Circular: