RBI directs PSU Banks to give loans to women groups at 7%

RBI directs PSU Banks to give loans to women groups at 7%
The Reserve Bank of India has asked public sector banks to provide credit to women self help groups at a rate of 7 per cent per annum so as to get the benefit of interest subvention scheme under the Swarnajayanti Gram Swarozgar Yojana Aajeevika (SGSY) scheme.

"PSBs 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 the FY-2014. This subvention will be available to all the PSBs on the condition that they make SHG (self help group) credit available at 7 per cent in the 150 districts," the RBI said in a notification.

The SGSY scheme under the Ministry of Rural Development was launched to reduce poverty by building strong institutions of the poor, particularly women.

For all loans up to Rs 3 lakh, sanctioned to women SHGs on or after December 1, 2013, banks must charge an interest rate of 7 per cent. However, for loans extended between April 1, 2013 and November 30, 2013, banks should convert the rate of interest to 7 per cent for all the existing loan accounts of the SHGs with effect from April 1, 2013.

Dion Global Solutions Ltd.

Story first published: Wednesday, November 20, 2013, 9:10 [IST]
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