The Reserve Bank asked banks to provide loans to women self-help groups (SHGs) at 7 percent 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 percent 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," RBI said in a notification.
The banks will lend to all the women SHGs in rural areas at 7 percent in 250 districts, it said.
All banks will be subvented to the extent of difference between the weighted average interest charged and 7 percent, subject to the maximum limit of 5.5 percent 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 percent annually in the 250 districts, it added.
"Further, the SHGs will be provided with an additional 3 percent subvention on the prompt repayment of loans. For the purpose of interest subvention of additional 3 percent on prompt repayment, an SHG account will be considered prompt payee if it satisfies the following criterion as specified by RBI," it added.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
