Interest subvention scheme for Women SHGs under NRLM - Year 2016-17

I. Interest subvention scheme on Credit to Women SHGs for the year 2016-
17 in 250 districts:-

i. All women SHGs will be eligible for interest subvention on credit up to

Rs. 3 lakh at 7% per annum. SHG availing capital subsidy under SGSY in
their existing credit outstanding will not be eligible for benefit under this
scheme.
ii. The Commercial Banks will lend to all the women SHGs in Rural areas at
the rate of 7% in the 250 districts as provided at Annexure I.
iii. All Commercial Banks will be subvented to the extent of difference
between the Weighted Average Interest Charged (WAIC as specified by
Department of Financial Services, Ministry of Finance for the year 2016-
17– Annexure II) and 7% subject to the maximum limit of 5.5% for the year
2016-17. This subvention will be available to all the Banks on the
condition that they make SHG credit available at 7% p.a. in the 250
districts.
iv. Further, the SHGs will be provided with an additional 3% subvention on
the prompt repayment of loans. For the purpose of Interest Subvention of
additional 3% on prompt repayment, an SHG account will be considered
prompt payee if it satisfies the following criterion as specified by
ReserveBank of India (RBI).

a. For Cash Credit Limit:

i. Outstanding balance shall not have remained in excess of

the limit/drawing power continuously for more than 30
days

ii. There should be regular credit and debits in the

accounts. In any case there shall be at least one
customer induced credit during a month.

iii. Customer induced credit should be sufficient to cover

the interest debited during the month.

b. For the Term loans: A term loan account where all of the interest
payments and/or installments of principal were paid within 30 days
of the due date during the tenure of the loan, would be considered
as an account having prompt payment.

The prompt payment guidelines would continue to be guided by RBI guidelines on

the subject in the future.

All prompt payee SHG accounts as on the end of the reporting quarter will be
eligible for the additional interest subvention of 3%. The banks should credit the
amount of 3% interest subvention to the eligible SHG loan accounts and thereafter
seek the reimbursement.

v. The scheme is limited to Women Self Help Groups in rural areas only.
 vi. The funding for the scheme will be met out of Central Allocation under
DAY- NRLM

vii. The interest subvention scheme shall be implemented for all Public Sector
Banks and Private sector Banks through a Nodal Bank selected by the
Ministry of Rural Development (MoRD). The Nodal Bank will operationalize
the scheme through a web based platform, as advised by MoRD. For the
year 2016-17, Canara bank has been nominated as the Nodal bank by MoRD.

viii. All Banks, who are operating on the Core Banking Solutions (CBS) can avail
the interest subvention under the scheme.

ix. In order to avail the Interest Subvention on credit extended to the SHGs @
7%, regular subvention, all Public Sector Banks are required to upload the
SHG loan account information on the Nodal Bank’s portal as per the
required technical specification. Public Sector Banks should also submit the
claims for 3% additional subvention on the same portal. Public Sector Banks
must submit the regular claims (difference between WAIC or lending rate
and 7%) and additional claims @ 3% on prompt repayment) on a quarterly
basis as on June 30, 2016, September 30, 2016, December 31, 2016 and
March 31, 2017 by last week of the subsequent month.

x. In order to avail the interest subvention on credit extended to the

SHGs@7% and additional subvention claims of 3%, all Public Sector Banks
and Private Sector Banks are required to submit claim certificate on
quarterly basis to the nodal bank. The claims submitted by any bank should
be accompanied by claim certificate (in original) certifying the claims for
subvention as true and correct (Annexure-III to V). The claims of any Bank
for the quarter ending March 2017 will be settled by MoRD only on receipt
of the Statutory Auditor’s certificate for the complete FY16-17 from the
Bank.

xi. Any remaining claim pertaining to the disbursements made during the year
2016-17 and not included during the year, may be consolidated separately
and marked as an 'Additional Claim' and submitted to Nodal Bank by Public
Sector Banks and Private Sector Banks latest by June 30, 2017, duly audited
by Statutory Auditor’s certifying the correctness.

xii. Any corrections in claims by Banks shall be adjusted from later claims
based on auditor’s certificate. For Public Sector Banks and Private sector
Banks, the corrections must be made on the Nodal Bank’s portal
accordingly.

II. Interest subvention scheme for Category II Districts (Other than 250
districts).

For category II districts, comprising of districts other than the above 250 districts,
all women S.H.Gs under DAY- NRLM will be eligible for interest subvention to
avail the loan facility at an interest rate of 7%. The funding for this
subvention will be provided to the State Rural Livelihoods Missions (S.R.L.Ms) from
the allocation for DAY- NRLM. In the Category II districts, Banks will charge the
SHGs as per their respective lending norms and the difference between the
lending rates and 7% subject to a maximum limit of 5.5% for the FY16-17 will be
subvented in the loan accounts of the SHGs by the SRLM. In pursuance of
the above, the salient features and the operational guidelines in respect of the
interest subvention for the category II districts, for the year 2016-17 are as
follows:

(A) Role of the Banks:

All banks who are operating on the Core Banking Solution (CBS) are required to
furnish the details of the Credit disbursement and Credit outstanding of the SHGs
across all districts in the desired format as suggested by the MoRD, directly from
the CBS platform, to the Ministry of Rural Development (through FTP) and to the
SRLMs. The information should be provided on a monthly basis to facilitate the
calculation and disbursement of the Interest Subvention amount to SHGs.

(B) Role of the State Governments:

i. All women SHGs, are regarded as SHGs under DAY- NRLM and will be
eligible for interest subvention on credit upto ` 3 lakhs at the rate of 7%
per annum on prompt repayment.

ii. This scheme will be implemented by the State Rural Livelihood Missions
(SRLMs). SRLMs will provide interest subvention to the eligible SHGs who
have accessed loan from Commercial andCooperative Banks. The
funding for this subvention will be met out of the Central Allocation and
State Contribution as per the norms of Government of India.

iii. The SHGs will be subvented with the extent of difference between the
lending Rate of the banks and 7% subject to a maximum limit of5.5% for
the year 2016-17 by the SRLMs, directly on a monthly/quarterly basis.
An e-transfer of the subvention amount will be made by the SRLM to the
loan accounts of the SHGs who have repaid promptly.

iv. For the purpose of the Interest Subvention, an account will be

considered as prompt payee if it satisfies the following criterion as
specified by RBI:

a. For Cash Credit Limit:

1. Outstanding balance shall not have remained in excess

of the limit/drawing power continuously for more than
30 days

2. There should be regular credit and debits in the

accounts. In any case there shall be at least one
customer induced credit during a month

3. Customer induced credit should be sufficient to cover

the interest debited during the month.

b. For the Term loans: A term loan account where all of the
interest payments and/or instalments of principal were paid
within 30 days of the due date during the tenure of the loan,
would be considered as an account having prompt payment
 The prompt payment guidelines would continue to be guided
by RBI guidelines on the subject in the future.

v. Women SHGs who have availed capital subsidy under SGSY in their
existing loans, will not be eligible for benefit of Interest
Subvention for their subsisting loan under this scheme.

vi. SRLMs should submit Quarterly Utilization Certificate indicating

subvention amounts transferred to the Loan accounts of the
eligible SHGs.
Annexure I

List of 250 eligible Districts for the Interest Subvention on the loan at 7% and
additional interest Subvention of 3% on the prompt repayment

Sl
No States Sl Name of districts
1 ANDHRA PRADESH 1 Guntur
2 Krishna
3 Srikakulam
4 East Godavari
5 Vijaynagram
6 Visakhapatnam
2 ARUNACHAL PRADESH 1 East Siang
2 East Kameng
3 Papumpare
4 Lohit
3 ASSAM 1 Chirang
2 Karbi Anglong
3 Sonitpur
4 Tinsukiya
5 Hailakandi
6 Dhemeji
7 Jorhat
8 Nagaon
4 BIHAR 1 Saharsa
2 Supaul
3 Madhepura
4 Nalanda
5 Khagria
6 EastChamparan (Motihari)
7 Arwal
8 Aurangabad
9 Gaya
10 Jamui
11 Jehanabad
12 Kaimur
13 Munger
14 Nawada
15 Rohtas
16 Paschim Champaran
17 Sitamarhi
5 CHATTISGARH 1 Balarampur
2 Surajpur
3 Sukama
4 Kondagaon
 5 Gariyaband
6 Baloda Bazar
7 Dhamtari
8 Raigarh
9 Bastar
10 Bijapur
11 Dantewada
12 Jashpur
13 Kanker
14 Kawardha
15 Koriya
16 Narayanpur
17 Rajnandgaon
18 Sarguja
6 GUJARAT 1 Chhotaudepur
2 Mahisagar
3 Mehsana
4 Junagadh
5 Vadodara
6 Banaskantha
7 Panchmahal
7 1 Pakkur
JHARKHAND 2 Dumka
3 Godda
4 Bokarao
5 Chatra
6 Garhwa
7 Giridh
8 Gumla
9 Hazaribagh
10 Khunti
11 Kodarma
12 Latehar(N)
13 Lohardaga
14 Paschim Singhbhum
15 Palamu
16 Purbi Singhbhum
17 Ramgarh
18 Ranchi(Rural)
19 Saraikela(N)
20 Simdega(N)
8 KARNATAKA 1 Bijapur
2 Chamrajnagar
3 Chitradurga
4 Gulbarga
5 Mysore
6 Tumkur
7
 7 Gadag
8 Koppal
9 MADHYA PRADESH 1 Sager
2 Damoh
3 Tikamgarh
4 Panna
5 Chahatapur
6 Jhabua
7 Dhar
8 Annupur
9 Balaghat
10 Dindori
11 Mandala
12 Seoni
13 Shahdol
14 Sidhi
15 Umaria
16 Chhindwara
17 Singrauli
18 Badwani
19 Sheopur
20 Alirajpur
10 MAHARASHTRA 1 Solapur
2 Ratnagiri
3 Thane
4 Wardha
5 Beed
6 Sindhurdurg
7 Chandrapur
8 Gadchiroli
9 Gondia
10 Jalna
11 Osmanabad
12 Nandurbar
13 Yavatmal
11 ODISHA 1 Angul
2 Bhadrak
3 Balasore
4 Cuttack
5 Balangir
6 Devagarh
7 Gajapati
8 Ganjam
9 Jaipur
10 Kalahandi
11 Kandhamal
12 Kendujhar
8
 13 Koraput
14 Malkangiri
15 Mayurbhanj
16 Nabarangpur
17 Nayagarh
18 Nuapada
19 Rayagada
20 Sambalpur
21 Sonapur
22 Sundargarh
12 RAJASTHAN 1 Dungarpur
2 Banswara
3 Dholpur
4 Jhalawar
5 Baran
6 Ajmer
7 Alwar
8 Dausa
9 Udaipur
13 TAMIL NADU 1 Cuddalore
2 Nagapattinam
3 Thanjaore
4 Trichy
5 Dindugal
6 Vilupuram
7 Vellore
8 Thiruvannamalai
9 Dharmapuri
14 UTTAR PRADESH 1 Agra
2 Aligarh
3 Auraiya
4 Basti
5 Bijnor
6 Lakhimpur Kheri
7 Unnao
8 Varanasi
9 Bara banki
10 Gorakhpur
11 Lucknow
12 Chandauli
13 Mirzapur
14 Sonbhadra
15 Badaun
16 Hardoi
17 Etwah
18 Azamgarh
19 Allahabad
9
 20 Ambedkarnagar
21 Bahraich
22 Deoria
23 Jalaun
24 Hamirpur
25 Banda
15 WEST BENGAL 1 Alipurdwar
2 Purba Medinipur
3 South 24 Parganas
4 Bankura
5 Medinipur West
6 Coochbehar
7 Birbhum
8 Puruliya
16 TELANGANA 1 Mahabubnagar
2 Adilabad
3 Warangal
4 Khammam
5 Karimnagar
17 KERALA 1 Idukki
2 Vayanadu
3 Pallakkad
4 Mallapuram
18 HARYANA 1 Mahendergarh
2 Karnal
3 Jind
4 Mewat
5 Bhiwani
6 Jhajjar
19 HIMACHAL PRADESH 1 Kangra
2 Una
3 Shimla
4 Mandi
20 JAMMU & KASHMIR 1 Kupwara
2 Poonch
3 Kistwar
4 Ganderbal
5 Budgam
6 Udhampur
21 PUNJAB 1 Patiala
2 Sangrur
3 Bathinda
4 Tarn Taran
5 Gurdaspur
6 Ferozepur
22 UTTRAKHAND 1 Pithoragarh
2 Pohri Garwal

10
 3 Chamoli
4 Bageshwar
23 MANIPUR 1 Chandel
2 Imphal East
24 MEGHALAYA 1 West Garo Hills
2 South West Khasi Hills
3 West Khasi Hill
25 MIZORAM 1 Serchhip
2 Aizwal
3 Lunglei
26 NAGALAND 1 Kiphere
2 Longleng
3 Peren
4 Tuensang
5 Mon
27 TRIPURA 1 Dhalai
2 West Tripura
3 North Tripura
28 PUDUCHERRY 1 Puducherry
29 ANDAMAN & NICOBAR North & Middle Andhman Dist
1
ISLANDS
SIKKIM South Sikkim
1
30
2 East Sikkim
31 GOA 1 North Goa