Loans to women SHGs in rural areas at 7% per annum

Q.  RBI has asked commercial and cooperative banks on 25th August 2016 to provide loans to women SHG in rural areas at what percent per annum?
- Published on 29 Aug 16

a. 7
b. 8
c. 9
d. 10

ANSWER: 7
 
Reserve Bank of India on 25th August 2016 asked commercial and cooperative banks to provide loans to women SHG or self help groups in rural areas at 7 percent per annum.
  • Loans will be provided for the financial year 2016-2017 under the Deendayal Antyodaya Yojana National Rural Livelihood Mission in 250 districts.
  • This is an interest subvention scheme for women SHGs.
  • All women self help groups would be eligible for interest subvention on credit up to three lakh rupees at 7 percent per annum.
  • SHGs avail capital subsidy under the Swarnajayanti Gram Swarozgar Yojana in their existing credit outstanding will not be eligible for benefit under this scheme.
  • All banks will be subvented to the extent of the difference between weighted average interest charged and 7 percent subject to a maximum limit of 5.5 percent for 2016-2017.
  • SHGs will be provided with additional 3 percent subvention on credit up to INR 3 lakh rupees at 7 percent per annum.
  • SHGs availing capital subsidy under the Swarnajayanti Gram Swarozgar Yojana in their existing credit outstanding will not be eligible for benefit under the scheme.
  • All banks will be subvented to the extent of the difference between the weighted average interest charged and 7 percent subject to a maximum limit of 5.5 percent for 2016-2017.
  • SHGs will also be provided additional 3 percent subvention on the prompt repayment of the loans.
  • For the purpose of interest subvention of additional 3 percent on prompt repayment, an SHG account will be considered prompt payee if it meets certain criterion specified by RBI.
  • National Rural Livelihood Mission (Aajevika) was launched by the Union Ministry of Rural Development in June 2011.
  • In 2015, the mission was replaced by Deen Dayal Antyodaya Yojana
  • Aided party by the World Bank, the mission aims at creation of efficient and effective institutional platforms of the rural poor
  • It seeks to enable them to increase household income through sustained livelihood enhancements and improved access to financial services

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