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Master Circular - Priority Sector Lending - Special Programmes
RPCD.
NO. SP. BC. 14 - 09.01.01- dated 17th August 2001
Reserve
Bank of India has, periodically, issued instructions/directives to banks with
regard to operationalisation of the Swarnjayanti Gram Swarozgar Yojana (SGSY)
scheme. To enable banks to have current instructions at one place, a Master
Circular incorporating all the existing guidelines/instructions/directives on
the scheme has been prepared and is appended. We advise that this Master
Circular consolidates all the previous instructions issued by RBI up to 30th
June 2001, which are listed in the Appendix.
Please
acknowledge receipt.
MASTER
CIRCULAR PRIORITY SECTOR LENDING SPECIAL PROGRAMMES
SWARNJAYANTI
GRAM SWAROZGAR YOJANA (SGSY)
The
Ministry of Rural Development, Government of India have launched a new programme
known as 'Swarnjayanti Gram Swarozgar Yojana' (SGSY) by restructuring the
following existing schemes:
1.
Integrated Rural Development Programme (IRDP)
2.
Training of Rural Youth for Self Employment (TRYSEM)
3.
Development of Women and Children in Rural Areas (DWCRA)
4.
Supply of Improved Toolkits to Rural Artisans (SITRA)
5.
Ganga Kalyan Yojana (GKY)
6.
Million Wells Scheme (MWS)
Detailed
�Guidelines� have been circulated to all DRDAs/Banks by the Ministry of
Rural Development.
1.
The Scheme
The
SGSY Scheme is operative from 1st April 1999 in rural areas of the
country. SGSY is a holistic Scheme covering all aspects of self-employment such
as organisation of the poor into Self Help Groups, training, credit, technology,
infrastructure and marketing. The scheme will be funded by the Centre and the
States in the ratio of 75:25 and will be implemented by Commercial Banks,
Regional Rural Banks and Co-operative Banks. Other financial institutions,
Panchayat Raj Institutions, District Rural Development Agencies (DRDAs),
Non-Government Organisations (NGOs), Technical institutions in the district,
will be involved in the process of planning, implementation and monitoring of
the scheme. NGO's help may be sought in the formation and nurturing of the Self
Help Groups (SHGs) as well as in the monitoring of the progress of the
Swarozgaris. Where feasible their services may be utilised in the provision of
technology support, quality control of the products and as recovery monitors cum
facilitators.
The
Scheme aims at establishing a large number of micro enterprises in the rural
areas. The list of Below Poverty Line (BPL) households identified through BPL
census duly approved by Gram Sabha will form the basis for identification of
families for assistance under SGSY.
The
objective of SGSY is to bring every assisted family above the poverty line
within three years by providing them income-generating assets through a mix of
bank credit and Government subsidy. The rural poor such as those with land,
landless labour, educated unemployed, rural artisans and disabled are covered
under the scheme.
The
assisted families known as Swarozgaris can be either individuals or groups and
would be selected from BPL families by a three-member team consisting of Block
Development Officer, Banker and Sarpanch.
SGSY
will focus on vulnerable sections of the rural poor. Accordingly the SC/ST will
account for at least 50 percent, Women 40 percent, and the disabled 3
percent of those assisted.
2.
Skill Upgradation
Once
the person or group of persons has been identified for assistance, their
training need also is to be ascertained with reference to Minimum Skill
Requirement (MSR). The assessment regarding technical skills would be made by
line departments and that of managerial skills by the banker, while scrutinising
the loan applications. Swarozgaris possessing skills will be put through basic
orientation programme which is mandatory. This programme includes elements of
Book Keeping, knowledge of market, identification and appraisal, acquaintance
with product costing, product pricing, familiarisation with project financing by
banks as well as basic skills in the key activity identified. It will be for a
short duration of not more than 2 days. BDOs, Bankers and line departments will
act as resource persons for imparting the training. The training expenditure
will be met by DRDAs.
For
those beneficiaries who need additional skill development/ upgradation of
skills, appropriate training would be organised through Government institutions,
ITIs, polytechnics, Universities, NGOs etc. Swarozgaris will be eligible for
loans under SGSY when they possess Minimum Skill Requirement, and it will be
disbursed only when they have satisfactorily completed the skill training.
For
this training, Swarozgaris will be entitled for financial assistance if they are
required to undergo training for more than a week. The rate of assistance would
be fixed locally. The bank will provide loans to the Swarozgaris for this
purpose. However, as the credit has to be extended before the project is taken
up, notwithstanding the general security norms for lending under the scheme,
banks may extend loans for skill development training with or without
collateral/third party guarantee at their discretion.
3.
Activity Clusters, Key Activities
Major
share of assistance upto 75 percent (both by number and funding) will be for key
activities and they should be taken up in clusters. For this, 4-5 key activities
will be identified for each block with the approval of Panchayat Samithis at
block level and DRDA/ZP at the District level. One or two activities in each
block would be identified during 1999-2000 so that implementation can be started
straight away. On farm activities to be assisted would include minor irrigation
such as open dug well/bore/tube well/lift irrigation/check dam etc. Non-farm
activities will include those activities that result in the production of
goods/services that have ready market. The unit cost as fixed by the regional
Committees of NABARD should be taken into consideration as indicative cost while
fixing the unit cost for the farm sector. In regard to loans falling under ISB
Sector, the responsibility of fixing the unit cost and other techno-economic
parameters is of the District SGSY Committee. The selection of activities should
be such that it would afford the Swarozgari an opportunity to expand his asset
and skill base in three years and at least in the third year the net income
would be not less than Rs. 2,000/- p.m.
4.
Self-Help Groups (SHGs)
The
Self Help Groups shall be organised by Swarozgaris drawn from the BPL list
approved by Gram Sabha. The Scheme provides for formation of Self Help Groups (SHGs),
nurturing and their linkages with banks.
Group
activities will be given preference and progressively majority of the funding
will be for Self Help Groups. Half the groups formed at block level should be
exclusively women groups.
SHG
under SGSY may consist of 10 to 20 persons belonging to BPL families. In case of
minor irrigation and in the case of disabled persons this number may be a
minimum of 5 persons. The group shall not comprise more than one member of the
same family. A person should not be a member of more than one group. SHG may be
an informal group or registered under Societies Act, State Co-operative Act or
as a partnership firm. The assistance (loan cum subsidy) may be extended to
individuals in a group or to all members in the group for taking up income
generation activities.
In
States and Union Territories where the formation of SHGs has not taken root,
banks may continue to extend credit facilities to eligible individual
Swarozgaris.
5.
Revolving Fund
Every
SHG that is in existence at least for a period of six months and which has
demonstrated the potential of a viable group will receive a revolving fund of
Rs. 25,000/- from banks as cash credit facility. Of this a sum of Rs. 10,000/-
will be given to the bank by the DRDA. Banks may charge interest only on the sum
exceeding Rs. 10,000/-. The revolving fund is provided to the groups to augment
the group corpus so as to enable larger number of members to avail loans and
also to facilitate increase in the per capita loan available to the members. The
revolving fund imparts credit discipline and financial management skills to the
members so that they become credit worthy. SHGs that have demonstrated their
successful existence, will receive assistance for economic activities under the
scheme.
6.
Lending Norms
The
size of loan under the scheme would depend on the nature of project. There is no
investment ceiling other than the unit cost i.e. investment requirement worked
out for the project. The loans under the scheme would be composite loan
comprising of Term Loan and working capital. The loan component and the
admissible subsidy together would be equal to total project cost. Banks may
follow model project report set out in key activities of the districts for
finalising the project cost of the Swarozgaris. Under any circumstance under
financing is to be avoided. Swarozgaris will be given the full amount of loan
and subsidy and they will have the freedom to procure the assets themselves.
Disbursements up to Rs.10,000/- under ISB sector may be made in cash where a
number of items are to be bought.
Emphasis
is laid on multiple dose of assistance. This would mean assisting a Swarozgari
over a period of time with second and subsequent dose(s) of credit enabling
him/her to cross the poverty line as also access higher amounts of credit.
Subsidy entitlement for all doses taken together should not exceed the limit
prescribed for that category. The second and subsequent doses may be granted by
the same bank or any other bank during the currency of first/earlier loan
provided the bank is satisfied about the financial discipline of the
first/earlier dose.
Loans
under the Scheme will carry interest as per the directives on interest rates
issued by Reserve Bank of India from time to time.
All
loans granted under the scheme are to be treated as advances under priority
sector. Loan applications should be disposed of within 15 days and at any rate
not later than one month.
Branch
Managers may be vested with adequate discretionary powers to sanction proposals
under the scheme without reference to any higher authority.
7.
Assistance to IRDP borrowers
The
existing IRDP borrowers may also be considered for second/multiple dose of
assistance under SGSY if they have failed to cross the poverty line because of
no fault of theirs.
Banks
may also extend credit under SGSY to non-wilful defaulter owing dues up to Rs.
5,000/- under IRDP. Subsidy available to the existing IRDP beneficiaries would
be restricted to the maximum ceiling prescribed for the category less the amount
already availed by the borrower under IRDP.
8.
Insurance Cover
Insurance
cover is available for assets/live stock bought out of the loan. Swarozgaris are
covered under the Group Insurance Scheme as per the details given at paragraphs
4.35 & 4.36 of the SGSY guidelines.
9.
Security Norms
For
individual loans up to Rs. 50,000/- and group loans up to Rs. 3 lakhs, the
assets created out of bank loan would be hypothecated to the bank as primary
security. In cases where movable assets are not created as in land-based
activities such as dug well, minor irrigation etc., mortgage of land may be
obtained. Where mortgage of land is not possible third party guarantee may be
obtained at the discretion of the bank.
For
all individual loans exceeding Rs. 50,000/- and group loans exceeding Rs. 3
lakhs in addition to primary security such as hypothecation/mortgage of land or
third party guarantee as the case may be, suitable margin money/other collateral
security in the form of insurance policy, marketable security/deeds of other
property etc. may be obtained at the discretion of the bank.
10.
Subsidy
Subsidy
under SGSY will be uniform at 30 percent of the project cost, subject to a
maximum of Rs. 7,500/-. In respect of SC/STs it will be 50 percent of the
project cost subject to a maximum of Rs. 10,000/-. For groups of Swarozgaris (SHGs)
the subsidy would be at 50 percent of the cost of the project, subject to a
ceiling of Rs. 1.25 lakhs. There will be no monetary limit on subsidy for
irrigation projects. Subsidy under SGSY will be back ended. The availability of
the benefit of subsidy to swarozgaris would be contingent on the proper
utilisation of loan as also its prompt repayment and maintaining the asset in
good condition. The procedure for operation of Subsidy Reserve Fund accounts as
detailed in paragraph 4.17 of the SGSY guidelines may please be followed.
DRDAs
will be opening savings banks accounts with the principal participating bank
branches for administration of subsidy. These accounts are to be reconciled
every three months and they will be subject to annual audit.
11.
Post Credit Follow-up
Loan
Pass books in regional languages may be issued to the Swarozgaris, which may
contain all the details of the loans disbursed to them.
Bank
branches may observe one day in a week as non-public business working day to
enable the staff to go to the field and attend to the problems of Swarozgaris.
Banks
should ensure through proper monitoring and verification that quality assets
have been procured by the Swarozgaris. Necessary documents relating to
acquisition of assets should be obtained by the bank and also followed through
visits by field staff. In case of non-procurement of assets by the Swarozgari in
spite of reasonable time and opportunity, the bank shall be free to cancel the
loan and recover the money. Legal proceedings (Civil/Criminal) wherever
necessary may be initiated against the Swarozgari and against all members in
case of SHG for recovery of loan.
12.
Risk Fund for Consumption Credit
The
scheme provides for the creation of Risk Fund with 1 percent of SGSY funds at
District level. Consumption loans not exceeding Rs. 2000/- per swarozgari would
be provided by the banks. Assistance to the extent of 10 percent of the total
consumption loans disbursed by banks to the SGSY swarozgaris during the year
would be provided out of this Risk Fund.
13.
Repayment of Loan
All
SGSY loans are to be treated as medium term loans with minimum repayment period
of five years. Instalments for repayment of loan will be fixed as per the unit
cost approved by the NABARD/Dist. SGSY Committee. There will be a moratorium on
repayment of loans during the gestation period. Repayment instalments should not
be more than 50 percent of the incremental net income expected from the project.
Number of instalments may be fixed taking into consideration the principal
amount, the interest liability and the repayment period.
Swarozgaris
will not be entitled for any benefit of subsidy if the loan is fully repaid
before the prescribed lock-in period. The repayment period for various
activities under SGSY can broadly be categorised into 5, 7 and 9 years depending
on the project. The corresponding lock-in period would be 3, 4 and 5 years
respectively. If the loan is fully repaid before the currency period, the
Swarozgaris will be entitled only to pro-rata subsidy.
14.
Recovery
Prompt
recovery of loans is necessary to ensure the success of the programme. Banks
shall take all possible measures, i.e., personal contact, organisation of joint
recovery camps with District Administration, legal action, etc to ensure
recovery. In case, even after this, the banks fail to recover the entire dues,
the process of forfeiture of subsidy for adjustment against dues may be taken
up. After getting the approval of the District SGSY committee the concerned bank
may adjust the subsidy against the Swarozgari's dues. If the bank is able to
realise any amount subsequently over and above the amount due to it, the amount
may be returned to the DRDA.
The
banks may engage the services of NGOs or individuals (other than government
servants) as monitor-cum-recovery facilitators, on a commission basis. A
processing-cum-monitoring fee of 0.5 percent of the loan amount may be charged
to the Swarozgaris to meet this expenditure. Prompt repayment at the
Swarozgari's level, will entitle him/her to waiver of the 0.5 percent
processing-cum-monitoring fee.
Keeping
in view the importance of loan recovery, banks should prepare the list of
defaulters under IRDP before the end of September 1999 and furnish the same to
Gram Sabha/BDO/DRDA and initiate recovery efforts.
15.
Refinance of SGSY Loans
Banks
are eligible for refinance from NABARD for the loans disbursed under SGSY as per
their guidelines. The eligibility for refinance is related to the recovery
position of the banks.
16.
Role of Banks and State Agencies
Banks
will be closely involved with Government agencies in implementing, planning and
preparation of projects, identification of key activities, clusters, self-help
groups, identification of individual swarozgaris infrastructure planning as well
as capacity building and choice of activity of the SHGs, grading of SHGs,
selection of Swarozgaris, pre-credit activities and post credit monitoring
including loan recovery. The bank has the final say in the selection of
Swarozgaris.
17.
Deputation of Bank Officials to the DRDAs
As
a measure of strengthening of DRDAs and for promoting a better credit
environment, deputation of bank officials to DRDAs has been suggested. Banks may
consider deputing officers at various levels to the state Governments/DRDAs in
consultation with them.
18.
Supervision and Monitoring
Banks
may set up SGSY cells at Regional/Zonal Offices. These cells should periodically
monitor and review the flow of credit to SGSY Swarozgaris, ensure the
implementation of the guidelines of the scheme, collect data from the branches
and make available consolidated data to the Head Office of the bank. The banks
should ensure that no query from the field level remains unattended by the Head
Office. Monitoring of the Scheme at the Head Office level of the bank may be
entrusted to a Senior Officer and the progress of this programme may be reviewed
on a regular basis by the Top Management.
The
Scheme provides for the setting up of SGSY committees at Block/ District/State
and Central level. These committees will hold periodical meetings wherein the
implementation of the scheme will be reviewed and monitored. It is expected that
banks will actively participate in these meetings and maintain closer
co-ordination with the different agencies responsible for the implementation of
SGSY.
19.
Service Area Approach
The
district SGSY Committee set up under the Scheme has been authorised to
reallocate the villages, which are either not covered by any bank branch or
where the concerned branch is not able to perform for any reason whatsoever. The
district SGSY Committee's decision on reallocation would be placed before DCC
for its consideration and further necessary action.
20.
Submission of Data
Close
monitoring at all levels would contribute greatly to the effective
implementation of the Scheme. Formats for reporting progress under SGSY as
received from Ministry of Rural Development are given in Annexure 1(2) to 1(7).
The information has to be compiled bank-wise at the block as well as district
level to the corresponding block/district authority by the concerned bank and
also to be used for the State-level information by substituting district for the
block for monitoring and implementation of the scheme.
Quarterly
progress reports under the scheme may be furnished to RBI/Ministry of Rural
Development, Government of India, New Delhi as per the proforma enclosed for
monitoring the State wise/bank wise progress in the implementation of the
scheme. The first such report to be submitted for the year ended 31st
March 2000.
The
recovery statement under the scheme may be submitted as per format enclosed on a
half yearly basis at the end of March/September every year within 45 days from
the close of half year to which it relates. The data relating to SC/ST segment
may be furnished separately in the annual statements as at end of march.
Banks
may include the scheme details and concepts as course contents in the training
programmes for staff members and hold sensitisation programmes on SGSY wherever
necessary to further strengthen the scheme.
The
review of the progress under SGSY scheme may be made by the banks at
Regional/Zonal/Head Office on a quarterly basis. A copy of the review note duly
approved by the Board may be forwarded to the Ministry of Rural Development, New
Delhi and Rural Planning & Credit Department, Reserve Bank of India, Central
Office, Mumbai.
21.
Annual Credit Plan 1999-2000
Allocation
made in the credit plan for IRDP is to be carried over to the SGSY scheme.
All
loans disbursed under IRDP since April 1999 is to be treated as disbursed SGSY.
In
case of loans partly disbursed under IRDP, they are to be treated as committed
liability under SGSY and the balance loan has to be disbursed under SGSY.
In
respect of loans sanctioned under IRDP but not disbursed, the cases have to be
reviewed to see if they fit into the basic criteria that it would lead to the
assisted family coming above the poverty line. If so, the loan can be disbursed.
In
so far as pending proposals under IRDP are concerned, they have to be reviewed
with reference to key activities selected in the block. If the pending
applications fit into parameters of these key activities, the loans can be
sanctioned under SGSY.
22.
Credit Mobilisation Targets
The
State-wise credit mobilisation targets are fixed by GOI every year. The
State-wise targets may be allocated among commercial banks, co-operative banks
and RRBs by SLBCs. The SLBCs should finalise the targets of individual banks on
the basis of acceptable parameters like resources, number of rural/semi-urban
branches, etc., so that each bank will be in a position to arrive at its
corporate target, the achievement of which will be strictly monitored by RBI.
Every effort should be taken by the banks to achieve the credit target fixed on
the above basis.
23.
LBR Returns
The
Code No. for SGSY under LBR reporting system has been allotted and communicated
to the banks. (Vide circular SAA 8/08.01.04/1999-2000 dt.20th January
2000).
Separate
guidelines have been issued by the Ministry of Rural Development indicating the
role and responsibilities of the line departments, banks, NGOs, Swarozgaris.
Banks should issue suitable instructions to their controlling offices/branches
for implementation.
24.
Clarifications
In
regard to the above, some issues have been raised by banks in the
operationalisation of the scheme. These issues together with clarifications are
given in Annexure 1(1).
Operational
issues which may arise during the course of implementation of the scheme may be
resolved locally in the Block/ District/State Level Committees in consultation
with officials of line departments keeping overall content of the scheme in view
to ensure that the smooth implementation of the scheme is not impeded.
ANNEXURE
1(1)
SWARNJAYANTI
SWAROZGAR YOJANA (SGSY) � CLARIFICATIONS
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No.
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Matter
Referred
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Clarifications
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Scheme
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1.
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State
Governments have been informed that from 1.4.1999 only the BPL census list
that has been undertaken in IX Plan (1999-2000 to 2003-2004) will be the
valid list.
Average
size of family that can be taken into account for calculating the income
level to identify BPL families.
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Ministry
of Rural Development has confirmed that the IXth Plan BPL list is
available with Local Authorities. The list will be made available to all
the banks.
BPL
list is the basis for consideration for assistance.
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2.
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Formalities
for formation of SHG & for lending to SHG would require minimum one
year whereas individuals may be assisted immediately. Due to delays for
SHG lending, individual lending is preferred by Swarozgaris. Relaxation
may be granted for SHG, financing during 1999-2000.
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The
SHG formation should take required time and should not be driven by any
targets. Process approach for formation of groups should be followed as
detailed in the guidelines. Existing DWCRA groups may be considered for
financing in key activities, if they possess characteristics of a good SHG.
As a relaxation during 1999-2000, more number of individual Swarozgaris
may be financed under SGSY.
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3.
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The
stipulation on category wise reservations (40% for Women, 50% for SC/ST,
3% for disabled) should be relaxed and flexibility offered.
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Achievement
of sub-targets may be ensured by Banks at District level. Flexibility is
not possible as the focus of the scheme will be particularly on vulnerable
groups
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Skill
Upgradation
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1.
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Financial
assistance to undergo skill development training conducted for more than a
week.
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(a)
Maximum ceiling limit/mode/period of repayment.
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Quantum
of assistance for skill development training would be dependent on the
nature of skill development, the institution facility available in the
locality and the period of training. It would also depend on the nature of
the activity and the Swarozgari. It would not be possible to prescribe any
period of training. The cost would vary accordingly.
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These
issues may be decided at the District-SGSY Committee level. As the
borrower has to undertake an activity and start repaying the skill
development loan along with activity specific loan. The repayment period
may run concurrently.
Mode
of payment is left to the individual judgement of the lending bank.
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(b)
Inclusion of the cost of training as part of the project and release the
loan for training as 1st instalment so that we can minimise the
documentation formalities, (only one account instead of two separate
accounts)
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Separate
documentation would be necessary, as the project cost would be disbursed
separately after the training.
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ii)
Who will fix the quantum of assistance locally?
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By
and large, the scale of assistance is fixed by the District SGSY
committee. Minor variations, if any, can always be decided by the banks in
consultation with the line department officials or the DRDA officials.
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iii)
Whether loan is to be given to the individual swarozgari or to the group?
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Loan
can be given either to the group or to the Individual Swarozgari.
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Activity
Clusters, Key activities
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1.
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Block
SGSY Committee should compile and update the data on village profile.
Choice
between spread and cluster based efficiency should be left to Block SGSY
Committee.
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Key
activities to be pursued by the Swarozgaris will be on the basis of
village profiles/P.L.P./S.A.A./Credit Plans. Block SGSY Committee will
have the say in the selection of Key activities and spread/ clusters.
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Self
Help Groups
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1.
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Modalities
to ensure sub targets for SC/ST, Women and Physically handicapped in the
case of group loan.
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Sub
targets may be monitored by the banks at the District level to achieve
required targets.
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2.
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Exit
route for member of the group or in the event of death with particular
reference to sharing of liabilities of the member and savings made by the
member.
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As
per Bye-laws/agreement of the group.
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3.
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Whether
a member in a group can avail of two subsidies one by availing individual
loan supported by the group and another loan by being a member of a group
in the case of a group loan.
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Member
can avail subsidy individually or as a member of a group.
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4.
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Whether
the member of a family can become member of different group and avail
loan?
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Yes.
The subsidy is given to the group and not to the individuals.
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5.
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If
Bank advance is granted to any individual member, then how the loan
accounts will be maintained in Bank Books? Such loans to individuals would
not conform to group approach.
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The
loan is either to an individual in a group or to a group and the books
will be maintained accordingly. The loan may be given to the members and
routed through SHG and recovery may be made though SHG.
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6.
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Whether
a group with less than ten members can be considered?
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Minimum
of ten members must be maintained in a group other than those for disabled
and minor irrigation activities.
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7.
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Existing
SHGs (including BPL and non-BPL families) offer ready scope for coverage
under SGSY?
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BPL
members of a mixed group can avail loans in individual capacity. Mixed
groups are not entitled to group subsidy. However, an exception has been
made for DWCRA groups for this year only.
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8.
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Appropriate
Grading criteria should be established for newly formed groups. The
procedure for assessing and selecting the agencies to do the grading,
training etc. have not been elaborated in the new SGSY guidelines.
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DCC/SLBC
can decide the grading based on NABARD rating norms. No external agency is
required unless DCC/SLBC decide otherwise.
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Revolving
Fund
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1.
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(a)
Whether the cash credit will be of permanent nature or can be recovered on
reducing balance over five years and terms of the loan.
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The
revolving fund - (cash credit facility) may be necessary on a permanent
basis and may co-exist with the SHG.
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(b)
When the account has to be brought into credit balance adjusted.
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Cash
Credit account should be monitored continuously and renewed periodically
depending on the necessity.
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(c)
Rs. 10,000/- paid by DRDA has to be repaid or not or treated as grant?
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Rs.
10,000/- from DRDA may be treated as subsidy grant in so far as the bank
is concerned. As far as group is concerned, it is a cash credit and has
therefore to be repaid. Only, interest is not charged on outstanding upto
Rs. 10,000/-).
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(d)
Method of liquidation of CC A/c.
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It
would be liquidated like any other cash credit. The liability of the group
is for the entire amount of cash credit outstanding.
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2.
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(a)
Mode of sanction and recovery under revolving fund is to be clarified.
Whether it would be Rs. 25,000/- for all groups and linked to thrift ratio
or number of members.
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Revolving
fund is not linked to the savings but is given only to those groups that
have passed the first round of grading. Revolving fund would be Rs.
25,000/- for all groups irrespective of number of members and may be
opened in the name of SHG. The operation of the account may be decided by
a resolution of the group. The account will be in the form of cash credit.
Interest will be charged on credit availed in excess of Rs. 10,000/-.
Bankers may decide the quantum of cash credit limit within the overall
limit of Rs. 25,000/- (Rs. 10,000/- + Rs. 15,000/-). The cash credit
account (RF) may continue till the SHG is in operation and the fund is
operated to the satisfaction of the lending banker.
|
|
(b)
Whether the operative limit or RF A/c. is to be reduced to Rs. 15,000/-
|
The
operative limit will remain at Rs. 25,000/-
|
|
(c)
Whether the banks have to take documents for Rs. 25,000/- or Rs. 15,000/-.
|
Banks
will have to take documents for Rs. 25,000/-.
|
|
3.
|
(a)
How is the DRDA subsidy of Rs. 10,000/- to be treated? Should it be
credited to the cash credit account straight away or to be kept in a
separate non-interest bearing account as deposit?
|
It
is a subsidy for Revolving Fund of the group and therefore may be kept in
subsidy Reserve Fund A/c. in the name of SHG. This would, therefore, not
attract CRR/SLR requirement. No interest should be charged on the Rs.
10,000/- credited to the subsidy reserve fund i.e. the SHG would be
required to pay interest on bank credit portion only.
|
|
(b)
The loan or subsidy does not bear any relation to the number of members in
the group, which may vary from 5 to 20 in a SHG. Groups with smaller
membership will get more per capita revolving fund.
|
The
loan amount would depend on the project undertaken by the group. The
Revolving Fund and Subsidy limits are for a group and variation in per
capita revolving fund/subsidy will therefore exist.
|
|
(c)
Revolving fund loan/subsidy does not bear a relation to the group savings.
Group savings indicate the capacity of the group to rotate the funds among
themselves.
|
Revolving
fund and subsidy are two supports available for SHGs under SGSY and their
entitlement are not linked to savings.
|
|
(d)
Security and interest norms for Revolving fund.
|
For
Revolving Fund, simple letter of undertaking from Group members would be
sufficient in addition to inter-se agreement and usual documentation. The
interest would be charged on bank credit portion of Revolving Fund. The
rate would be as applicable to priority sector lending.
|
|
4.
|
Under
what sub-head revolving fund loan is to be categorised within priority
sector?
|
May
be shown under loans to SHGs under priority sector.
|
Lending
Norms
|
|
1.
|
Second
and subsequent doses may be granted by the same bank or any other bank.
How a borrower under a service area will be accommodated by another bank
for 2nd/multiple dose.
|
In
terms of para (vi) of our circular dated 1.9.1999, if the bank is not in a
position to grant second/multiple dose, as in the case of Weak Commercial
Bank/Co-operative Bank/RRB, another bank may finance the borrower after
obtaining no objection certificate from the lending bank. In such cases,
borrowers may be allowed to go beyond the Service Area. SGSY Committees at
Block/District may decide such cases.
|
|
2.
|
An
individual who has availed a non-minor irrigation loan is willing to avail
a loan for minor irrigation. Eligible quantum of subsidy may be specified.
|
A
SGSY borrower under non-minor irrigation will not be eligible for
assistance and subsidy entitlement under minor irrigation loan.
|
|
3.
|
Who
is responsible authority for preparation of project profile and who will
decide the reality of the profiles, technical feasibility, economic
viability etc. for each block and who is the authority for approval?
|
The
Block SGSY Committee is required to prepare project profiles of 8-10 key
activities. For this, the potential linked plans of NABARD, village credit
profile of SAA may be relied on. These project profiles along with
recommendations of Panchayat Samiti should be forwarded to District SGSY
Committee, which will scrutinise the proposals and approve them.
|
|
4.
|
Whether
the stamp duty on Hypothecation agreement, general form of Guarantee and
Irrevocable Power of Attorney is waived or not? If not, the quantum of
stamp duty to be levied for each document?
|
The
waiver of stamp duty on various documents to be executed by individual/
group loanees rests with the State Governments.
|
|
5.
|
Title
of loan account in case of Group finance
|
It
should be name of the group and denoted as XYZ - SHG-village.
|
|
6.
|
(i)
Whether cash disbursement is allowed in farm sector also.
(ii)
If so, what is the limit?
(iii)
Whether cash disbursement will be applicable in all the blocks in a
district or the identification of blocks for cash disbursement system will
be entrusted to the DCC/Dist. SGSY Committee in order to ensure necessary
safeguards for this purpose?
|
Banks
may disburse all loans for agricultural purposes in cash and this will be
applicable in all Blocks/Districts.
|
|
7.
|
Emphasis
is laid on multiple doses of assistance. Whether the credit can be given
to more than one activity? Whether subsequent doses of credit can be
provided to the same activity or to different activity?
|
More
than one activity can be assisted. However, the activity should be within
the key activities identified.
|
|
8.
|
In
case of financing through SHG, the savings mobilised by SHG may be taken
as margin. A stipulation of bringing in a margin of 25% by way of group
savings will reduce the future debt service burden of the beneficiaries.
|
Savings
of the group need not be linked to the loan under SGSY as the target group
is from the BPL list. Loan is given to a SHG. only if the grading is
satisfactory (para 3.1 of the guidelines). As per the guidelines full
project cost has to be financed.
|
|
9.
|
It
is stated that under-financing should be avoided. Does it mean that the
individual banker has absolutely no discretion to determine the amount of
loan?
|
Financing
of the project has to be as per the project profile. The project profile
indicates the amount of investment that is required for each activity.
However, the bankers do have a final say in the sanction of loans as
indicated in the guidelines.
|
|
10.
|
Documents
to be obtained from individuals/ SHG under SGSY
|
The
application and documentation formats provided for individuals/group
loaning under IRDP may be used with suitable modifications under SGSY.
|
Insurance
Cover
|
|
1.
|
Please
advise mode of ascertaining the date of birth of a Swarozgari in the case
where loan is extended to a person between 55 to 60 years.
|
The
Swarozgari's ration card, voter's list, BPL list and if literate, school
leaving certificate or if nothing is available his declaration would be
sufficient to determine the age of Swarozgari.
|
Security
Norms
|
|
1.
|
Group
may consist of 10 to 20 persons-Maximum quantum of loan to the group could
be Rs. 10 lakhs and minimum may be Rs. 5 lakhs. Collateral security upto
Rs. 10 lakhs should be waived.
|
The
security norms were revised in the CLCC meeting held in June'99. Norms
indicated in paragraph 5.9 of the Master Circular may be followed
|
|
2.
|
In
case of group loans, if the group is not in a position to offer its own
assets as collateral security, banks may seek collateral security from
individual members of the Group. Norms may be stipulated for obtaining
collateral security in respect of group loans.
|
Collateral
Security may be obtained if the prime security is not sufficient. In such
a case it will be open to the bank to seek collateral from individual
members of the group or others depending on the circumstances of the case.
Bankers are free to decide.
|
Subsidy
|
|
1.
|
RPCD.BC.6/568(A)(P)
dated 10.7.91 permits the principal branches in a district to allow
overdrawing to the extent of 10% of total subsidy allocated for the year.
The limits for each bank is decided in the meeting to finalise physical
financial target whether the said guidelines under IRDP would hold good
for SGSY. If so, the latest position in the matter.
|
The
same instructions will hold good under SGSY.
|
|
2.
|
What
will be the subsidy component in multiple doses of credit involving Minor
Irrigation Project where there is no monetary ceiling?
|
There
is no ceiling on subsidy in respect of minor irrigation project even in
case of multiple doses of credit for individual as well as for group
loans. (Refer para IX of circular dated 1.9.99)
|
|
3.
|
Detailed
guidelines for implementation of back-end subsidy together with terms and
conditions governing creation of subsidy deposit in the form of Subsidy
Reserve Fund A/c. its adjustment etc. may be circulated.
|
Refer
to para 4.17 and 4.24 of Government of India guidelines for details on
back-end subsidy. The terms and conditions of the back-end subsidy are the
same as under IRDP.
|
Post
Credit Follow-up
|
|
1.
|
(a)
In case of non-procurement misutilisation of loan whether the civil
criminal action can be initiated?
(b)
If only criminal then FIR is to be filed jointly by the Bank and DRDA. At
present, civil action cannot be initiated in Government sponsored
programmes.
|
Reference
is invited to para 4.10 of Government of India guidelines.
|
|
2.
|
If
Swarozgari does not purchase the assets within one month from the date of
release of the amount by the bank, what steps should be initiated and how
to recover the loan amount from the Swarozgari?
|
The
reasons for non-procurement should be looked into by the bank/BDO. If the
non-procurement of assets is wilful or due to negligence of the Swarozgari,
after giving reasonable opportunity for procurement the bank is free to
cancel the loan and recover the money.
|
Risk
Fund for Consumption Credit
|
|
1.
|
10%
of consumption loans disbursed by banks could be provided out of Risk Fund
at District Level for Swarozgaris from Weaker Section. Whether this 10% is
subsidy or repayable loan.
|
The
banks will get 10% of the consumption credit disbursed by them during the
year from DRDA to maintain a risk fund. The fund enables the bank to
write-off consumption loans, which have become irrevocable.
|
|
2.
|
At
what point of time consumption credit is to be disbursed and whether any
separate application form/security document is required to be obtained or
it should be included within SGSY application form and limit will be
inclusive of consumption loan limit.
|
Swarozgaris
(other than Self Help Group members) may be considered for consumption
loan not exceeding Rs. 2,000/-. Separate application/document would be
necessary. The members of SHGs will not be eligible for consumption loan,
it is open for the SHGs to meet this from the cash credit facility.
|
|
3.
|
Modalities
of opening/applying for the risk fund may be elaborated. Who will be the
implementing agency for this fund and what does it cover?
|
Risk
Fund is to be constituted by banks to cover the risk arising out of loans
sanctioned for consumption purposes to Weaker Section including SGSY
borrowers, small marginal farmers, landless agricultural workers, rural
artisans etc. (para 4.30 of SGSY guidelines). The modalities are available
in Annexure XXI of IRDP Manual.
|
Repayment
of Loan
|
|
1.
|
Does
the 'number of instalments' and 'repayment' have the same meaning?
|
The
repayment period varies according to the activity taken up. Number of
instalments would, therefore, depend on the amount of loan, interest
liability and the repayment period (i.e. 5, 7 and 9 years as the case may
be) of the activity for which the loan has been given. This will be part
of the Project Profile.
|
|
2.
|
What
is prompt repayment period to entitle for the waiver of 0.5%
processing-cum-monitoring fee. If waived, how further payment may be made?
|
So
long as the loan repayment has not been delayed by the Swarozgari beyond a
schedule of time limit (with grace period) for repayment instalment the
account may be considered as regular. The processing-cum-monitoring fee
could be waived in the last instalment.
|
|
3.
|
In
case the loan is fully repaid before certain period specified i.e.
lock-in-period, the borrower is eligible for pro-rata subsidy. The working
of pro-rata needs elucidation.
|
Working
of pro-rata subsidy for SGSY repayment is enclosed.
|
|
4.
|
Income
of beneficiary necessarily crosses Rs. 2,000/- p.m. net of bank instalment,
after taking up the activity or at the end of third year. It may not be
possible for a poor man to take up activity of such a scale, which would
generate cash surpluses of more than Rs. 4,000/-. District SGSY Committee
may attempt to formulate comparatively bigger project, which may fail for
want of skill and experience.
|
A
number of Project profiles being worked out in the field and the feedback
from the States indicate that this can be achieved.
|
Recovery
|
|
1.
|
Incentive
and disincentive for recovery. Whether the processing-cum-monitoring fee
is to be charged as one time measure in concerned Swarozgaris accounts or
whether it can be charged every year.
|
The
processing-cum-monitoring fee has to be charged once at the time of
disbursement of the loan.
|
|
2.
|
RBI
circular reads: In case of default in repayment of loan by any Swarozgari,
banks may adjust subsidy (including interest earned) against his dues
after getting approval from Dist. SGSY Committee.
|
No
interest is payable on the subsidy kept in Subsidy Reserve Fund A/c. and
like-wise no interest is chargeable on the amount of loan representing
subsidy portion. The clause "including interest earned" may be
deleted from RBI circular as well as para 4.24 of Government guidelines.
|
|
3.
|
Whether
processing charges are to be levied at the time of disbursement or at the
time of referring the case to NGO for assistance in recovery and
monitoring. Whether it has to be refunded in case of prompt recovery?
|
The
processing-cum-monitoring charges may be levied at the time of
disbursement of loan and refunded i.e. adjusted towards the repayment in
the last instalment since the repayment position will be known towards the
end.
|
|
4.
|
A
benchmark level of recovery should be maintained at each village/block and
banks would have to review about further lending in such village/block
where recovery is less than the minimum level.
|
The
banks have been requested to prepare the defaulters list by end of
September 1999. The matter will be reviewed at the appropriate time. For
SGSY, minimum recovery levels should be 80%.
|
Supervision
& Monitoring
|
|
1.
|
In
some States, the quarterly meetings of Block Committees under SAA are
being turned into SGSY Committee meetings, thus defeating the purpose for
setting up separate fora under SGSY at Block/Dist. Level.
|
The
issues relating to SGSY are to be taken up for discussion in the Block and
District SGSY committees. SGSY has specific committees because it requires
special attention. The need for separate committees on SGSY exists at
least for the first 2-3 years so that issues can be discussed threadbare.
|
|
2.
|
Convenors
at all levels except at District level are Government officials - LDM is
the convenor at District level forum. In view of this and for meaningful
co-ordination between the agencies, convenor at district level be changed
and District level government official may be nominated as convenor
District SGSY Committee.
|
There
is no change in the existing position.
|
|
3.
|
It
has been suggested that Block level SGSY Committee monthly meetings of
that month and quarterly BLBC meetings be synchronised to enable the LDO
to attend them on selective basis.
|
LDOs
may attend the Block level SGSY meetings selectively only when they attend
SC/DCC meetings if the BLBC is conducted before or after.
|
|
4.
|
Similarly,
under SGSY there is a District SGSY Committee, which is akin to SC of DCC.
There is need to synchronise these fora also.
|
The
present position may continue.
|
Service
Area Approach
|
|
1.
|
Under
SGSY Scheme, District SGSY Committee has been empowered to allocate the
villages, which are either not covered, by any bank branch or where
concerned bank branch has not performed for any reason. Please clarify
whether the reallocation of village is restricted to SGSY Scheme alone or
for all other banking activities in the village and whether RBI approval
is necessary.
|
This
was discussed and decided in the CLCC. In order to ensure that such
reallocation does not pose any problem at the level of implementation we
have advised in para XVIII of our circular dated 1.9.1999 that the
reallocation decision be referred to DCC for its consideration and
necessary action.
|
|
2.
|
In
case group loaning covering 2/3 villages, the branch having more members
from its service area may finance the Group.
|
The
Block/District SGSY Committee may decide on the basis of allocation given
to each branch. Group loaning can also be decided by the BLBC/DCC/SC.
|
Submission
of Data
|
|
1.
|
Segregation
of Recoveries under IRDP/SGSY.
|
Loans
disbursed up to 31 March 1999 under IRDP should be reported separately.
|
|
Items
not included in RBI Circular
|
|
1.
|
As
per Government guidelines, review of establishment of linkages is to be
taken up especially on the technical support by line departments so as to
decide on the continuation of financing the specific key activity - Issue
has not been dealt with in RBI circular
|
Only
the salient features of the Scheme have been highlighted in the Circular.
Guidelines would continue to be the guiding feature.
|
System
of Back-end Subsidy - Stipulation of Lock-in-Period (Model)
Full
Project Cost as Bank Loan Rs. 10,000/-
Subsidy
Rs. 5,000/-
|
Loan
Repayment Period
|
Lock-in-Period
(in Years)
|
With
maintenance of assets in good condition and regular repayment of loan
instalments
|
With
regular repayment after (B) but before expiry of (A)
|
Eligible
amount of pro-rata subsidy for adjustment
|
|
|
|
At
the
end of
|
Subsidy
Eligible
|
|
|
|
(A)
|
(B)
|
|
(Rs.)
|
|
(Rs.)
|
|
1
|
2
|
3
|
4
|
5
|
6
|
|
5
Years
|
3
Years
|
First
Year and Second Year
|
Nil
|
3rd
Year
4th Year
5th Year
|
3000
4000
5000
|
|
7
Years
|
4
Years
|
First
Year to Third Year
|
Nil
|
4th
Year
5th Year
6th year
7th Year
|
4/7
x 5000 = 2857
5/7 x 5000 = 3571
6/7 x 5000 = 4286
7/7 x 5000 = 5000
|
|
9
Years
|
5
Years
|
First
Year to Fourth Year
|
Nil
|
5th
Year
6th year
7th Year
8th Year
9th Year
|
5/9
x 5000 = 2778
6/9 x 5000 = 3333
7/9 x 5000 = 3889
8/9 x 5000 = 4444
9/9 x 5000 = 5000
|
ANNEXURE
1(2)
SGSY
- DISTRICT LEVEL - LOAN AND RECOVERY - BANK-WISE
|
State
______________________
|
State
Code __________
|
|
District
____________________
|
Block
______________
|
|
Year
______________________
|
Month
_____________
|
(Rs.
in Lacs)
|
Sr.
No.
|
Name
of Bank
|
Bank
Code
|
Amount
of Loan Sanctioned
|
Amount
of Loan Disbursed
|
Amount
Due for Repayment in the Month
|
Total
Amount that should have been repaid upto the month
|
Total
Amount Repaid so far
|
|
Group
|
Individual
|
Group
|
Individual
|
Group
|
Individual
|
Group
|
Individual
|
Group
|
Individual
|
Total
|
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
10
|
11
|
12
|
13
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANNEXURE
1 (3)
SGSY
- SWAROZGARI LOAN REPAYMENT DETAILS
(Proforma
- BR 2B - From Bank Branch to Block and from Block to DRDA)
|
Bank
Code ___________
|
Bank
Name __________________
|
|
Block
Code __________
|
Block
Name _________________
|
|
Month
______________
|
Year
_______________________
|
|
Sr.
No.
|
Name
of the Swarozgari
|
Swarozgari
Code
|
BPL
Code
|
Amount
Due in the Month (in Rs.)
|
Amount
Paid during the Month
(in Rs.)
|
Total
Amount that should have been paid so far (in Rs.)
|
Total
Amount Repaid
(in Rs.)
|
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
This proforma to be filled in only for Swarozgaris.
Annexure
1(4)
SGSY
- Self-Help Groups (SHGs) Loan Repayment Details
(Proforma
- BR 2C - From Bank Branch to Block and from Block to DRDA)
|
Bank
Code ___________
|
Bank
Name _______________________
|
|
Block
Code __________
|
Block
Name ______________________
|
|
Month
_______________
|
Year
____________________________
|
|
Sr.
No.
|
Name
of the SHG
|
Group
Code
|
Amount
Due in the Month
(in Rs.)
|
Amount
Paid during the Month
(in Rs.)
|
Total
Amount that should have been paid so far (in Rs.)
|
Total
Amount Repaid
(in Rs.)
|
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
This proforma to be filled in only for Groups.
Annexure
1(5)
SGSY
- Expenditure on Subsidy
(Proforma
- DR 2A - From Bank Branch to Block and from Block to DRDA)
|
Name
of the District _____________________
|
District
Code _________
|
|
Year
____________________________
|
Month
______________
|
|
Bank
Branch Name
|
Bank
Branch Code
|
Amount
of Subsidy with the Branch as on 01.04. ____ (in Rs.)
|
Amount
Released upto Last Month
(in Rs.)
|
Amount
Released during the Month
(in Rs.)
|
Total
Amount Available with the Branch
(in Rs.)
|
Amount
Adjusted upto the Month
(in Rs.)
|
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annexure
1(6)
SGSY
- Expenditure on SHGs
(Proforma
- DR 2D - From Block to DRDA)
|
Bank
Name ______________
|
Bank
Branch ___________
|
|
Month
_____________
|
Year
______________
|
Details
of expenditure during the month
|
Sr.
No.
|
SHG
Name
|
SHG
Code
|
Expenditure
on Capacity Building
|
Contribution
to Revolving Fund
|
Bank
Branch to which Revolving Fund given
|
|
1
|
2
|
3
|
4
|
5
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annexure
1(7)
SGSY
- Expenditure on Risk Fund for Consumption Credit
(Proforma
- DR 2E - From Block to DRDA)
|
Name
of the District ___________________
|
District
Code _________
|
|
Month
___________________________
|
Year
______________
|
|
Sr.
No.
|
Name
of the Bank
|
Bank
Code
|
Expenditure
Incurred during the month (in Rs.)
|
Amount
Reimbursed by the DRDA
|
|
1
|
2
|
3
|
4
|
5
|
|
|
|
|
|
|
|
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Note:
Individual consumption utilisation certificate with names and addresses of the
persons and amount of loan to be furnished by the banks.
Appendix
List
of circulars that have been consolidated by the Master circular
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No.
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Circular
No.
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Date
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Subject
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1
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SP.BC.23/09.01.01/99-2000
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01.09.1999
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Swarnjayanti
Gram Swarozgar Yojana (SGSY)
|
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2
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SP.BC.51/09.01.01/99-2000
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30.12.1999
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Swarnjayanti
Gram Swarozgar Yojana (SGSY)
|
|
3
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SP.BC.58/09.01.01/99-2000
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02.02.2000
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Swarnjayanti
Gram Swarozgar Yojana (SGSY)
|
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4
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SP.BC.01/09.01.01/2000-01
|
03.07.2000
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SGSY-Reporting
formats
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5
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SP.BC.03/09.01.01/2000-01
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06.07.2000
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Credit
mobilisation target under SGSY during 2000-01
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