| Date: |
06-11-2002
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| Notification No: |
RBI Notification No 39/2002
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| Issuing Authority: |
RBI
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| Type: |
Notification
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| File No: |
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| Subject: |
Exemption of Advances Granted to Self Help Groups (SHGs) against Group Guarantee from the Limit of Unsecured Guarantees and Advances
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Exemption of Advances Granted to Self Help Groups (SHGs) against Group
Guarantee from the Limit of Unsecured Guarantees and Advances
DBOD.
No. BP. BC. 39/ 21.04.141 - 6th November 2002
Please
refer to paragraph 114 of the Statement on �Mid-term Review of Monetary and
Credit Policy for the year 2002-03� enclosed with Governor�s letter MPD. No.
BC. 222/ 07.01.279/ 2002-03 dated October 29, 2002.
2.
At present, banks are required to limit their commitment by way of
unsecured advances in such a manner that 20 per cent of banks� outstanding
unsecured guarantees together with total of outstanding unsecured advances
should not exceed 15 per cent of their total outstanding advances (cf.
paragraphs 2.2 and 2.3 of our master circular DBOD. No. Dir. BC. 07/ 13.03.00/
2002-03 dated July 26, 2002).
3.
Banks generally lend to Self Help Groups (SHGs) against group guarantee
without insisting on any security. Considering the high recovery rate in respect
of banks� advances to SHGs and that this programme helps the poor, it has been
decided that unsecured advances given by banks to SHGs against group guarantee
would be excluded for the purpose of computation of the prudential norms on
unsecured guarantees and advances until further notice. The matter would be
reviewed after a year in the light of growth in aggregate unsecured advances,
and the recovery performance of advances to SHGs.
4.
Please acknowledge receipt.
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