RBI /2004-05/ 421
RPCD.SP.BC.No. 94 /09.01.01/2004-05
April 13, 2005
The Chairman and Managing Director
All Scheduled Commercial Banks (Except RRBs)
Dear Sir,
Interest rates to be charged on group loans under
Swarnjayanti Gram Swarozgar Yojana (SGSY)
As you are aware that Swarnjayanti Gram Swarozgar
Yojana (SGSY) is a major poverty alleviation and employment generation programme
of the Government of India, implemented in the rural areas of the country, focuses
on Group approach.
2. Government of India, Ministry of Rural Development
observed certain anomalies in rate of interest charged by banks on Group loans
and individual loans under SGSY.
3. Further, clarifications have been sought
by some banks on the rate of interest to be charged on group loans under SGSY.
It is, therefore, clarified that the rates of interest to be charged on Group
loans under SGSY may be linked to per capita size of the loans so as to mitigate
the burden on the BPL beneficiaries on the analogy of IRDP group loans.
You are, therefore, advised to issue necessary instructions
to your controlling offices/ branches in this regard.
Yours faithfully,
Sd/-
(G.Srinivasan)
Chief General Manager
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