The Chairman/ Managing Director
All Scheduled Commercial Banks
Circular – Deendayal Antyodaya Yojana - National Rural Livelihoods Mission
Please refer to the Master Circular FIDD.GSSD.CO.BC.No.09/09.01.01/2015-16
dated July 30, 2015 consolidating guidelines / instructions /
directions issued to banks with regards to National Rural Livelihoods
Mission. Ministry of Rural Development, Department of Rural Development,
Government of India vide their letter dated March 29, 2016 has renamed
National Rural Livelihoods Mission(NRLM) as Deendayal Antyodaya Yojana -
National Rural Livelihoods Mission(DAY-NRLM).The Master Circular has been
suitably updated by incorporating the instructions on DAY-NRLM issued up to
June 30, 2016, which are listed in the Appendix and
also been placed on website (rbi.org.in).
Please acknowledge receipt.
A copy of Master
Circular is enclosed.
Chief General Manager
Encls: As above
Antyodaya Yojana - National Rural Livelihoods Mission ( DAY-NRLM)
1.1 The Ministry of Rural
Development, Government of India launched a new programme known as NRLM now
renamed as Deendayal Antyodaya Yojana - National Rural Livelihoods Mission
(DAY-NRLM),by restructuring and replacing the Swarnjayanti Gram Swarozgar
Yojana (SGSY) scheme with effect from April 01, 2013. Detailed ‘Guidelines’
were circulated to all Scheduled Commercial Banks including Regional Rural
Banks vide RBI circular
RPCD.GSSD.CO.No.81/09.01.03/2012-13 dated June 27, 2013.
1.2 DAY-NRLM (renamed as
DAY-NRLM w.e.f. March 29, 2016) is the flagship program of Govt. of India
for promoting poverty reduction through building strong institutions of the
poor, particularly women, and enabling these institutions to access a range
of financial services and livelihoods services. DAY-NRLM is designed to be
a highly intensive program and focuses on intensive application of human
and material resources in order to mobilize the poor into functionally
effective community owned institutions, promote their financial inclusion
and strengthen their livelihoods. DAY-NRLM complements these institutional
platforms of the poor with services that include financial and capital
services, production and productivity enhancement services, technology,
knowledge, skills and inputs, market linkage, etc. The community
institutions also offer a platform for convergence and partnerships with
various stakeholders by building environment for the poor to access their
rights and entitlements and public service.
1.3 A women’s self-help group,
coming together on the basis of mutual affinity is the primary building
block of the DAY-NRLM community institutional design. DAY-NRLM focuses on
building, nurturing and strengthening the institutions of the poor women,
including the SHGs and their Federations at village and higher levels. In
addition, DAY-NRLM will promote livelihoods institutions of rural poor. The
mission will provide a continuous hand-holding support to the institutions
of poor for a period of 5 – 7 years till they come out of abject poverty.
The community institutional architecture put in place under DAY-NRLM will
provide support for a much longer duration and of a greater intensity.
1.4 The support from DAY-NRLM
will include all round capacity building of the SHGs ensuring that the
group functions effectively on all issues concerning their members,
financial management, providing them with initial fund support to address
vulnerabilities and high cost indebtedness, formation and nurturing of SHG
federations, making the federations evolve as strong support organizations,
making livelihoods of the poor sustainable, formation and nurturing of
livelihoods organizations, skill development of the rural youth to start
their own enterprises or take up jobs in organized sector, enabling these
institutions to access their entitlements from the key line departments,
1.5 The implementation of
DAY-NRLM has been in a Mission Mode since April, 2013. DAY-NRLM adopts a
demand driven approach, enabling the States to formulate their own State
specific poverty reduction action plans. DAY-NRLM enables the State rural
livelihoods missions to professionalize their human resources at State,
district and block level. The State missions are capacitated to deliver a
wide range of quality services to the rural poor. DAY-NRLM emphasises
continuous capacity building, imparting requisite skills and creating
linkages with livelihoods opportunities for the poor, including those emerging
in the organized sector, and monitoring against targets of poverty
reduction outcomes. The blocks and districts in which all the components of
DAY-NRLM will be implemented, either through the SRLMs or partner
institutions or NGOs, will be the intensive blocks and districts, whereas
remaining will be non-intensive blocks and districts. The selection of
intensive districts will be done by the states based on the demographic
vulnerabilities. It will be rolled out in a phased manner over the next 7 -
8 years. All blocks in the country will become intensive blocks over time.
The key features of DAY-NRLM have been furnished in Annex I. The key difference from SGSY have been
listed in Annex II.
2. Women SHGs and their
2.1 Women SHGs under DAY-NRLM
consist of 10-15 persons. In case of special SHGs i.e. groups in the difficult
areas, groups with disabled persons, and groups formed in remote tribal
areas, this number may be a minimum of 5 persons.
2.2 DAY-NRLM will promote
affinity based women Self –help groups.
2.3 Only for groups to be formed
with Persons with disabilities, and other special categories like elders,
transgenders, DAY-NRLM will have both men and women in the self-help
2.4 SHG is an informal group and
registration under any Societies Act, State cooperative Act or a
partnership firm is not mandatory vide Circular RPCD. No. Plan
BC.13/PL-09.22/90-91 dated July 24th, 1991. However Federations of SHGs
formed at village level, cluster level, and at higher levels are to be
registered under appropriate acts prevailing in their States.
Financial Assistance to the SHGs
3. Revolving Fund (RF): DAY-NRLM would provide Revolving Fund (RF) support
to SHGs in existence for a minimum period of 3/6 months and follow the
norms of good SHGs, i.e. they follow ‘Panchasutra’ – regular meetings,
regular savings, regular internal lending, regular recoveries and
maintenance of proper books of accounts. Only such SHGs that have not
received any RF earlier will be provided with RF, as corpus, with a minimum
of ? 10, 000 and up to a maximum of ? 15,000 per SHG. The purpose of RF is
to strengthen their institutional and financial management capacity and
build a good credit history within the group.
4. Capital Subsidy has been
discontinued under DAY-NRLM:
No Capital Subsidy will be
sanctioned to any SHG from the date of implementation of DAY-NRLM.
5. Community Investment support
CIF will be provided to the SHGs
in the intensive blocks, routed through the Village level/ Cluster level
Federations, to be maintained in perpetuity by the Federations. The CIF
will be used, by the Federations, to advance loans to the SHGs and/or to
undertake the common/collective socio-economic activities.
6. Introduction of Interest
DAY-NRLM has a provision for
interest subvention, to cover the difference between the Lending Rate of
the banks and 7%, on all credit from the banks/ financial institutions
availed by women SHGs, for a maximum of ? 3,00,000 per SHG. This will be
available across the country in two ways:
(i) In 150 identified districts,
banks will lend to the women SHGs @7% up to an aggregated loan amount of ?
3,00,000/-.The SHGs will also get additional interest subvention of 3% on
prompt payment, reducing the effective rate of interest to 4%.
(ii) In the remaining districts
also, DAY-NRLM compliant women SHGs will be registered with SRLMs. These
SHGs are eligible for interest subvention to the extent of difference
between the lending rates and 7% for the loan up to ? 3 lakhs, subjected to
the norms prescribed by the respective SRLMs. This part of the scheme will
be operationalized by SRLMs.
(A separate circular on January
21, 2016 was issued to all Public Sector Banks containing the detailed
guidelines on interest subvention and its operationalization across the
country for the year 2015-16 along with the list of 150 identified
districts. Letters were issued to select Private Sector Banks. Salient
features and the implementation procedure of the Scheme are enclosed in Annex III. Interest subvention for subsequent
years will be communicated separately to the banks by GOI/RBI).
7. Role of banks:
7.1 Opening of Savings accounts: The role of banks would commence with opening of
accounts for all the Women SHGs, SHGs with members of Disability and the
Federations of the SHGs. The ‘Know Your Customer’ (KYC) norms as specified
from time to time by Reserve Bank of India are applicable for
identification of the customers.
7.2 Lending Norms:
7.2.1 The eligibility criteria
for the SHGs to avail loans:
• SHG should be in active
existence at least since the last 6 months as per the books of account of
SHGs and not from the date of opening of S/B account.
• SHG should be practicing
‘Panchasutras’ i.e. Regular meetings; Regular savings; Regular
inter-loaning; Timely repayment; and Up-to-date books of accounts;
• Qualified as per grading norms
fixed by NABARD. As and when the federations of the SHGs come to existence,
the grading exercise can be done by the Federations to support the Banks.
• The existing defunct SHGs are
also eligible for credit if they are revived and continue to be active for
a minimum period of 3 months.
7.2.2 Loan amount: Emphasis is laid on the multiple doses of
assistance under DAY-NRLM. This would mean assisting an SHG over a period
of time, through repeat doses of credit, to enable them to access higher
amounts of credit for taking up sustainable livelihoods and improve on the
quality of life. The amount of various doses of credit should be as
• First dose: 4-8 times to the
proposed corpus during the year or ? 50,000 whichever is higher.
• Second dose: 5-10 times of
existing corpus and proposed saving during the next twelve months or ? 1
lakh, whichever is higher.
• Third dose: Minimum of ? 2
lakhs, based on the Micro credit plan prepared by the SHGs and appraised by
the Federations /Support agency and the previous credit History.
• Fourth dose onwards: Loan
amount can be between ? 5-10 lakhs for fourth dose and/or higher in
subsequent doses. The loan amount will be based on the Micro Credit Plans
of the SHGs and their members.
The loans may be used for
meeting social needs, high cost debt swapping and taking up sustainable
livelihoods by the individual members within the SHGs or to finance any
viable common activity started by the SHGs.
(Corpus is inclusive of
revolving funds, if any, received by that SHG, its own savings and funds
from other sources in case of promotion by other institutes/NGOs.)
7.3 Type of facility and
7.3.1SHGs can avail either Term
loan or a CCL loan or both based on the need. In case of need, additional
loan can be sanctioned even though the previous loan is outstanding.
7.3.2 Repayment schedule could
be as follows:
first dose of loan will be repaid in 6-12 instalments
dose of loan will be repaid in 12-24 months.
dose will be sanctioned based on the micro credit plans, the repayment has
to be either monthly/quarterly /half yearly based on the cash flow and it
has to be between 2 to 5 Years.
dose onwards: repayment has to be either monthly / quarterly / half yearly
based on the cash flow and it has to be between 3 to 6 Years.
7.4. Security and Margin: No collateral and no margin will be charged up to ?
10.00 lakhs limit to the SHGs. No lien should be marked against savings
bank account of SHGs and no deposits should be insisted upon while
7.5. Dealing with Defaulters:
7.5.1 It is desirable that
wilful defaulters should not be financed under DAY-NRLM. In case wilful
defaulters are members of a group, they might be allowed to benefit from
the thrift and credit activities of the group including the corpus built up
with the assistance of Revolving Fund. But at the stage of assistance for
economic activities, the wilful defaulters should not have the benefit of
further assistance until the outstanding loans are repaid. Wilful
defaulters of the group should not get benefits under the DAY-NRLM Scheme
and the group may be financed excluding such defaulters while documenting
7.5.2 Further, non-wilful
defaulters should not be debarred from receiving the loan. In case default
is due to genuine reasons, Banks may follow the norms suggested for
restructuring the account with revised repayment schedule.
8. Credit Target Planning
8.1 Based on the Potential
Linked Plan/State Focus Paper prepared by NABARD, SLBC sub-committee may
arrive at the district-wise, block-wise and branch-wise credit plan. The
sub- committee has to consider the existing SHGs, New SHGs proposed, and
number of SHGs eligible for fresh and repeat loans as suggested by the
SRLMs to arrive at the credit targets for the states. The targets so
decided should be approved in the SLBC and should be reviewed and monitored
periodically for effective implementation.
8.2. The district-wise credit
plans should be communicated to the DCC. The Block-wise/Cluster-wise
targets are to be communicated to the bank Branches through the
9. Post credit follow-up
9.1 Loan pass books in regional
languages may be issued to the SHGs which may contain all the details of
the loans disbursed to them and the terms and conditions applicable to the
loan sanctioned. The passbook should be updated with every transaction made
by the SHGs. At the time of documentation and disbursement of loan, it is advisable
to clearly explain the terms and conditions as part of financial literacy.
9.2 Bank branches may observe
one fixed day in a fortnight to enable the staff to go to the field and
attend the meetings of the SHGs and Federations to observe the operations
of the SHGs and keep a track of the regularity in the SHGs meetings and
Prompt repayment of the loans is
necessary to ensure the success of the programme. Banks shall take all
possible measures, i.e. personal contact, organization of joint recovery
camps with District Mission Management Units (DPMUs) / DRDAs to ensure the
recovery of loans. Keeping in view, the importance of loan recovery, banks
should prepare a list of defaulters under DAY-NRLM every month and furnish
the list in the BLBC, DLCC meetings. This would ensure that DAY-NRLM staff
at the district/ block level will assist the bankers in initiating the
11. Deputation of the bank
officials to SRLMs
As a measure of strengthening
the (DPMUs) / DRDAs and for promoting a better credit environment,
deputation of the bank officials to DPMUs/ DRDAs has been suggested. Banks
may consider deputing officers at various levels to the State
Governments/DRDAs in consultation with them.
12. Supervision and monitoring
of the Scheme
Banks may set up DAY-NRLM cells
at Regional/Zonal offices. These cells should periodically monitor and
review the flow of credit to the SHGs, ensure the implementation of the
guidelines to the scheme, collect data from the branches and make available
consolidated data to the Head office and the DAY-NRLM units at the
districts/ blocks. The cell should also discuss this consolidated data in
the SLBC, BLBC and DCC meetings regularly to maintain the effective
communication with the state staff and all banks.
12.1 State Level Bankers’
Committee: SLBCs shall constitute a
sub-committee on SHG-bank linkage. The sub-committee should consist of
members from all banks operating in the State, RBI, NABARD, CEO of SRLM,
representatives of State Rural Development Department,
Secretary-Institutional Finance and Representatives of Development
Departments etc. The sub- committee shall meet once in a month with a
specific agenda of review, implementation and monitoring of the SHG-Bank
linkage and the issues/ constraints in achievement of the credit target.
The decisions of SLBCs should be derived from the analysis of the reports
of the sub-committee.
12.2 District Coordination
Committee: The DCC (DAY-NRLM
sub-committee) shall regularly monitor the flow of credit to SHGs at the
district level and resolve issues that constrain the flow of credit to the
SHGs at district level. This committee meeting should have participation of
LDMs, AGM of NABARD, district coordinators of the banks and DPMU staff
representing DAY-NRLM and office bearers of SHG federations.
12.3 Block level Bankers
Committee: The BLBC shall meet
regularly and take up issues of SHG bank linkage at the block level. In
this Committee, the SHGs/ Federations of the SHGs should be included as
members to raise their voice in the forum. Branch wise status of SHG credit
shall be monitored at the BLBC (Annex B and C may be used for the purpose)
12.4 Reporting to Lead District
Managers: The branches may furnish
the progress report and the delinquency report achieved under various
activities of DAY-NRLM in the format at Annex
‘V’ and ‘Annex VI’ to
the LDM every month for onward submission to Special Steering
Committee/sub-committee constituted by SLBC.
12.5 Reporting to RBI: Banks may give a state-wise consolidated report on
the progress made on DAY-NRLM to RBI/NABARD at quarterly intervals.
12.6 Reporting on SHG-Bank
linkages: NABARD shall submit
monthly report on the SHG bank linkage, data for which shall flow from the
CBS platform to DAY-NRLM on regular basis.
12.7 LBR returns: Existing procedure of submitting LBR returns to be
continued duly furnishing the correct code.
13. Data Sharing:
Data sharing on a mutually
agreed format / interval may be provided to SRLM for initiating various
strategies including recovery etc. The financing banks may enter into a
Memorandum of Understanding (MOU) for regular data sharing with the State
Rural Livelihood Missions, through the CBS platform.
14. DAY-NRLM support to the
14.1 SRLM would develop
strategic partnerships with major banks at various levels. It would invest
in creating enabling conditions for both the banks and the poor for a
mutually rewarding relationship.
14.2 SRLM will assist the SHGs
through imparting financial literacy, extending counselling services on
savings, credit and training on Micro-investment Planning embedded in
14.3 Improving quality of
banking services to poor clients by positioning customer relationship
managers (Bank Mitra).
14.4 Leveraging IT mobile
technologies and institutions of poor and youth as business facilitators
and business correspondents.
14.5. Community based recovery
mechanism: One exclusive sub -
committee for SHG Bank Linkage may be formed at village/cluster/ block
level which will provide support to the banks in ensuring proper
utilization of loan amount, recovery etc. The bank linkage sub - committee
members from each village level federation along with project staff will
meet once in a month under the chairmanship of the Branch Manager in the
branch premises with the agenda items relating to bank linkage.
Features of DAY-NRLM
1. Universal Social
Mobilization: To begin with, DAY-NRLM
would ensure that at least one member from each identified rural poor
household, preferably a woman, is brought under the Self Help Group (SHG)
network in a time bound manner. Subsequently, both women and men would be
organized for addressing livelihoods issues i.e. farmers organizations,
milk producers’ cooperatives, weavers associations, etc. All these
institutions are inclusive and no poor would be left out of them. DAY-NRLM
would ensure adequate coverage of vulnerable sections of the society such
that 50% of the beneficiaries are SC/STs, 15% are minorities and 3% are
persons with disability, while keeping in view the ultimate target of 100%
coverage of BPL families.
2. Participatory Identification
of poor (PIP): The experience from SGSY
suggests that the current BPL list has large inclusion and exclusion errors.
To widen the target groups beyond the BPL list and to include all the needy
poor, DAY-NRLM will undertake community based process i.e. participation of
the poor in the process of identifying the target group. Participatory
process based on sound methodology and tools (social mapping and well-being
categorization, deprivation indicators) and also locally understood and
accepted criterion ensures local consensus that inadvertently reduces the
inclusion and exclusion errors, and enables formation of the groups on the
basis of mutual affinity. Over the years, the participatory method of
identifying the poor have been developed and applied successfully in the
states like AP, Kerala, Tamil Nadu and Odisha.
The households identified as
poor through the P.I.P process will be accepted as DAY-NRLM target group
and will be eligible for all the benefits under the programme. The list
finalized after PIP process will be vetted by the Gram Sabha and approved
by the Gram Panchayat.
Till the PIP process is
undertaken by the State in a particular district/Block, the rural
households already included in the official BPL list will be targeted under
DAY-NRLM. As already provided in the Framework for implementation of
DAY-NRLM, up to 30% of the total membership of the SHGs may be from among
the population marginally above the poverty line, subject to the approval
of the BPL members of the group. This 30% also includes the excluded poor,
those who are really as poor as those included in BPL list but their name
does not figure in the list.
3. Promotion of Institutions of
the poor: Strong institutions of the
poor such as SHGs and their village level and higher level federations are
necessary to provide space, voice and resources for the poor and for
reducing their dependence on external agencies. They empower them and also
act as instruments of knowledge and technology dissemination, and hubs of
production, collectivization and commerce. DAY-NRLM, therefore, would focus
on setting up these institutions at various levels. In addition, DAY-NRLM
would promote specialized institutions like Livelihoods collectives,
producers’ cooperative/companies for livelihoods promotion through deriving
economies of scale, backward and forward linkages, and access to
information, credit, technology, markets etc. The Livelihoods collectives
would enable the poor to optimize their limited resource.
4. Strengthening all existing
SHGs and federations of the poor. There
are existing institutions of the poor women formed by Government efforts
and efforts of NGOs. DAY-NRLM would strengthen all existing institutions of
the poor in a partnership mode. The self-help promoting institutions both
in the Government and in the NGO sector would promote social accountability
practices to introduce greater transparency. This would be in addition to
the mechanisms that would be evolved by SRLMs and state governments. The
learning from one another underpins the key processes of learning in
5. Emphasis on Training,
Capacity building and skill building: DAY-NRLM
would ensure that the poor are provided with the requisite skills for
managing their institutions, linking up with markets, managing their
existing livelihoods, enhancing their credit absorption capacity and credit
worthiness, etc. A multi-pronged approach is envisaged for continuous
capacity building of the targeted families, SHGs, their federations,
government functionaries, bankers, NGOs and other key stakeholders.
Particular focus would be on developing and engaging community
professionals and community resource persons for capacity building of SHGs
and their federations and other collectives. DAY-NRLM would make extensive
use of ICT to make knowledge dissemination and capacity building more
6. Revolving Fund and Community
investment support Fund (C.I.F): A
Revolving Fund would be provided to eligible SHGs as an incentive to
inculcate the habit of thrift and accumulate their own funds towards
meeting their credit needs in the long-run and immediate consumption needs
in the short-run. The C.I.F would be a corpus and used for meeting the
members’ credit needs directly and as catalytic capital for leveraging
repeat bank finance. The C.I.F would be routed to the SHGs through the
Federations. The key to coming out of poverty is continuous and easy access
to finance, at reasonable rates, till they accumulate their own funds in
7. Universal Financial
Inclusion: DAY-NRLM would work
towards achieving universal financial inclusion, beyond basic banking
services to all the poor households, SHGs and their federations. DAY-NRLM
would work on both demand and supply side of Financial Inclusion. On the
demand side, it would promote financial literacy among the poor and
provides catalytic capital to the SHGs and their federations. On the supply
side, it would coordinate with the financial sector and encourage use of
Information, Communication & Technology (ICT) based financial
technologies, business correspondents and community facilitators like ‘Bank
Mitras’. It would also work towards universal coverage of rural poor
against loss of life, health and assets. Further, it would work on
remittances, especially in areas where migration is endemic.
8. Provision of Interest
Subvention: The rural poor need credit
at low rate of interest and in multiple doses to make their ventures
economically viable. In order to ensure affordable credit, DAY-NRLM has a
provision for subvention on interest rate above 7% per annum for all
eligible SHGs, who have availed loans from mainstream financial
9. Funding Pattern: DAY-NRLM is a Centrally Sponsored Scheme and the
financing of the programme would be shared between the Centre and the
States in the ratio of 75:25 (90:10 in case of North Eastern States
including Sikkim; completely from the Centre in case of UTs). The Central
allocation earmarked for the States would broadly be distributed in
relation to the incidence of poverty in the States.
10. Phased Implementation: Social capital of the poor consists of the
institutions of the poor, their leaders, community professionals and more
importantly community resource persons (poor women whose lives have been
transformed through the support of their institutions). Building up social
capital takes some time in the initial years, but it multiplies rapidly
after some time. If the social capital of the poor does not play the lead
role in DAY-NRLM, then it would not be a people’s programme. Further, it is
important to ensure that the quality and effectiveness of the interventions
is not diluted. Therefore, a phased implementation approach is adopted in
DAY-NRLM. DAY-NRLM would reach all districts by the end of 12th Five-year
11. Intensive blocks. The blocks that are taken up for implementation of
DAY-NRLM, ‘intensive blocks’, would have access to a full complement of
trained professional staff and cover a whole range of activities of
universal and intense social and financial inclusion, livelihoods,
partnerships etc. However, in the remaining blocks or non-intensive blocks,
the activities may be limited in scope and intensity.
12. Rural Self Employment
Training Institutes (RSETIs). RSETI
concept is built on the model pioneered by Rural Development Self
Employment Institute (RUDSETI) – a collaborative partnership between SDME
Trust, Syndicate Bank and Canara Bank. The model envisages transforming
unemployed youth into confident self- employed entrepreneurs through a
short duration experiential learning programme followed by systematic long
duration hand holding support. The need-based training builds
entrepreneurship qualities, improves self-confidence, reduces risk of
failure and develops the trainees into change agents. Banks are fully
involved in selection, training and post training follow up stages. The
needs of the poor articulated through the institutions of the poor would
guide RSETIs in preparing the participants/trainees in their pursuits of
self-employment and enterprises. DAY-NRLM would encourage public sector
banks to set up RSETIs in all districts of the country.
difference from SGSY
1. DAY-NRLM is promoting a major
shift from purely ‘allocation based’ strategy to a ‘demand driven’ strategy
wherein states have the flexibility to develop their own plans for capacity
building of women SHGs and Federations, infrastructure and marketing, and
policy for financial assistance for the SHGs.
2. DAY-NRLM will identify the
target group of poor through a ‘participatory identification of the poor’
process instead of using the BPL list as was done in SGSY. This will ensure
that the voiceless, poorest of poor are not ignored. In fact under DAY-NRLM,
the first preference is given to the poorest of poor households.
3. DAY-NRLM will promote the
formation of women SHGs on the basis of affinity and
not on the basis of a common activity, as it used to be under SGSY. It is
definitely possible that members who come together on the basis of affinity
could be having a common activity.
4. Unlike SGSY, the DAY-NRLM has
taken a saturation approach and will ensure all the poor in a village are
covered and a woman from each poor family is motivated to join the SHG.
5. SHG Federations: All SHGs in
a village come together to form a federation at the village level. The
village federation is a very important support structure for the members
and their SHGs. The cluster federation is the next level of federation. A
cluster consists of a group of villages within a block. The exact
configuration will vary from State to State, but typically a cluster
consists of 25 - 40 villages. The Village federations and the Cluster
federations are the two critical support structures for the SHGs and their
members in their long journey out of poverty.
6. DAY-NRLM will provide
continuous hand-holding support to SHGs, and their federations. This was
missing in SGSY. Under DAY-NRLM this support will be provided to a great
extent by capacitating the SHG federations and by building a cadre of
community professionals from among the poor women. The federations and the
community professionals will be imparted the necessary skills by the
7. The objective of DAY-NRLM is
to ensure that SHGs are enabled to access repeat finance from Banks, till
they attain sustainable livelihoods and decent living standards. This was
missing in SGSY, where the emphasis was on one time support.
subvention scheme for Women SHGs
I. Interest subvention scheme on
Credit to Women SHG for all Commercial Banks (only Public Sector Banks,
Private Sector Banks and Regional Rural Banks) and Co-operative banks in
i. All women SHGs will be
eligible for interest subvention on credit upto ? 3 lakhs 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 and
Cooperative Banks will lend to all the women SHGs at the rate of 7% in the
150 districts. Annex IV provides
the names of the 150 districts.
iii. All Commercial Banks
(excluding RRBs) 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.) and 7% subject to the maximum
limit of 5.5%. This subvention will be available to all the Banks on the
condition that they make SHG credit available at 7% p.a. in the 150
iv. RRBs and Cooperative Banks
will be subvented to the extent of difference between the maximum lending
rates (as specified by NABARD) and 7% subject to the maximum limit of 5.5%.
This subvention will be available to all RRBs and Cooperative Banks on the
condition that they make SHG credit available at 7% p.a. in the 150
districts. RRBs and Cooperative Banks will also get concessional refinance
from NABARD. Detailed guidelines for RRBs and Cooperative Banks will be
issued by NABARD.
v. 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.
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 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.
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
vi. The Interest Subvention
scheme shall be implemented for all commercial banks (excluding RRBs)
through a Nodal Bank selected by the Ministry of Rural Development.
vii. For the RRBs and
Cooperative Banks the scheme will be operationalized by NABARD similar to
the short term crop loan scheme.
viii. All Commercial Banks
(including the PSBs, Private Banks and RRBs) 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 commercial banks (excluding RRBs) are required to upload the SHG loan
account information on the Nodal Bank’s portal as per the required
technical specification. Banks must submit the claims for 3% additional
subvention on the same portal.
x. The claims submitted by bank
should be accompanied by a Statutory Auditor’s certificate (in original)
certifying the claims for subvention as true and correct.
xi. In order to avail the
Interest Subvention on credit extended to the SHGs @ 7%, all RRBs and
Cooperative Banks are required to submit their claims to respective NABARD
- Regional Offices on a quarterly basis as at June, September, December and
March. The claims for the last quarter should be accompanied with a
Statutory Auditor’s certificate certifying the claims for the Financial
Year as true and correct. The claims of any Bank for the quarter ending March
will be settled by MoRD only on receipt of the Statutory Audited
certificate for the complete Financial Year by the Bank.
xii. RRBs and Cooperative Banks
may submit their consolidated claims pertaining to the 3% additional
subvention on disbursements made during the entire year to respective
NABARD - Regional Offices latest by June every year, duly audited by
Statutory Auditors certifying the correctness.
xiii. Any remaining claim
pertaining to the disbursements made during the year and not included
during the year, may be consolidated separately and marked as an
'Additional Claim' and submitted to Nodal Bank (for all Commercial banks
except RRBs) and NABARD Regional Offices (for all RRBs and Cooperative
Banks) latest by June every year, duly audited by Statutory Auditors
certifying the correctness.
xiv. Any corrections in claims
by PSBs and Pvt. Sector Banks shall be adjusted from later claims based on
auditor’s certificate. The corrections must be made on the Nodal Bank’s
xv. For process of submission of
claims by RRBs and Cooperative Banks, detailed guidelines will be issued by
II. Interest subvention scheme
for Category II Districts (Other than 150 districts).
For category II districts,
comprising of districts other than the above 150 districts, all women SHGs
under DAY-NRLM will continue to 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). The State-wise distribution of the provision under this budget
head would be determined each year. 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% subjected to a maximum limit of
5.5% 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, are as
(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
i. All women SHGs, comprising of
more than 70% BPL or rural poor members (rural poor as per the
Participatory Identification Process) are regarded as SHGs under DAY-NRLM.
Such SHGs, comprising of rural poor members from the intended DAY-NRLM
target group will be eligible for interest subvention on credit up to ? 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 and Cooperative Banks. The funding for this subvention will
be met out of the Central Allocation: State Contribution in the ratio of
iii. The SHGs will be subvented
with the extent of difference between the lending Rate of the banks and 7%
subjected to a maximum limit of 5.5% 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. 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
v. SRLMs should submit Quarterly
Utilization Certificate indicating subvention amounts transferred to the
Loan accounts of the eligible SHGs
The States with state specific
interest subvention schemes are advised to harmonize their guidelines with
the Central scheme.
Priority Sector Lending –
Restructuring of SGSY as National Rural Livelihoods
Credit Facility under National
Rural Livelihoods Mission(NRLM)- Aajeevika- Reporting to RBI
Restructuring of SGSY as
National Rural Livelihoods Mission (NRLM)-Aajeevika-Interest Subvention
National Rural Livelihoods
Mission(NRLM)- Aajeevika- Interest Subvention Scheme
National Rural Livelihoods
Mission(NRLM)- Aajeevika- Interest Subvention Scheme 2015-16
National Rural Livelihoods
Mission(NRLM)- Aajeevika- Interest Subvention Scheme 2015-16