opening of Savings account is not covered under the grant assistance

lqo
<rSqpft3i<Trftqftdris*at
gmaurared<fumr
cqc qrmt Rr, errc i.24, * ariio,
qffics, di'dr(Td), gcdtftr: +91 22-26530084
dicrqlcf
+-dir: +91 22-26528141
{*cr : [email protected]
www.nabard.org
National Bank for Agriculture and Rural Development
micro Credit Innovations Department
Head Office: Plot No.24, 'G'Block,
Bandra Kurla Complex, Bandra (E), Mumbai4oo 051
400 051
ffic
Teli+g1 22 26530084 . Fax: +9'l 22 2652 8141
E-mail: [email protected] . Website: www.nabard.org
:
tlrf / Promotional
Ref.No. NB. MCID /
Circular wo.2l"V mClD-
Grant Dormant SHG(Policv)
2s/ 20L4
/2OI4-t5
04 December 2OI4
The Chairmanf Managing Director/
Chief Executive Officer
All Scheduled Commercial Banks / Regional Rural Banks
/ State Cooperative
Banks
Dear Sir
Incentive Scheme for Tracking and Revival of Dormant SHGs
Please refer to our circular Ref. No. NB. MCID / H-1005/ Promotional Grant
Dormant SHG(Policy) / 2Ot3-14 dated 29 November 20L3 (Circular no. 251IMCIDL6/20t3) detailing the scheme of providing grant assistance to banks which take up
the work of tracking and revival of dormant SHGs, which is operative upto 31 March
20t4.
2.
On a review of the scheme, it has been decided to extend the operative"^
period of the scheme up to 31 March 20t6 subject to following revisions.
Revival of dormant SHGs which are having outstanding loan account with the
banks which is NPA for 6 months or more only is covered under the grant
assistance scheme.
ii.
to be credit linked but becoming dormant before /after
opening of Savings account is not covered under the grant assistance
SHGs which are yet
scheme.
iii.
Similarly, SHGs which are unable to avail repeat/renewal of loan, due to the
reasons of dormancy, after clearing the outstanding bank loans is also not
covered under the scheme.
iv.
The revised scheme of grant assistance would help the banks in reducing
NPAs in SHG loan portfolio.
v.
Revival of dormancy in an SHG [of the type (i) detailed above] for which SHPI
grant assistance has been availed by the bank previously, would be
ilSqqra>> ud srclstdl
Taking Rural India >> Fonrard
considered subject to a lapse of minimum period of 03 years from the
closure of the SHPI project. Needless to add, that SHPI project should have
been implemented satisfactorily. Similar condition is applicable in case of
receipt of SHPI grant assistance from any other agency also. Banks seeking
grant assistance for revival of dormant SHGs have to submit declaration
regarding receipt of SHPI grant assistance from NABARD/any other agency
for the SHGs proposed to be revived, date of closure of SHPI project and
other relevant details.
3.
There is no other change in the terms and conditions bf the scheme
contained
in Circular No.25VmClD dated 29 November
4.
as
2013.
The details of the revised incentive scheme along with application forms
(annexure I to lV) enclosed.
Please acknowledge receipt of this circular.
Yours faithfully
Chief General Manager
Encl : As above.
gr$qqr<a>>qd qprsfldl
Taking Rural India >> Fonrard
Annexure
I
Incentive Scheme for tracking and revival of dormant SHGs
L
Why the scheme
The phenomenal growth of SHG - Bank Linkage Programme (SHG-BLP) has
brought with it issues like inactive groups and dormancy in SHG functioning. Most
of the SHG formation activities have been supported under specific project with
defined project periods. Lack of support by promoting agencies / individuals after
the project period has often led to dormancy and inactirieness in these SHGs
supported. While, there are no explicit data to indicate how many SHGs are
dormant, sample studies have mapped the extent of dormancy in certain cases.
Further, various stakeholders have also voiced the need to chalk out a suitable
approach to address the issue of revival of these dormant SHGs.
2
Indicators of SHG
leveldormancy
The factors suggestive of inactiveness are; irregular conduct of SHG level
meetings, low attendance in meetings, irregular savings by members, nonoperation of savings account with the bank, arrears in writing of the books of
accounts, client drop outs, defaults by members in repayment of loans availed
from groups' corpus/bank loans availed through the group etc.
3
Reasons for SHG
Dormancy in SHG could be due to lack of affinity/homogeneity of members
forming the SHG, domination of the group by a few members leading to other
members becoming inactive or disinclined, non-rotation of leadership, conflict
among members, lack of managerial capacity of members, non-receipt of loan
requested by members, non-availability of bank linkages and consequent lack of
motivation to continue.
leveldormancy
The real reason for these could be due to inadequate nurturing, hand holding by
the SHG promoting institution (SHPI), SHPI withdrawing from the area without
alternate arrangement, closure of SHPI project before groups' sustainability,
memberS dropping out of the group due to migration, marriage, ill health, death
etc.
4
Approach
Approach to revival of dormant SHGs would be a bank-led initiative so as to
ensure continuance of banking support to dormant SHGs, after the revival.
For the purpose of coverage under the incentive scheme, revival of groups
which are dormant with outstanding NPA loan of 06 months or more with the
banks only are considered.
r$qqna>>qd qtusrt
Taking Rural lndia >> Forward
Dormancy could be due to SHGs not following the "Panchasutras" with lrregular
meetings or no meetings, low attendance in the meetings, no regular savings by
the members, dormancy in bank operations, arrears in writing of the books of
accounts, significant defaults by members in repayment of, loans availed from
groups' corpus/bank loans availed through the group, or even embezzlement of
loans by group members/ leaders etc. For the purposes of quantification of the
foregoing parameters of dormancy, the following is suggested:
(a)
-
lrregular meetings
not even once in every month for the last 6 months, (b)
No meetings in the last 6 months or more (c) low attendance in the meetings
average attendance of members in group meetings less-than 25%, (d) no regular
savings less than 25% of members saving regularly, (e) dormancy in savings
bank operations - no operation ( credit or debit other than crediting of periodic
-
-
interest or debiting of service charges) in S/B account of SHG in the last 6 months
- more than 6 months.
(f) arrears in writing of the books of accounts
5
/
Some essentials
steps in the
Bank branches need to first track dormant SHGs in its books (savings
credit linked) and their area of operation.
revival plan of
Bank branches need to identify branch wise village-wise number of
dormant SHGs ( indicating the key reason for dormancy)
/
dormant SHGs
Banks may identify the dormant SHGs in its books and engage the
services of either the SHPI which has promoted the SHGs, or other quality
NGOs that could serve as a Business facilitator, leaders of wellfunctioning SHGs or its own BC with adequate knowledge of the subject
for revival of the dormant SHGs.
Besides revival of dormant SHGs in its own books, banks can also plan
for revival of dormant SHGs in books of other banks. In which case,
bank would facilitate repayment of outstanding NPA loan account, by
the group with the earlier bank, revive the group, sanction and disburse
fresh loan from the bank itself.
6
Revival Plan (list
of activities to be
done by
banklBclBFl
NGO engaged by
the Bank)
The revival plan should interolio include among other things following activity.
i.
ii.
identifying the key factors for dormancy,
capacity building, convincing and hand holding
inactive / dormant groups.
of
SHG members of
iii.
Depending on the reasons for dormancy, it should facilitate overcome
the key constraints which interalia could include, tracking the SHG/ its
members, conflict resolution, capacity building through
counselling/training, facilitating group dynamics, ensuring bank linkage
operations, restoration/renewal of credit facilities after revival.
iv.
regularising the loan account on clearance of NPA and renewal of credit
facilities etc.
v.
Handholding the SHG and ensure
minimum period
that it follows "Punchsutras" for a
release of new loan by the
of one year after
bank/release of lst instalment of incentive.
Only few essentials requirements of the revival plan are illustrated above and this
is not a standardised format for revival.
n'r$qqna>>qd st?Tsri
Taking Rural India >> Forurard
7
The following types of SHGs which slipped into dormancy owing to not following
the basic tenets of SHGs or in geographies where specialised programmes are on-
Exclusions
(lneligible)
8
9
going aiming at universal coverage of SHGs, or SHG formation on a saturation
mode may be excluded viz;
a) SHG formed without ensuring affinity amongst its members / SHG
formed with members not from the same neighbourhood
b) Revival of SHGs where more than 50 % of its members are not keen or
have joined other SHGs or dropped out
c) Revival of SHGs in 150 WSHG districts and blocks where NRLM roll out is
complete.
dl Districts where other agencies have taken up revival of dormant SHGs.
institutions for
seeking the
incentive.
RRBs, and DCCBs (PACs) would be eligible for NABARD's grant
incentive
for revival of dormant groups. Commercial banks may
assistance /
submit proposals to NABARD Regional Office through their controlling offices.
RRBs and DCCBs (including PACs) may zubmit proposals to NABARD Regional
Office through their Head Office.
NABARD
NABARD would provide grant assistance for revival and credit linkage of dormant
incentive Grant
Assistance for
SHGs at
revival.
However, the bank should not have received grant assistance from NABARD or
any other agency for promotion of SHGs identified as dormant & considered for
revival under the project in the last 3 years. The period of 3 years would be
reckoned from the date of closure of the previous project. The bank has to
submit a declaration in this regard.
Commercial banks,
Eligible
the rate of Rs.3,000/= per SHG revived.
Grant assistance would be released on completion of benchmark activity based
on the recommendations of Project lmplementation & Monitoring Committee
(PIMC) [specially constituted
for the
purpose consisting
of
the
DDM/Representative of Regional office of NABARD, Bank branch representative
and LDM wherever neededl. The release pattern for the incentive will be in 2
instalmerits as specified in the annexure ll. Application format and claim forms
are specified in Annexure lll and lV.
NABARD would support training interventions and incentivisation of the agency
/
BC/BF/ individual as envisaged under the scheme. NABARD would make
payment of incentives to the bank as a back-ended incentive. The banks may
utilise the incentive available from NABARD for payment to the agency /
individual contracted for the task.
10
Operational
period
of
the
Sanctions/approvals for the proposals received upto 3L March 2015 will be
considered on a selective basis.
scheme
nr$vr qKfi
>>
qei mel sri
Taking Rural India >> Fonvard
Annexure ll
Grant assistance for revival of SHGs which are dormant with outstanding NPA loan account of 5
months or more with the bank
Instalment
Amount of grant
Bench mark activity to be completed
No
assistance
- Closure of existing NPA loan account by the group on full
repayment
months.
& continue to
be active for a minimum period of
1500=00
3
- Sanction and disbursement of new loan by the bank to the group
(on disbursement of CC loan / term loan) on removing the
dormancy. Minimum loan amount of Rs.50000/- per SHG
2
- One year after release of 1st instalment of grant support.
- towards Handholding support, provided the loan account is regular
and SHG following'Panchasutras'.
nr*qrn*<>>trd strrsri
Taking Rural India >> Fonvard
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y€ilq arrafilq, errc d. 24,
dirregraf
dRtov,
National Bank for Agriculture and Rural Development
micro Credit Innovations Department
S ddr,
Head Office: Plot No.24,'G' Block,
Bandra Kurla Complex, Bandra (E), Mumbai.4oo 051
siar (Td), gq€ - 400 051
tftr: +91 22-26530084
qrds: +91 22-26528141
{*cr : [email protected]
www.nabard.org
,dqet
Teli+g1 22 26530084 . Fax: +91 22 2652 8141
E-mail: [email protected] . Website: www.nabard.org
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NB.MCID/ /
Promotional Grant Dormant SHG (Policyl
/ IOI
-LS of date
Copy together with enclosures forwarded for information and necessary action to:
7.
The Secretary to the Government of lndia, Ministry of Finance, Department of Financial Services,
Banking Division, Jeevan Deep Building, Parliament Street, New Delhi 110 001.
2.
The Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs,
Jeevan Deep Building, Parliament Street, New Delhi 110 001.
3.
The Secretary to the Government of India, Ministry of Rural Development, Krishi Bhavan, New
Delhi 110 001.
4'
The Director, National Rural Livelihood Mission (NRLM), Ministry
5.
The Secretary to the Government of lndia, Ministry of Agriculture, Krishi Bhavan, Dr. Rajendra
Prasad Road, New Delhi 110 001.
6.
The Chief General Manager, R.P.C.D, RBl, Central Office, 1-0th Floor, Central Building, p.B No.
10014, Mumbai - 400 001.
7.
The Chairman, tndian Banks Association, Stadium House,6th Floor, Block 3, Veer Nariman Road,
Mumbai - 400 020.
8.
The Chief General Manager/General Manager/Officer-in-Charge, NABARD, Regional Office/Sub
of Rural Development,
Government of India, 6th Floor, Hotel Samrat Kautilya Marg, Chanakyapuri, New Delhi- LLOO2L
Office.
9.
The chief General Manager, NABARD, All Ho Departments, Mumbai.
10. The Principal, College of Agricultural Banking, pune.
11. The Director, Bankers' Institute of Rural Development (society), Lucknow.
12. The olc, Bankers' Institute of Rural Deveropment, Mangalore/Bolpur.
13. The EA to Chairman, NABARD, HO, Mumbai
14. The EAs to DMDs, NABARD, HO, Mumbai.
f+
==)
(K Roy)
Asst. General Manager