The Ministry of Rural Development, Government of India is operating a scheme namely ‘Interest Subvention Scheme under Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM)’. The funding for the scheme will be met out of Central Allocation under DAY- NRLM. This scheme is limited to Women Self Help Groups in rural areas only and 21 Public Sector Banks and 19 Private Sector Banks are implementing the scheme. For the year 2017-18, Canara bank has been nominated as the Nodal bank by MoRD which will operationalize the scheme through a web based platform, as advised by MoRD. Besides commercial banks RRBs and Co-operative banks have been implementing the scheme regulated by NABARD.
All women SHGs in rural areas will be eligible for interest subvention on credit upto ₹ 3 lakhs at 7% per annum. The women SHGs already availed capital subsidy under SGSY in their existing credit outstanding will not be eligible for benefit under this scheme.
The banks who lend to women SHGs in rural area at the rate of 7% 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 for the year 2017-18 – Annexure II) and 7% subject to the maximum limit of 5.5% for the year 2017-18. The CBS enabled banks can only participate in the scheme.
Additional interest subvention of 3%for prompt payment:
The SHGs are provided with an additional 3% subvention on the prompt repayment of loans/cash credit accounts. The account is considered as an account as an account having prompt payment if they satisfy following repayment criterion specified by RBI.
In case of Cash Credit Limit, the outstanding balance shall not have remained in excess of the limit/drawing power continuously for more than 30 days and there shall be regular credit and debits in the accounts. In any case there shall be at least one customer induced credit during a month and such customer induced credit must be sufficient to cover the interest debited during the month. A term loan account where all of the interest payments and/or installments 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.