GOVERNMENT OF ANDHRA PRADESH

ABSTRACT

Self Help Group Lending by Commercial, Cooperative and Regional Rural Banks – Re-imbursement of Interest over and above 3% - Pavala Vaddi Scheme – Orders-Issued.

*****************************************************************************************************************

PANCHAYAT RAJ & RURAL DEVELOPMETN (RD.III) DEPARTMENT

G.O.Ms. No.152                                                                                                                                                                        Dated: 2.05.2005

Read the Following:-

  1. G.O.Ms.No.271, PR & RD (RD.III) Department dated 17.09.2004

* * *

ORDER:

  1. In the reference read above, Government have allowed payment of incentive to Self Help Groups on the interest charged by banks over and above 3% per annum, subject to the maximum ceiling of 6%, provided that there is 100% repayment of the loan by Self Help Groups.


  2. Government have since reviewed the policy and have decided to absorb the entire interest burden over and above 3% rate without restricting the incentive to a maximum of 6% interest differential .


  3. Further, the revised guidelines for operationalizing the scheme are given below:

    1. The scheme will be applicable to all loans extended to Self Help Groups by banks on or after 01.07.2004.


    2. Interest Incentive in respect of active loans will be released to the groups once in a year based on the performance of the loan account obtaining as on March 31st of the previous financial year. However, in respect of the loan account which is closing during the middle of year, intrest incentive will be released within one month of account closure. The loan accounts that are classified as Non Performing Assets in the books of the bank as at the close of previous financial year are ineligible.


    3. Considering that statutory auditors of bank confirm classification of performing assets by its branches, it has been decided to rely upon certified statement of eligible groups issued by the bank branch .


    4. Accordingly, the DRDAs shall obtain from the bank branches the following lists immediately after close of financial year

      1. List of active loan accounts as at close of financial year for which the claim is being made indicating the actual Interest applied


      2. List of groups that have closed / foreclosed their accounts during the year indicating the actual Interest applied


    5. DRDA shall determine the eligible Interest Incentive and issue proceedings, suo-motu, for release of incentive based on the certified statement of bank branch.This shold be completed by 15th May.


    6. DRDA will release the Interest Incentive directly to the groups by way of cheque and obtain utilisation certificates as per the procedure adopted for revolving fund .


    7. DRDA will put in place appropriate MIS for SHG-Bank Linkage Programme and update the same at quarterly intervals to monitor the repayment performance of the scheme.

  4. The interest incentive scheme shall also be extended to loans provided by banks to Village Organisations, which are federations of Women Self Help Groups.


  5. This order issues with the concurrence of Finance Department vide their U.G.No. 94422-A//110/A2/Expr.PR & RD /2005, Dated 29.04.2005

(BY ORDER AND IN THE NAME OF THE GOVERNMENT OF ANDHRAPRADESH)


K.Raju
PRINCIPAL SECRETARY TO GOVERNMENT(RD)

To

The Chief Executive Officer, Society for Elimination of Rural Poverty, Hyderabad.

The Commissioner, Rural Development, Hyderabad.

All District Collectors in the State

All Project Directors, DRDA in the State

The Principal Secretary to Government, Finance and Planning Department,(EXpr PR & RD) Hyderabad.

Copy to :-

All Special Chief Secretaries / Principal Secretaries / Secretaries

PS to All Ministers

The Principal Secretary to Chief Minister

The Special Secretary to Chief Minister

PS to Chief Secretary to Government

PS to Minister (RD, RWS & EG) / ps to minister (PR)

PS to Principal Secretary, RD, PR & Rd Department

PA to Additional Secretary (RD), PR & RD Department

SF / SC



// FORWARDED :: BY ORDER //

SECTION OFFICER.