New Delhi, Nov 20 (KNN)  The Reserve Bank of India (RBI) has directed public sector banks (PSBs) to provide loans to women self-help groups (SHGs) at 7 per cent per annum to avail the benefit of interest rate subvention under the Swarnajayanti Gram Swarozgar Yojana-Aajeevika (SGSY) scheme.
 
“All women SHGs will be eligible for interest subvention to avail the credit upto Rs 3 lakh at 7 per cent per annum,” the RBI said in a notification.
 
PSBs will be subvented to the extent of difference between the Weighted Average Interest charged and 7 per cent subject to the maximum limit of 5.5 per cent, for the FY-2014. This subvention will be available to all the PSBs on the condition that they make SHG credit available at 7 per cent in the 150 districts, it said.
 
The regional rural banks (RRBs) will be subvented to the extent of difference between the lending rates and 7 per cent for the FY-2014 on the condition they make SHG credit available at 7 per cent, it added.
 
The RBI further said that SHGs will be given an additional 3 per cent subvention on prompt repayment of loan.
 
SGSY is an initiative by the government to provide sustainable income to poor people living in rural areas of the country. (KNN/ST)