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. Ref. No. NB.MCIDj J 36q jWSHGj 2013-14

Circular No: 3 " /MeID ..ll*!2013-14

25 February 2014

The Chairmun!Mar.aglng Director All Scheduled Commercial Banks! Regional Rural Banks

Dear Sir

Women Self Help Group Scheme (WSHG) -reimbursement of 5% service charge payable to NGOs

National Bank for Agriculture and Rural Development

Micro Credit Innovations Department

Head Office: SKC, Sandra (E) Mumbai - 400 051 Tel. : +91-22-26530084 • Fax: +91-22-26528141 E-mail : mcid@nabard.org • Website: www.nabard.org

Please refer to our circular No 33(A)/MCID -01/2012 dated 27 February 2012 outlining the

operational guidelines for implementation ofWSHG Scheme. It was envisaged therein that, banks

may lend to the SHGs at a rate not more than bank's base rate plus 5% p.a. The additional interest

of 5% was intended to be collected as service charge payable by banks to NGOs for meeting their

administrative, transaction and risk costs.

2. Ministry of Rural Development, Government of India has agreed to bear the cost of

service charge of 5% payable to NGOs. The modalities for release of funds to banks are outlined

in MoRD letter D.O No. J-11011/7 /2011.SGSY.1 (FTS 13019/11) dated 09 July 2013 a copy of which

is enclosed for your reference.

3. You are, therefore, requested to immediately stop charging the additional 5% se(vice

charge from the WSHGs in all 150 districts. The 5% service charge payable to anchor NGOs in

these districts for giving hand holding support to WSHGs may be claimed separately from

respective SRLMs

mB'Jur 'l1RCf > > ~ ~~ 31rT Takina Rural India » Forward

... • • •• eco friendlv DaDer

- 2-

4. In case some SHGs have already been charged with additional 5% service charge during

2013-14, these SHGs should be reimbursed at the earliest and the amount is to be claimed from

SRLMs.

Yours faithfully

(~ Chief General Manager Encl: As above

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Micro Credit Innovations Department

Head Office: SKC, Sandra (E) Mumbai - 400 051 Tel. : +91-22-26530084 • Fax : +91-22-26528141 E-mail: mcid@nabard.org • Website: www.nabard.org

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mur 'l1'ffif > > ~ 'W~ 3lrT Taking Rural India » Forward

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Endt.no. NB.MCID/ 'i? 70 /WSHG/ 2013-14 of date

Copy forwarded for information and necessary action to:

L ' The Secretary to the Government of India, Department of Financial Services, Ministry of Finance, Jeevan Deep Building, Parliament Street, New Delhi 110001.

2. The Secretary to the Government of India, Ministry of Rural Development, Krishi Bhavan, New Delhi 110001 with reference to letter No 1-12011/16/2013-RL(c) dated 18.02.2014.

3. The Joint Secretary, RL, Aajeevika, National Rural Livelihood Mission (NRLM), Ministry of Rural Development, Government of India, 6th Floor, Hotel Samrat, Kautilya Marg, Chanakyapuri,New Delhi - 110021

4. The Executive Assistant to Chairman, NABARD Head Office, Mumbai

5. The Executive Assistant to ED(VRR), NABARD Head Office, Mumbai

6. The Chief General Manager/General Manag~r/Offi~er-in-Charge,_ f\!A~ARD, Regional Office with the requ~st to br'ln'gth'e c~ntents of this ci~cular to the notic-e of SLBC in their state.

7. Director, BIRD, Lucknow, Bolpur and Mangalore.

(D K Mishra) Deputy General Manager

JlTI'fiur 11RO » ;w 'fflU :mit Taking Rural India » Forward