What changed
This master circular updates and consolidates all prior circulars on SGSY into a single reference document. It replaces the July 2010 master circular and includes all instructions issued till date. The scheme itself remains unchanged, but banks now have a unified set of guidelines.
What it means for you
Banks must align their rural lending operations with the consolidated SGSY guidelines, covering SHG formation, revolving fund, lending norms, subsidy, and recovery. This ensures consistency in priority sector lending for self-employment in rural areas. Non-compliance could affect priority sector targets and audit outcomes.
What you must do
- Update internal policy manuals to reflect the consolidated SGSY master circular.
- Train branch staff on SGSY norms, especially SHG lending, subsidy lock-in, and security requirements.
- Ensure all SGSY loans are linked to BPL families identified through Gram Sabha-approved census.
- Coordinate with DRDAs and NGOs for SHG formation, training, and monitoring.
- Submit required data and returns as per the circular's format and timelines.
Who it affects
All commercial banks, Regional Rural Banks, Co-operative banks, District Rural Development Agencies (DRDAs), NGOs involved in SHG promotion
What is the funding ratio for SGSY?
The scheme is funded by the Centre and States in a 75:25 ratio. Banks provide credit, while subsidies are available as per guidelines.
How are beneficiaries identified under SGSY?
Beneficiaries are selected from Below Poverty Line (BPL) households identified through a BPL census approved by the Gram Sabha. A three-member team consisting of Block Development Officer (BDO), Banker, and Sarpanch selects eligible Swarozgaris.