SHG Policy | TSCAB
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Loans, Savings

SHG Policy

Preamble

The Bank proposes to increase the volume of business by diversifying the loaning portfolio through the branches. In this connection, introduction of schematic loaning program under Urban SHG is proposed for implementation.

 
Self Help Group

Self Help Groups shall be confined to a specific locality with homogenous income generating activities. In each group, members will be women only and total number of members shall be between 10-20 only.

While identifying the group for Bank Linkage with the Bank, the following aspects shall be taken into consideration:

  1. One woman shall be member in one group only. Membership in more than one group is not permitted.

  2. Women members shall be residents of same locality and their income level shall also be at similar levels only.

  3. Women members shall be those who are falling under BPL (Below Poverty Level) category.

  4. It shall be ensured that the age group of the members shall be between 18 to 60 years.

 
Mode of Financing

“A” grade groups shall only be considered for providing financial assistance. “A” grade group means

  1. Members should elect one President & one Secretary and who would act as Group leaders.

  2. The group shall have regular monthly meetings, duly recording the meeting proceedings in the minutes book.

  3. The group shall have bank account and all transactions shall be made through the account only.

  4. The group shall have regular monthly savings.

  5. The group shall maintain books of accounts on regular basis.

  6. The group shall have internal lending prior to sanction of loan. The group shall have internal lending atleast for a period not less than 6 months.

  7. The group should atleast get minimum marks as per CRI (Critical Rating Index) is eligible for linkage.

  8. Seniority of the groups can be protected in case of groups migrated from one bank to another.

  9. The group shall maintain Income & Expenditure statement every month.

 
Volume of Loan

The following dosage of credit is suggested for each group:

 

DOSE

Amount in Rs.

I

50,000/-

II

1,00,000/-

III

2,00,000/-

IV

3,00,000/-

V

Upto a maximum of 5,00,000/-

 

Note: Branch shall insist for Micro Credit Plan(MCP) from 3rd Dose onwards.

 
Rate of Interest

Rate of Interest shall be 13% per annum. The branch shall insist for payment of interest as per the agreement rate and the interest subsidy/ subvention if any shall be credited to the respective account only after receipt of the amount from the State Govt.

 
Repayment Period

The branch shall recover the amount in equated monthly installments. Entire amount shall be recovered in 24 to 60 monthly installments as agreed to by the group, at the time of entering into an agreement.

SMS alerts shall be made for all the transactions made by the account holders.

 
Documentation

The branch shall use separate format of loan application, designed and supplied for the purpose.

Along with the application form, the branch shall seek

  1. Inter se agreement

  2. Article of agreement

  3. Residential proof / Address proof of all members.

  4. Copy of Aadhar card

  5. Individual photos of all the members and group photo of the SHG.

  6. Xerox copy of minutes for the meetings held during the last 6 months.

In case the groups migrate from other banks, the Branch Manager shall send a letter to the branch (from where the groups are willing to migrate) to close their account and transfer the balance lying in the account. The groups which have applied for the loan need not be insisted to approach the earlier Bank’s branch for cancellation of their account. Similarly, No Dues Certificate from the earlier Bank’s branch also can be obtained by the Branch Manager by writing a letter separately.

The AGM/ BM is empowered to sanction loans under SHG scheme upto Rs.5.00 lakhs.

The SHG and its members are jointly & severally responsible for repayment of the loan and also undertake to make the members repay their individual share/quantum of loan.