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Corporate Laws Central Ministry of Finance Foreign Exchange Management Act, 1999

Enhancement of collateral free loans to Self Help Groups (SHGs) under DAY-NRLM from 10 Lakh to 20 Lakh

09-Aug-2021 | RBI/2021-2022/83 FIDD.GSSD.CO.BC.No.09/09.01.003/2021-22

RBI has modified the paragraph 7.4 of RBI Master Circular FIDD.GSSD.CO.BC.No.04/09.01.01/2021-22 (on DAY-NRLM) dated April 01, 2021 as under-

For loans to SHGs up to Rs.10.00 lakh-
No collateral and margin will be charged.
No lien should be marked against savings bank account of SHGs and
No deposits should be insisted upon while sanctioning loans.

For loans to SHGs above Rs 10 lakh and up to Rs 20 lakh-
No collateral should be charged and
No lien should be marked against savings bank account of SHGs.
However, the entire loan (irrespective of the loan outstanding, even if it subsequently goes below Rs.10 lakh) would be eligible for coverage under Credit Guarantee Fund for Micro Units (CGFMU).

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