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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Master Circular on SHG-Bank Linkage Programme

01-Apr-2025 | RBI/2025-26/01 FIDD.CO.FID.BC.No.4/12.01.033/2025-26

RBI has issued a Master Circular on SHG-Bank Linkage Programme, effective from 1st April 2025.

Key Highlights -
1. The provisions of the Master Circular are applicable to Schedule Commercial Banks.
2. Self Help Groups (SHGs), registered or unregistered which are engaged in promoting savings habit amongst their members are eligible to open savings banks accounts with banks.
3. Banks have the discretion to decide on the interest rate applicable to loans given to SHGs / member beneficiaries subject to adherence to the guidelines contained in RBI Master Directions on Interest Rates on Advances, 2016.
4. Loans to SHGs are eligible for categorization under Priority Sector Lending (PSL) subject to adherence to the provisions of RBI Master Directions on Priority Sector Lending - Targets and Classification, 2025.
5. Service charge applicable on priority sector loans to SHGs shall be as prescribed in RBI Master Directions on Priority Sector Lending - Targets and Classification, 2025.
6. Banks are advised to adhere to the RBI Master Directions on Credit Information Reporting, 2025 regarding the reporting to Credit Information Companies (CICs).
7. SHG Bank Linkage Programme shall be reviewed on a quarterly basis.

Kindly refer to the attached document for more information.

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