What changed
Government of India revised para 4.36 of SGSY guidelines, increasing the Group Life Insurance payout from LIC to ₹6,000 for natural death and ₹12,000 for accidental death. The earlier Master Circular instructions stand amended accordingly.
What it means for you
Banks must ensure that for SGSY-linked group life insurance, the higher benefit amounts are applied to all eligible claims. This increases the financial protection for self-help group members and their nominees. Lenders need to update internal processes and communicate the revised sums to branches.
What you must do
- Issue instructions to all controlling offices and branches about the revised SGSY Group Life Insurance payouts.
- Update internal circulars and training materials to reflect the new benefit amounts of ₹6,000 (natural death) and ₹12,000 (accidental death).
- Ensure that claims processing for SGSY members aligns with the revised LIC payout structure.
- Acknowledge receipt of this RBI circular to the issuing office.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Branches handling SGSY accounts, LIC and its nodal offices, SGSY self-help group members and nominees
What are the new insurance payouts under SGSY Group Life Insurance?
For natural death, LIC pays ₹6,000 to the nominee; for accidental death, the payout is ₹12,000.
Does this circular apply to Regional Rural Banks?
No, the circular is addressed to all Scheduled Commercial Banks excluding RRBs.
When did these revised payouts take effect?
The circular was issued on December 15, 2010, and the revised guidelines were effective from that date.