What changed
The master circular was updated to incorporate all DAY-NRLM scheme modifications issued up to April 1, 2021. Key changes include the discontinuation of capital subsidy for SHGs and revised revolving fund limits (minimum ₹10,000, maximum ₹15,000 per SHG). The circular also reaffirms interest subvention provisions and CIF routing through federations.
What it means for you
Banks must align SHG lending with the updated scheme, ensuring no capital subsidy is sanctioned. Revolving fund disbursement must adhere to the new limits and eligibility criteria (SHGs existing 3-6 months following Panchasutra). Interest subvention claims require proper documentation and coordination with SRLMs. Federations remain key for CIF management.
What you must do
- Update internal policies to reflect discontinuation of capital subsidy under DAY-NRLM.
- Ensure revolving fund disbursement complies with ₹10,000-₹15,000 limits and eligibility norms.
- Coordinate with SRLMs for interest subvention claims and CIF routing through federations.
- Train branch staff on updated SHG lending guidelines and documentation requirements.
Who it affects
Public Sector Banks, Private Sector Banks (including Small Finance Banks), Rural lending branches, SHG loan processing teams
What is the new revolving fund limit for SHGs under DAY-NRLM?
The revolving fund support is now a minimum of ₹10,000 and up to a maximum of ₹15,000 per SHG, provided the SHG has existed for at least 3-6 months and follows Panchasutra norms.
Is capital subsidy still available for SHGs?
No, capital subsidy has been discontinued under DAY-NRLM. No such subsidy should be sanctioned to any SHG from the date of implementation of the scheme.
How should banks handle interest subvention under DAY-NRLM?
Banks must account for interest subvention as per scheme provisions, covering the difference between the lending rate and the subvented rate. Proper documentation and coordination with SRLMs are essential for claims.