Finance Minister T Harish Rao has asked bankers to return any excess interest collected from Self Help Groups (SHGs) beyond the RBI regulations within a month, along with any interest accrued on the excess interest. He also warned them against collecting levy charges from SHGs in violation of RBI regulations.
Harish asked banks to collect interest from SHGs in accordance with RBI norms, i.e., 7% for loans under Rs 3 lakh and 10% for loans between Rs 3 lakh and Rs 5 lakh, at the State Level Bankers Council (SLBC) meeting held at the MCR HRD Institute here on Friday.
According to the Minister, certain banks were not implementing the revised interest rates, resulting in an unnecessary loss for both SHGs and the State government. Within a month, he wanted the excess interest collected from the SHGs returned to their accounts. Harish pointed out that the SHGs were repaying their loans on time.
While officials from the Society for the Elimination of Rural Poverty (SERP) were handling services such as mobilization, documentation, monitoring, and recovery, among others, he faulted banks for charging SHGs Rs 500-5,000 for these services under various guises. He requested that the bankers submit a detailed report to the state government on this subject.
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He stated that the Medak DCCB had signed an agreement to share 5% of the interest with village organizers, as well as Mandal Samakhya and Zilla Samakhya, who were in charge of mobilization and other services. He suggested that other banks offer a similar service.
Furthermore, Harish requested that banks provide more loans to agriculture and allied sectors, as well as education and home loans, in order to support oil palm cultivation in the state.
He furthermore wanted them to provide loans to Micro, Small, and Medium Enterprises (MSMEs) and sanction bridge loans, assuring the State government’s support in this regard.
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