The Finance Minister T. Harish Rao has taken an initiative to provide relief to over two lakh women’s Self-Help Groups (SHGs) in the State of Telangana. The minister noticed that some banks were collecting additional interest rates against the guidelines set by the Reserve Bank of India (RBI). He directed officials to ensure that loans for SHGs are based on RBI guidelines and that any money collected against the rules should be paid back with interest.
The RBI had issued clear guidelines to bankers on July 20, 2022, regarding interest rates for loans to women’s SHGs. The maximum interest rate for loans up to Rs 3 lakh was set at seven per cent, and for loans up to Rs 5 lakh or one year’s MCLR, whichever is lower, it was set at 10 per cent.
The Finance Minister discovered that some banks were not following these guidelines and were charging higher interest rates. He found that women in SHGs were losing money due to these excessive charges. The matter was discussed in the 35th review meeting of the State-level Bankers Committee (SLBC) on December 23, 2022. The minister directed bankers to review their practices and ensure that they were following RBI guidelines. If they had charged excess interest, they were instructed to deposit the same in the bank accounts of SHG women.
Following this directive, bankers had a review meeting and found that Rs 217.61 crore was collected additionally from 203,535 SHGs. As a result, the additional money collected by the bankers was deposited into the bank accounts of SHG women on Monday. About two lakh SHGs benefited from the Finance Minister’s initiative.