Banks return Rs 217 crore to SHGs courtesy Harish

During the meeting, he directed officials to ensure that the money that was collected is paid back with interest. 
Finance Minister T Harish Rao. (File photo)
Finance Minister T Harish Rao. (File photo)

HYDERABAD: Over two lakh women’s Self-Help Groups (SHGs) in the State have received Rs 217 crore in their bank accounts on Monday. The banks, which erroneously collected huge interests from 2.03 lakh SHG women returned the money on Monday, due to Finance and Health Minister T Harish Rao.  

Harish Rao, during the 35th review meeting of the State Level Bankers Committee (SLBC) held on December 23, 2022, directed the officials to implement the interest rates for the loans of SHGs based on the guidelines of the Reserve Bank of India (RBI). During the meeting, he directed officials to ensure that the money that was collected is paid back with interest. 

As per RBI guidelines released on July 20, 2022, banks can impose a maximum of 7 per cent interest for loans up to Rs 3 lakh and 10 per cent for loans up to Rs 5 lakh or one year’s Marginal Cost of Funds Based Landing Rate (MCLR), whichever is low, on SHGs.

The minister noted that a few banks and branches of the same banks had not complied with the rule and charged additional interest, resulting in losses to SHGs. During the SLBC meeting held in December, Harish asked banks to review the guidelines again and directed them to refund the money collected in excess of the SHGs. Subsequently, the management of different banks held a meeting and found that they had collected an additional Rs 217.61 crore from 2,23,535 SHGs.

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