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RBI enhanced Collateral Free Loans to SHGs under DAY-NRLM to Rs 20 lakh from Rs 10 Lakh

On August 9, 2021, the collateral free loans to self-help groups (SHGs) provided under Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) have been enhanced to Rs 20 lakh from Rs 10 lakh by Reserve Bank of India (RBI).

  • Under this enhancement, for loans to SHGs up to Rs 10 lakh there will be no collateral and no margin will be charged, also, no lien should be marked against savings bank account of SHGs and no deposits should be insisted upon while sanctioning loans.
  • For loans to SHGs above Rs 10 lakh and up to Rs 20 lakh, no collateral should be charged and no lien should be marked against savings bank account of SHGs.
  • However, the entire loan (irrespective of the loan outstanding, even if it subsequently goes below ₹10 lakh) would be eligible for coverage under Credit Guarantee Fund for Micro Units (CGFMU).


In April 2011, the Ministry of Rural Development (MoRD) launched the National Rural Livelihood Mission (NRLM) by restructuring Swarnajayanti Gram Swarojgar Yojana (SGSY). Later, on March 29, 2015, NRLM was renamed as DAY-NRLM.


To promote poverty reduction through building institutional platforms for the poor, particularly women, and providing them access to a range of financial services and livelihoods.

  • It also enables the states to formulate their own state-specific poverty reduction action plans.


Its agenda is to cover 7 Crore rural poor households, across 600 districts, 6000 blocks, 2.5 lakh Gram Panchayats and 6 lakh villages through SHGs and federated institutions in a period of 8-10 years.

Points to be noted:

i.All women SHGs would be eligible for Interest subvention on credit up to Rs 3 lakh at subvented rate of 7% per annum.

ii.SHGs availing capital subsidy under SGSY (Swarnajayanti Gram Swarojgar Yojana) in their existing credit outstanding are not eligible for benefit under this scheme.

Recent Related News:

On June 2021, under Section 10 (2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), RBI has expanded the scope of the Bharat Bill Payment System (BBPS) by permitting the addition of ‘mobile prepaid recharges’ as an additional biller category in BBPS on a voluntary basis.

About Reserve Bank of India (RBI):

Establishment– 1st April 1935
Headquarters– Mumbai, Maharashtra
Governor– Shaktikanta Das
Deputy Governors– Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar

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