RBI/2025-26/02
FIDD.GSSD.CO.BC.No.01/09.01.003/2025-26
April 1, 2025
The Chairman/Managing Director & CEO
Public Sector Banks,
Private Sector Banks (including Small Finance Banks)
Madam/Dear Sir,
Master Circular – Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM)
Please refer to the Master Circular FIDD.GSSD.CO.BC.No.03/09.01.003/2024-25 dated April 16, 2024 on Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM).
- The enclosed Master Circular consolidates and updates all the instructions/guidelines on the subject issued till date and replaces the earlier Master Circular issued on the subject.
Yours faithfully,
(R Giridharan)
Chief General Manager
Master Circular
Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM)
1. Background
The Ministry of Rural Development (MoRD), Government of India launched the National Rural Livelihood Mission (NRLM) by restructuring Swarnajayanti Gram Swarojgar Yojana (SGSY) with effect from 01st April 2013 (RBI Circular No. RBI/2012-13/559 dated 27 June 2013). NRLM was renamed as DAY-NRLM (Deendayal Antyodaya Yojana - National Rural Livelihoods Mission) w.e.f. March 29, 2016. The DAY-NRLM is the flagship program of Government of India for promoting poverty reduction through building strong institutions of the poor, particularly women, and enabling these institutions to access a range of financial services and livelihoods. DAY-NRLM adopts a demand driven approach, enabling the States to formulate their own State specific poverty reduction action plans. The key features of DAY-NRLM have been furnished in Annex I.
2. Women SHGs and their Federations
2.1 DAY-NRLM promotes affinity-based women Self Help Groups (SHGs). However, only in case of groups to be formed with persons with disabilities and other special categories like elders and transgenders, DAY-NRLM may have both men and women in the Self-Help Groups.
2.2 Women SHGs under DAY-NRLM consist of 10-20 members. In case of special SHGs i.e., groups in the difficult areas, groups with disabled persons, and groups formed in remote tribal areas, this number may be a minimum of 5 members.
2.3 Federations of Self Help Groups formed at village, gram panchayat, cluster or higher level may be registered under appropriate Acts prevailing in their respective states.
Financial Assistance to the SHGs
3. Revolving Fund
DAY-NRLM, MoRD, will provide Revolving Fund (RF) support as corpus ranging between ₹20,000 - ₹30,000 per SHG to strengthen their institutional and financial management capacity and build a good credit history within the group. SHGs in existence for a minimum period of 3/6 months and follow the norms of good SHGs known as ‘Panchasutras’, viz., regular meetings, regular savings, regular internal lending, regular recoveries and maintenance of proper books of accounts, and which have not received any RF earlier will be eligible for such support.
4. Capital Subsidy
No capital subsidy would be sanctioned to any SHG under DAY-NRLM.
5. Community Investment Support Fund (CIF)
CIF will be provided by MoRD to the SHGs promoted under DAY-NRLM in all blocks and will be routed through the village level/cluster level federations, to be maintained in perpetuity by the federations. The CIF may be used by the federations to advance loans to the SHGs and/or to undertake common/collective socio-economic activities.
6. Interest Subvention
DAY-NRLM has a provision for interest subvention for women SHGs. Salient features of the Scheme are enclosed in Annex II.
7. Role of banks:
7.1 Opening of Savings/Current Accounts:
The role of banks would commence with opening of accounts for all the SHGs including those having members with disability and for the federations of SHGs.
- (i) The SHGs engaged in promoting of savings habits among their members would be eligible to open savings bank accounts.
- (ii) For KYC verification pertaining to SHG members, instructions in the Master Direction on KYC (dated February 25, 2016, as updated from time to time) shall be adhered to. As regards submission of PAN/Form 60 by SHGs, banks shall be guided by Section 33A(b) of the Master Direction on KYC.
- (iii) Business Correspondents deployed by banks may also be authorized to open saving bank accounts of the SHGs, subject to adherence to extant BC guidelines and in accordance with the bank’s Board approved policy on Business Correspondents.
- (iv) Opening of savings account of all members with the bank shall not be made a prerequisite for credit linkage of SHGs. Banks are advised to maintain separate savings and loan accounts for SHGs.
- (v) Banks are advised to open savings accounts of federations of SHGs at village, gram panchayat, cluster or higher level. These accounts may be categorized as savings account for ‘Association of persons’. The ‘Know Your Customer’ (KYC) norms for the signatories of such accounts as specified from time to time by Reserve Bank of India would be applicable.
- (vi) Banks are advised to open current accounts for Producer Groups promoted under DAY-NRLM at village, gram panchayat, cluster or higher level. The ‘Know Your Customer’ (KYC) norms for the signatories of such accounts as specified from time to time by Reserve Bank of India would be applicable.
7.2 Transaction in Savings/Cash Credit account of SHGs and Federation of SHGs
- (i) SHGs and their federations may be encouraged to transact through their respective savings/cash credit accounts.
- (ii) Banks are advised to put in place dual-authentication facility in both ON-US and OFF-US[^1] environment to enable SHGs to perform transactions in jointly operated savings/cash credit accounts at retail outlets managed by Business Correspondents. Banks are also advised to extend all such services to SHGs and their federations through Business Correspondents as per their board approved policies.
7.3 Lending to SHGs and their individual members
7.3.1 Eligibility Criteria for SHGs to avail loans:
- (i) SHGs should be in active existence for at least 6 months as per their books of accounts (and not from the date of opening of S/B account).
- (ii) SHGs should be practicing ‘Panchasutras’ i.e., regular meetings, regular savings, regular inter-loaning, timely repayment and up-to-date books of accounts.
- (iii) SHGs should qualify as per grading norms fixed by NABARD. As and when the federations of the SHGs come into existence, the grading exercise may be done by the federations to support the banks.
- (iv) The existing defunct SHGs are also eligible for credit if these are revived and continue to be active for a minimum period of three months.
7.3.2 Loan Application:
- (i) All banks may use the Common Loan Application Forms devised by Indian Bank’s Association (IBA) for extending credit facility to SHGs.
- (ii) Banks may encourage SHGs to submit loan applications online through the system developed by DAY-NRLM and the National Portal for Credit Linked Schemes.
7.3.3 Loan amount
- (i) Emphasis is laid on the multiple doses of assistance under DAY-NRLM. This would mean assisting an SHG over a period of time, through repeat doses of credit, to enable the group to access higher amounts of credit for taking up sustainable livelihoods and improving the quality of life.
- (ii) SHGs may avail either Term Loan (TL) or a Cash Credit Limit (CCL) or both based on their requirement. In case of need, additional loan may be sanctioned even though the previous loan is outstanding, based on the repayment behavior and performance of the SHG.
- (iii) In case of CCL, banks are advised to sanction a minimum loan of ₹6 lakh to each eligible SHG for a period of 3 years with a yearly drawing power (DP). The drawing power may be enhanced annually based on the repayment performance of the SHG. The drawing power may be calculated as follows:
- DP for the first year: 6 times of the existing corpus or minimum of ₹1.5 lakh, whichever is higher.
- DP for the second year: 8 times of the corpus at the time of review/enhancement or minimum of ₹3 lakh, whichever is higher.
- DP for the third year: Minimum of ₹6 lakh based on the Micro Credit Plan (MCP) prepared by SHG and appraised by the federations/support agency and the previous credit history.
- DP for the fourth year onwards: Above ₹6 lakh, based on the MCP prepared by SHG and appraised by the federations/support agency and the previous credit history.
- (iv) In case of Term Loan, banks are advised to sanction loans in doses as mentioned below:
- First dose: 6 times of the existing corpus or minimum of ₹1.5 lakh, whichever is higher.
- Second dose: 8 times of the existing corpus or minimum of ₹3 lakh, whichever is higher.
- Third dose: Minimum of ₹6 lakh, based on the MCP prepared by the SHGs and appraised by the federations/support agency and the previous credit history.
- Fourth dose onwards: Above ₹6 lakh, based on the MCP prepared by the SHGs and appraised by the federations/support agency and the previous credit history.
(Corpus is inclusive of revolving funds, if any, received by the SHG, its own savings, interest earned by the SHG from on-lending to its members, income from other sources, and funds from other sources in case of promotion by other institutes/NGOs.)
- (v) Banks are advised take necessary measures to ensure that eligible SHGs are provided with repeat loans.
