RPCD. SP. BC. 19 /09.01.01/2001-2002

The Chairman /Managing Director
All Indian Scheduled Commercial Banks

Dear Sir,

Swarnjayanti Gram Swarozgar Yojana (SGSY)- Implementation -CLCC discussions

Please refer to our circulars RPCD.NO.SP.BC.23/09.01.01/99-2000 dated 1 September 1999, SP.BC.58/09.01.01/99-2000 dated 2 February 2000 and SP.BC. 1/ 09.01.01 /2000-01 dated 3 July 2000 on the above subject.

2. The Central Level Coordination Committee (CLCC) meeting on SGSY held on 15 May 2001 noted that the performance under SGSY was not encouraging .The credit mobilisation was only 29% of the target and applications were pending for disbursement with banks. You are therefore requested to ensure that applications are disposed off within the prescribed time limit and gap between sanction and disbursement is reduced.

3. Underfinancing

Instances of underfinancing under the SGSY scheme have been noticed. In this connection, we invite your attention to Para VI of our circular dated 1 September 1999 and reiterate that while financing activities selected under SGSY, the banks may ensure adequacy of finance so as to enable the activity to generate sufficient income for the swarozgari to cross the poverty line. The scheme has envisaged that the activity would afford the swarozgari an opportunity to expand his asset and skill base in three years. The per family investment should be such that it generates at least in the third year, a net income above Rs. 2000 per month. Please ensure that there is no underfinancing.

4. Financing of IRDP beneficiaries

It is reiterated that non-wilful defaulters under IRDP owing dues up to Rs. 5000/- should not be denied assistance under SGSY.

5. Quarterly progress reports

As per our circular SP. BC.1 dated 3 July 2000 on SGSY Reporting Formats, the quarterly progress report under the scheme has to be submitted to RBI and Ministry of Rural Development, Government of India, New Delhi as per the prescribed formats. However, there is considerable delay in receipt of progress reports from the banks. You are therefore advised to ensure timely submission of progress reports to us and to the Ministry of Rural Development.

6. Revolving Fund

As already clarified by us earlier vide our circular SP.BC.58 dated 2 February 2000, the entire amount of Revolving Fund should be treated as cash credit and drawal of any amount out of this limit will have to be repaid, interest however, will be charged only on amount exceeding Rs. 10000/-. The Revolving Fund will be a standing amount for continuous operation. However, in case of discontinuation of activity or loan account becoming bad or dissolution of a group etc the adjustment of Government grant of the Revolving Fund towards the outstanding loan should be as advised vide our circular SP. BC.89/09.01.01/95-96 dated 13 February 1996 (Copy enclosed) for forfeiture and adjustment of subsidy under the erstwhile IRDP.

7. Please issue suitable instructions to your controlling offices / branches in this regard.

Please acknowledge receipt.

Yours faithfully

Sd/-
(Deepali Pant Joshi)
General Manager