The Reserve Bank of India published an updated master circular consolidating and updating its instructions to public sector banks, private sector banks (including small finance banks) on Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM). The circular replaces the April 2024 master circular and brings together operational requirements for SHG account opening and transactions, credit linkage, collateral and margin norms, monitoring and reporting, and the FY 2025-26 interest subvention arrangements for women self-help groups. The updated guidance reiterates banks’ role from account opening onward, including applying RBI KYC directions for SHG member verification, allowing Business Correspondents to open SHG savings accounts subject to extant BC guidelines and board-approved policy, and not making members’ individual bank accounts a prerequisite for SHG credit linkage. Banks are advised to enable dual authentication for SHG transactions in jointly operated savings/cash credit accounts across ON-US and OFF-US environments at BC outlets. For credit, eligible SHGs must generally be active for at least six months (by their books) and follow the ‘Panchasutras’, with grading norms set by NABARD; term loans and cash credit limits can be provided in multiple “doses”, with cash credit limits advised at a minimum INR 6 lakh per eligible SHG for three years and drawing power scaling with corpus and performance. Collateral-free lending is reiterated up to INR 10 lakh (with no margin and no lien on SHG savings accounts), and for loans above INR 10 lakh and up to INR 20 lakh, no collateral and no lien is advised, with potential Credit Guarantee Fund for Micro Units coverage and margin capped at 10% of the portion exceeding INR 10 lakh. For FY 2025-26, the interest subvention scheme for rural women SHGs under DAY-NRLM provides credit up to INR 3 lakh at 7% per annum (with banks subvented at 4.5% per annum on outstanding up to INR 3 lakh) and credit above INR 3 lakh up to INR 5 lakh at the lower of the bank’s one-year MCLR or other external benchmark-based lending rate or 10% per annum (with banks subvented at 5% per annum on outstanding between INR 3 lakh and INR 5 lakh), payable only while accounts remain standard. Indian Bank is identified as the nodal bank for FY 2025-26, with quarterly claim certificates due as on June 30, September 30, December 31, and March 31 (the March 2026 quarter to be settled on receipt of the statutory auditor’s certificate for FY 2025-26), and all FY 2025-26 claims (including additional claims) to be submitted by September 30, 2026. The circular also sets out implementation mechanics for the Women Enterprise Acceleration Fund, including reimbursement of eligible credit guarantee fees for loans to individual women SHG members (up to INR 5 lakh for up to five years) and a 2% interest subvention for prompt repayment on outstanding up to INR 1.5 lakh per borrower for up to three years, processed through the same nodal bank platform with quarterly claims and SRLM verification using DAY-NRLM unique codes.

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