A Scheduled Commercial Bank is tasked with supporting the National Rural Livelihoods Mission (NRLM) in a block with a high density of Self Help Groups (SHGs). The bank has identified an SHG (General Category) that has been active for 18 months, successfully completing two cycles of internal lending, and maintaining perfect bookkeeping (grading A). The SHG applies for a Community Investment Fund (CIF) of INR 1,00,000 from the NRLM and a Term Loan of INR 5,00,000 from the bank. The bank is evaluating the SHG's eligibility for the Interest Subvention (IS) scheme under NRLM, which provides a 2% subvention and an additional 3% Prompt Repayment Incentive (PRI). Considering the latest NRLM guidelines for the maximum loan limit, the Interest Subvention (IS) scheme eligibility, and the Prompt Repayment Incentive (PRI), which of the following statements about the SHG's loan eligibility and interest subvention is most accurate?

Question

Accepted Answer

The SHG is eligible for the maximum loan limit of INR 20,00,000 for the first cycle, and the 5% interest subvention (bringing the rate down to 4%) is only applicable on the term loan component up to INR 3,00,000, with the rest being at the normal lending rate.

Answer

The SHG is eligible for the 3% Prompt Repayment Incentive (PRI) on the full INR 5,00,000 Term Loan, but the initial 2% Interest Subvention is only available for loans above INR 3,00,000 and up to INR 5,00,000.

Answer

The SHG is eligible for Interest Subvention only up to INR 3,00,000 (where the effective interest rate is 7% per annum), but the 3% PRI (bringing the effective rate to 4%) is available on the entire loan amount of INR 5,00,000.

Answer

The SHG is eligible for the full 5% interest subvention (2% IS + 3% PRI) on the entire INR 5,00,000 Term Loan, provided the loan amount does not exceed INR 3,00,000 and is repaid on time.

Download Single Question PDF

Share with Friends & Study Groups

Preparing for Current Affairs?

Practice by Subject

Practice by Exam

Topic-Wise Solved Questions