NPAs in SHG loans

admin September 2, 2020 Daily Current Affairs

With the proportion of non-performing assets (NPAs) in bank loans given to self-help groups (SHGs) seeing a steady rise in the previous financial year,
- the Union Ministry of Rural Development has asked states to “monitor the status of NPA district-wise” and
- Take “corrective measures” to “recover overdue/ outstanding dues”.
- In some states, NPAs make up more than a quarter of the loans taken by SHGs, with Uttar Pradesh seeing a 15% jump.
The ministry asked state officials to take action during a Performance Review Committee meeting held recently.
The issue of NPAs in bank loans to SHGs was one of the important items on the agenda of the meeting, which reviewed the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission, under which the government provides support to SHGs, including bank linkages.
The State Rural Livelihood Missions (SRLMs) were told to “work out the amount to be deposited with banks before Sept 20 to avoid the account becoming irregular/ NPA”.
Uttar Pradesh, which has 71,907 SHGs, reported that 36.02% of the loans taken by the groups were NPAs at the end of March 2020, from 22.16% at the beginning of last financial year.
UP was followed by Punjab, which had an NPA share of 19.25%, Uttarakhand (18.32%) and Haryana (10.18%).
In Arunachal Pradesh, the NPA proportion stood at an alarming 43%, though the number of SHGs there is just 209.