Telangana: 2 lakh women receive refund of 217 cr in SHG accounts

Hyderabad: Around two lakh Self Help Group (SHGs) women in the State have received a refund of Rs 217.61 crore after Finance Minister T Harish Rao instructed bankers to verify the SHG loan accounts.

The move comes after the Reserve Bank of India (RBI) ordered banks to charge a concessional interest rate of 7% for loans, upto Rs 3 lakh for rural SHGs and 10% for loans beyond Rs 5 lakh, whichever is lower. 

Following the RBI guidelines, a state-level bankers committee (SLBC) meeting was held on December 23 last year where Rao instructed them to refund excess interest if collected.

“Harish Rao has learned that a few banks have not complied with this law and have instead accrued higher interest. Even within the same bank, there were variations in the interest rates that were collected. The pastor discovered that the self-help group members were losing money by paying exorbitant interest rates,” a press release said.