19
T
he Self Help Group Bank Linkage Programme has been in
existence for well over 25 years. The operational guidelines
for the pilot project for linking 500 SHGs with Banks were
issued by NABARD on 26 February, 1992. It is one of the
few programmes which has continued to get policy support from
the Reserve Bank of India, financial support and involvement of
the Government of India and NABARD’s leadership for all these
years. NABARD’s top management including the chairman have
actually supported this program. Right fromSh. P RNayak, during
whose Chairmanship this programme was launched as a Pilot
programme to the present CMD Sh. Harsh Bhanwala, have been
actively involved with the programme and provided leadership,
guidance, and support. It was Sh. P R Nayak who convinced RBI to
issue instructions to Banks so that they could open SB Accounts
of informal/unregistered SHGs and also lend to these groups,
bulk amounts, without the group furnishing details of purposes
for which the loan amount would be lent to their members.
Dr. P Kotaiah fully supported the SBLP and even attended one of
the many 3 day familiarization programmes in Karnataka which
MYRADA conducted for our officers.
I took over from Dr. P Kotaiah as Chairman and provided support
and guidance to the programme to the best of my abilities. In
the process, I made a few errors of judgment which I feel have
adversely affected the SBLP. I would like to state these here.
First of all, I inadvertently made the concerned department
(MCID) start chasing the numbers. I remember once, sometime
in 1998 suggesting to the then CGM of MCID, Sh. G K Aggarwal
and the then GM of the department Sh. Sheokhand to instead
focus on institutional development, particularly the RRBs
and Cooperative Banks. I felt the re-engineered RRBs and
Cooperative banks would take care of the needs of poor who
were by-passed by the banking system. The officers strongly
resisted and felt that their department would like to continue its
strong involvement with SBLP. I then challenged the officers in
that case to aim for something big, like linking one million SHGs
with banks. Sh. Sheokhand readily accepted this and indicated
that the department would ensure linking of a million SHGs with
banks by 2008. Actually this target was reached by 2004 itself.
But the chase of numbers had begun and the focus shifted to
increasing the number of linked SHGs rather than developing a
sustainable, self-managed financial institutional setup for the
poor who were and never will be the favourite clients of traditional
banks because of the low value of their transactions which do not
generate profits or even meet the costs.
Shri Y C Nanda
Former Chairman, NABARD
