PSB Micro Credit (Self Help Group) from Download

This document is a multi-part packet containing forms and legal templates issued by Punjab & Sind Bank for managing Self Help Groups (SHGs) (SHG_AppFor… p. 1). It covers everything from opening a basic group savings account to securing micro-credit linkage loans (SHG_AppFor… pp. 1, 5).

• Dual Signatory Operation: The SHG savings account is managed via joint signatures of any two designated representatives (SHG_AppFor… p. 1).
• Mandatory Resolution Book: Groups must submit a formal group resolution copy detailing the approved transaction-handlers (SHG_AppFor… pp. 1, 3).
• Strict Membership Cap: An individual Self Help Group is legally capped at a maximum of 20 members (SHG_AppFor… p. 18).
• Inter-se Agreement: All members must sign a mutual pact binding them jointly and severally liable for all debts contracted by the SHG (SHG_AppFor… pp. 6, 17).

• Two Financing Structures: Groups can apply for either a Cash Credit (CC) facility or a fixed Term Loan (TL) (SHG_AppFor… pp. 5, 13).
• Direct On-Lending Purpose: Loans are granted strictly for on-lending to individual group members to fund livelihood or economic activities (SHG_AppFor… pp. 6, 13).
• Strict Repayment Windows:
  • Cash Credit (CC): Every separate principal withdrawal must be repaid within 12 to 24 months (SHG_AppFor… pp. 13, 15).
  • Term Loan (TL): Principal is cleared in predetermined monthly, quarterly, or half-yearly instalments (SHG_AppFor… pp. 13, 15).

• Zero Service Charges: Because SHG loans are classified as advances to weaker sections, the bank levies no service charges (SHG_AppFor… pp. 13, 15).

The bank uses a strict 100-point evaluation system over the group’s last 6 months of operations to determine credit eligibility (SHG_AppFor… pp. 10-11):

• Attendance & Meetings: Up to 20 points for meeting regularity and average member attendance (SHG_AppFor… p. 10).
• Lending Velocity: Up to 20 points evaluated based on how rapidly the group corpus is rotated out as loans to members (SHG_AppFor… p. 10).
• Repayment Track Record: Up to 20 points tracked against actual recoveries versus internal group demands (SHG_AppFor… p. 10).
• Pass Threshold: Only groups achieving A Grade (80+ marks) or B Grade (70–79 marks) are eligible for credit linkage or loan enhancements (SHG_AppFor… pp. 10-11).

Loan sizing follows a tiered structure indexed to the group’s internal corpus size (SHG_AppFor… p. 13):

• 1st Dose (Fresh Linkage): Minimum of ₹50,000 or 4–8 times the group’s total corpus (SHG_AppFor… p. 13).
• 2nd Dose: Minimum of ₹1,00,000 or 5–10 times the group’s total corpus (SHG_AppFor… p. 13).
• 3rd & 4th Doses: Scaled from ₹2,00,000 up to ₹10,00,000 mapped strictly to a comprehensive Micro Credit Plan (SHG_AppFor… p. 13).

• Defaulter Public Disclosure: If the group defaults on its payments, the bank retains an unqualified right to disclose member names publicly as defaulters (SHG_AppFor… p. 21).
• Dishonour Notice Waiver: By signing the D.P. Note Delivery Letter, representatives explicitly waive their right to a notice of dishonour under the Negotiable Instruments Act (SHG_AppFor… p. 22).

If you are filling this out for your group, tell me:

• Is your SHG applying for a first-time fresh linkage or a repeat loan dose?
• Are you setting up a flexible Cash Credit account or a structured Term Loan?

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