[Solved] Consider the following statements: The Self-Help Group (SHG) programme was originally initiated by the State Bank of India by providing microcredit to the financially deprived. In an SHG, all members of a group take responsibility for a loan that an individual member takes The Regional Rural Banks and Scheduled Commercial Banks support SHGs.

Q24. Consider the following statements:

1. The Self-Help Group (SHG) programme was originally initiated by the State Bank of India by providing microcredit to the financially deprived.
2. In an SHG, all members of a group take responsibility for a loan that an individual member takes
3. The Regional Rural Banks and Scheduled Commercial Banks support SHGs.

How many of the above statements are correct?

1. Only one
2. Only two
3. All three
4. None

Answer: 2

Statement 1 is incorrect. NABARD began promoting self-help groups in 1991–1992. And it served as the actual launch pad for the “SHG movement.” The Reserve Bank of India additionally permitted SHGs to open savings banks accounts in 1993. The ability to use banking services gave the movement a significant boost.

Statement 2 is correct: The Banks provide the loan to the Self Help Group as a whole and it is the collective responsibility of the SHG to repay that loan. Hence all members of a group take responsibility for a loan that an individual member takes. Further, the SHG may decide to not provide any share in further loans to the defaulter member.

Statement 3 is correct. The Financial Inclusion Fund scheme to support Scheduled Commercial Banks (SCBs) and Regional Rural Banks (RRBs) for enabling Dual Authentication option in the microATMs for SHG transactions is being launched to provide an enabling eco-system for the SHGs to seamlessly operate at Business Correspondent points with the proposed “Dual Authentication” feature. Thus, it can be said that SCBs and RRBs support the SHGs in availing the credits as per their needs.