After 2007, unlike the significant expansion in the balance sheets of the central banks of several advanced economies that resulted from their policy responses to the crisis, the behaviour of the Reserve Bank’s balance sheet was distinctly different since specific measures, such as, reduction in CRR and unwinding of Government’s MSS balances implied corresponding contraction in Reserve Bank’s liabilities, even as both measures were the key channels for injecting large liquidity to the financial system.
It was also decided that banks may charge interest on the finance provided to the Groups / NGOs for on-lending to SHGs at the rates indicated by the NABARD from time to time. Further, the SHGs were to be free to decide on the interest rate to be charged to their members, provided the rate of interest was not excessive.