I am delighted to continue the excellent tradition set by my predecessor in regard to micro-credit. Accordingly, RBI announced a policy framework in the Mid-Term Review of Monetary and Credit Policy of November 2003 based on interactive sessions with various stakeholders in the sector and reports of four Informal Groups.
The framework urged the banks to provide adequate incentives to their branches for financing the SHGs, establish linkages with them, simplify the procedures while providing for total flexibility in such procedures to suit the local conditions.