RAS question
SHG-Bank Linkage Programme was started by:
Correct answer: (B) NABARD.
NABARD started the SHG-Bank Linkage Programme in 1992 with a 1992-93 pilot that linked Self Help Groups formed by members of poor households to formal financial institutions for savings and credit.
Explanation
NABARD started the SHG-Bank Linkage Programme in 1992. The model grew out of NABARD's research studies and action research project. In 1992-93, it began as a pilot that linked around 500 Self Help Groups formed by members of poor households with formal financial institutions. NABARD, rather than a ministry or a commercial bank, is therefore the correct answer. The programme created a cost-effective channel through which poor households that lacked adequate access to financial services could save and obtain credit through banks. Most participating Self Help Groups are women's groups. The model later became the world's largest microfinance programme by client base and reach, covering 17.75 crore households.
Why the other options are wrong
- (A) RBI regulates the banking system, but it did not start the SHG-Bank Linkage Programme. The model evolved from NABARD's research, and NABARD began the 1992-93 pilot.
- (C) SBI is a commercial bank. Such banks can participate in the linkage programme, but no single commercial bank started it. NABARD developed the model and began the pilot that linked Self Help Groups with formal financial institutions.
- (D) The Ministry of Finance did not start the programme. It originated in NABARD's microfinance research and its 1992-93 pilot.
Concept
This tests financial inclusion and the role of rural credit institutions in the Indian Economy syllabus. Questions about NABARD, Self Help Groups and bank linkage recur in RAS because the SHG-Bank Linkage Programme connects institutional credit, women's economic participation and microfinance delivery in rural India.