A circular has been issued from the Finance Ministry, in which banks have been asked to not to sanction term loans to Poor women-members of Self Help Groups (SHGs). However, they can avail cash credit on the savings of five years in the ratio of 1:4.

The circular said, "The present practice of giving term loans has a cost to the bank because of the high number of transactions and documentation required. This takes away lot of precious time of the staff of the branch."

A senior official at State Level Banker's Committee said, "However, we understand that the conversion of existing term loans into cash credit is in the process and might take some more time."

Following the directions, most of the public sector lenders do not offer loans to SHGs anymore.