Department of Rural Development - Northern Province

Circular No: 05/2016

Reference: NP/19/11/Dept/cir
Date: [Not specified in document]

To: All Rural Development Officers / Development Officers, Department of Rural Development, Northern Province.

Subject: Procedures to be followed regarding Revolving Credit Operations implemented by Village / Women's Rural Development Societies

Introduction

With the objective of ensuring that revolving credit operations implemented by Village and Women's Rural Development Societies are conducted transparently and in an orderly manner according to proper procedures, the Department has decided that the following procedures shall be followed by the Treasurers of the respective societies as a basis for carrying out these operations.

PART A: Revolving Credit Procedures

1. Loan Disbursement

I) Application Procedure

During loan disbursement, the procedure of receiving applications from the respective beneficiaries must be followed. A sample application form is attached as Annexure I.

II) Subscription Verification

When providing a loan application form, the society's Treasurer must first verify whether the subscription for the respective year has been paid before issuing the application form. This ensures that only members in good standing are eligible for loans.

III) Approval by Society Bodies

All loan applications must be considered at the society's General Body / Executive Committee meeting, and the beneficiaries to whom loans will be provided shall be selected. This ensures collective decision-making and transparency in beneficiary selection.

IV) Summary Sheet Requirement

When the Treasurer visits the Rural Development Officer to obtain approval for loan disbursement, a completed Summary Sheet containing details of the beneficiaries to be provided loans must be taken. This form is essential as it contains information required by the Rural Development Officer for data entry into the computer regarding beneficiary details. A sample form is attached as Annexure II - Self-Employment Loan Beneficiary Details.

V) Payment Voucher Procedure

When loan funds are provided to beneficiaries, a payment voucher (Voucher) shall be prepared, and after obtaining the signature confirming receipt of funds, the loan shall be provided. Societies that have not been using the payment voucher system so far shall take steps to use it in the future. Instructions regarding this shall be provided by the Rural Development Officer.

2. Loan Recovery

I) Receipt Issuance

When recovering loan installments, the Treasurer must issue a receipt to the person making the payment. Societies that do not have a receipt system shall take steps to implement this.

II) Clear Specification on Receipt

The receipt shall clearly specify the loan installment amount, interest amount, and any late fees/penalties collected. This ensures transparency and proper record-keeping.

III) Member Loan Recovery Register

All loan recoveries must be recorded monthly by the Treasurer in the Member Loan Recovery Register maintained by the Treasurer (on pages allocated separately for each beneficiary). A sample register is attached as Annexure III - Member Loan Register.

IV) Bank Deposit

All loan recoveries must be deposited by the Treasurer into the respective bank account at the end of each month. This ensures funds are safely held and properly accounted for.

V) Monthly Recovery Report

A report of the loan recoveries made during the respective month must be submitted by the Treasurer to the Rural Development Officer before the 5th of the following month. A sample format is attached as Annexure IV.

VI) Documentation for Reporting

When coming to submit the loan recovery report, the Treasurer must bring the bank book showing the deposit of recoveries, the receipt book containing carbon copies of receipts issued to beneficiaries, and the Member Loan Register. This comprehensive documentation enables proper verification.

VII) Verification by Development Officers

The Development Officers working in Divisional Secretariats (Rural Development Officer, or in their absence the Divisional Rural Development Officer) in conjunction with the Rural Development Officer shall scrutinize the above-mentioned report and registers, confirm that proper procedures are being followed, sign the relevant register, and assist the Treasurer in following proper procedures for registrations.

3. Incentive for Treasurers

Considering the workload on the Treasurer when following the above procedures, the Department grants permission to provide an incentive to the Treasurer/Bookkeeper participating in the monthly savings collection activity, from the interest income (%) amount decided by the societies in their monthly savings fund (not exceeding 20%).

To receive this incentive, the Treasurer/Bookkeeper must submit the monthly savings collection report to the Rural Development Officer before the 5th of the following month and obtain written permission from the Rural Development Officer for the eligible incentive amount. Only after receiving this written permission can the Treasurer/Bookkeeper obtain the relevant incentive. For this purpose, it is appropriate for the Treasurer/Bookkeeper to maintain a small register (03 pages).

Therefore, considering the above points, I request your cooperation for the steps being taken by the Department to effectively implement the revolving fund programs conducted by the societies.

You are requested to inform the society office bearers involved in revolving credit operations in your Divisional Secretariat division about the clarification regarding the above matter.

S. Srijeyanthan
Director
Department of Rural Development
Northern Province

Distribution

1. Secretary, Ministry of Rural Development, Northern Province - for information.
2. Relevant Government Agent - for information.
3. Divisional Secretary - for information and necessary action.
4. District Rural Development Officer - for information and necessary action.

PART B: Circular No: 02/2017 - Electronic Communication of Information

Date: 16.02.2017

To: All District Rural Development Officers, Rural Development Officers, Development Officers, Sewing Instructors, and all Officers, Department of Rural Development, Northern Province.

Subject: Exchange of Information through Electronic Method

1. Email Communication

Considering the limitations and costs associated with paper-based information exchange, email addresses (User Names) have already been provided to all District Rural Development Offices and Divisional Rural Development Offices for exchanging information electronically.

• All concerned officers are instructed to exchange information using this facility.
• When Rural Development Officers send information from Divisional Secretariats to the Department of Rural Development, Northern Province, a copy must be sent to their District Development Officer.
• When exchanging information via Email, an acknowledgement of receipt must be sent to the sender.
• All officers are instructed to check Email daily at 8.30 am and 3.30 pm. Additionally, if there is a need to send a special Email, the information must be communicated to the relevant persons by telephone.

2. Copying District Officers

A copy of letters sent from the Department of Rural Development via Email to Rural Development Officers must also be sent to the respective District Rural Development Officer. All officers must confirm receipt of these letters, and District Rural Development Officers must follow up on action regarding those letters. Letters sent to District Officers must also follow this procedure.

3. Routing through District Officers

All letters to be sent by Rural Development Officers to the Northern Province Department of Rural Development with the recommendation of the District Rural Development Officer shall be sent via Email to the District Officer and forwarded through him/her only.

4. Scanning Documents

All relevant files and information requiring signatures must be signed by the respective officer and sent via scanner. Additionally, all other information exchanges should preferably be conducted through your officer's Email.

5. Optimal Use of Equipment

You are requested to provide full cooperation to effectively and economically utilize the Computer, Scanner, Printer, Dongle, and other IT equipment provided to you, to reduce time and expenses through electronic information exchange, and to effectively utilize funds.

6. Appropriate Use of Email

Only information exchanges that need to be conducted via Email should be sent. Also, avoid sending documents via Email that should be sent as hard copies (for example, inspection reports and basic documents for inspection reports, evaluations, activity monitoring, etc.).

7. User IDs

The User IDs of all District Rural Development Officers, Divisional Rural Development Officers, and the Northern Province Department of Rural Development are attached herewith.

8. Effective Date

This Circular No. 02/2017 comes into effect from 01/03/2017. The cooperation of all relevant officers is required to implement this.

S. Srijeyanthan
Director
Department of Rural Development
Northern Province

Distribution for Circular 02/2017

1. Deputy Secretary, Northern Province - for information.
2. Secretary, Ministry of Rural Development, Northern Province - for information.
3. Government Agent - for information and guidance.
4. Divisional Secretary - for information and assistance in implementation.

Summary of Key Procedures

Loan Disbursement Flowchart

1. Verify member subscription paid → Issue application form
2. Collect applications → Present to General/Executive Committee
3. Committee selects beneficiaries → Prepare Summary Sheet
4. Treasurer takes Summary Sheet to RDO for approval
5. After approval → Prepare payment voucher
6. Beneficiary signs voucher → Receive loan funds

Loan Recovery Flowchart

1. Collect installment from beneficiary → Issue official receipt
2. Record in Member Loan Register (per beneficiary page)
3. Deposit all collections in bank account by month end
4. Prepare Monthly Recovery Report
5. Submit report with bank book, receipt book, register to RDO by 5th of following month
6. RDO/Development Officer verifies and signs register

Required Registers and Forms

• Annexure I: Loan Application Form
• Annexure II: Self-Employment Loan Beneficiary Details Summary Sheet
• Annexure III: Member Loan Register (per beneficiary pages)
• Annexure IV: Monthly Loan Recovery Report Format
• Payment Voucher Book
• Official Receipt Book (with carbon copies)
• Bank Passbook

Treasurer Incentive Conditions

• Maximum 20% of interest income
• Monthly report must be submitted by 5th of following month
• Must obtain written permission from RDO
• Maintain small register (3 pages) for tracking

These guidelines supersede any previous instructions on revolving credit operations and must be strictly followed by all societies.