No. REGP/M-746/06-07/673

DATE : 14-08-2006.


Sub:- Lifting of ban on Brick Bhatta and Rice Mill in Uttar Pradesh-reg.

Ref:- 1. Order No. REGP/M-600/Varanasi/2003-04 dt.10-09-2003 of Dy. CEO (V.I.)

         2  Letter No. REGP/M-600/Varanasi/2003-04 dt.27-02-2003 from Director (REGP)


Based on the complaints received that the old existing units of Brick Bhatta and Rice Mill units are being provided bank finance under Rural Employment Generation Programme (REGP) scheme, preliminary investigations were conducted which confirmed the allegations in respect of certain units. It was, therefore, decided by KVIC to conduct indepth survey of all Brick Bhatta and Rice Mill units during to ascertain the factual position. The settlement of Margin Money (M.M.) claims in respect of these units was kept in abeyance and a ban was imposed on sanction of new REGP projects for Brick Bhatta and Rice Mill units in uttar Pradesh.

The Physical Verification of 305 units had already been conducted and district level committees have been constituted to verify the documents and settle the cases of Margin Money of these units. The issue has been examined by the Commission in its meeting No. 535 dt. 31-07-2006 and it has been decided that the issue of ban on the sanction of Brick Bhatta and Rice Mill Units should be looked into in detail and necessary action may be initiated to remove the ban.

Accordingly, it has been decided that the ban on sanction of REGP projects for Brick Bhatta and Rice Mill units will be lifted with immediate effect from the date of issue of the circular. Concerned State Director, KVIC, Lucknow; Divisional Director, Varanasi and Gorakhpur and Chief Executive Officer, U.P. Khadi & V.I. Board may please note the instructions and take necessary action immediately. The circular may also be brought to the notice of all the Nodal Branches and Financing Banks in the State and may also be placed in the SLBC meeting for information.

However, safeguards may be followed while sponsoring and sanctioning the project proposals for Brick Bhatta and Rice Mill units by Banks, KVIC & Khadi & V.I. Board offices. Guidelines issued vide circular No. REGP/Policy/M-211(II)/06-07 dt. 17-07-2006 may be strictly followed by KVIC/KVIB offices while sponsoring the project proposals of Brick Bhatta and Rice Mill units to the Banks. Preliminary scrutiny and spot inspection may be conducted to verify that the unit being set up is as per REGP norms and is a new unit and not existing unit of Brick Bhatta or Rice Mill.

Further the following guidelines may also be strictly followed in the matter:

  1. Since the old matter of claim settlement is not yet settled, opening up sanction of new units should be done with caution and care to avoid generation of problematic cases in future.

  2. State/Divisional offices should first properly register all applications under REGP immediately on receipt, without any sort of scrutiny by any official.

  3. Time limit for scrutiny and response/forwarding stands amended to 30 days for forwarding of project application to Bank from the date of receipt form RICS or beneficiary directly in respect of field offices of KVIC/KVIB. This is in supercession of the Circular no. REGP/M-436/Online App.Tracking/2004-05/1799 dated 18/23.2.2005 wherein the time limit was stipulated as 7 days in respect of aplication received from RICS and 15 days in respect of application received from the beneficiary directly. The time limit has been extended to provide for the spot visit to carry out site inspection of the project before forwarding/sponsoring the project proposals to the Bank.

  4. Written distribution of work and responsibility for scrutiny needs to be issued by the concerned State/Divisional Directors to ensure proper accountability and clarity of work in respect of preliminary scrutiny before forwarding/sponsoring the project proposals to the Bank.

  5. Physical Spot Verification and preliminary scrutiny of the site of the project should be carried out in line with the guidelines circulated vide Circular No. REGP/Policy/M-211(II)/06-07 dt. 17-07-2006.

  6. While forwarding cases to the Bank, State/Divisional Offices will ensure that District (Industry/Social Category) wise targets are not exceeded and if certain area is performing better over other, targets should be refixed before forwarding excess cases.

Receipt of the circular may please be acknowledged.



  1. All State/Divisional Directors of KVIC

  2. All State/U.T. KVI Boards

Copy to:-

  1. Dr. Ramesh Yadav, Hon'ble Member, KVIC.

  2. Jt. Chief Executive Officer, KVIC, Mumbai.

  3. All Dy. Chief Executive Officers, KVIC, Mumbai/Guwahati.

  4. Managing Directors of all Public Sector Banks.

  5. Chairmen of all Regional Rural Banks.

  6. U.P. Khadi & V.I. Board, Lucknow (U.P.)

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