## Report on RBI Master Circular: Credit Facilities to Scheduled Castes (SCs) / Scheduled Tribes (STs)
**1. Executive Summary:**
This report analyzes the Reserve Bank of India's (RBI) Master Circular (FIDD.CO.GSSD.BC.No.0709/09.001/2025-26) dated June 16, 2025, regarding credit facilities to Scheduled Castes (SCs) and Scheduled Tribes (STs). This Master Circular consolidates existing RBI guidelines and instructions to banks aimed at increasing the flow of credit to SCs and STs. The core purpose is to ensure greater financial inclusion and economic empowerment of these communities through targeted lending programs and supportive measures by banks. Key findings highlight the emphasis on district-level coordination, proactive bank involvement, specific targets under government schemes, and enhanced monitoring and reporting mechanisms.
**2. Introduction:**
This report provides an overview and analysis of the RBI Master Circular pertaining to credit facilities for Scheduled Castes (SCs) and Scheduled Tribes (STs), based solely on the text provided. The purpose is to inform stakeholders about the key provisions, implementation aspects, and expected outcomes of this circular.
**3. Policy Overview:**
This is a Master Circular, consolidating previous circulars on the subject. The core objective, as inferred from the text, is to enhance credit access and financial inclusion for SCs and STs by:
* Directing banks to increase lending to these communities.
* Facilitating their participation in government-sponsored schemes.
* Removing barriers to credit access through proactive assistance and supportive measures.
* Providing targeted credit facilities through different schemes such as Differential Rate of Interest (DRI) Scheme, and Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC).
**4. Background and Rationale:**
This Master Circular consolidates existing instructions. The rationale for its issuance likely stems from a continued need to address historical disparities in access to credit for SCs and STs. The existence of numerous previous circulars (as listed in the Appendix) suggests an ongoing effort by the RBI to refine and improve lending practices to these communities. The need for consolidation itself indicates a potential for improved clarity and ease of implementation for banks.
**5. Key Provisions / Changes:**
As a Master Circular, this document doesn't introduce entirely *new* provisions but rather consolidates and reinforces existing ones. The key provisions outlined in the text include:
* **Planning Process:** Banks are directed to integrate SC/ST considerations into district-level credit planning, giving weightage to their needs and developing suitable schemes. Liaison with District Industries Centres is emphasized.
* **Role of Banks:** Banks are instructed to assist SC/ST borrowers with loan applications, create awareness of available schemes, avoid demanding deposits under government-sponsored programs, and ensure the timely release of subsidies. Rejection of loan applications should be reviewed at a higher level.
* **Support for Corporations:** Banks are to provide institutional support to the National Scheduled Tribes Finance Development Corporation and the National Scheduled Castes Finance Development Corporation. Loans to State Sponsored Organisations are eligible for priority sector classification.
* **Reservations under Centrally Sponsored Schemes:** The circular highlights the importance of SC/ST inclusion under schemes like Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), aiming for 50% beneficiary coverage. It also mentions that under DRI, banks should grant at least 40% of total DRI advances to eligible SC/ST borrowers. Land holding eligibility criteria is relaxed for SCs/STs under DRI.
* **Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC):** Banks are directed to be aware of this scheme which supports entrepreneurship among SCs.
* **Monitoring and Review:** Banks are required to establish special cells to monitor credit flow to SC/ST beneficiaries, report data to RBI and the government, and conduct periodic reviews.
* **SLBC Meetings:** SLBC convenor banks should invite representatives from relevant commissions and corporations to attend meetings.
**6. Target Audience and Stakeholders:**
The primary target audience and stakeholders are:
* **All Scheduled Commercial Banks, including Small Finance Banks:** These institutions are directly responsible for implementing the guidelines.
* **Scheduled Castes (SCs) and Scheduled Tribes (STs):** They are the intended beneficiaries of the enhanced credit access.
* **District Level Consultative Committees:** These committees play a coordinating role.
* **District Industries Centres:** Banks should liaise with these centres.
* **National and State Level SC/ST Development Corporations:** Banks need to support these institutions.
* **Government Agencies:** Involved in administering centrally sponsored schemes and subsidies.
* **IFCI Ltd.:** The nodal agency for CEGSSC.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency/Bodies:** Reserve Bank of India (RBI), Scheduled Commercial Banks, District Level Consultative Committees, District Industries Centres, National Scheduled Tribes Finance Development Corporation, National Scheduled Castes Finance Development Corporation, IFCI Ltd., and State Governments (through their Corporations).
* **Timelines/Procedures:** The text specifies periodic reviews by banks and the establishment of monitoring cells. Specific timelines for loan processing are implied (loans should be sanctioned in a timely manner), but not explicitly defined. Data reporting requirements are stipulated in the Master Direction on Priority Sector Lending.
**8. Expected Outcomes / Impact of Changes:**
The intended outcomes of this Master Circular, as inferred from the consolidated provisions, are:
* Increased flow of credit to SCs and STs for self-employment and income-generating activities.
* Greater participation of SCs and STs in government-sponsored schemes.
* Improved financial inclusion and economic empowerment of these communities.
* Enhanced monitoring and accountability of banks in lending to SCs and STs.
* Streamlined and clearer guidelines for banks to follow.
**9. Conclusion:**
The RBI Master Circular on credit facilities for SCs and STs represents a consolidated effort to promote financial inclusion and economic development among these communities. It reinforces the importance of targeted lending programs, proactive bank involvement, and robust monitoring mechanisms. By consolidating existing guidelines, the circular aims to provide clarity and facilitate effective implementation by banks, ultimately leading to increased access to credit and improved economic opportunities for SCs and STs. The continued emphasis on monitoring and data collection suggests a commitment to assessing the effectiveness of these measures and making further adjustments as needed.
Key Entities Referenced
RESERVE BANK OF INDIA: The issuing authority of the circular and a central bank.
RBI20252656: Reference number associated with the Reserve Bank of India.
FIDD.CO.GSSD.BC.No.0709.09.001202526: Specific circular number/identifier within the Reserve Bank of India's system.
June 16, 2025: Date of the circular.
All Scheduled Commercial Banks including Small Finance Banks: The target audience/addressees of the circular.
Master Circular Credit facilities to Scheduled Castes SCs Scheduled Tribes STs: The subject of the circular, dealing with credit facilities for Scheduled Castes and Scheduled Tribes.
Scheduled Castes: A socially disadvantaged group in India.
SCs: Abbreviation for Scheduled Castes.
Scheduled Tribes: A socially disadvantaged group in India.
STs: Abbreviation for Scheduled Tribes.
Appendix: Location of the list of consolidated circulars.
R. Giridharan: Chief General Manager at Reserve Bank of India.
Financial Inclusion Development Dept.: Department within the Reserve Bank of India.
Central Office: Location of the Financial Inclusion Development Department.
Shahid Bhagat Singh Marg: Street address of the Central Office Building.
P.B.No.10014: Post Box number for the Central Office.
Mumbai: City where the Central Office is located.
RBINABARD: Reserve Bank of India/National Bank for Agriculture and Rural Development
Government: Referring to government sponsored programs.
National Scheduled Tribes Finance Development Corporation: A corporation under the Ministry of Tribal Affairs.
Ministry of Tribal Affairs: The administrative body overseeing the National Scheduled Tribes Finance Development Corporation.
National Scheduled Castes Finance Development Corporation: A corporation under the Ministry of Social Justice & Empowerment.
Ministry of Social Justice Empowerment: The administrative body overseeing the National Scheduled Castes Finance Development Corporation.
State Sponsored Organisations for Scheduled Castes Scheduled Tribes: Organizations that work for the specific purpose of purchase and supply of inputs and/or the marketing of the outputs of the beneficiaries of these organisations.
Government of India: The national government.
State Governments: The governments of the states within India.
Scheduled CasteScheduled Tribes Development Corporations: Corporations at the state level.
Centrally Sponsored Schemes: Schemes sponsored by the central government.
Deendayal Antyodaya Yojana National Rural Livelihoods Mission: A government program for rural livelihoods.
DAYNRLM: Acronym for Deendayal Antyodaya Yojana National Rural Livelihoods Mission.
NRLM: Previously known as Swarnajayanti Gram Swarozgar Yojana.
Ministry of Rural Development: The ministry responsible for DAYNRLM/NRLM.
Swarnajayanti Gram Swarozgar Yojana: The scheme restructured into DAYNRLM/NRLM.
Differential Rate of Interest: DRI, a scheme providing finance at a concessional rate.
DRI Scheme: Differential Rate of Interest, a scheme providing finance at a concessional rate.
Credit Enhancement Guarantee Scheme for Scheduled Castes: CEGSSC, a scheme promoting entrepreneurship amongst the Scheduled Castes SCs.
CEGSSC: Credit Enhancement Guarantee Scheme for Scheduled Castes.
Member Lending Institutions: MLIs, Institutions extending financial assistance to entrepreneurs.
MLIs: Abbreviation for Member Lending Institutions.
IFCI Ltd.: The Nodal Agency under the CEGSSC scheme.
National Commission for SCsSTs: National Commission for Scheduled Castes and Scheduled Tribes
SLBC: State Level Bankers Committees
National Scheduled Castes and Scheduled Tribes Finance and Development Corporation: A national level finance and development corporation.
NSFDC: Abbreviation for National Scheduled Castes and Scheduled Tribes Finance and Development Corporation.
State Scheduled Castes and Scheduled Tribes Finance and Development Corporation: State level finance and development corporations.
SCDC: Abbreviation for State Scheduled Castes and Scheduled Tribes Finance and Development Corporation.
Master Direction on Priority Sector Lending: Document providing guidelines for priority sector lending.
District Level Consultative Committees: Committees formed under the Lead Bank Scheme.
Lead Bank Scheme: A scheme to promote financial inclusion.
District Industries Centres: Centres set up in different districts for promoting self-employment.
भारतीय �रज़वर् बैंक
_________________________ RESERVE BANK OF INDIA___________________________
www.rbi.org.in
RBI/2025-26/56
FIDD.CO.GSSD.BC.No.07/09.09.001/2025-26 June 16, 2025
The Chairman/ Managing Director / Chief Executive Officer
All Scheduled Commercial Banks (including Small Finance Banks)
Madam/ Dear Sir,
Master Circular - Credit facilities to Scheduled Castes (SCs) & Scheduled Tribes
(STs)
The Reserve Bank of India has, from time to time, issued a number of
guidelines/instructions to banks on credit facilities to Scheduled Castes (SCs) & Scheduled
Tribes (STs). The enclosed Master Circular consolidates the circulars issued by Reserve
Bank on the subject till date, as listed in the Appendix.
Yours faithfully,
(R. Giridharan)
Chief General Manager
िवत्त ीय समावेशन और िवकास िवभाग, के �ीय कायार्लय,10 वी मंिजल, कें द्रीय कायार्लय भवन, शहीद भगतिसंह मागर्,पो� बॉ� सं.
10014, मुंबई-400001
Financial Inclusion & Development Dept., Central Office,10th Floor, Central Office Building, Shahid Bhagat Singh
Marg,P.B.No.10014,Mumbai-1
टेली Tel:022-22601000 फै �ः 91-22-22621011/22610943/22610948 ई -मेल : cgmincfidd@rbi.org.in
िहंदी आसान है,इसका प्रयोग बढ़ाइए।
“चेतावनी : मेल �रज़वर् बैंक द्वारा-डाक, एसएमएस या फोन कॉल के ज�रए िकसी की भी व्य ��गत जानकारी जैसे बैंक के खाते
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passwords, etc. It never keeps or offers funds to anyone. Please do not respond in any manner to such offers.
1Master Circular - Credit Facilities to Scheduled Castes (SCs) & Scheduled Tribes
(STs)
Banks should take the measures indicated below to step up their advances to
SCs/STs.
1. Planning Process
1.1 The District Level Consultative Committees formed under the Lead Bank Scheme
should continue to be the principal mechanism of co-ordination between banks and
development agencies in this regard. The district credit plans formulated by the Lead
Banks should clearly indicate the linkage of credit with employment and development
schemes.
1.2 Banks will have to establish closer liaison with the District Industries Centres,
which have been set up in different districts for promoting self-employment.
1.3 At the block level, a certain weightage is to be given to SCs/STs in the planning
process. Accordingly, the credit planning should be weighted in their favour and
special bankable schemes suited to them should be drawn up to ensure their
participation and larger flow of credit to them for self-employment. It will be necessary
for the banks to consider their loan proposals with utmost sympathy and
understanding.
1.4 Banks should periodically review their lending procedures and policies to see that
loans are sanctioned in time, are adequate and production-oriented and that they
generate incremental income to make them self-liquidating.
1.5 While formulating the Block/ District Credit Plan, special focus may be given to
villages with sizeable population of SC/ST communities/ specific localities (bastis) in
the towns/villages having a concentration of these communities.
22. Role of Banks
2.1 Bank staff may help the borrowers in filling up the forms and completing other
formalities so that they are able to get credit facility within a stipulated period from the
date of receipt of applications.
2.2 In order to encourage SC/ST borrowers to take advantage of credit facilities,
greater awareness among them about various schemes formulated by banks needs
to be created through various means such as brochures, visits by field staff etc so that
salient features of the schemes, as also the advantages that will accrue to them are
known to such borrowers. Banks should advise their branches to organize meetings
more frequently exclusively for SC/ST beneficiaries to understand their credit needs
and to incorporate the same in the credit plan.
2.3 Circulars issued by RBI/NABARD should be circulated among the staff for
compliance.
2.4 Banks should not insist on deposits while considering loan applications under
Government sponsored poverty alleviation schemes/self-employment programmes
from borrowers belonging to SCs/STs. It should also be ensured that applicable
subsidy is not held back while releasing the loan component till the full repayment of
bank dues. Non-release of subsidy upfront amounts to under-financing and hampers
asset creation/income generation.
2.5 The National Scheduled Tribes Finance & Development Corporation and National
Scheduled Castes Finance & Development Corporation have been set up under the
administrative control of Ministry of Tribal Affairs and Ministry of Social Justice &
Empowerment, respectively. Banks should advise their branches/controlling offices to
render all the necessary institutional support to enable these institutions to achieve
the desired objectives.
2.6. Loans sanctioned to State Sponsored Organisations for Scheduled Castes/
Scheduled Tribes for the specific purpose of purchase and supply of inputs and/or the
marketing of the outputs of the beneficiaries of these organisations are eligible for
priority sector classification.
32.7 Rejection of SC/STs’ loan applications under government programmes should be
done at the next higher level instead of at the branch level and reasons of rejection
should be clearly indicated.
3. Role of SC/ST Development Corporations
The Government of India has advised all State Governments that the Scheduled
Caste/Scheduled Tribes Development Corporations can consider bankable
schemes/proposals for bank finance.
4. Reservations for SC/ST beneficiaries under major Centrally Sponsored
Schemes.
There are several major centrally sponsored schemes under which credit is provided
by banks and subsidy is received through Government Agencies. Credit flow under
these schemes is monitored by RBI. Under each of these, there is a significant
reservation/relaxation for the members of the SC/ST communities.
4.1 Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM)
DAY-NRLM (previously known as NRLM) was launched by the Ministry of Rural
Development, Government of India by restructuring the erstwhile Swarnajayanti Gram
Swarozgar Yojana, effective from April 1, 2013. DAY-NRLM would ensure adequate
coverage of vulnerable sections of the society such that 50% of these beneficiaries
are SCs/STs. Details of the scheme are available in the Master Circular on DAY-NRLM
as updated from time to time.
4.2 Differential Rate of Interest (DRI) Scheme
Under the DRI Scheme, banks provide finance up to ₹15,000/- at a concessional rate
of interest of 4 per cent per annum to the weaker sections of the community for
engaging in productive and gainful activities. In order to ensure that persons belonging
to SCs/STs also derive adequate benefit under the DRI Scheme, banks have been
advised to grant eligible borrowers belonging to SCs/STs such advances to the extent
of not less than 2/5th (40 percent) of total DRI advances. Further, the eligibility criteria
under DRI, viz. size of land holding should not exceed 1 acre of irrigated land and 2.5
acres of unirrigated land, are not applicable to SCs/STs. Members of SCs/STs
satisfying the income criteria of the scheme can also avail of housing loan up to
4₹20,000/- per beneficiary over and above the individual loan of ₹15,000/- available
under the scheme.
5. Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC)
The CEGSSC was launched by Ministry of Social Justice & Empowerment on May 6,
2015 with the objective of promoting entrepreneurship amongst the Scheduled Castes
(SCs), by providing credit enhancement guarantee to Member Lending Institutions
(MLIs), which extend financial assistance to these entrepreneurs. IFCI Ltd. has been
designated as the Nodal Agency under the scheme, to issue the guarantee cover in
favour of MLIs for financing SC entrepreneurs.
Individual SC entrepreneurs/Registered Companies and Societies/Registered
Partnership Firms/Sole Proprietorship firms having more than 51% shareholding and
management control for the previous 6 months by SC entrepreneurs/ promoters/
members are eligible for guarantee from IFCI Ltd. against the loans extended by MLIs.
The amount of guarantee cover under CEGSSC ranges from a minimum of ₹0.15 cr
to a maximum of ₹5.00 cr.
The tenure of guarantee is up to a maximum of 7 years or repayment period, whichever
is earlier.
6. Monitoring and Review
6.1 A special cell should be set up at the Head Office of banks for monitoring the flow
of credit to SC/ST beneficiaries. Apart from ensuring the implementation of the RBI
guidelines, the cell would also be responsible for collection of relevant information/data
from the branches, consolidation thereof and submission of the requisite returns to
RBI and Government.
6.2 The Head Office of banks should periodically review the credit extended to
SCs/STs on the basis of returns and other data received from the branches. Any major
gap or variation in credit flow to SCs/STs on a year to year basis should be reported
to the Board as part of the review on the theme of “Financial Inclusion” in terms of
circular DBR No.BC.93/29.67.001/2014-15 dated May 14, 2015.
56.3 Banks should review the measures taken to enhance the flow of credit to SC/ST
borrowers on a quarterly basis. The review should also consider the progress made
in lending to these communities directly or through the State Level Scheduled
Caste/Scheduled Tribe Corporations for various purposes based, amongst others, on
field visits of the senior officers from the Head Office/Controlling Offices.
6.4 SLBC Convenor bank should invite the representative of National Commission for
SCs/STs to attend SLBC meetings. Besides, the Convenor bank may also invite
representatives from the National Scheduled Castes and Scheduled Tribes Finance
and Development Corporation (NSFDC) and State Scheduled Castes and Scheduled
Tribes Finance and Development Corporation (SCDC) to attend SLBC meetings.
7. Reporting Requirements
Data on advances to SCs and STs should be reported as prescribed in the Master
Direction on Priority Sector Lending as updated from time to time, within the time
frames stipulated.
6Appendix
Credit Facilities to Scheduled Castes / Scheduled Tribes
List of Circulars Consolidated in the Master Circular
No. Circular No. Date Subject
1. DBOD.No.BP.BC.172/C.464(R)-78 December 12, Role of Banks in Promoting
1978 Employment
2. DBOD.No.BP.BC.8/C.453(K)-Gen January 09, 1979 Agricultural Credit to Small and
Marginal Farmers
3. DBOD.No.BP.BC.45/C.469(86)-81 April 14, 1981 Credit Facilities to SC / ST
4. DBOD.No.BP.BC.132/C.594-81 October 22, 1981 Recommendations of the Working
Group on the Development of
Scheduled Castes
5. RPCD.No.PS.BC.2/C.594-82 September 10, Credit Facilities to SC / ST
1982
6. RPCD.No.PS.BC.9/C.594-82 November 05, Concessional Bank Finance to SC / ST
1982 Development Corporations
7. RPCD.No.PS.BC.4/C. 594-83 August 22, 1983 Credit Facilities to SC / ST
8. RPCD.No.PS.BC.20/C.568(A)-84 January 24, 1984 Credit Facilities to SC / ST - Rejection
of Loan Applications
9. RPCD.No. CONFS.62/PB-1-85/86 July 24, 1985 Role of Private Sector Banks in
Lending to SCs / STs
10. RPCD.No.SP.BC.22/C.453(U)-85 October 09, 1985 Credit Facilities to Scheduled Tribes
under DRI Scheme
11. RPCD.No.SP.BC.129/C.594(Spl)/88 June 28, 1989 National SC / ST Finance and
-89 Development Corporation
12. RPCD.No.SP.BC.93/C.594.MMS- March 13, 1991 Scheduled Caste Development
90/91 Corporation (SCDCs) - Instructions on
Unit Cost
13. RPCD.No.SP.BC.122/C.453(U)-90- May 14, 1991 Housing Finance to SCs / STs -
91 Inclusion under the DRI
14. RPCD.No.SP.BC.118/C.453(U)- May 27, 1993 Priority Sector Advances - Housing
92/93 Finance
15. RPCD.No.LBS.BC.86/02.01.01/96- December 16, Inclusion of National Commission for
97 1996 SCs / STs in State Level Bankers
Committees (SLBCs)
716. RPCD.No.SP.BC.124/09.09.01/96- April 15, 1997 Parliamentary Committee on the
97 Welfare of SCs / STs - Insisting on
Deposits from SCs/ STs by Banks
17. RPCD.No.SAA.BC.67/08.01.00/98- February 11, Credit Facilities to SCs / STs
99 1999
18. RPCD.No.SP.BC.51/09.09.01/2002- December 04, Proceedings of the work shop on the
03 2002 role of financial institutions in the
development of SCs and STs
19. RPCD.No.SP.BC.102/09.09.01/200 June 23, 2003 Sample study for review of credit flow
2-03 to SCs and STs - Major Findings
20. RPCD.SP.BC.No.49/09.09.01/2007- February 19, Credit facilities to SC/ STs – Revised
08 2008 Annexure
21. RPCD.GSSD.BC.No.81/09.01.03/20 June 27, 2013 Restructuring of SGSY as National
12-13 Rural Livelihood Mission (NRLM)
8