Executive Summary:
This master circular consolidates existing guidelines from the Reserve Bank of India (RBI) regarding credit facilities for Scheduled Castes (SCs) and Scheduled Tribes (STs). It outlines measures for banks to enhance lending to these communities, including planning processes, the role of banks and SC/ST Development Corporations, and reservations under centrally sponsored schemes. The circular also covers monitoring, review, and reporting requirements for banks.
Key Points / Main Content:
Planning Process:
* District Level Consultative Committees should coordinate between banks and development agencies.
* District credit plans should link credit with employment and development schemes.
* Banks should liaise with District Industries Centres to promote self-employment.
* Credit planning should favor SCs/STs at the block level, considering their loan proposals sympathetically.
* Lending procedures should be reviewed to ensure timely, adequate, and production-oriented loans.
* Villages/localities with a sizeable SC/ST population may be specially chosen for intensive lending.
Role of Banks:
* Bank staff should assist SC/ST borrowers with application formalities.
* Banks should create awareness among SC/ST borrowers about available schemes through brochures and meetings.
* RBINABARD circulars should be circulated among staff for compliance.
* Banks should not insist on deposits for government-sponsored schemes from SC/ST borrowers.
* Applicable subsidies should be released upfront and not held back.
* Banks should support the National Scheduled Tribes Finance Development Corporation and National Scheduled Castes Finance Development Corporation.
* Loans to State Sponsored Organizations for SCs/STs for inputs/outputs are eligible for priority sector classification.
* Rejection of SC/ST loan applications under government programs should occur at a higher level with clear reasons.
Role of SC/ST Development Corporations:
* State Governments advised that SC/ST Development Corporations can consider bankable schemes/proposals for bank finance.
Reservations under Centrally Sponsored Schemes:
* Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM): Ensure 50% of beneficiaries are SC/STs.
* Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM): Extend advances to SCs/STs to the extent of their strength in the local population.
* Differential Rate of Interest (DRI) Scheme: Grant at least 40% of total DRI advances to eligible SC/ST borrowers; landholding criteria are not applicable to them; housing loan up to ₹20,000 can be availed.
Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC):
* Aims to promote SC entrepreneurship by providing credit enhancement guarantee to Member Lending Institutions (MLIs).
* IFCI Ltd. is the Nodal Agency for issuing guarantee cover.
* Eligibility includes individual SC entrepreneurs and firms with majority shareholding/control by SC entrepreneurs.
* Guarantee cover ranges from ₹0.15 cr to ₹5.00 cr with a maximum tenure of 7 years.
Monitoring and Review:
* Banks should establish a special cell at their Head Office to monitor credit flow to SC/ST beneficiaries.
* The Head Office should periodically review credit extended to SCs/STs.
* Any major gap in credit flow should be reported to the Board.
* Banks should review measures to enhance credit flow to SC/ST borrowers quarterly.
* SLBC Convenor bank should invite representatives of National Commission for SCs/STs and NSFDC and SCDC to SLBC meetings.
Reporting Requirements:
* Data on advances to SCs and STs should be reported as prescribed in the Master Direction on Priority Sector Lending.
Impact Analysis:
Banks:
* Impact: Required to implement specific measures to increase lending to SCs/STs, monitor credit flow, and report data to RBI and Government.
* Action Required: Review and update lending policies, train staff, establish monitoring cells, and ensure compliance with reporting requirements.
SC/ST Borrowers:
* Impact: Benefit from increased access to credit, assistance with loan applications, and awareness of available schemes.
* Action Required: Engage with banks and development agencies, utilize available schemes, and fulfill loan requirements.
RBI:
* Impact: Responsible for monitoring credit flow to SCs/STs and ensuring banks comply with guidelines.
* Action Required: Review reports submitted by banks, conduct periodic evaluations, and update guidelines as needed.
Government (Central and State):
* Impact: Responsible for supporting SC/ST Development Corporations and implementing centrally sponsored schemes.
* Action Required: Provide necessary institutional support to SC/ST Development Corporations, ensure adequate coverage of SCs/STs under centrally sponsored schemes, and monitor the progress of these schemes.
National Scheduled Castes Finance and Development Corporation (NSFDC) and National Scheduled Tribes Finance and Development Corporation:
* Impact: Expected to achieve their objectives of supporting SC/STs through financial assistance.
* Action Required: Collaborate with banks and other institutions to provide financial assistance and promote entrepreneurship among SC/STs.
Key Entities Referenced
Scheduled Castes (SCs): A historically disadvantaged group in India, benefiting from specific credit facilities and developmental programs as outlined in the circular.
Scheduled Tribes (STs): An indigenous group in India, also benefiting from specific credit facilities and developmental programs as outlined in the circular.
Reserve Bank of India (RBI): The central bank of India, which has issued guidelines and instructions to banks regarding credit facilities for SCs and STs.
National Scheduled Castes Finance Development Corporation: A corporation set up under the Ministry of Social Justice & Empowerment, providing financial assistance to Scheduled Castes.
National Scheduled Tribes Finance Development Corporation: A corporation set up under the Ministry of Tribal Affairs, providing financial assistance to Scheduled Tribes.
Ministry of Social Justice Empowerment: The Indian government ministry responsible for the welfare and empowerment of Scheduled Castes, among other groups.
Ministry of Tribal Affairs: The Indian government ministry responsible for the welfare and development of Scheduled Tribes.
Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM): A poverty alleviation program implemented by the Ministry of Rural Development, Government of India, with specific provisions for SC/ST beneficiaries.
RBI/2022-2023/97
FIDD.CO.GSSD.BC.No.10/09.09.001/2022-23 August 1, 2022
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,
(Nisha Nambiar)
Chief General Manager
िवत् तीय समावेशन और िवकास िवभाग, केन्�ीय कायार्लय,10 वी मंिजल, क��ीय कायार्लय भवन, शहीद भगत�संह मागर्,
पोस्ट बॉक्स 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 फैक्सः 91-22-22621011/22610943/22610948 ई -मेल : cgmincfidd@rbi.org.in
�हंदी आसान है, इसका �योग बढ़ाइए।
“चते ावनी : मले �रज़व र्बक� �ारा-डाक, एसएमएस या फोन कॉल के ज�रए �कसी क� भी व्य ि�गत जानकारी जसै ेबक� के खात ेका ब्य ौरा, पासवडर् आ�द नह�
मागं ी जाती है। यह धन रखन ेया देन ेका �स्त ाव भी नह� करता है। ऐस े�स्त ाव� का �कसी भी तरीके स ेजवाब मत दीिजए।"
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details, 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 'adopting' villages for intensive lending, villages with sizeable population of
SC/ST communities may be specially chosen. Alternatively, specific localities (bastis)
in the concerned villages which have a concentration of these communities could also
be adopted.
2. 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.
22.2 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.
2.7 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.
33. 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 SC/STs. Details of the scheme are available in the Master Circular on DAY-NRLM
as updated from time to time.
4.2 Deendayal Antyodaya Yojana - National Urban Livelihoods Mission (DAY-NULM)
The Ministry of Housing and Urban Affairs (MoHUA), Government of India, launched
the DAY-NULM (previously known as NULM) by restructuring the erstwhile Swarna
Jayanti Shahari Rozgar Yojana (SJSRY), effective from September 24, 2013. Under
DAY-NULM, advances should be extended to SCs/STs to the extent of their strength
in the local population. Details of the scheme are available in the Master Circular on
DAY-NULM as updated from time to time.
4.3 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
4under 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
₹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
5to the Board as part of the review on the theme of “Financial Inclusion” in term of
circular DBR No.BC.93/29.67.001/2014-15 dated May 14, 2015.
6.3 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 12.12.78 Role of Banks in Promoting
Employment
2. DBOD.No.BP.BC.8/C.453(K)-Gen 09.01.79 Agricultural Credit to Small and
Marginal Farmers
3. DBOD.No.BP.BC.45/C.469(86)-81 14.04.81 Credit Facilities to SC / ST
4. DBOD.No.BP.BC.132/C.594-81 22.10.81 Recommendations of the
Working Group on the
Development of Scheduled
Castes
5. RPCD.No.PS.BC.2/C.594-82 10.09.82 Credit Facilities to SC / ST
6. RPCD.No.PS.BC.9/C.594-82 05.11.82 Concessional Bank Finance to
SC / ST Development
Corporations
7. RPCD.No.PS.BC.4/C. 594-83 22.08.83 Credit Facilities to SC / ST
8. RPCD.No.PS.1777/C. 594-83 21.11.83 Credit Facilities to SC / ST
9. RPCD.No.PS.1814/C.594-83 23.11.83 Credit Facilities to SC / ST
10. RPCD.No.PS.BC.20/C.568(A)-84 24.01.84 Credit Facilities to SC / ST -
Rejection of Loan Applications
11. RPCD.No.CONFS/274/PB-1-84/85 15.04.85 Role of Private Sector Banks
in Lending to SCs / STs
12. RPCD.No.CONFS.62/PB-1-85/86 24.07.85 Role of Private Sector Banks
in Lending to SCs / STs
13. RPCD.No.SP.BC.22/C.453(U)-85 09.10.85 Credit Facilities to Scheduled
Tribes under DRI Scheme
14. RPCD.No.SP.376/C-594-87/88 31.07.87 Credit Facilities to SC / ST
15. RPCD.No.SP.BC.129/C.594(Spl)/88-89 28.06.89 National SC / ST Finance and
Development Corporation
16. RPCD.No.SP.BC.50/C.594-89/90 25.10.89 Scheduled Caste Development
Corporation - Instructions on
Unit Cost
17. RPCD.No.SP.BC.107/C.594-89/90 16.05.90 Credit Facilities to SCs / STs
18. RPCD.No.SP.1005/C.594/90-91 04.12.90 Credit facilities to Scheduled
Castes and Scheduled Tribes -
Evaluation Study
19. RPCD.No.SP.BC.93/C.594.MMS-90/91 13.03.91 Scheduled Caste Development
Corporation (SCDCs) -
Instructions on Unit Cost
20. RPCD.No.SP.BC.122/C.453(U)-90-91 14.05.91 Housing Finance to SCs / STs
- Inclusion under the DRI
Scheme
21. RPCD.No.SP.BC.118/C.453(U)-92/93 27.05.93 Priority Sector Advances -
Housing Finance
22. RPCD.No.LBS.BC.86/02.01.01/96-97 16.12.96 Inclusion of National
Commission for SCs / STs in
State Level Bankers
Committees (SLBCs)
23. RPCD.No.SP.BC.124/09.09.01/96-97 15.04.97 Parliamentary Committee on
the Welfare of SCs / STs - Insisting
on Deposits from SCs/ STs by
Banks
724. RPCD.No.SAA.BC.67/08.01.00/98-99 11.02.99 Credit Facilities to SCs / STs
25. RPCD.No.SP.BC.51/09.09.01/2002-03 04.12.02 Proceedings of the work shop on the
role of financial institutions in the
development of SCs and STs
26. RPCD.No.SP.BC.84/09.09.01/2002-03 09.04.03
Amendment to the Master Circular
27. RPCD.No.SP.BC.100/09.09.01/2002-03 04.06.03
Changes in the reporting system
28. RPCD.No.SP.BC.102/09.09.01/2002-03 23.06.03 Sample study for review of credit
flow to SCs and STs - Major Findings
29. RPCD.SP.BC.No.49/09.09.01/2007-08 19.02.08 Credit facilities to SC/ STs – Revised
Annexure
30. RPCD.GSSD.BC.No.81/09.01.03/2012-13 27.06.13 Restructuring of SGSY as National
Rural Livelihood Mission (NRLM)
31. RPCD.CO.GSSD.BC.No.26/09.16.03/2014-15 14.08.14 Restructuring of Swarna Jayanti
Shahari Rozgar Yojana (SJSRY) as
National Urban Livelihood Mission
32.
FIDD.CO.GSSD.BC.No.06/09.09.001/2017-18 01.07.17 Credit facilities to Scheduled Castes
(SCs) & Scheduled Tribes (STs)
33. FIDD.CO.GSSD.BC.No.03/09.09.001/2019-20 01.07.19 Credit facilities to Scheduled Castes
(SCs) & Scheduled Tribes (STs)
34. FIDD.CO.GSSD.BC.No.05/09.09.001/2021-22 05.04.21 Credit facilities to Scheduled Castes
(SCs) & Scheduled Tribes (STs)
8