**Executive Summary**
This Master Circular consolidates existing Reserve Bank of India (RBI) guidelines and instructions on credit facilities to Scheduled Castes (SCs) and Scheduled Tribes (STs). It aims to enhance credit flow to these communities and promote their self-employment. The circular is effective from June 16, 2025.
**Key Points / Main Content**
**Planning Process**
* District Level Consultative Committees are the primary mechanism for coordinating banks and development agencies.
* District credit plans must link credit with employment and development schemes.
* Banks should establish closer liaison with District Industries Centres to promote self-employment.
* SCs/STs should be given weightage in the planning process, with credit planning weighted in their favour and special bankable schemes developed.
* Loan proposals from SCs/STs require sympathetic consideration.
* Banks must periodically review lending procedures to ensure timely, adequate, and production-oriented loans that are self-liquidating.
* Block/District Credit Plans should focus on villages with a significant SC/ST population.
**Role of Banks**
* Bank staff should assist borrowers with forms and formalities to ensure timely credit access.
* Awareness of bank schemes should be created among SC/ST borrowers through various means.
* Branches should organize frequent meetings exclusively for SC/ST beneficiaries to understand their needs.
* RBI/NABARD circulars must be circulated to staff for compliance.
* Banks should not insist on deposits for loan applications under government poverty alleviation or self-employment programs for SCs/STs.
* Applicable subsidies must not be held back from loan components.
* Banks should support the National Scheduled Tribes Finance & Development Corporation and National Scheduled Castes Finance & Development Corporation.
* Loans to State Sponsored Organisations for SCs/STs for input purchase/supply or output marketing are eligible for priority sector classification.
* Rejection of SC/ST loan applications under government programs should occur at the next higher level, with clear reasons provided.
**Role of SC/ST Development Corporations**
* State Governments have been advised that SC/ST Development Corporations can consider bankable schemes/proposals for bank finance.
**Centrally Sponsored Schemes for SC/ST Beneficiaries**
* Several major centrally sponsored schemes offer significant reservations/relaxations for SC/ST communities.
* **Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM):** Aims for adequate coverage of vulnerable sections, with 50% beneficiaries being SCs/STs.
* **Differential Rate of Interest (DRI) Scheme:** Banks must grant eligible SC/ST borrowers at least 40% of total DRI advances. Landholding criteria for DRI are not applicable to SC/STs, and they can avail housing loans up to ₹20,000/-.
**Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC)**
* This scheme promotes entrepreneurship among SCs by providing credit enhancement guarantees to Member Lending Institutions (MLIs).
* IFCI Ltd. is the Nodal Agency.
* Individual SC entrepreneurs and eligible firms/companies with 51% SC ownership and control are eligible for guarantees.
* Guarantee amounts range from ₹0.15 crore to ₹5.00 crore, with a tenure up to 7 years or repayment period.
**Monitoring and Review**
* Banks must establish a special cell at Head Office to monitor credit flow to SC/ST beneficiaries.
* This cell will ensure guideline implementation, collect data, and submit returns to the RBI and Government.
* Head Offices should periodically review credit extended to SCs/STs and report significant gaps or variations to the Board.
* Banks should review measures to enhance credit flow to SC/ST borrowers quarterly, considering direct lending and lending through State Level Corporations.
* SLBC Convenor banks should invite representatives from the National Commission for SCs/STs, NSFDC, and SCDC to attend SLBC meetings.
**Reporting Requirements**
* Data on advances to SCs and STs must be reported as per the Master Direction on Priority Sector Lending, within stipulated timeframes.
**Impact Analysis**
**Scheduled Commercial Banks (including Small Finance Banks)**
* **Impact:** Banks are required to implement revised planning processes, enhance liaison with development agencies, develop specific schemes, and review their lending procedures to increase credit flow to SCs/STs. They must also establish monitoring cells and report data as prescribed.
* **Action Required:** Familiarize themselves with the Master Circular, integrate its guidelines into their operational procedures, establish a dedicated monitoring cell, and ensure timely and accurate reporting.
**Scheduled Castes (SCs) and Scheduled Tribes (STs) - Borrowers**
* **Impact:** These communities are expected to benefit from increased access to credit, tailored financial products, and enhanced support for self-employment and entrepreneurship. They may also experience improved loan processing and greater awareness of available schemes.
* **Action Required:** Actively engage with banks to understand and apply for relevant credit facilities and government-sponsored schemes.
**SC/ST Development Corporations**
* **Impact:** These corporations are expected to play a more active role in considering bankable schemes and proposals for bank finance, and receive institutional support from banks.
* **Action Required:** Develop and present bankable schemes/proposals to banks, and collaborate with banks for the implementation of credit facilities.
**Government Agencies (Ministry of Rural Development, Ministry of Tribal Affairs, Ministry of Social Justice & Empowerment)**
* **Impact:** These agencies' sponsored schemes will see increased participation from SC/ST beneficiaries due to the focus and requirements outlined in the circular.
* **Action Required:** Ensure continued provision and effective implementation of their respective schemes, coordinating with banks and development agencies.
**RBI**
* **Impact:** The RBI will monitor the implementation of these guidelines and the effectiveness of credit flow to SCs/STs through periodic reporting from banks.
* **Action Required:** Continue to issue necessary directives, monitor compliance, and review the overall effectiveness of credit delivery mechanisms for SCs/STs.
Key Entities Referenced
Master Circular - Credit facilities to Scheduled Castes (SCs) & Scheduled Tribes (STs): The central policy document consolidating guidelines on credit facilities for SCs and STs.
Reserve Bank of India: The issuing authority of the Master Circular and regulator of banks.
Lead Bank Scheme: A scheme that serves as the principal mechanism for coordination between banks and development agencies for credit planning.
Differential Rate of Interest (DRI) Scheme: A scheme that provides concessional loans to weaker sections, with specific applicability and relaxation for SCs/STs.
Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC): A scheme launched to promote entrepreneurship among SCs by providing credit enhancement guarantees.
भारतीय ररज़र्व 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
वर्त्तीय समार्ेशन और वर्कास वर्भाग, के न्द्रीय कायावलय,10 र्ी मंविल, कें द्रीय कायावलय भर्न, शहीद भगतवसंह मागव,पोस्ट बॉक्स सं.
10014,म ंबई -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 क्सः 91-22-22621011/22610943/22610948 ई -मेल : cgmincfidd@rbi.org.in
ह िंदी आसान ै,इसका प्रयोग बढ़ाइए।
“चेतावनी : ाार्ा बैंक वर्ज़वर लेम-डाक, एसएलएस या फोन कॉम के जवर्ए हकसी की भी व्यक्तिगत जानकार्ी जैसे बैंक के खाते
का ब्यौर्ा, पासवडर आहद न ी िंलािंगी जाती ै। य धन र्खने या देने का प्रस्ताव भी न ी िंकर्ता ै। ऐसे प्रसत् ावो िंका हकसी भी तर्ीके
से जवाब लत दीहजए।"
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 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