Executive Summary:
This Master Circular, updated as of June 30, 2019, consolidates guidelines and instructions for banks regarding credit facilities to Scheduled Castes (SCs) and Scheduled Tribes (STs). It emphasizes measures to increase advances to SCs/STs, 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, and loan proposals should be considered with empathy.
* Lending procedures should be reviewed for timely and adequate loan sanctions.
* Villages or localities with sizeable SC/ST populations may be chosen for intensive lending.
Role of Banks:
* Bank staff should assist borrowers in completing formalities.
* Awareness about schemes should be created among SC/ST borrowers through field staff contact and meetings.
* RBI/NABARD circulars should be circulated among staff for compliance.
* Banks should not insist on deposits for government-sponsored schemes and should release applicable subsidies upfront.
* Banks should support the National Scheduled Tribes Finance Development Corporation and National Scheduled Castes Finance Development Corporation.
* Advances to State-sponsored SC/ST organizations for input supply or output marketing should be treated as Priority Sector Advances.
* Loan application rejections for SCs/STs should occur at the next higher level with clear reasons.
Role of SC/ST Development Corporations:
* State Governments have been advised that Scheduled Caste/Tribes Development Corporations can consider bankable schemes/proposals for bank finance.
* Guidelines issued to banks on priority sector lending will apply regarding collateral security and/or third-party guarantees for loans.
Reservations for SC/ST Beneficiaries:
* 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 population.
* Differential Rate of Interest (DRI) Scheme: Grant at least 40% of total DRI advances to eligible SC/ST borrowers; relaxed land holding criteria; housing loans up to ₹20,000 for SC/STs.
Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC):
* Aimed to promote entrepreneurship among SCs by providing Credit Enhancement Guarantee to Member Lending Institutions (MLIs).
* IFCI Ltd. is the Nodal Agency under the scheme.
* Eligibility: Registered Companies/Societies/Partnership Firms/Sole Proprietorship firms/Individual SC Entrepreneur having more than 51% shareholding by SC entrepreneurs.
* Amount of Guarantee cover: Min 0.15 Cr. - Max. 5.00 Cr.
* Tenure of Guarantee: Max. 7 years or repayment period, whichever is earlier.
Monitoring and Review:
* A special cell should monitor credit flow to SC/ST beneficiaries at the Head Office of banks.
* SLBC convenor Bank should invite the representative of National Commission for SCs/STs to attend SLBC meetings.
* Head Offices should periodically review credit extended to SCs/STs.
* Banks should review measures to enhance credit flow to SC/ST borrowers quarterly.
* Any major gap or variation in credit flow to SC/ST on a year-to-year basis should be reported to the Board of the Bank for review.
Reporting Requirements:
* Data on advances to SCs and STs should be reported as prescribed in Master Direction under Priority sector lending.
Impact Analysis:
Banks (All Scheduled Commercial Banks and Small Finance Banks):
* Impact: Banks are required to implement the guidelines and instructions to enhance credit facilities to SCs/STs.
* Action Required: Review and update lending procedures, establish or strengthen monitoring cells, ensure staff compliance, and submit timely reports to RBI and Government.
SC/ST Borrowers:
* Impact: Increased access to credit facilities and government schemes for self-employment and economic development.
* Action Required: Understand available schemes and approach banks for availing credit facilities, providing necessary documentation and information.
District Level Consultative Committees:
* Impact: Continued role as the primary coordination mechanism between banks and development agencies.
* Action Required: Ensure effective coordination and integration of credit plans with employment and development schemes for SCs/STs.
State Governments and SC/ST Development Corporations:
* Impact: Opportunity to propose bankable schemes for SC/STs and facilitate their access to credit.
* Action Required: Develop viable schemes and provide necessary support to SC/ST beneficiaries in accessing bank finance.
IFCI Ltd. (as Nodal Agency for CEGSSC):
* Impact: Responsible for issuing guarantee cover to MLIs under the CEGSSC scheme.
* Action Required: Encourage MLIs to finance SC entrepreneurs to boost entrepreneurship amongst the marginal strata of the society.
RBI:
* Impact: Monitoring credit flow to SCs/STs and ensuring compliance with guidelines.
* Action Required: Review reports submitted by banks and take necessary action to address any gaps or variations in credit flow.
Key Entities Referenced
Scheduled Castes SCs: A socially disadvantaged group in India, historically subjected to discrimination.
Scheduled Tribes STs: Adivasi (indigenous) groups in India recognised in the Constitution as especially vulnerable and disadvantaged.
Small Finance Banks: A type of bank in India licensed by the Reserve Bank of India to further financial inclusion by providing banking services to underserved populations.
Lead Bank Scheme: A scheme where designated banks take a lead role in coordinating banking services in a district in India.
District Industries Centres: Government bodies established in various districts of India to promote self-employment and industrial development.
RBI: Reserve Bank of India, the central bank of India.
National Scheduled Castes Finance Development Corporation: An Indian government corporation set up to promote the economic development of Scheduled Castes.
National Scheduled Tribes Finance Development Corporation: An Indian government corporation set up to promote the economic development of Scheduled Tribes.
भारतीय �रज़व र्बक�
_________________________ RESERVE BANK OF INDIA___________________________
www.rbi.org.in
RBI/2019-20/06
FIDD.CO.GSSD.BC.No.03/09.09.001/2019-20 July 01, 2019
The Chairman & Managing Director / CEO
All Scheduled Commercial Banks &
Small Finance Banks
Dear Sir/Madam,
Master Circular-Credit facilities to Scheduled Castes (SCs) & Scheduled
Tribes (STs)
Please refer to the Master Circular FIDD.CO.GSSD.BC.No.06/09.09.001/2017-18 dated July
01, 2017 consolidating guidelines / Instructions / directions issued to banks with regard to
providing credit facilities to Scheduled Castes (SCs) and Scheduled Tribes (STs).
2. The Master Circular has been suitably updated by incorporating the instructions issued up
to June 30, 2019 and has also been placed on website https://www.rbi.org.in.
Yours faithfully,
(Sonali Sen Gupta)
Chief General Manager
�वत् तीय समावेशन और �वकास �वभाग, केन्द्र�य कायार्लय,10 वी मंिजल, क�द्र�य कायार्लय भवन, शह�द भगत�सहं माग,र्पोस्ट 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
टेल� Tel:022-22601000 फैक्सः 91-22-22621011/22610943/22610948 ई -मेल : cgmincfidd@rbi.org.in
�हदं � आसान है, इसका प्रयोग बढ़ाइए।
“चेतावनी : द्वारा बक� �रज़व र्मेल-डाक, एसएमएस या फोन कॉल के ज�रए �कसी क� भी व य ् िक्तगत जानकार� जसै े बक� के खाते का
ब य् ौरा, पासवड र्आ�द नह�ं मांगी जाती है। यह धन रखने या देने का प्रस त् ाव भी नह�ं करता है। ऐसे प्रस त ् ाव� का �कसी भी तर�के से जवाब
मत द�िजए।"
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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 following measures 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.
1.2 The district credit plans formulated by the lead banks should clearly indicate the
linkage of credit with employment and development schemes.
1.3 Banks will have to establish closer liaison with the District Industries Centres, which
have been set up in different districts for promoting self-employment.
1.4 At the block level, a certain weightage is to be given to scheduled castes / scheduled
tribes in the planning process. Accordingly, the credit planning should be weighted in
favour of scheduled castes / scheduled tribes and special bankable schemes suited
to members of these communities should be drawn up to ensure their participation in
such schemes and larger flow of credit to them for self-employment. It will be
necessary for the banks to consider loan proposals of these communities with utmost
sympathy and understanding.
1.5 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.
1.6 While 'adopting' villages for intensive lending, villages with sizeable population of
these communities may be specially chosen; the alternative of adopting specific
localities (bastis) in the concerned villages which have a concentration of these
communities could also be considered.
2. Role of Banks
2.1 Bank staff may help the poor 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 will have to be
created. As a majority of the eligible borrowers would be illiterate persons, publicity
through brochures, other literature, etc. will be of limited utility. The more desirable
method would be for the field staff of banks to contact such borrowers and explain to
2them the salient features of the schemes as also the advantages that will accrue.
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. The banks should advise their branches / controlling
offices to render all the necessary institutional support to enable the institution to
achieve the desired objectives.
2.6 Advances sanctioned to State sponsored organizations of SC / ST, for the specific
purpose of purchase and supply of inputs to and / or the marketing of outputs of the
beneficiaries viz. artisans, village and cottage industries of these organizations,
should be treated as Priority Sector Advances, subject to the condition that the
relative advances are exclusively for the purpose of purchase and supply of inputs to
and / or marketing of the outputs of beneficiaries of these organizations.
2.7 Rejection of loan applications in respect of SCs / STs 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/
Tribes Development Corporations can consider bankable schemes / proposals for bank
finance. As regards Collateral Security and / or third-party guarantee for loans, guidelines
issued to banks on priority sector lending will apply.
34. 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.
(i) Deendayal Antyodaya Yojana - National Rural Livelihoods Mission:
The Ministry of Rural Development, Government of India has launched Deendayal
Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) by restructuring
erstwhile Swarnajayanti Gram Swarozgar Yojana, effective from April 01, 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 NRLM (FIDD.GSSD.CO.BC.No.02/09.01.01/2019-20 dated July 01,
2019).
(ii) Deendayal Antyodaya Yojana - National Urban Livelihoods Mission:
The Ministry of Housing and Urban Affairs (MoHUA), Government of India, has
launched the Deendayal Antyodaya Yojana - National Urban Livelihoods Mission
(DAY-NULM) by restructuring 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
(FIDD.GSSD.CO.BC.No.01/09.16.03/2019-20 dated July 01, 2019).
(iii) Differential Rate of Interest Scheme
Under the DRI Scheme, banks provide finance up to ₹15,000/- at a concessional rate
of interest of 4 percent 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 Differential Rate of
Interest (DRI) Scheme, banks have been advised to grant to 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 that 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.
45. Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC)
The CEGSSC was launched by Ministry of Social Justice & Empowerment on 6th
May, 2015 with the objective to promote entrepreneurship amongst the Scheduled
Castes (SCs), by providing Credit Enhancement Guarantee to Member Lending
Institutions (MLIs), who shall be providing 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, who shall be encouraged
to finance SCs entrepreneurs to boost entrepreneurship amongst the marginal
strata of the society.
Eligibility: Registered Companies and Societies/Registered Partnership Firms/Sole
Proprietorship firms/Individual SC Entrepreneur having more than 51%
shareholding by SC entrepreneurs/promoters/members with the management
control for the past 6 months are eligible for guarantee from IFCI Ltd. against the
loans extended by MLIs Bank / Institutions.
Amount of Guarantee cover under CEGSSC- Min ₹ 0.15 Cr. & Max. ₹ 5.00 Cr
Tenure of Guarantee – Max. 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 SLBC convenor Bank should invite the representative of National Commission for
SCs / STs to attend SLBC meetings. Besides, the Convener bank may also invite
representatives from 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.
6.3 A periodical review should be made by the Head Office of banks of the credit
extended to SCs / STs on the basis of returns and other data received from the
branches.
6.4 Bank 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. Any major gap
5or variation in credit flow to SC/ST on a year to year basis should be reported to
Board of the Bank for review under the themes of “Financial Inclusion” in term of
circular DBR No.BC.93/29.67.001/2014-15 dated May14, 2015.
7. Reporting Requirements
Data on advances to SCs and STs should be reported as prescribed in Master
Direction under Priority sector lending vide Master Direction
FIDD.CO.Plan.1/04.09.01/2016-17 dated July 07, 2016 and updated as on
December 04, 2018. Banks are advised to submit the same in a timely manner. For
Small Finance Banks a Notification is available on our website vide
FIDD.CO.SFB.No.9/04.09.001/2017-18 dated July 6, 2017.
6Credit 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 -
7Insisting on Deposits from SCs
/ STs by Banks
24. 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 01.07.2017 Credit facilities to Scheduled
Castes (SCs) & Scheduled Tribes
(STs)
8