Executive Summary:
This document is a response to Lok Sabha Unstarred Question No. 1248 regarding loan disbursement to Scheduled Castes (SCs) and Scheduled Tribes (STs) at the lowest interest rates. It outlines the existing provisions and schemes aimed at promoting the economic upliftment of SCs and STs through financial assistance and credit facilities. The response details various schemes and guidelines issued by the Reserve Bank of India (RBI) and other relevant organizations. The date of the response is July 28, 2025.
Key Points / Main Content:
Interest Rate Deregulation:
* RBI has deregulated interest rates on advances by Scheduled Commercial Banks (SCBs); rates are determined by banks with Board approval, subject to RBI's regulatory framework.
Centrally Sponsored Schemes (CSS):
* Several CSS offer reservations/relaxations in credit/financial assistance to SC/ST communities.
* Differential Rate of Interest (DRI) Scheme: 4% interest rate, with 40% of beneficiaries from SC/ST, easier eligibility, and higher loan amounts.
* Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM): Interest rate subvention with 50% SC/ST beneficiary coverage.
* Stand-Up India scheme: Loans between ₹10 lakh and ₹1 crore at low interest rates for SC/ST and women entrepreneurs establishing greenfield enterprises.
Financial Assistance through Corporations:
* National Scheduled Castes Finance and Development Corporation (NSFDC): Concessional interest rates through Channel Partners (State Channelising Agencies/Banks) for income-generating schemes like Micro Finance, Term Loan, Educational Loan, Udyam Nidhi Yojna, and Aajeevika Micro finance Yojana.
* National Scheduled Tribes Finance and Development Corporation (NSTFDC): Concessional interest rates through various agencies under schemes like Adivasi Mahila Sashaktikaran Yojana, Micro Credit Scheme for Self Help Groups, Adivasi Shiksha Rrinn Yojana, and Term Loan Scheme.
Priority Sector Lending (PSL):
* RBI's PSL targets include a sub-target of 15% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE) for Regional Rural Banks (RRBs) and 12% for other banks for lending to Weaker Sections, including SC/ST communities.
* RBI issues guidelines for banks to ensure credit flow to SCs/STs and reviews measures to enhance credit flow quarterly.
Impact Analysis:
Scheduled Castes (SCs) and Scheduled Tribes (STs):
* Impact: Benefit from targeted schemes offering concessional interest rates, easier eligibility criteria, and financial assistance for income-generating activities and entrepreneurship.
* Action Required: Explore and apply for relevant schemes offered by banks, NSFDC, NSTFDC, and other financial institutions to avail financial assistance for economic development.
Scheduled Commercial Banks (SCBs) and Other Banks:
* Impact: Required to adhere to RBI guidelines on interest rate determination and priority sector lending targets for weaker sections, including SCs/STs.
* Action Required: Implement RBI guidelines, design loan products catering to SC/ST communities, meet PSL targets, and report progress on credit flow to SC/ST borrowers to RBI on a quarterly basis.
Reserve Bank of India (RBI):
* Impact: Responsible for regulating interest rates, issuing guidelines to banks, monitoring credit flow to SCs/STs, and reviewing the effectiveness of measures taken.
* Action Required: Continue to monitor the flow of credit to SC/ST communities, refine guidelines as needed, and ensure banks comply with PSL targets and reporting requirements.
National Scheduled Castes Finance and Development Corporation (NSFDC) and National Scheduled Tribes Finance and Development Corporation (NSTFDC):
* Impact: Responsible for providing financial assistance through various schemes at concessional interest rates to SCs/STs through Channel Partners/agencies.
* Action Required: Effectively implement and manage financial assistance schemes, collaborate with Channel Partners/agencies, and ensure the schemes reach the intended beneficiaries.
Key Entities Referenced
Scheduled Castes and Scheduled Tribes: Refers to the socially and economically disadvantaged groups in India, for whom the government has several schemes for upliftment.
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and monetary policy.
Scheduled Commercial Banks: Banks in India that are licensed to operate under the Banking Regulation Act and are included in the Second Schedule to the Reserve Bank of India Act, 1934.
Differential Rate of Interest Scheme: A scheme providing loans at a concessional interest rate of 4% per annum, with 40% of beneficiaries from SC/ST communities.
Deendayal Antyodaya Yojana National Rural Livelihoods Mission: A poverty alleviation program implemented by the Ministry of Rural Development in India, with provisions for interest rate subvention and coverage of vulnerable sections like SCs/STs.
Stand-Up India scheme: A scheme to promote entrepreneurship among women and Scheduled Castes and Scheduled Tribes, by facilitating loans for setting up greenfield enterprises.
National Scheduled Castes Finance and Development Corporation: An apex organization for financing, facilitating and mobilizing funds for the economic empowerment of Scheduled Castes.
National Scheduled Tribes Finance and Development Corporation: An apex organization for financing, facilitating and mobilizing funds for the economic empowerment of Scheduled Tribes.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 1248
ANSWERED ON MONDAY, JULY 28, 2025/ SRAVANA 6, 1947 (SAKA)
Disbursal of Loan on Lowest Interest Rate to SCs/STs
1248. DR. ALOK KUMAR SUMAN:
Will the Minister of FINANCE be pleased to state:
(a) whether it is a fact that the Government has made provision for disbursement of loan at
lowest interest rate to Scheduled Castes and Scheduled Tribes people for the promotion of
their economic strata;
(b) if so, the details thereof;
(c) whether it is also a fact that Scheduled Caste and Scheduled Tribe persons are not availing
there facilities due to lowest paying capacity, if so, the measures taken by the Government in
this regard;
(d) whether the Government has made any categorization for special consideration to the
Scheduled Castes and Scheduled Tribes for availing the loan facilities for their overall
development; and
(e) if so, the details thereof and if not, the reasons therefor?
ANSWER
THE MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (e): The Reserve Bank of India (RBI) has informed that it has deregulated the interest rate
on advances sanctioned by Scheduled Commercial Banks (SCBs) and interest rates on advances
are determined by banks with the approval of their respective Board, subject to broad regulatory
framework issued in this regard by RBI.
There are several Centrally Sponsored Schemes (CSS) under which significant
reservation/relaxation in credit/ financial assistance is extended by banks/corporations topersons from Scheduled Castes (SC) and Scheduled Tribes (ST) communities. These include, inter
alia,—
(i) Differential Rate of Interest (DRI) Scheme at a concessional interest rate of 4% per annum,
with 40% of beneficiaries from SC/ST communities having easier eligibility and higher
permissible loan amount;
(ii) Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) has a
provision for subvention on interest rates with adequate coverage of vulnerable sections of
the society such that 50% of the beneficiaries are SCs/STs.
(iii) Stand-Up India scheme, in which banks extend loans between ₹10 lakh and ₹1 crore at low
interest rate to SC/ST and women borrowers for setting up greenfield enterprise;
(iv) Financial assistance for income generating schemes for SCs, by National Scheduled Castes
Finance and Development Corporation (NSFDC), through Channel Partners (State
Channelising Agencies/Banks), on concessional interest rates, under various schemes viz.,
Micro Finance Scheme Term Loan Scheme, Educational Loan Scheme, Udyam Nidhi Yojna
and Aajeevika Micro finance Yojana etc.;
(v) Financial assistance for income generating schemes for STs by National Scheduled Tribes
Finance and Development Corporation (NSTFDC), through various agencies at
concessional rate of interest under various schemes viz., Adivasi Mahila Sashaktikaran
Yojana, Micro Credit Scheme for Self Help Groups, Adivasi Shiksha Rrinn Yojana and Term
Loan Scheme;
Further, under RBI’s Priority Sector Lending (PSL) targets for all commercial banks, including
nationalised banks and Primary (Urban) Co-operative Banks, a sub-target of 15% of Adjusted
Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBSE) for
RRBs and 12% of ANBC or CEOBSE for all other bank categories, has been prescribed for
lending to Weaker Sections which includes, inter alia, persons from SC/ST communities.
RBI has also, from time to time, issued guidelines/instructions to banks for ensuring credit flow
to SCs/STs and for reviewing the measures taken to enhance the flow of credit to SC/ST
borrowers on a quarterly basis. The review also considers the progress made in lending to these
communities directly or through the State Level SC/ST Corporations for various purposes
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