What changed
Following a Parliamentary Committee meeting on July 18, 2005, RBI issued fresh advisories to banks. Banks must now give sufficient publicity to SC/ST loan facilities, make all-out efforts to achieve targets under priority sector and schemes like SGSY, SJSRY, SLRS, PMRY, and ensure strict branch-level compliance with the Master Circular on SC/ST credit, with failures reported to the Board. Banks must also adhere to related guidelines on natural calamity relief, farmer indebtedness, and public representative participation in district meetings.
What it means for you
Banks face heightened scrutiny on SC/ST lending performance and must proactively push credit outreach. Non-compliance with Master Circular instructions must now be escalated to the Board, increasing accountability. The directive reinforces RBI's monitoring role and signals that meeting priority sector targets for SCs/STs is a non-negotiable regulatory expectation.
What you must do
- Launch or intensify publicity campaigns to raise awareness of SC/ST loan facilities among poorer sections.
- Review and accelerate progress toward priority sector lending targets for SCs/STs and government-sponsored schemes.
- Ensure all branches strictly follow the Master Circular on SC/ST credit facilities and report any failures to the Board.
- Adhere to RBI guidelines on natural calamity relief, farmer indebtedness relief, and public representative participation in district-level meetings.
- Acknowledge receipt and submit action-taken report to RBI by September 15, 2005.
Who it affects
All scheduled commercial banks (excluding RRBs), Bank branches handling priority sector lending, Board of Directors of banks, SC/ST borrowers and communities
What is the deadline for banks to report action taken on this circular?
Banks must acknowledge receipt and advise RBI of the action taken by September 15, 2005.
Which government-sponsored schemes are specifically mentioned for credit flow to SCs/STs?
The circular mentions SGSY, SJSRY, SLRS, and PMRY as key schemes under which banks must make all-out efforts to achieve targets.
What happens if a bank branch fails to follow the Master Circular instructions on SC/ST credit?
Such failures must be brought to the notice of the bank's Board of Directors, ensuring higher-level oversight and accountability.