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DRI Scheme Loan Limits Raised to Rs 15,000 and Rs 20,000

Current · Source: Reserve Bank of India · RBI/2006-2007/436 · issued FY 2006-07 · ~2 min read
Quick answerRBI has increased the maximum loan under the Differential Rate of Interest (DRI) scheme from Rs 6,500 to Rs 15,000 and the housing loan limit from Rs 5,000 to Rs 20,000 per beneficiary, effective immediately. The 1% lending target remains unchanged.
The rule, in the simplest words
How it plays out — a real example

A credit & lending officer in Indore updates her branch's loan application forms to show the new DRI loan limit of Rs 15,000. She then approves a Rs 12,000 loan for a low-income tailor to buy a sewing machine, knowing the higher cap lets her serve more borrowers while meeting the bank's 1% DRI target.

What changed

The loan limit under the DRI scheme was raised from Rs 6,500 to Rs 15,000 per beneficiary, and the housing loan limit was increased from Rs 5,000 to Rs 20,000. These changes follow the Finance Minister's 2007-08 Budget announcement. All other terms and conditions of the scheme remain the same.

What it means for you

Banks must immediately update their systems and branch instructions to reflect the higher loan caps for DRI advances. The increased limits allow banks to serve more low-income borrowers with larger concessional loans, potentially improving outreach and compliance with the 1% lending target.

What you must do

Who it affects

All scheduled commercial banks (excluding RRBs), Branch managers and loan officers handling DRI advances, Low-income beneficiaries eligible under the DRI scheme

❓ Common questions

What are the new loan limits under the DRI scheme?

The general loan limit has been raised from Rs 6,500 to Rs 15,000 per beneficiary, and the housing loan limit has been increased from Rs 5,000 to Rs 20,000 per beneficiary.

Do the other terms and conditions of the DRI scheme change?

No, all other terms and conditions of the scheme remain unchanged. Only the loan limits have been revised as per the Finance Minister's Budget announcement.

What is the lending target for banks under the DRI scheme?

Banks must continue to lend 1% of their previous year's total advances under the DRI scheme, as specified in earlier circulars.

📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/436 RPCD. SP. BC. No 101 / 09. 07. 01/ 2006-07 June13, 2007 The Chairman / Managing Directors Indian Scheduled Commercial Banks (Excluding RRBs) Dear Sir, Revision of Differential Rate of Interest Scheme. As you are aware, Government of India had formulated in March, 1972 a scheme for extending financial assistance at concessional rate of interest @ 4% to selected low income groups for productive endeavours initially by public sector banks and then by private sector banks also . The scheme known as Differential Rate of Interest Scheme (DRI) is now being implemented by all Scheduled Commercial Banks. Detailed guidelines to banks for implementation of the scheme were issued vide circular DBOD No B. P. 1900/C.453 (U) -77 dated July 6, 1977. 2 In his Budget Speech ( Para 87) for 2007-08, the Hon’ble Finance Minister has proposed to raise the limit of the loan under the Differential Rate of Interest scheme from Rs 6500/ to Rs 15000/ and the limit of the housing loan from Rs 5000/ to Rs 20000/ per beneficiary. 3 You are, therefore, advised to issue necessary instructions to your controlling offices and branch offices to ensure that the revised guidelines are implemented immediately. The other terms and conditions of the scheme remain unchanged. 4 The target for lending under DRI scheme will continue to be 1% of the previous years’ total advances as hitherto (para III of our circular RPCD No Plan .BC 84 /04.09.01/ 2006-07 dated April 30, 2007. 5 Please acknowledge receipt. Yours faithfully, (G Srinivasan) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/436 · issued FY 2006-07. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
🏦 Branch Manager
  • Issue immediate instructions to all controlling offices and branches to implement the revised DRI loan limits of Rs 15,000 (general) and Rs 20,000 (housing).
  • Monitor branch-level compliance and report any deviations to the controlling office.
💻 IT / Systems
  • Update internal manuals, loan application forms, and staff training materials to reflect the new limits.
📜 Compliance
  • Ensure that the 1% of previous year's total advances target for DRI lending is maintained as per existing guidelines.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Branch Manager at a bank this circular applies to (All scheduled commercial banks (excluding RRBs), Branch managers and loan officers handling DRI advances, Low-income beneficiaries eligible under the DRI scheme), your first concrete step on “DRI Scheme Loan Limits Raised to Rs 15,000 and Rs 20,000” is: “Issue immediate instructions to all controlling offices and branches to implement the revised DRI loan limits of Rs 15,000 (general) and Rs 20,000 (housing).” (RBI issued this FY 2006-07).

  1. Circular: RBI/2006-2007/436 -- DRI Scheme Loan Limits Raised to Rs 15,000 and Rs 20,000
  2. Issued: FY 2006-07
  3. Action required: Issue immediate instructions to all controlling offices and branches to implement the revised DRI loan limits of Rs 15,000 (general) and Rs 20,000 (housing).
  4. Action required: Ensure that the 1% of previous year's total advances target for DRI lending is maintained as per existing guidelines.
  5. Action required: Update internal manuals, loan application forms, and staff training materials to reflect the new limits.
  6. Action required: Monitor branch-level compliance and report any deviations to the controlling office.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3596&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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