What changed
The annual family income eligibility for borrowers under the DRI scheme has been significantly increased. For rural areas, the limit has been raised from Rs 6,400 to Rs 18,000, and for urban areas, from Rs 7,200 to Rs 24,000. These changes were proposed in the Union Budget 2008-09 and replace the earlier limits set in 1986.
What it means for you
Banks must update their loan processing systems and staff training to reflect the new, higher income thresholds for DRI loans. This will expand the pool of eligible borrowers, potentially increasing the volume of subsidized lending. The unchanged 1% lending target means banks may need to actively identify and onboard more eligible customers to meet the requirement.
What you must do
- Issue immediate instructions to all controlling offices and branches to implement the revised income limits for DRI loans.
- Update internal loan origination and eligibility check systems with the new rural (Rs 18,000) and urban (Rs 24,000) annual family income caps.
- Ensure that the 1% of previous year's total advances lending target under DRI scheme continues to be met.
- Communicate the revised criteria to branch staff and ensure proper documentation of borrower income for compliance.
Who it affects
All Indian Scheduled Commercial Banks (excluding RRBs), Borrowers seeking loans under the Differential Rate of Interest Scheme, Bank branch managers and loan officers handling DRI applications
What are the new income limits for DRI scheme eligibility?
For rural areas, the annual family income limit is now Rs 18,000, and for urban areas, it is Rs 24,000. These replace the previous limits of Rs 6,400 and Rs 7,200 respectively.
Does the DRI lending target change with this revision?
No, the target for lending under the DRI scheme remains unchanged at 1% of the previous year's total advances.
When should banks implement these changes?
Banks are advised to implement the revised guidelines immediately upon receipt of this circular.