Current · Source: Reserve Bank of India · RBI/2007-2008/279 · issued 13 Jun 2007 · ~2 min read
Quick answerRBI has revised income eligibility for the Differential Rate of Interest (DRI) scheme. Rural borrowers now need annual family income up to Rs 18,000; urban borrowers up to Rs 24,000. Banks must implement immediately. Lending target remains 1% of previous year's total advances.
The rule, in the simplest words
The DRI (a special loan for poor people) now lets more people apply: if your family earns up to Rs 18,000 per year in a village, or up to Rs 24,000 per year in a city, you can get this loan.
Banks must change their computer systems and teach staff the new income limits right away.
Banks still have to give out DRI loans equal to 1% of all the loans they gave last year.
How it plays out — a real example
A credit & lending officer in Indore updates her branch's loan application form to show the new urban income limit of Rs 24,000. She then approves a DRI loan for a vegetable seller whose family earns Rs 22,000 a year, which was not allowed under the old Rs 7,200 limit.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2007-2008/279
RPCD. SP. BC. No 55 / 09. 07. 01/ 2007-08
April, 10, 2008
The Chairman / Managing Directors
Indian Scheduled Commercial Banks
(Excluding RRBs)
Dear Sir,
Differential Rate of Interest Scheme- Revision of the income limits
Please refer to our circular ref. RPCD.SP. BC. No. 101/ 09.07.01/2006-07 dated June 13, 2007 intimating the revised loan limits of the captioned scheme being presently implemented by all scheduled commercial banks.
2. In para 95 of the Union Budget Speech for 2008-09, it has been proposed that borrower’s eligibility criteria for availing loan under the (DRI) Scheme will be increased. Accordingly, borrowers with annual family income of Rs.18000 in rural areas and Rs.24000 in urban areas will now be eligible to avail of the facility as against the earlier annual income criteria of Rs.6400 in rural areas and Rs.7200 in urban areas, fixed by the Government of India in 1986.
3. You are, therefore, advised to issue necessary instructions to your controlling offices and branch offices to ensure that the revised guidelines regarding the borrowers' eligibility criteria are implemented immediately. The other terms and conditions of the DRI scheme remain unchanged
4. The target for lending under the DRI scheme will continue to be 1 per cent 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/2007-2008/279 · issued 13 Jun 2007. The plain-English explanation above is BankPulse’s own independent summary.
Issue immediate instructions to all controlling offices and branches to implement the revised income limits for DRI loans.
Communicate the revised criteria to branch staff and ensure proper documentation of borrower income for compliance.
💻 IT / Systems
Update internal loan origination and eligibility check systems with the new rural (Rs 18,000) and urban (Rs 24,000) annual family income caps.
📜 Compliance
Ensure that the 1% of previous year's total advances lending target under DRI scheme continues to be met.
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 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), your first concrete step on “DRI Scheme: Income Limits Revised for Borrowers” is: “Issue immediate instructions to all controlling offices and branches to implement the revised income limits for DRI loans.” (RBI issued this 13 Jun 2007).
Circular: RBI/2007-2008/279 -- DRI Scheme: Income Limits Revised for Borrowers
Issued: 13 Jun 2007
Action required: Issue immediate instructions to all controlling offices and branches to implement the revised income limits for DRI loans.
Action required: Update internal loan origination and eligibility check systems with the new rural (Rs 18,000) and urban (Rs 24,000) annual family income caps.
Action required: Ensure that the 1% of previous year's total advances lending target under DRI scheme continues to be met.
Action required: Communicate the revised criteria to branch staff and ensure proper documentation of borrower income for compliance.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
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.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4113&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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