What changed
This Master Circular, issued July 1, 2009, consolidates all previous RBI instructions on credit facilities for SCs/STs into one document. It does not introduce new rules but updates and unifies existing guidelines for easier reference.
What it means for you
Banks must now follow a single, clear set of guidelines for SC/ST lending, ensuring consistent treatment across all branches. The circular emphasizes sympathetic loan processing, special bankable schemes, and closer coordination with development agencies to boost credit flow to these communities.
What you must do
- Review and align your bank's lending policies with the consolidated Master Circular guidelines.
- Ensure credit planning at block level gives weightage to SC/ST communities and draw up special bankable schemes.
- Train field staff to assist SC/ST borrowers with applications and create awareness through direct contact.
- Adopt villages or localities with significant SC/ST populations for intensive lending under the Lead Bank Scheme.
- Periodically review loan procedures to ensure timely, adequate, and production-oriented credit to SC/ST borrowers.
Who it affects
All Indian scheduled commercial banks, Lead banks and district-level consultative committees, Bank field staff handling priority sector lending, SC/ST borrowers seeking credit facilities
Does this Master Circular introduce new lending targets for SCs/STs?
No, it consolidates existing instructions without setting new targets. Banks must continue to weight credit planning in favor of SCs/STs and ensure sympathetic loan processing.
How should banks create awareness among illiterate SC/ST borrowers?
Banks should rely on field staff to personally contact borrowers and explain scheme features, as brochures and literature have limited utility for illiterate individuals.
What is the role of District Level Consultative Committees under this circular?
These committees remain the principal coordination mechanism between banks and development agencies to ensure effective credit flow to SCs/STs.