What changed
This Master Circular consolidates all prior instructions on credit facilities to minority communities up to March 31, 2021. It reaffirms the list of 121 minority concentration districts and the sub-target of 12% of ANBC for weaker sections, including minorities, under priority sector lending.
What it means for you
Banks must continue to monitor and report credit flow to minority communities, especially in the 121 identified districts. The circular reinforces existing obligations without introducing new targets, but compliance with priority sector sub-targets remains critical for regulatory adherence.
What you must do
- Ensure smooth credit flow to minority communities, particularly in the 121 minority concentration districts.
- Set up a Special Cell headed by a Deputy/Assistant General Manager as Nodal Officer to oversee minority credit.
- Designate an exclusive officer in Lead Banks of minority concentration districts to promote credit schemes.
- Classify advances to partnership firms with majority minority ownership as minority community advances.
- Monitor priority sector sub-target of 12% of ANBC for weaker sections, including minorities, as per phased implementation.
Who it affects
All Scheduled Commercial Banks, Small Finance Banks, Lead Banks in minority concentration districts, Priority sector lending teams
Which communities are considered minorities under this circular?
The Government of India has notified Sikhs, Muslims, Christians, Zoroastrians, Buddhists, and Jains as minority communities.
How should banks treat advances to partnership firms owned by minorities?
If the majority of partners or beneficial ownership belongs to minority communities, such advances can be classified as minority community advances. However, advances to companies cannot be classified as such due to separate legal entity status.
What is the role of the designated officer in minority concentration districts?
The officer must exclusively handle credit flow issues to minorities, publicize bank credit programs, and prepare suitable schemes in collaboration with branch managers.