What changed
RBI issued a Master Circular consolidating all previous circulars on credit facilities to Scheduled Castes and Scheduled Tribes. The circular reiterates existing instructions without introducing new policy changes.
What it means for you
Banks must continue to prioritize SC/ST lending through district-level coordination and special bankable schemes. They need to ensure loan applications are processed sympathetically, without deposit requirements or subsidy withholding, to support asset creation and income generation.
What you must do
- Review and align branch-level credit plans with district credit plans to give weightage to SC/ST borrowers.
- Adopt villages or localities with significant SC/ST populations for intensive lending under the Lead Bank Scheme.
- Train staff to assist SC/ST borrowers with application forms and ensure loans are sanctioned within stipulated timelines.
- Do not insist on deposits for loans under government-sponsored poverty alleviation schemes and release subsidies upfront.
- Circulate this Master Circular and related RBI/NABARD guidelines to all staff for compliance.
Who it affects
All Scheduled Commercial Banks including Small Finance Banks, District Level Consultative Committees, Bank branch managers and field staff, SC/ST borrowers and self-employment scheme beneficiaries
Does this Master Circular introduce new lending targets for SC/ST borrowers?
No, it consolidates existing guidelines without setting new targets. Banks must continue to give weightage to SC/STs in credit planning and adopt villages with high SC/ST populations.
Can banks ask for deposits from SC/ST borrowers under government schemes?
No, banks should not insist on deposits while considering loan applications under government-sponsored poverty alleviation or self-employment programs for SC/ST borrowers.
What should banks do if they have adopted a village with low SC/ST population?
Banks should either adopt villages with sizeable SC/ST communities or specific localities (bastis) within villages that have a concentration of these communities.