What changed
This is a consolidation of existing circulars into a single Master Circular, not new policy. It reiterates the list of 121 minority concentration districts and the requirement for banks to monitor credit flow there. It also reaffirms the definition of minority communities and the need for special cells and nodal officers.
What it means for you
Banks must continue to prioritize lending to minority communities, especially in the 121 identified districts, to meet the 12% weaker sections sub-target under PSL. The circular reinforces the need for dedicated monitoring and outreach, which may require additional resources and reporting. Non-compliance could attract regulatory scrutiny.
What you must do
- Ensure your bank has a special cell with a nodal officer (DGM/AGM rank) for minority community credit.
- In each of the 121 minority concentration districts, designate a Lead Bank officer to exclusively handle credit flow to minorities.
- Monitor and report credit flow to minorities in these districts to ensure fair share within the 40% PSL target and 12% weaker sections sub-target.
- Publicize credit schemes among minority communities and collaborate with branch managers to prepare suitable schemes.
Who it affects
All Scheduled Commercial Banks (excluding RRBs and foreign banks with <20 branches), Lead Banks in minority concentration districts, Nodal officers and special cells handling minority credit
Which communities are considered minorities for this circular?
The Government of India has notified Sikhs, Muslims, Christians, Zoroastrians, Buddhists, and Jains as minority communities.
What is the target for lending to weaker sections under PSL?
For FY 2023-24, banks must lend 12% of ANBC or credit equivalent of OBE (whichever is higher) to weaker sections, which includes minority communities.
Do we need to set up a special cell in every branch?
No, each bank should set up one special cell at the head office or regional level with a nodal officer. In each of the 121 minority concentration districts, the Lead Bank must designate an officer to exclusively handle minority credit.