Stories
RBI Directs Banks: Boost Loans and Prioritize SC/ST Category
- •The RBI has directed banks to increase loans for the SC/ST category and link credit planning to employment and development schemes.
- •Banks must ensure timely, adequate, and production-based credit for SC/ST borrowers, especially in areas with significant SC/ST populations.
- •Banks cannot impose deposit conditions for SC/ST loans under government poverty alleviation schemes and cannot withhold subsidies until the loan is repaid.
- •Rejection of SC/ST loan applications under government programs must be decided at the next higher level, with clear reasons recorded.
- •Under the DRI Scheme, SC/ST borrowers should receive at least 40% of total DRI advances, and CEGSSC offers guarantee cover up to ₹5 crore for SC entrepreneurs.
Key Questions Answered
The Reserve Bank of India has instructed banks to increase credit facilities and prioritize SC/ST borrowers by linking credit planning to employment and development schemes. Banks must ensure timely, adequate, and production-based credit, with special attention given to villages and local areas having significant SC/ST populations.
No, banks cannot impose a deposit condition for loans given to SC/ST borrowers under government poverty alleviation or self-employment schemes. Additionally, applicable subsidies cannot be withheld until the borrower repays the entire loan, as withholding them is considered under-financing.
Under the DRI Scheme, banks provide loans up to ₹15,000 for productive activities at an interest rate of 4%, with SC/ST borrowers intended to receive at least 40% of the total DRI advances. Furthermore, eligible SC/ST borrowers can obtain an additional housing loan of up to ₹20,000 under the DRI scheme, and landholding limits will not apply to them.
