Stories
RBI Directs Banks: Boost Lending to SC/ST Categories, Outlines 7 Key Steps
- •The Reserve Bank of India (RBI) issued a master circular on October 1, 2026, instructing banks to enhance credit access for Scheduled Castes (SC) and Scheduled Tribes (ST) categories.
- •Banks must prioritize SC/ST communities in credit planning, linking loans to employment and development schemes, and developing special self-employment schemes.
- •Bank employees are required to assist SC/ST customers with loan applications, provide timely credit, and inform them about various schemes; advance deposits for government schemes are prohibited.
- •The RBI emphasizes that subsidies under government schemes cannot be withheld until full loan repayment, as this affects asset creation and income generation.
- •Key central government schemes like DAY-NRLM and DRI have special provisions for SC/ST, including 50% SC/ST beneficiaries in DAY-NRLM and 40% of DRI loans for eligible SC/ST borrowers.
Key Questions Answered
Issued on October 1, 2026, the RBI's new master circular instructs banks to enhance credit planning, streamline loan application processes, and increase awareness programs to ensure greater and easier access to credit for Scheduled Castes and Scheduled Tribes.
Under the DAY-NRLM scheme, at least 50% of beneficiaries must be from SC and ST communities. Additionally, under the Differential Rate of Interest (DRI) scheme, eligible SC and ST borrowers must receive a minimum of 40% of total DRI advances.
The Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC) provides credit guarantees to lending institutions, enabling them to offer financial assistance and promote entrepreneurship among individual SC entrepreneurs and eligible businesses.
