The Reserve Bank of India (RBI) has periodically issued comprehensive guidelines and instructions to banks to promote the flow of credit to Scheduled Castes (SCs) and Scheduled Tribes (STs). In order to facilitate greater participation of SC/ST beneficiaries in availing credit facilities, it is imperative to enhance awareness of various schemes through effective communication strategies such as distribution of brochures, outreach by field staff, and dedicated awareness campaigns. Banks should instruct their branches to conduct exclusive meetings with SC/ST beneficiaries more frequently to assess their credit requirements and incorporate these into the bank’s credit planning process.

Several major Centrally Sponsored Schemes offer credit facilities through banks, coupled with government-provided subsidies. These schemes are monitored by the RBI and provide targeted support to SC/ST communities through specific reservations or relaxations. Notable schemes include:

1. Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM)

The Ministry of Rural Development launched the DAY-NRLM, restructured from the erstwhile Swarnajayanti Gram Swarozgar Yojana, effective April 1, 2013. This scheme mandates the inclusion of vulnerable sections, with at least 50% of beneficiaries drawn from SC/ST communities. Comprehensive details of the scheme are provided in the updated Master Circular on DAY-NRLM.

2. Differential Rate of Interest (DRI) Scheme

Under the DRI Scheme, banks extend credit of up to ₹15,000 at a concessional interest rate of 4% per annum to economically weaker sections for engaging in productive activities. To ensure substantial participation from SC/ST individuals, banks are advised to allocate at least 40% of their total DRI advances to eligible SC/ST borrowers.

Moreover, the landholding criteria—1 acre of irrigated or 2.5 acres of unirrigated land—are waived for SC/ST beneficiaries. Additionally, those meeting the income criteria may avail of housing loans up to ₹20,000 in addition to the standard loan limit under the scheme.

3. Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC)

Launched on May 6, 2015 by the Ministry of Social Justice and Empowerment, the CEGSSC aims to promote entrepreneurship among Scheduled Castes by offering credit enhancement guarantees to Member Lending Institutions (MLIs). IFCI Ltd. serves as the designated Nodal Agency for issuing guarantee covers on behalf of SC entrepreneurs.

Eligible entities include:

• Individual SC entrepreneurs
• Registered companies and societies
• Registered partnership firms and sole proprietorships with over 51% shareholding and management control by SC promoters for the preceding six months

The guarantee coverage ranges from ₹0.15 crore to ₹5.00 crore, with a maximum tenure of seven years or until the repayment period ends, whichever is earlier.

Monitoring and Review Mechanism

To ensure the effective implementation of these initiatives, banks are required to establish a dedicated cell at their Head Office to monitor the flow of credit to SC/ST beneficiaries. This cell will oversee adherence to RBI guidelines, collect and consolidate data from branches, and submit periodic reports to both RBI and the Government.

The Head Office should regularly review lending data pertaining to SC/ST beneficiaries. Any significant discrepancies or year-on-year variations should be reported to the Board as part of the broader “Financial Inclusion” review, in accordance with RBI circular DBR No.BC.93/29.67.001/2014-15 dated May 14, 2015.

Banks must conduct quarterly reviews of measures taken to enhance credit flow to SC/ST borrowers, including progress in direct lending and partnerships with State-level SC/ST Finance and Development Corporations. These reviews should incorporate insights from field visits conducted by senior officials from Head Offices or Controlling Offices.

Further, SLBC Convenor Banks are advised to invite representatives from the National Commission for SCs/STs, as well as from the National and State Scheduled Castes and Scheduled Tribes Finance and Development Corporations (NSFDC and SCDC), to participate in SLBC meetings to facilitate coordinated efforts.