Reserve Bank of India (RBI) Consolidates Guidelines on Credit Facilities to Scheduled Castes and Scheduled Tribes in Master Circular

Key facts

• The Reserve Bank of India (RBI) issued the Master Circular on Credit Facilities to Scheduled Castes (SCs) & Scheduled Tribes (STs) on October 01, 2026 (RBI/2026-27/272), consolidating all circulars issued on the subject till date, addressed to all Scheduled Commercial Banks including Small Finance Banks.
• Under the Differential Rate of Interest (DRI) Scheme, banks provide finance up to ₹15,000 at a concessional 4% per annum, with not less than 2/5th (40%) of total DRI advances to be granted to eligible SC/ST borrowers, and the land-holding eligibility criteria of 1 acre irrigated or 2.5 acres unirrigated land do not apply to SCs/STs.
• SC/ST members satisfying the DRI income criteria can avail housing loans up to ₹20,000 per beneficiary over and above the individual loan of ₹15,000 under the scheme.
• Under Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), launched by the Ministry of Rural Development effective April 1, 2013, 50% of beneficiaries should be SCs/STs.
• The Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC), launched by the Ministry of Social Justice & Empowerment on May 6, 2015, designates IFCI Ltd. as the Nodal Agency to issue guarantee cover to Member Lending Institutions financing SC entrepreneurs, with guarantee tenure up to a maximum of 7 years or the repayment period, whichever is earlier.
• Loans sanctioned to State Sponsored Organisations for SCs/STs for purchase and supply of inputs or marketing of beneficiaries' outputs are eligible for priority sector classification.
• Banks should not insist on deposits from SC/ST borrowers under government sponsored poverty alleviation or self-employment schemes, and applicable subsidy should not be held back while releasing the loan component, as non-release of subsidy upfront amounts to under-financing.
• Rejection of SC/ST loan applications under government programmes should be done at the next higher level instead of at the branch level, with reasons clearly indicated.
• Banks should set up a special cell at their Head Office for monitoring credit flow to SC/ST beneficiaries, review measures to enhance such credit on a quarterly basis, and report major year-to-year gaps in credit flow to the Board or its delegated committee.
• The SLBC Convenor bank should invite representatives of the National Commission for SCs/STs to SLBC meetings, and may also invite representatives from the National Scheduled Castes and Scheduled Tribes Finance and Development Corporation (NSFDC) and State Scheduled Castes and Scheduled Tribes Finance and Development Corporation (SCDC).