Laws and sections by number or title, due dates, pages, and updates.
Scheduled Commercial Banks must ensure smooth credit flow to minority communities within priority sector lending targets. Banks must monitor credit flow in 121 minority concentration districts, establish special cells with nodal officers, and submit half-yearly and quarterly data reports to the Reserve Bank of India and government ministries. Domestic commercial banks and foreign banks must maintain a priority sector lending target of 40 percent of Adjusted Net Bank Credit or Credit Equivalent amount of Off-Balance Sheet Exposures, while Small Finance Banks must maintain 75 percent. Within these targets, banks must allocate a sub-target of 12 percent for weaker sections, which includes minority communities.
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RBI/2023-24/02 FIDD.GSSD.BC.No.02/09.10.001/2023-24 April 01, 2023
The Chairman/Managing Director/Chief Executive Officer All Scheduled Commercial Banks (excluding RRBs and Foreign Banks with less than 20 branches)
Madam/ Dear Sir,
Master Circular on Credit Facilities to Minority Communities
The Reserve Bank of India has periodically issued guidelines/instructions/directives to banks with regard to providing credit facilities to Minority Communities. The Master Circular enclosed consolidates the circulars issued by Reserve Bank on the subject till date, as listed in the Appendix .
Yours faithfully,
(Nisha Nambiar) Chief General Manager
Encl: As above
Master Circular
Credit Facilities to Minority Communities: 1.1 In order to ensure that minority communities secure, in a fair and adequate measure, the benefits flowing from various Government sponsored schemes, Scheduled Commercial Banks (referred to as ‘banks’ hereafter) are advised to ensure smooth flow of bank credit to minority communities. 1.2 Government of India has forwarded a list of 121 minority concentration districts having at least 25% minority population ( Annexure I ), excluding those States/UTs where minorities are in majority (Jammu & Kashmir, Punjab, Meghalaya, Mizoram, Nagaland and Lakshadweep). Accordingly, banks are advised to specially monitor the credit flow to minorities in these 121 districts thereby, ensuring that the minority communities receive a fair and equitable portion of the credit within the overall target of the priority sector. 1.3 In terms of Reserve Bank's Master Direction on Priority Sector Lending (PSL) dated September 04, 2020 (as updated from time to time), a target of 40 percent of Adjusted Net Bank Credit (ANBC) or Credit Equivalent amount of Off-Balance Sheet Exposures (OBE), whichever is higher, as on March 31 of the previous year, has been mandated for lending to the priority sector by domestic Scheduled Commercial Banks and foreign banks; for Small Finance Banks the target is 75% of their Adjusted Net Bank Credit (ANBC). Within this, a sub-target of 12 per cent of ANBC or Credit Equivalent amount of OBE, whichever is higher, as on March 31 of the previous year, has been mandated for FY:2023-24 for lending to weaker sections which includes, among others, persons from minority communities.
Definition of Minority Communities 2.1 The following communities have been notified as minority communities by the Government of India, Ministry of Minority Affairs:
Creation of Special Cell and designating an exclusive Officer 3.1 Each bank should set up a special cell having a Nodal Officer holding the rank of Deputy General Manager/Assistant General Manager or any other similar rank, in order to ensure smooth flow of credit to minority communities. 3.2 The Lead Bank in each of the minority concentration districts should have an officer who shall exclusively look after the problems regarding the credit flow to minority communities. It shall be his/her responsibility to publicise among the minority communities various programmes of bank credit and also to prepare suitable schemes for their benefit in collaboration with branch managers. 3.3 The designated officer should exclusively look after aspects relating to credit assistance to minority communities in the concerned districts. The designated officer may be attached to the Lead Bank set up at the district level so as to receive necessary guidance from Lead District Manager, who will be senior enough and have adequate experience for liaising effectively with other credit institutions and Government agencies and will also be working in close collaboration with the branch managers of other banks in the district. The designated officer will also arrange group meetings for their guidance for formulation of schemes suitable for the members of the minority communities. Banks concerned may ensure that the role assigned to the designated officer/s is effectively fulfilled. 3.4 The name, designation and office address of (i) the officer-in-charge of the Special Cell at Head Office and (ii) officer appointed by Lead Banks in the identified districts to look after the problems of minority communities exclusively, should be furnished by banks to the National Commission for Minorities and updated periodically. A copy of the relevant communication may also be furnished to The Chief General Manager, Financial Inclusion and Development Department, Reserve Bank of India, SBS Marg, Fort, Central Office, Mumbai 400001.
Role of Lead Banks 4.1 Lead Banks of the minority concentration districts will have to exercise the pro-active role expected of them to ensure that the minority communities, particularly those who are poor and illiterate have access to bank credit for taking up productive activities. 4.2 The Lead Banks in the 121 identified districts having concentration of minority communities may involve the State Minority Commission/Finance Corporation in the extension work including creating awareness, identification of beneficiaries, preparation of viable projects, provision of backward and forward linkages such as supply of inputs/marketing, recovery etc. 4.3 They may collaborate with District Development Managers (DDMs) of NABARD/NGOs/Voluntary Organizations in reaching the poor through Self Help Groups (SHGs). 4.4 The Convenor banks of the District Consultative Committees (DCCs), District Level Review Committees (DLRCs) and the State Level Bankers Committees (SLBCs) should ensure that steps taken to facilitate the flow of credit to the minority communities and the progress made in this regard are reviewed regularly at their meetings. Chairman/Managing Director of State Minority Commissions/Boards or the State Minorities Financial Corporations or their representatives may be invited to attend the meetings of DLRCs/SLBCs.
Advances under DRI Scheme Banks may route loans under the DRI scheme through State Minority Finance/Development Corporation on the same terms and conditions as are applicable to loans routed through SC/ST Development Corporations, subject to the beneficiaries of the Corporations meeting the eligibility criteria and other terms and conditions prescribed under the scheme. Banks may ensure proper maintenance of the register to evolve timely sanction and disbursement of loan applications.
Monitoring 6.1 Data on credit extended to members of minority communities should be furnished to Reserve Bank of India and to the Government of India, Ministry of Finance and Ministry of Minority Affairs, on half yearly basis as at the end of March and September every year within one month from the end of each half year ( Annexure II ). 6.2 The Convenor banks of the District Consultative Committees in the identified minority concentrated districts should furnish the data on priority sector advances granted by banks to specified minority communities compiled by them, in the prescribed format ( Annexure III ), for the district under their lead responsibility to the concerned Regional Offices of RBl within one month from the close of the relative quarter. 6.3 The progress made in regard to the flow of credit to the minority communities should be reviewed regularly at the meetings of the District Consultative Committees (DCCs) and the State Level Bankers Committees (SLBCs). 6.4 The Lead Banks in the identified minority concentrated districts should furnish the relevant extracts of the agenda notes and the minutes of the meetings of the DCCs and of the respective SLBCs to the Ministry of Finance, GoI and to the Ministry of Minority Affairs on a quarterly basis for their use.
