RBI issues Master Circular to streamline credit facilities for SCs/ STs

On 16-6-2025, the Reserve Bank of India (‘RBI’) issued a ‘Master Circular – Credit facilities to Scheduled Castes (SCs) & Scheduled Tribes (STs)’ consolidated guidelines to outline measures for banks to enhance credit access and financial inclusion for SCs and STs through streamlined procedures, special reservations, and enhanced monitoring.

Key Points from Master Circular on credit facilities for SCs/ STs:

1. The RBI’s Master Circular aims to outline steps through which banks will now be able to improve credit facilities made available to SCs and STs, ensuring equitable access to financial services.

2. Banks, through District Level Consultative Committees, will collaborate with government agencies in prioritizing credit supports to SCs and STs, while promoting self- employment and development schemes through District Industries Centres.

3. Banks will give special focus to villages/localities with a high SC/ST population will be driven to promote financial inclusion with regular policy reviews for streamlining the loan and credit accessibility.

4. Banks will take active steps to implement and enhance the core values of this Master Circular, such as:

   1. Active support system to SC/ST borrowers;

   2. Releasing upfront subsidies to SC/ST applicants;

   3. Extend institutional support to National Scheduled Tribes Finance & Development Corporation and National Scheduled Castes Finance & Development Corporation;

   4. Loan application rejections will be decided at higher level.

5. Several major government schemes will be providing reservations against credit and subsidies to SC/ST communities, monitored by the RBI, like:

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

   2. Differential Rate of Interest (DRI) Scheme.

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

6. Banks will establish special monitoring cells to track SC/ST credit flow as required by this Master Circular.

7. The State Level Bankers’ Committee will oversee policy execution, ensuring quarterly reviews and data consolidation effectively assess loan performance.

8. The SLB Committee will include representatives from government agencies and financial corporations for consistent oversight and review progress.

9. The Circular mandates banks to report data on SC/ST loans as per the Priority Sector Lending guidelines. Timely submission ensures transparency, accountability, and compliance, allowing periodic assessments to address gaps in credit distribution.

10. By streamlining credit accessibility and reinforcing institutional support, RBI’s Master Circular aims to uplift SC/ST communities, fostering entrepreneurship and economic self-sufficiency.