Friday, November 13, 2015

Credit Facilities to Minority Communities

 Definition of Minority Communities

The following communities are notified as minority communities by the Ministry of Welfare:
(a)        Sikhs
(b)        Muslims
(c)        Christians
(d)        Zoroastrians
(e)         Buddhists
(f)          Jains

Creation of Special Cell and Designating an exclusive Officer

A Special Cell should be set up in each bank and it should be headed a Deputy General Manager/Assistant General Manager or any other similar rank who should function as a 'Nodal Officer'.

The Lead Bank in the minority concentration districts should have an officer who shall exclusively look after the credit flow to minority communities.  It  shall  be  his  responsibility  to  publicise various programmes of bank credit and also to prepare suitable schemes for their benefit in collaboration with branch managers.

Government has forwarded a list of 121 minority concentration districts, excluding those States /UTs where minorities are in majority (J & K, Punjab, Meghalaya, Mizoram, Nagaland and Lakshadweep) for the banks to monitor the credit flow to minorities in these districts.

The designated officer may be attached to the Lead Bank. He will arrange group meetings for formulation of suitable schemes.

The Convenor banks of the DCCs and the SLBCs should ensure that steps taken to facilitate the flow of credit and the progress are reviewed regularly.

The Convenor banks of DLRC/SLRM/SLBCs may invite Chairman/ Managing Directors of State Minority Commissions/Boards or the State Minorities Financial Corporations or their representatives to attend the meetings of District Level Review Committee (DLRC), State Level Review Meeting (SLRM) and State Level Bankers Committee (SLBC).

Names, designation and office addresses of (i) the officer-in-charge of the Special Cell at Head Office and (ii) officer appointed by Lead Banks, should be furnished to the National Commission for Minorities A copy of the relevant communication may also be furnished to Financial Inclusion and Development Department of RBI.

The Lead Banks in the identified districts may involve the State Minority Commission / Finance Corporation in the extension work.

The Lead Banks in the identified districts may collaborate with DDMs of NABARD/ NGOs/ Voluntary Organizations in reaching the poor through Self Help Groups (SHGs).

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. Banks may ensure proper maintenance of the register to evolve timely sanction and disbursement of loan applications.


The monitoring statements should reach RBl within one month from the close of each half-year.

Advances granted to a partnership firms, where the majority of the partners belong to specified minority communities, may be treated as advances to minority communities. Advances granted to a company cannot be classified as advances to minority communities.

The Convenor banks of the DCC in the identified districts should furnish the data on priority sector advances granted by banks to specified minority communities to the concerned Regional Offices of RBl within one month from the close of the relative quarter.

The Lead Banks in the identified 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 Union Ministry of Finance and to the Ministry of Welfare on a quarterly basis for their use.


Banks should include suitable lecture sessions as part of all relevant training programmes like induction courses, programmes on rural lending, financing of priority sectors, poverty alleviation programmes, etc.

The Lead Banks should organize Entrepreneur Development Programmes. Depending upon the major vocation and type of activity undertaken by large sections of the people in the districts, suitable programmes may be organized in co-operation with State Governments, Industries Department, DIC, SIDBI, State Technical Consultancy Organization, KVIC and other voluntary organizations. The duration, the course content, the faculty support etc. should be decided by taking into account the prevailing conditions, need and existing skills as well as aptitude of the people.

The Lead Banks may organize sensitization workshops for bank officials regarding micro credit/ lending to SHGs with the help of DDMs of NABARD.


There should be good publicity about various anti-poverty programmes where there is large concentration of minority communities.

The Lead Banks may create awareness among minority communities about the credit facilities available, through (i) print media (ii) TV channels - DD/ local channels, (iii) participation / setting up of stalls in the Melas / fairs.

National Minorities Development and Finance Corporation (NMDFC)

NMDFC was established in September 1994 to promote economic and developmental activities for the backward sections amongst the minorities. NMDFC works as an apex body and channelises its funds to the beneficiaries through the State Minority Finance Corporation of the respective State/Union Territory Governments.

The NMDFC is operating the Margin Money Scheme. Bank finance under the scheme will be upto 60 percent of the project cost. The remaining amount is shared by NMDFC, the State channelising agency and the beneficiary in the proportion of 25%, 10%, and 5%, respectively. Banks may implement the Margin Money scheme evolved by NMDFC. The assets created out of the loan amount are to be charged to the banks. Recoveries are to be appropriated first towards bank dues.

Prime Minister’s 15 Point Programme for the Welfare of Minorities

All scheduled commercial banks are required to ensure that within the overall target for priority sector lending and the sub-target of 10 percent for the weaker sections, sufficient care is taken to ensure that minority communities also receive an equitable portion of the credit.

Based on RBI Circular dt 16/07/15. Please visit for any further clarification if required….. Poppy