Flow of Credit
to SCs / STs
Planning Process
(a) At the block
level, weightage is to be given to scheduled castes / scheduled tribes in the
planning process. Special bankable schemes suited to these communities should
be drawn up. Banks should consider loan proposals with utmost sympathy and
understanding.
(b)
The
District Level Consultative Committees should be the principal mechanism of
co-ordination between banks and development agencies.
(c)
The
district credit plans should indicate the linkage of credit with employment and
development schemes.
(d)
Banks
will establish closer liaison with the District Industries Centres.
(f)
Banks
should review their lending procedures and policies to see that loans are
sanctioned in time, are adequate and production-oriented and that they generate
incremental income to make them self-liquidating.
(g)
While
'adopting' villages for intensive lending, villages with sizeable population of
these communities may be specially chosen.
(h)
Special
efforts should be made to evolve suitable bankable schemes for weaker sections
including members of these communities.
Role of Banks
(i)
Bank
staff may help the poor borrowers in filling up the forms and completing other
formalities.
(j)
Awareness
among the beneficiaries about various schemes will have to be created by contacting
such borrowers and explaining to them the salient features of the schemes as
also the advantages that will accrue. Banks should organize meetings with SC /
ST beneficiaries to understand their credit needs and to incorporate the same
in the credit plan.
(k)
Bank
should keep Application Register / Deposit Register, Complaint Register in
desired order and maintain relevant documents and pass book in local language
too, besides in Hindi and English.
(m)
Banks
should not insist on deposits while considering such loan applications. Non
release of subsidy upfront amounts to under-financing and hampers asset creation
/ income generation hence should be avoided.
(n)
The
National Scheduled Tribes Finance & Development Corporation and National
Scheduled Castes Finance & Development Corporation have been set up under
the administrative control of Ministry of Tribal Affairs and Ministry of Social
Justice & Empowerment, respectively.
(o)
Advances
sanctioned to State sponsored organizations of SC / ST, for the specific
purpose of purchase and supply of inputs to and / or the marketing of outputs
of the beneficiaries viz. artisans, village and cottage industries of these
organizations, should be treated as Priority Sector Advances.
Role of SC / ST
Development Corporations
(p) SC/ST
Development Corporations can consider bankable schemes / proposals for bank
finance. As regards Collateral Security and / or third party guarantee for
loans, guidelines issued to banks on priority sector lending will apply.
Rejection of
Applications
(q) If
applications in respect of SCs / STs are to be rejected, it should be done at
the next higher level. Further, reasons for rejection should be clearly
indicated.
There are
several major centrally sponsored schemes under which credit is provided and
subsidy is received. Under each of these, there is a significant reservation / relaxation
for the members of the SC / ST communities.
Reservations for
SC / ST Beneficiaries under Major Centrally Sponsored Schemes
National Rural
Livelihoods Mission
(r) NRLM would
ensure adequate coverage of vulnerable sections of the society such that 50% of
these beneficiaries are SC/STs.
National Urban
Livelihoods Mission
(s)
Under NULM, advances should be extended to SCs / STs to the extent of their
strength in the local population.
Differential
Rate of Interest Scheme
(t) Banks have
been advised to grant to eligible borrowers belonging to SCs / STs such
advances to the extent of not less than 2/5th (40 percent) of total DRI advances.
Scheme for
Rehabilitation of Manual Scavenger
(u)
Government of India stopped funding the NSLRS since 2005-06 and approved the
Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS).
Relaxations/
Reservations for SC/ST beneficiaries under major centrally sponsored schemes
(v)
Under the DRI scheme, the eligibility criteria that size of land holding should
not exceed 1 acre of irrigated land and 2.5 acres of unirrigated land is not
applicable to SCs / STs. Moreover, members of SCs / STs satisfying the income
criteria of the scheme can also avail of housing loan up to Rs.20,000/- per beneficiary
over and above the individual loan of Rs.15,000/- available under the scheme.
Monitoring and
Review
A
special cell should be set up at the Head Office for monitoring the flow of
credit to SC / ST beneficiaries.
Convenor
bank (of SLBC) should invite the representative of National Commission for SCs
/ STs, representatives from National Scheduled Castes and Scheduled Tribes
Finance and Development Corporation (NSFDC) and State Scheduled Castes and
Scheduled Tribes Finance and Development Corporation (SCDC) to attend SLBC
meetings
A
periodical review should be made by the Head Office of banks of the credit
extended to SCs / STs.
The
Board of Directors should review on quarterly basis, the measures taken to
enhance the flow of credit to SC / ST borrowers. The review should also
consider the progress made in lending to these communities directly or through through
related agencies. A copy each of such review notes should be sent to Reserve
Bank.
Reporting
Requirements
It has been
considered necessary to have data of banks' advances for SCs and STs under
priority sectors and Differential Rates of Interest (DRI) Scheme separately.
Accordingly banks may submit half-yearly reports to RBI showing credit extended
to SCs and STs under priority sectors and an yearly report showing credit
extended to SCs and STs under DRI Scheme.
Based on RBI
Circular dt 01/07/15. Please visit www.rbi.org.in for any
further clarification if required….. Poppy
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