RBI Master Circular No: RBI/2012-13/89 (02-Jul-12) Master Circular- Priority Sector Lending - Credit Facilities to Minority Communities

RPCD. GSSD. BC. No.2/09.10.01/2012 - 13

The Chairman/ Managing Director
All Indian Scheduled Commercial Banks

Dear Sir,

Reserve Bank of India has, periodically, issued instructions/directives to banks with regard to providing credit facilities to Minority Communities. To enable banks to have current instructions at one place, a Master Circular incorporating all the existing guidelines/instructions/directives has been prepared and is appended. We advise that this Master Circular has been updated and consolidates all the previous instructions issued by Reserve Bank from time to time, which are listed in the Annexure - IV.

2. Please acknowledge receipt.

Yours faithfully,

C.D.Srinivasan

Chief General Manager

INDEX

Sr. No.	Description
Annexure -- I	Format of the half yearly statement showing priority sector advances granted to the members of the specified minority communities vis-a-vis overall priority sector advances
Annexure -- II	List of Minority Concentration Districts
Annexure -- III	Format of the quarterly statement showing priority sector advances granted to the members of the specified minority communities vis-a-vis overall priority sector advances in the Identified Districts
Annexure - IV	List of Circulars consolidated in the Master Circular

Master Circular

Priority Sector Lending

Special Programmes

1. Credit Facilities to Minority Communities

The Government of India has indicated that care should be taken to see that minority communities secure, in a fair and adequate measure the benefits flowing from various Government sponsored special programmes. All commercial banks, both in public and private sector have been advised to ensure smooth flow of bank credit to minority communities.

2. Definition of Minority Communities

2.1 The following communities have been notified as minority communities by the Government of India, Ministry of Welfare:

a. Sikhs

b. Muslims

c. Christians

d. Zoroastrians

e. Buddhists

3. Creation of Special Cell and Designating an exclusive Officer

3.1 A Special Cell should be set up in each bank to ensure smooth flow of credit to minority communities and it should be headed by an officer holding the rank of Deputy General Manager/Assistant General Manager or any other similar rank who should function as a 'Nodal Officer'.

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 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 Government of India has forwarded a list of 121 minority concentration districts having at least 25% minority population, excluding those States /UTs where minorities are in majority (J & K, Punjab, Meghalaya, Mizoram, Nagaland and Lakshadweep). Accordingly, all scheduled commercial banks have been advised vide our letter RPCD.SP.BC.No.13/ 09.10.01/2007-08 dated July 16, 2007 to specially monitor the credit flow to minorities in these 121 districts as against 103 districts which were hitherto monitored, thereby ensuring that the minority communities receive a fair and equitable portion of the credit within the overall target of the priority sector (Updated list of Minority Concentration districts at Annexure II).

3.4 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. He would thus, be able to receive necessary guidance from Lead Bank Officer, who will be senior enough and have adequate experience for liaising effectively with the 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. It will be necessary for the banks concerned to ensure that the role assigned to the designated officer/s is effectively fulfilled.

3.5 The Convenor banks of the District Consultative Committees (DCCs) 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.

3.6 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).

3.7 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 in the identified districts to look after exclusively the problems of minority communities, should be furnished by banks to the National Commission for Minorities at the following address and updated periodically:

The Secretary
National Commission for Minorities
Government of India
5th Floor
Lok Nayak Bhawan
Khan Market
New Delhi 110 003

A copy of the relevant communication may also be furnished to Rural Planning and Credit Department, Reserve Bank of India, Central Office, Mumbai.

3.8 The Lead Banks in the 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.

3.9 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). 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 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.

5 Monitoring

5.1 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. The statements (given in Annexure I) should reach RBl within one month from the close of each half-year.

5.2 In the case of a partnership firm, if the majority of the partners belong to one or the other of the specified minority communities, advances granted to such partnership firms may be treated as advances granted to minority communities and accordingly included in the prescribed statement. A company has a separate legal entity and hence advances granted to it cannot be classified as advances to the specified minority communities.

5.3 The Convenor banks of the District Consultative Committees in the identified districts should furnish the data on priority sector advances granted by banks to specified minority communities compiled by them in the prescribed format (vide 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. A list indicating the names of the identified districts and RPCD Regional Offices to which the Lead Bank should submit the statement is enclosed in Annexure II.

5.4 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).

5.5 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.

6. Training

6.1 With a view to ensuring that the bank staff and officers have proper perspective and appreciation of the various programmes for welfare of minorities, necessary orientation may be provided to officials and other staff. For this purpose, 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.

6.2 The Lead Banks functioning in the identified districts should organize Entrepreneur Development Programmes so that the members of the minority communities in these areas are enabled to derive the benefit of various programmes being financed by the banks. 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, District Industries Centre, SIDBI, State...