Credit facilities to Scheduled Castes (SCs) & Scheduled Tribes (STs)

Through targeted credit facilities, governments seek to empower SCs and STs, not merely as recipients of aid, but as drivers of their economic destinies. Central to this endeavor are the Scheduled Caste Development Corporations (SCDCs) and Scheduled Tribe Development Corporations (STDCs). From seed capital for entrepreneurial ventures to support for educational pursuits, SCDCs and STDCs play a pivotal role in channeling credit where it is needed most, catalyzing economic transformation at the grassroots level. Reserve Bank of India (RBI) has issued a Circular indicating the measures to be taken by Banks to step up their advances to SCs/STs.ique needs of Scheduled Castes (SCs) and Scheduled Tribes (STs) are pivotal instruments in the pursuit of inclusive growth and social justice. By empowering individuals with access to financial resources, governments pave the way for economic liberation and social mobility.

1. Planning Process:

The District Level Consultative Committees formed under the Lead Bank Scheme should continue to be the principal mechanism of co-ordination between banks and development agencies. Banks should periodically review their lending procedures and policies to see that loans are sanctioned in time and while formulating the Block/ District Credit Plan, special focus may be given to villages with sizeable population of SC/ST communities/ specific localities in the towns/villages having a concentration of these communities.

2. Role of Banks:

The role of the bank is as follows:

• Bank staff may help the borrowers in filling up the forms and completing other formalities;
• Create awareness among them about various schemes formulated by banks through various means such as brochures, visits by field staff etc.;
• Circulars issued by RBI/NABARD to be circulated among the staff for compliance;
• The National Scheduled Tribes Finance & Development Corporation and National Scheduled Castes Finance & Development Corporation have been set up under the administrative control of the Ministry of Tribal Affairs and the Ministry of Social Justice & Empowerment, respectively. Banks should advise their branches/controlling offices to render all the necessary institutional support to enable these institutions to achieve the desired objectives;
• Rejection of SC/STs’ loan applications under government programmes should be done at the next higher level instead of at the branch level and reasons of rejection should be clearly indicated.

3. Role of SC/ST Development Corporations:

The Government of India has advised all State Governments that the Scheduled Caste/Scheduled Tribes Development Corporations can consider bankable schemes/proposals for bank finance.

4. Reservations for SC/ST beneficiaries under major Centrally Sponsored Schemes:

There are several major centrally sponsored schemes under which credit is provided by banks and subsidy is received through Government Agencies. Credit flow under these schemes is monitored by RBI. Some of them are: Deendayal Antyodaya Yojana – National Rural Livelihoods Mission, Deendayal Antyodaya Yojana – National Urban Livelihoods Mission, Differential Rate of Interest (DRI) Scheme.

5. Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC):

The CEGSSC was launched by the Ministry of Social Justice & Empowerment on May 6, 2015 with the objective of promoting entrepreneurship amongst the Scheduled Castes (SCs), by providing credit enhancement guarantee to Member Lending Institutions (MLIs), which extends financial assistance to these entrepreneurs. The amount of guarantee cover under CEGSSC ranges from a minimum of ₹ 0.15 Crore to a maximum of ₹ 5.00 Crore.

6. Monitoring and Review:

A special cell should be set up at the Head Office of banks for monitoring the flow of credit to SC/ST beneficiaries. Apart from ensuring the implementation of the RBI guidelines, the cell would also be responsible for collection of relevant information/data from the branches, consolidation thereof and submission of the requisite returns to RBI and Government. Banks should review the measures taken to enhance the flow of credit to SC/ST borrowers on a quarterly basis. It stipulates that the review should also consider the progress made in lending to these communities directly or through the State Level Scheduled Caste/Scheduled Tribe Corporations for various purposes based, amongst others, on field visits of the senior officers from the Head Office/Controlling Offices.

7. Reporting Requirements:

Data on advances to SCs and STs should be reported, within the time frames stipulated.

These apex bodies serve as catalysts for change, leveraging financial resources to uplift SCs and STs across the nation. By extending credit-linked schemes and fostering entrepreneurship, they empower individuals to seize opportunities and chart their paths towards prosperity.

In conclusion, credit facilities tailored to the unique needs of Scheduled Castes (SCs) and Scheduled Tribes (STs) are pivotal instruments in the pursuit of inclusive growth and social justice. By empowering individuals with access to financial resources, governments pave the way for economic liberation and social mobility.