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Guidelines on credit facilities to minority communities

To ensure that minority communities secure the benefits of various Government sponsored schemes, Reserve Bank of India (RBI) regularly issues guidelines on ‘Credit Facilities to Minority Communities’.

Which communities are notified as minority for the purpose of the Guidelines?

The following communities have been notified as minority communities by the Government of India (GoI), Ministry of Minority Affairs –

  1. Sikhs
  2. Muslims
  3. Christians
  4. Zoroastrians
  5. Buddhists
  6. Jains

Government of India has identified 121 minority concentration districts having at least 25% minority population, excluding those States / UTs where minorities are in majority (i.e. Jammu & Kashmir, Punjab, Meghalaya, Mizoram, Nagaland and Lakshadweep). 

What are the responsibilities of banks?

Banks are required to specially monitor the credit flow to minorities in the 121 districts identified by the Government of India. 

In terms of Reserve Bank's Master Direction on Priority Sector Lending (PSL) dated September 04, 2020 (as updated from time to time), domestic scheduled commercial banks, foreign banks and Small Finance Banks must lend at least 11.5% (for FY: 2022-23) of Adjusted Net Bank Credit (ANBC) or Credit Equivalent amount of Off-Balance Sheet Exposures (CEOBE), whichever is higher, as on March 31 of the previous year, to weaker sections which includes, among others, persons from minority communities.

What are the timelines for reporting data?

Information to be covered by data Data to be furnished by Data to be furnished to Frequency / timeline
Credit extended to members of minority communities Banks RBI and GoI, Ministry of Finance and Ministry of Minority Affairs Half yearly basis (March and September) within 1 month from the end of each half year
Priority sector advances granted by banks to specified minority communities Convenor banks of DCCs in identified minority concentrated districts Concerned Regional Offices of RBI Within 1 month from the close of the relative quarter
Relevant extracts of agenda notes and minutes of the meetings of DCCs and respective SLBCs Lead Banks in identified minority concentrated districts Union Ministry of Finance and Ministry of Minority Affairs Quarterly basis

What is the role of National Minorities Development and Finance Corporation (NMDFC)?

National Minorities Development and Finance Corporation (NMDFC) promotes 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 each State / Union Territory. Banks may implement the schemes evolved by NMDFC.

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

An important objective of the Programme is to ensure that an appropriate percentage of the priority sector lending is targeted for the minority communities and that the benefits of various government sponsored schemes reach the under-privileged, which includes the disadvantaged sections of the minority communities. The New Programme is to be implemented by the Central Ministries / Departments concerned through State Governments / Union Territories and envisages location of certain proportion of development projects in minority concentration districts. Accordingly, all scheduled commercial banks are required to ensure that within the overall target for priority sector lending and the sub-target of 11.5% (for FY: 2022-23) for the weaker sections, sufficient care is taken to ensure that minority communities also receive an equitable portion of the credit. 


References

Reserve Bank of India. (2022, August 02). 'Master Circular on Credit Facilities to Minority Communities'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12367&Mode=0


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