RBI /2006-07/ 52 RPCD NO. SP.BC.09 /09.10.01/2006-07, DT. 05/07/2006

Master Circular-Priority Sector Lending - Credit facilities to Minority Communities

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 circulars on this subject issued by Reserve Bank till date as indicated in the Annexure– IV.

Please acknowledge receipt.

Yours faithfully,

Sd/-
(G. Srinivasan)
Chief General Manager

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Master Circular

PRIORITY SECTOR LENDINGS - SPECIAL PROGRAMMES

1. CREDIT FACILITIES TO MINORITY COMMUNITIES

The Government of India have 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. (List of Minority concentration districts at Annexure II)

3.3 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.

3.4 The convener 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.

3.5 The Convener 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)

3.6 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,
Lok Nayak Bhavan,
5th Floor, Khan Market,
New Delhi-110 003.

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

3.7 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.

3.8 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. With a view to monitoring the performance of banks in providing credit to the specified minority communities, data on credit assistance provided to members of minority communities should be furnished to Reserve Bank of India and to the Government of India, Ministry of Finance, and Ministry of Welfare, on half yearly basis as on the last Friday of March and September every year. The statements (given in Annexure I) should reach RBI 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 RBI within one month from the close of the relative quarter. A list indicating the names of the identified districts, the respective lead banks and RPCD Regional offices to whom the lead bank should submit the statement is 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 Technical Consultancy Organization, Khadi and Village Industries Commission and other voluntary organizations which are fully equipped to impart such training and orientation. The duration of the programme, the course content, the faculty support to be selected etc. should be decided by each lead bank taking into account the prevailing conditions, need and existing skills as well as aptitude of the people in the district.

6.3. The Lead Banks in the identified districts may sensitise and motivate the staff posted to identified districts through proper training to assist the minority communities under various credit schemes.

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

7. Publicity

7.1 There should be good publicity about various anti-poverty programmes of the Government where there is large concentration of minority communities and particularly in the districts listed in the Annexure II which have a concentration of minority communities.

7.2 The Lead Banks in the identified districts may create awareness among minority communities regarding credit facilities available from banks through appropriate measures which may include publicity through (i) print media i.e. distribution of pamphlets in local languages, advertisements/articles in newspapers etc. (ii) TV channels - DD/local channels, (iii) participation / setting up of stalls in the Melas / fairs organized during the religious /festive occasions by these communities.

8. National Minorities Development and Finance Corporation (NMDFC)

8.1 National Minorities Development and Finance Corporation (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.

8.2 The NMDFC is operating, inter-alia, the Margin Money Scheme. Bank finance under the scheme will be up to 60 percent of the project cost. The remaining amount of the project cost 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. While extending bank finance, banks should bear in mind the guidelines/instructions issued by RBI from time to time on priority sector advances. It may be ensured that the assets created out of the loan amount are mortgaged/hypothecated to the banks. Where recoveries have been made by the banks, it would be in order if the amounts are appropriated first towards bank dues.

ANNEXURE 1

Statement showing Priority Sector Advances granted to the Members of the specified Minority Communities vis-à-vis Overall Priority Sector Advances for the Half-year ended ___________
(Vide paragraph 5.1)

(No. of Accounts - Actuals)
(Amount in lakhs of Rupees)

Bank Name ____________________________________________________ Bank Code __________
Part 'A' - For Identified Districts

			Christians (10)		Muslims (20)		Buddhists (30)		Sikhs (40)		Zoroastrians (50)		Total 'A'		Others 'B' (90)		Total P/S Advances in Identified Districts 'C' (99)
			No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.
Uttar Pradesh
1.	Rampur	280
2.	Bijnor	276
3.	Moradabad	278
4.	Saharanpur	274
5.	Muzaffarnagar	272
6.	Meerut	270
7.	Bahraich	244
8.	Gonda	243
9.	Gaziabad	269
10.	Pilibhit	249
11.	Deoria	236
12.	Barabanki	202
13.	Basti	242
West Bengal
14.	Murshidabad	126
15.	Maldah	128
16.	North Dinajpur	130
17.	South Dinajpur	131
18.	Birbhum	122
19.	Nadia	124
20.	24-Paraganas (S)	103
21.	24-Paraganas (N)	101
22.	Cooch Bihar	136
23.	Howrah	110
Kerala
24.	Mallapuram	983
25.	Kozikhode	980
26.	Cannanore	985
27.	Palghat	974
28.	Wyanad	988
Bihar
29.	Purnea	078
30.	Araria	083
31.	Kishanganj	049
32.	Katihar	071
33.	Darbhanga	074
Karnataka
34.	Bidar	866
35.	Gulbarga	864
36.	Bijapur	868
Maharashtra
37.	Greater Bombay	600
38.	Aurangabad	624
Andhra Pradesh
39.	Hyderabad	800
40.	Kurnool	830
Haryana
41.	Gurgaon	348
Madhya Pradesh
42.	Bhopal	764
Rajasthan
43.	Jaisalmer	522
Gujarat
44.	Kutch	586
	Total	000

Bank Name ____________________________________________________ Bank Code __________
Part 'B' - For All Districts in the Country

			Christians (10)		Muslims (20)		Buddhists (30)		Sikhs (40)		Zoroastrians (50)		Total 'A'		Others 'B' (90)		Total P/S Advances in All Districts 'C' (99)
			No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.	No. of A/cs.	Amt. O/S.
1.	Haryana	34
2.	Himachal Pradesh	46
3.	Jammu & Kashmir	44
4.	Punjab	30
5.	Rajasthan	50
6.	Chandigarh	39
7.	Delhi	29
8.	Assam	01
9.	Manipur	15
10.	Meghalaya	04
11.	Nagaland	14
12.	Tripura	18
13.	Arunachal Pradesh	09
14.	Mizoram	03
15.	Sikkim	17
16.	Bihar	06
17.	Orissa	16
18.	West Bengal	10
19.	Andaman & Nicobar Islands	19
20.	Madhya Pradesh	70
21.	Uttar Pradesh	20
22.	Gujarat	54
23.	Maharashtra	60
24.	Goa	68
25.	Daman & Diu	67
26.	Dadra & Nagar Haveli	69
27.	Andhra Pradesh	80
28.	Karnataka	84
29.	Kerala	96
30.	Tamil Nadu	90
31.	Pondicherry	99
32.	Lakshadweep	89
	All India	00

ANNEXURE II

List of Minority Concentration Districts

(vide paragraphs 3.2, 5.3, and 7.1)

States/R.Os of RPCD	Districts	Name of Lead Bank
Uttar Pradesh (Lucknow)	1. Rampur 2. Bijnor 3. Moradabad 4. Saharanpur 5. Muzaffarnagar 6. Meerut 7. Bahraich 8. Gonda 9. Ghaziabad 10. Pilibhit 11. Deoria 12. Barabanki 13. Basti	Bank of Baroda Punjab National Bank Syndicate Bank Punjab National Bank Punjab National bank Syndicate Bank Allahabad Bank Allahabad Bank Syndicate Bank Bank of Baroda Central Bank of India Bank of India State Bank of India
West Bengal (Kolkata)	14. Murshidabad 15. Malda 16. North Dinajpur 17. South Dinajpur 18. Birbhum 19. Nadia 20. 24-Parganas (N) 21. 24-Parganas (S) 22. Cooch Behar 23. Howrah	United Bank of India United Bank of India United Bank of India United Bank of India UCO Bank United Bank of India Allahabad Bank United Bank of India Central Bank of India UCO Bank
Kerala (Thiruvananthapuram)	24. Mallappuram 25. Kozikode 26. Cannnanore 27. Palghat 28. Wyanad	Canara Bank Canara Bank Syndicate Bank Canara Bank Canara Bank
Bihar (Patna)	29. Purnea 30. Araria 31. Kishanganj 32. Katihar 33. Darbhanga	Central Bank of India State Bank of India Central Bank of India Central Bank of India Central Bank of India
Karnataka (Bangalore)	34. Bidar 35. Gulbarga 36. Bijapur	State bank of India State Bank of India Syndicate Bank
Maharashtra (Mumbai)	37. Greater Mumbai 38. Aurangabad	Bank of Maharashtra Bank of Maharashtra
Andhra Pradesh (Hyderabad)	39. Hyderabad 40. Kurnool	State Bank of Hyderabad Syndicate Bank
Haryana (New Delhi)	41. Gurgaon	Syndicate Bank
Madhya Pradesh (Bhopal)	42. Bhopal	Bank of India
Rajasthan (Jaipur)	43. Jaisalmer	State Bank of Bikaner & Jaipur
Gujarat (Ahmedabad)	44. Kutch	Dena Bank

ANNEXURE III

Statement showing priority sector advances granted to the members of specified minority communities vis-à-vis overall priority sector advances (in the identified Districts) for the quarter ended -----------------------------------------------------------
(Vide paragraph 5.3)

Name of the District ----------------------------------

(Rs. in Crores)
Name of Community	No. of accounts		Amounts outstanding
	Previous Quarter	Current Quarter	Previous Quarter	Current Quarter
A. Minority Communities 1. Christians 2. Muslims 3. Buddhists 4. Sikhs 5. Zoroastrians
TOTAL ( 1 TO 5 )
B. Others
C. Total priority     sector advances     in the identified     districts     (A + B)
D. Share of A out     of C in %

Note : (1) No. of accounts actual

(2) Amount outstanding Rupees in crores

MASTER CIRCULAR

ANNEXURE IV

Credit Flow to Minority Communities

List of Circulars consolidated in the Master Circular

Sr. No.	Circular No.	Date	Subject
1.	RPCD No SP.BC.4/PS.160-86-87	24.07.86	Credit facilities to Minority Communities
2.	RPCD No.SP.BC.97/PS.160-86-87	29-07-86	Credit facilities to Minority Communities
3.	RPCD No.SP.1378/PS.160-86-87	09.01.87	Credit facilities to Minority Communities
4.	RPCD No.SP.1563/PS.160-86-87	11.02.87	Credit facilities to Minority Communities
5.	RPCD No.SP.BC.75/PS.160-86-87	08.04.87	Credit facilities to Minority Communities
6.	RPCD No.SP.BC.14/PS.160-87-88	31.07.87	Credit facilities to Minority Communities
7.	RPCD No.SP.374/PS.160-87-88	31.07.87	Credit facilities to Minority Communities
8.	RPCD No.SP.BC.45/PS.160/87-88	16.10.87	Credit facilities to Minority Communities
9.	RPCD No.SP..BC.55/PS.160-87-88	02.11.87	Credit facilities to Minority Communities
10.	RPCD No.SP.BC.56/PS.160-87-88	02.11.87	Credit facilities to Minority Communities
11.	RPCD No.SP.649/PS.160-88-89	27.09.88	Prime Minister’s 15-Point Directive about Welfare of Minorities
12.	RPCD No.SP.BC.46/PS.160-88-89	17.11.88	Credit facilities to Minority Communities
13.	RPCD No.Stat.BC.66/Stat-20(CB)/88-89	21.01.89	Credit facilities to Minority communities
14.	RPCD No.LBS.BC.121/LBC.34-88/89	07.06.89	Inclusion of representatives of State Minority Commissions/Boards or State Minorities Financial Corporations and of SC/ST Corporations in the DLRC and SLRM
15.	RPCD No.SP.BC.37/C.453(U)89-90	03.10.89	DRI Scheme-Routing of Advances through State Minority Finance/Development Corporation
16.	RPCD No.SP.BC.124/PS.160-89-90	26.06.90	Credit facilities to Minority Communities
17.	RPCD No.SP.BC.80/PS.160-92-93	10.03.93	Credit facilities to Minority Communities-Quarterly Statement
18.	RPCD No. SP.1934/PS.160-92-93	22.06.93	Credit facilities to Minority Communities
19.	RPCD No.SP.BC.17/PS.160-93-94	10.08.93	Credit facilities to Minority Communities-Training to Staff
20.	RPCD No.SP.BC.32/PS.160-93-94	06.09.93	Credit facilities to Minority Communities –Revised Format
21.	RPCD No.SP.BC.50/PS160-93-94	13.10.93	Credit facilities to Minority Communities –Revised Format
22.	RPCD No.SP.BC.83/PS.160/93-94	07.01.94	Credit flow to Minority Communities-Quarterly statement.
23	RPCD No.SP.BC.166/PS.160-93-94	`15.06.94	Credit facilities to Minority Communities –41 Identified Districts
24.	LBS.BC.29/02.03.01-94-95.	31.08.94	Inclusion of representatives of State Minority Commission/Boards or State Minorities Finance Corporations in SLBC.
25.	RPCD No.SP.BC.79/09.10.01-94-95	09.12.94	List of Specified Minority Communities-Inclusion of Buddhists in place of Neo-Buddhists
26	RPCD No.SP.BC.33/09.10.01-96-97	07.09.96	Credit facilities to Minority Communities-Quarterly Statement
27.	RPCD No. SP.BC.43/09.10.01-96-97	10.10.96	Credit Flow to Minority Communities –Compendium of Instructions
28.	RPCD No. SP.BC.108/09.12.01-96-97	28.02.97	National Minorities Development and Finance Corporation (NMDFC)
29.	RPCD No.SPBC.13/09.10.01/01-02	13.08.01	Credit facilities to Minority Communities- Evaluation Study
30.	RPCD No.SP.1074/09.10.01-2001-02	21.01.02	Enhancing Credit Flow to Minority Communities
31.	RPCD No.SP.BC.62/09.10.01/2001-02	04.02.02	Enhancing Credit flow to minority communities

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