FINANCIAL INCLUSION AND DEVELOPMENT

This role encapsulates the essence of renewed national focus on Financial Inclusion, promoting financial education and literacy and making credit available to productive sectors of the economy including the rural and MSME sector.

Information pertaining to Financial Inclusion and Development Department


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  What is the rate of interest on agricultural loans that can be charged by the financial institutions under RBI? 1. In terms of Master Directions – Reserve Bank of India (Interest Rate on Advances) Directions 2016 (updated as on February 26, 2020), the interest rate on agricultural advances and advance to farmers shall be charged as per the instructions contained in the following circulars:

i) RPCD.No.PLFS.BC.60/PS.165-85 dated June 06, 1985 stipulated that the total interest debited to an account should not exceed the principal amount in respect of agricultural advances to small and marginal farmers, and,

ii) RPCD.No.PLFS.BC.129/05.02.27/97-98 dated June 29, 1998 stipulated that in respect of short duration crops and allied activities, compounding of interest by banks to agricultural advances be applied only if the loan/instalment becomes overdue.

2. In terms of para 13 (a) of Master Directions - Reserve Bank of India (Interest Rate on Advances) Directions 2016 (updated as on February 26, 2020) for loans covered by schemes specifically formulated by the Government of India, banks have to charge interest rates as per scheme.  Accordingly, the interest rate under the Interest Subvention scheme shall be governed by RBI circulars FIDD.CO.FSD.BC.No.15/05.02.001/2018-19 dated March 7, 2019 (for short term crop loans) and FIDD.CO.FSD.BC.No.10/05.02.001/2019-20 dated August 26, 2019 (for animal husbandry, dairying and fisheries).
 
  What are the Reserve Bank of India's guidelines on One Time Settlement (OTS) to small and medium enterprises

In terms of circular RPCD.CO.MSME & NFS.BC.40/06.02.31/2012-2013 dated November 1, 2012 all Scheduled Commercial banks were advised to put in place a Non-discretionary One Time Settlement scheme for recovery of non-performing loans for the MSE sector, duly approved by the Board of Directors. The circular is available on our website www.rbi.org.in.

 
  What are RBI guidelines on Education Loans?

Reserve Bank of India vide its Circular RPCD.PLNFS.BC.N. 83/ 06.12.05/2000-01 dated April 28, 2001 on ‘Educational Loan Scheme’ had forwarded the Model Education Loan Scheme prepared by Indian Banks’ Association (IBA), for implementation by all Scheduled Commercial Banks (SCBs). The scheme has since been modified by IBA from time to time. The Scheme provides broad guidelines to the banks and implementing bank will have the discretion to make changes suiting to the convenience of students/parents etc. The scheme can be accessed at IBA’s website.

 

 

What are the guidelines pertaining to PMEGP scheme?

The PMEGP Scheme was formulated by Government of India and circulated by Reserve Bank of India. Vide its circular RPCD.PLNFS.BC.41/09.04.01/2008-2009 dated October 10, 2008, which is available on our website www.rbi.org.in.

 
  What are the guidelines pertaining to resolution of stressed MSME units? In consultation with the Government of India, Ministry of MSME, RBI had issued the guidelines on the Framework for Revival and Rehabilitation of MSMEs along with operating instructions to banks vide Circular FIDD.MSME & NFS.BC.No.21/06.02.31/2015-16 dated March 17, 2016. The revival and rehabilitation of MSME units having loan limits up to ₹25 crore are undertaken under this Framework. The Committee approach is to be adopted for deciding corrective action plan which includes rectification, restructuring and recovery. The circular is available on our website www.rbi.org.in  
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RBIND/ R/2018/ 01994/6 dated May 08, 2018
Recently is there any Awareness Campaign available with RBI for promotion of Financial Literacy in Educational Institutions, if yes what were the provisions and procedures, if so furnish details from 2012 to Till Now. Reserve Bank of India (RBI) disseminates financial literacy through its Regional Offices (ROs) and Scheduled Commercial Banks (SCBs). With a view to spread financial literacy among school/college students, RBI has issued following guidelines to SCBs and its ROs:

a) Regional offices of RBI have been advised since 2014 to target school and college students in the activities undertaken by them under Financial Literacy Initiatives, for inculcating saving and responsible banking habits. Regional offices of RBI conduct the financial literacy programs in schools/colleges.

b) With a view of commencing financial education at school level with incorporation of Financial Education in School Curriculum, Regional offices of RBI have been advised in 2015 to get the financial education workbooks (developed by CBSE) translated into vernacular language and pursue with the state education boards in their jurisdiction to adopt the financial education workbooks in their school curriculum.

c) In 2016, Financial Literacy Centres operated by Banks have been advised to adopt a tailored approach for different target groups viz. Farmers, Micro and Small Entrepreneurs, School Children, SHGs, Senior Citizens etc while conducting financial literacy programs.

d) In addition to the above, RBI has developed tailored financial literacy content for five target groups' viz. Farmers, Small entrepreneurs, School children, Self Help Groups and Senior Citizens that can be used by the trainers in financial literacy programmes.
May 23, 2018
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