The Differential Rate of Interest (DRI) scheme is a social welfare initiative aimed at providing financial assistance to economically weaker sections of society. It enables them to access credit at a significantly lower interest rate.
1. Definition of DRI
- The DRI Scheme is a government initiative where banks provide loans to economically weaker sections at a concessional interest rate of 4% per annum.
- Launched to promote financial inclusion and empower marginalized sections of society.
2. Objective of DRI
- To assist economically disadvantaged individuals in achieving financial self-sufficiency.
- To provide loans for income-generating activities, housing, education, and other critical needs.
- To encourage entrepreneurship among weaker sections by offering affordable credit.
3. Eligibility Criteria for Borrowers
- Individuals whose annual family income does not exceed:
- ₹18,000 in rural areas.
- ₹24,000 in urban areas.
- Priority is given to certain categories such as:
- Scheduled Castes (SC) and Scheduled Tribes (ST).
- Physically handicapped individuals.
- Women and artisans.
4. Loan Amount under DRI
- A maximum of ₹15,000 is provided for general purposes.
- For housing loans, the amount can go up to ₹20,000.
- Education loans are also available for eligible candidates under specific guidelines.
5. Interest Rate under DRI
- Loans under the DRI scheme are provided at a concessional interest rate of 4% per annum.
- This low rate makes borrowing affordable for the weaker sections of society.
6. Purpose of Loans under DRI
- Income-Generating Activities: Loans can be used for small businesses, farming, and other entrepreneurial ventures.
- Education: Assistance for students from weaker sections to pursue higher studies.
- Housing: Loans for the construction or repair of a house.
- Medical Assistance: For treatment of illnesses or surgeries for eligible families.
7. Role of Banks in DRI Scheme
- All scheduled commercial banks (except RRBs) are required to implement the DRI scheme.
- Banks are mandated to lend up to 1% of their total advances under the scheme.
- They must ensure priority allocation to weaker sections and maintain transparency in the loan disbursement process.
8. Advantages of DRI Scheme
- Social Inclusion: Ensures financial access to underprivileged sections of society.
- Low-Cost Credit: Offers loans at a significantly lower interest rate compared to other lending schemes