Differential rate of interest (DRI)

Differential rate of interest (DRI) loan scheme was introduced in 1972.

The scheme is being implemented by all Scheduled Commercial Banks in India.

The scheme makes it obligatory upon all the public sector banks in India to lend 1 per cent of the total lending of the preceding year to ‘the poorest among the poor’ at an interest rate of 4 per cent per annum.

This scheme is meant for—

[a] Persons belonging to SC/STs, Adivasis engaged in agricultural operations and/or allied activities

[b] Persons engaged in collection of forest products, fodder and selling these in markets.

[c] Persons engaged in Village and Cottage Industries on a very small scale.

[d] Indigent students aspiring to pursue higher studies.

[e] Physically handicapped persons.

[f] Institution of physically handicapped for their productive activities.

[g] State Level Corporations working for welfare of SC/ST.

[h] Co-operative Societies, large sized multi-purpose societies organised specially for the benefit of tribal population in areas identified by Government of India.

Loans are granted to any person whose—

[a] Family income from all sources is not more than Rs.7,200/- p.a. in metropolitan/ urban/ semi-urban areas or Rs.6,400/- p.a. in rural areas.

[b] Land holding does not exceed 1.25 acres of irrigated land or 2.5 acres of dry land.

[c] Land holding criteria does not apply to SC/ST borrowers.