RBI/2014-15/430
[Link].49 /02.01.001/2014-15 January 28, 2015
The Chairmen & Managing Directors
All Scheduled Commercial Banks (including RRBs)
Dear Sir/Madam,
Dispensing with ‘No Due Certificate’ for lending by banks
Please refer to our circular [Link] (SAA).[Link].62/08.01.00/2004-05 dated
December 8, 2004 on Relaxation in Service Area norms. Further, in terms of
circular [Link].85/05.04.02/2006-07 dated April 30, 2007 on
‘Simplification of the Procedures and Processes for Obtaining Agricultural Loans’,
banks were advised to dispense with the requirement of ‘No Due Certificate’ for
small loans up to Rs.50,000 to small and marginal farmers, share-croppers and the
like and, instead, obtain self-declaration from the borrower.
2. Reference is also invited to circular [Link].1/09.01.01/2012-
13 dated July 02, 2012 wherein for lending under Government Sponsored Scheme
SGSY (now NRLM), if the Service Area branch does not issue ‘No Due Certificate’
within 15 days from the date of receipt of application from the borrower, the
borrowers are free to approach any branch in the block for their credit
requirements.
3. In this connection, we have been receiving complaints from borrowers as
banks are refusing to grant loans without ‘No Due Certificate’, especially in rural
and semi-urban areas. In order to ensure hassle free credit to all borrowers,
especially in rural and semi-urban areas and keeping in view the technological
वित्तीय समािेशन और विकास विभाग,कें द्रीय कायाालय, 10वीं मंज़िल,कें द्रीय कायाालय भिन,,शहीद भगत सिंह मागा,पो.बा.िंं.10014,मंबई 400 001
टेलीफोन:Tel: 022-22601000 फै क्िं Fax: 91-22-22621011/22619048 ईमेल E-mail: cgmicfidd@[Link]
Financial Inclusion and Development Department,Central Office,10th Floor,Central Office Building,Shahid Bhagat Singh Marg,[Link] No.10014, Mumbai 400001
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चेतावनी: रिज़वव बैंक द्वािा ई-मेल, डाक, एसएमएस या फोन कॉल के जरिए ककसी की भी वयक्ततगत जानकािी जैसे बैंक के खाते का बयौिा, पासवडव आदि नहीीं
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Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details, passwords, etc. It never
keeps or offers funds to anyone. Please do not respond in any manner to such offers.
2
developments and the different ways available with banks to avoid multiple
financing, banks are advised to dispense with obtaining ‘No Due Certificate’ from
the individual borrowers (including SHGs & JLGs) in rural and semi-urban areas for
all types of loans including loans under Government Sponsored Schemes,
irrespective of the amount involved unless the Government Sponsored Scheme
itself provides for obtention of ‘No Dues Certificate’.
4. Banks may kindly note that while Service Area Approach continues to be
applicable for Government Sponsored Schemes, the borrower is free to approach
any bank branch in his service area for obtaining credit under Government
Sponsored Schemes.
5. Banks are encouraged to use an alternative framework of due diligence as
part of credit appraisal exercise other than the ‘No Due Certificate’ which could,
among others, consist of one or more of the following:
Credit history check through credit information companies
Self declaration or an affidavit from the borrower
CERSAI registration
Peer monitoring
Information sharing among lenders
Information search (writing to other lenders with an auto deadline)
6. Banks are also advised to submit credit information/data to all Credit
Information Companies (CICs), as required in terms of extant instructions issued
by RBI.
Yours faithfully
(A. Udgata)
Principal Chief General Manager
