RBI issues circular regarding contribution to RIDF and other such funds by UCBs

May 05, 2020 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Reserve Bank of India (RBI) on April 24, 2020 has been decided that all Primary (Urban) Co-operative Banks (UCBs) are required to contribute to Rural Infrastructure Development Fund (RIDF) established with NABARD and other Funds with NABARD, NHB, SIDBI, MUDRA Ltd., against their priority sector lending (PSL) with effect from March 31, 2021.

The PSL shall be considered at the end of the financial year or on the quarterly basis. In case, any UCB is coming out short in the PSL lending rate, they shall be given an amount of contribution to be passed on in the Rural Infrastructure Development Fund or other such funds established by the NABARD.

The interest rates and the lending rates on such contribution shall be affixed by the RBI. In case of any over estimation or misclassification, appropriate adjustments shall be made keeping in mind such targets of the PSL.

[Notification No. DOR (PCB).BPD.Cir.No.12/09.09.002/2019-20]


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