Home › Circulars › RBI/2011-12/451

RIDF and Similar Fund Interest Rates Revised

Current · Source: Reserve Bank of India · RBI/2011-12/451 · issued 16 Mar 2012 · ~2 min read
Quick answerRBI revised interest rates on deposits with NABARD/SIDBI/NHB and RIDF loans from April 1, 2012, linking them to the new Bank Rate of 9.5%. Existing deposits and loans up to March 31, 2012 keep old rates. Banks must adjust calculations for priority sector shortfalls.
The rule, in the simplest words
How it plays out — a real example

Priya, the treasury head at a mid-sized private bank, sees that her bank's agriculture lending shortfall is 3 percentage points. She updates her system to apply the new deposit rate of 6.5% (9.5% minus 3%) for funds placed with NABARD from April 1, 2012, ensuring her team's compliance reports reflect the revised rates.

What changed

Following the Bank Rate hike from 6% to 9.5% in February 2012, RBI reviewed rates on deposits placed with NABARD/SIDBI/NHB for priority sector shortfalls and RIDF loans. For deposits and loans up to March 31, 2012, old rates linked to the pre-revised Bank Rate remain unchanged. From April 1, 2012, new rates are linked to the current Bank Rate, with deposits earning Bank Rate minus 2 to 5 percentage points depending on shortfall, and RIDF loans at Bank Rate minus 1.5 percentage points.

What it means for you

Banks will earn lower returns on funds parked with NABARD/SIDBI/NHB for priority sector shortfalls after April 2012, as the new rates are lower than the old ones relative to Bank Rate. This reduces the penalty cost of missing priority sector targets, but also lowers income from RIDF lending. Banks need to update their internal rate calculations and pricing models for priority sector compliance.

What you must do

Who it affects

All Scheduled Commercial Banks (excluding RRBs), Banks with priority sector shortfalls, Banks using RIDF or similar funds with NABARD, SIDBI, NHB

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the new deposit rate for a bank with a shortfall of 3 percentage points in agriculture lending?

From April 1, 2012, the rate is Bank Rate (9.5%) minus 3 percentage points, i.e., 6.5% per annum.

Will the old rates apply to deposits placed before March 31, 2012?

Yes, deposits kept with NABARD/SIDBI/NHB due to shortfall up to March 31, 2012 will continue to earn the pre-revised Bank Rate-linked rates.

What is the lending rate for RIDF loans disbursed after April 1, 2012?

The rate is Bank Rate (9.5%) minus 1.5 percentage points, i.e., 8.0% per annum.

📜 Read the original circular — full text as issued by RBI
Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 40 kb ) Rates of Interest - RIDF and other funds RBI/2011-12/451 RPCD.CO. Plan.BC.66/04.09.54/2011-12 March 16, 2012 The Chairman/Managing Director/ Chief Executive Officer (All Scheduled Commercial Banks excluding RRBs) Dear Sir/Madam, Rates of Interest - RIDF and other funds Consequent upon the revision of Bank Rate from 6 percent to 9.5 percent vide RBI's notification dated February 13, 2012, the interest rates applicable to RIDF and other similar funds with SIDBI and NHB have been reviewed and it has been decided as under:- (a) to keep the interest rates payable to banks on deposits kept with NABARD/SIDBI/NHB due to shortfall in their prescribed priority sector obligations and on loans disbursed by NABARD from RIDF upto March 31, 2012 unchanged and linked to pre-revised Bank Rate as under: Deposit Rates S. No. Shortfall in agriculture lending target for domestic commercial banks and higher of shortfall in overall priority sector lending target or aggregate shortfall in sub-targets of MSE and exports for foreign banks Existing Rate prior to revision of Bank Rate 1. Less than 2 percentage points Pre-revised Bank Rate (6.0 percent) 2. 2 and above, but less than 5 percentage points Pre-revised Bank Rate minus 1 percentage point (5.0 percent) 3. 5 and above, but less than 9 percentage points Pre-revised Bank Rate minus 2 percentage points (4.0 percent) 4. 9 percentage points and above Pre-revised Bank Rate minus 3 percentage points (3.0 percent) Lending Rates 5. Loans disbursed from RIDF upto March 31, 2012 Pre-revised Bank Rate plus 0.5 percentage points (6.5 percent) (b) to revise the interest rates payable to banks on deposits placed with NABARD/SIDBI/NHB and loans disbursed by NABARD from RIDF on or after April 01, 2012,linked to the Bank Rate as under: Deposit Rates S. No. Shortfall in agriculture lending target for domestic commercial banks and higher of shortfall in overall priority sector lending target or aggregate shortfall in sub-targets of MSE and exports for foreign banks Revised Rates 1. Less than 2 percentage points Bank Rate (9.5 % at present) minus 2 percentage points 2. 2 and above, but less than 5 percentage points Bank Rate (9.5 % at present) minus 3 percentage points 3. 5 and above, but less than 9 percentage points Bank Rate (9.5 % at present) minus 4 percentage points 4. 9 percentage points and above Bank Rate (9.5 % at present) minus 5 percentage points Lending Rates 5. Loans disbursed from RIDF on or after April 01, 2012 Bank Rate (9.5 % at present ) minus 1.5 percentage points 2. Please acknowledge receipt. Yours faithfully, (C.D.Srinivasan) Chief General Manager 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/451 · issued 16 Mar 2012. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update internal systems to apply new deposit rates for priority sector shortfall funds placed on or after April 1, 2012.
📜 Compliance
  • Recompute RIDF loan pricing for disbursements from April 1, 2012, using Bank Rate minus 1.5 percentage points.
  • Ensure existing deposits and loans up to March 31, 2012 continue at old rates as per the circular.
  • Communicate the revised rates to treasury and priority sector monitoring teams.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (All Scheduled Commercial Banks (excluding RRBs), Banks with priority sector shortfalls, Banks using RIDF or similar funds with NABARD, SIDBI, NHB), your first concrete step on “RIDF and Similar Fund Interest Rates Revised” is: “Update internal systems to apply new deposit rates for priority sector shortfall funds placed on or after April 1, 2012.” (RBI issued this 16 Mar 2012).

  1. Circular: RBI/2011-12/451 -- RIDF and Similar Fund Interest Rates Revised
  2. Issued: 16 Mar 2012
  3. Action required: Update internal systems to apply new deposit rates for priority sector shortfall funds placed on or after April 1, 2012.
  4. Action required: Recompute RIDF loan pricing for disbursements from April 1, 2012, using Bank Rate minus 1.5 percentage points.
  5. Action required: Ensure existing deposits and loans up to March 31, 2012 continue at old rates as per the circular.
  6. Action required: Communicate the revised rates to treasury and priority sector monitoring teams.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7070&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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