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RIDF and NABARD funds now count as priority sector indirect agriculture

Current · Source: Reserve Bank of India · RBI/2013-14/591 · issued 15 May 2014 · ~2 min read
Quick answerFrom March 31, 2014, scheduled commercial banks can treat outstanding deposits placed under RIDF, Warehouse Infrastructure Fund, Short Term Co-operative Rural Credit Refinance Fund, and Short Term RRB Fund with NABARD as indirect agriculture, counting toward priority sector targets.
The rule, in the simplest words
How it plays out — a real example

As an agri & priority-sector lending officer in Indore, I'm happy to report that our bank's outstanding deposits under RIDF have been reclassified as indirect agriculture. This means we can now use these deposits to meet our priority sector lending targets, easing the pressure on our team to find additional loans. We'll update our internal systems to reflect this change and review our internal policies to ensure compliance with the revised master circular.

What changed

RBI decided that outstanding deposits placed by scheduled commercial banks under RIDF and certain other funds with NABARD, due to priority sector shortfall, will be classified as indirect agriculture. These deposits as of March 31 each year will count toward overall priority sector achievement, and the preceding March 31 outstanding will form part of Adjusted Net Bank Credit.

What it means for you

Banks can now use these NABARD deposits to meet priority sector lending targets, easing pressure from shortfalls. This change effectively broadens the definition of indirect agriculture, allowing banks to leverage existing fund placements for compliance. It may reduce the need for additional priority sector lending or purchase of priority sector lending certificates.

What you must do

Who it affects

All scheduled commercial banks (excluding Regional Rural Banks), Priority sector lending compliance teams, Risk and treasury departments managing NABARD fund placements

❓ Common questions

Which specific funds with NABARD are covered under this circular?

The circular covers outstanding deposits under Rural Infrastructure Development Fund (RIDF), Warehouse Infrastructure Fund, Short Term Co-operative Rural Credit Refinance Fund, and Short Term RRB Fund.

From which date are these guidelines effective?

These guidelines are applicable with effect from March 31, 2014.

How does this affect Adjusted Net Bank Credit (ANBC) computation?

The outstanding deposits under these funds as of the preceding March 31 will form part of ANBC, as per the amendment to the master circular on ANBC computation.

📜 Read the original circular — full text as issued by RBI
RBI/2013-14/591 RPCD.CO.Plan. BC 101/04.09.01/ 2013-14 May 15, 2014 The Chairman/ Managing Director/ Chief Executive Officer [All scheduled commercial banks (excluding Regional Rural Banks)] Madam/Dear Sir, Treatment of RIDF and certain other funds under priority sector It has been decided to include the outstanding deposits placed by scheduled commercial banks under Rural Infrastructure Development Fund (RIDF) and certain other funds established with NABARD, on account of their shortfall in lending to priority sector as part of indirect agriculture under priority sector classification. 2. Accordingly, the outstanding deposits as on March 31st of the current year under RIDF, Warehouse Infrastructure Fund, Short Term Co-operative Rural Credit Refinance Fund and Short Term RRB Fund with NABARD will be treated as part of indirect agriculture and will count towards overall priority sector target achievement. The outstanding deposits under the above funds with NABARD as on preceding March 31st will form part of Adjusted Net Bank Credit. 3. These guidelines are applicable with effect from March 31, 2014. The paragraph (II) (iii) of the master circular RPCD.CO.Plan.BC 9 /04.09.01/2013-14 July 01, 2013 on computation of ANBC is amended accordingly. Yours faithfully, (T V Rao) Deputy General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/591 · issued 15 May 2014. 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 include these deposits in Adjusted Net Bank Credit calculations as of the preceding March 31.
📜 Compliance
  • Reclassify outstanding deposits under RIDF, Warehouse Infrastructure Fund, Short Term Co-operative Rural Credit Refinance Fund, and Short Term RRB Fund as indirect agriculture for priority sector reporting.
  • Ensure priority sector target achievement reports reflect this change from March 31, 2014 onwards.
  • Review and amend internal policies on priority sector compliance to align with the revised master circular on ANBC computation.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All scheduled commercial banks (excluding Regional Rural Banks), Priority sector lending compliance teams, Risk and treasury departments managing NABARD fund placements), your first concrete step on “RIDF and NABARD funds now count as priority sector indirect agriculture” is: “Reclassify outstanding deposits under RIDF, Warehouse Infrastructure Fund, Short Term Co-operative Rural Credit Refinance Fund, and Short Term RRB Fund as indirect agriculture for priority sector reporting.” (RBI issued this 15 May 2014).

  1. Circular: RBI/2013-14/591 -- RIDF and NABARD funds now count as priority sector indirect agriculture
  2. Issued: 15 May 2014
  3. Action required: Reclassify outstanding deposits under RIDF, Warehouse Infrastructure Fund, Short Term Co-operative Rural Credit Refinance Fund, and Short Term RRB Fund as indirect agriculture for priority sector reporting.
  4. Action required: Update internal systems to include these deposits in Adjusted Net Bank Credit calculations as of the preceding March 31.
  5. Action required: Ensure priority sector target achievement reports reflect this change from March 31, 2014 onwards.
  6. Action required: Review and amend internal policies on priority sector compliance to align with the revised master circular on ANBC computation.
  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=8877&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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