Date: 2020-04-24Category: Not ApplicableState: Union GovernmentCountry: India
Non-achievement of Priority Sector Lending Targets by Primary (Urban) Co-operative Banks (UCBs) - Contribution to the Rural Infrastructure Development Fund (RIDF) and other funds
This circular, issued by the Reserve Bank of India (RBI) on April 24, 2020, addresses the non-achievement of Priority Sector Lending (PSL) targets by Primary Urban Cooperative Banks (UCBs). Effective March 31, 2021, UCBs (excluding those under all-inclusive directions) will be required to contribute to the Rural Infrastructure Development Fund (RIDF) established with NABARD, and other funds with NABARD, NHB, SIDBI, and MUDRA Ltd., against their PSL shortfall vis-à-vis the prescribed target.
PSL achievement will be determined at the end of the financial year based on the average of quarterly achievements. The RBI will determine interest rates and tenures for these contributions. Misclassifications reported by the Department of Supervision will be adjusted from the achievement of the year to which the misclassification pertains.
Furthermore, effective March 31, 2021, non-achievement of PSL targets will no longer be a criterion for classifying a UCB as Financially Sound and Well Managed (FSWM), but it will still be considered for regulatory clearances/approvals.
UCBs are instructed to place a copy of this circular before their Board of Directors in the next meeting and send confirmation to the concerned Regional Office of the Department of Supervision of RBI.
Contact Information:
Neeraj Nigam
Chief General Manager
Department of Regulation, Central Office
Address: Central Office, 1st Floor, Bandra-Kurla Complex, Mumbai 400051
Phone: 022-26571112
Email: cgmdcbrcor@rbi.org.in
Key Entities Referenced
NHB: National Housing Bank
Reserve Bank of India: The central bank of India, which issued the circular.
Primary Urban Cooperative Banks (UCBs): The entities to whom the circular is addressed and whose priority sector lending targets are being discussed.
Priority Sector Lending (PSL): A type of lending that the Reserve Bank of India mandates banks to allocate towards specific sectors of the economy.
Rural Infrastructure Development Fund (RIDF): A fund established with NABARD to which UCBs must contribute if they do not meet their PSL targets.
NABARD: National Bank for Agriculture and Rural Development, an apex development financial institution in India.
MUDRA Ltd.: A financial institution for developing and refinancing micro units enterprises
SIDBI: Small Industries Development Bank of India
भारतीय �रज़व र् बक�
__________________________RESERVE BANK OF INDIA________________________
www.rbi.org.in
RBI/2019-20/226
DOR (PCB).BPD.Cir.No.12/09.09.002/2019-20 April 24, 2020
The Chief Executive Officer
All Primary (Urban) Co-operative Banks
Dear Sir / Madam,
Non-achievement of Priority Sector Lending Targets by Primary (Urban) Co-operative
Banks (UCBs) - Contribution to the Rural Infrastructure Development Fund (RIDF) and
other funds
Please refer to the circular DCBR.BPD (PCB).Cir.No.07/09.09.002/2017-18 dated May 10,
2018 on Revised Guidelines on Lending to Priority Sector for Primary (Urban) Co-operative
Banks (UCBs).
2. On a review of the extant guidelines, it has been decided that, with effect from March 31,
2021, all UCBs (excluding those under all-inclusive directions) will be 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)
shortfall vis-à-vis the prescribed target. The operational details in this regard are as under:
i. The PSL achievement will be determined at the end of the financial year based on
the average of priority sector target / sub-target achievement as at the end of each
quarter of the year. UCBs (excluding those under all-inclusive directions) having
shortfall in PSL lending targets will be allocated amounts for contribution to the Rural
Infrastructure Development Fund (RIDF) established with NABARD and other
relevant funds, as decided by the Reserve Bank from time to time.
ii. The interest rates on UCBs’ contribution to RIDF and other funds, tenure of deposits,
etc. will be fixed by Reserve Bank of India from time to time.
iii. The misclassifications reported by the Reserve Bank's Department of Supervision, if
any, would be adjusted / reduced from the achievement of that year to which the
amount of declassification / misclassification pertains, for allocation to various funds
in subsequent years.
िविनयमन िवभाग क��ीय कायार्लयसी पहली मंिज़ल बान्�ाकुलार् संकुल बान्�ा पूवर् ,मुंबई , भारत
, फोन ( , -) 7 , 1112 ई म ,ेल cgm -dcbrco@r ,b i.org.in ( ) - 400051
Department of Regulation, Centra: l O02ff2ice2,6 C57-7, 1st ; Floor,: Bandra-Kurla Complex, Mumbai - 400051, India
Phone: (022) 26571112; E-mail: cgmdcbrco@rbi.org.in
ब�क िहन्दी म� प�ाचार का स्वागत करता है
चेतावनी भारतीय �रज़व र्ब�क �ारा ईमेल डाक एसएमएस या फोन कॉल के ज�रये कोई भी �ि�गत जानकारी जैसे ब�क खाते का ब्यौरा पासवडर् आ�द नह� माँगा जाता ह।ै यह धन रखने या
—
देने का �स्ताव भी नह� करता ह।ै ऐसे �स्ताव� का �कसी भी �कार से जवाब मत दीिजए।
: Caution: RBI never- sen,ds m,ails, SMSs or makes calls asking for personal information like bank acc,ount details, passwords, etc.
It never keeps or offers funds to anyone. Please do not respond in any manner to su ch offers.3. It has also been decided that, non-achievement of PSL targets will not be included as one
of the criteria for classifying a UCB as Financially Sound and Well Managed (FSWM) with
effect from March 31, 2021. However, it will continue to be taken into account while granting
regulatory clearances/approvals for various purposes.
4. A copy of this circular should be placed before the Board of Directors of your bank in its
next meeting and a confirmation thereof should be sent to the concerned Regional Office of
Department of Supervision of Reserve Bank of India.
Yours faithfully
(Neeraj Nigam)
Chief General Manager