Rates of Interest - RIDF and other funds

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Published on March 16, 2012

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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