GENERAL PROVISIONSCentral

Section 46A of The Reserve Bank of India Act, 1934

1[46A. Contribution to National Rural Credit (Long Term Operations) Fund and National Rural Credit (Stabilisation) Fund.--The Bank shall contribute every year such sums of money as it may consider necessary and feasible to do so, to the National Rural Credit (Long Term Operations) Fund and the National Rural Credit (Stabilisation) Fund established and maintained by the National Bank under sections 42 and 43, respectively, of the National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981).]

Summary

The Bank must make yearly payments into two specific funds for rural support.
These are the National Rural Credit (Long Term Operations) Fund and the (Stabilisation) Fund.
The Bank decides the exact amount to pay based on what it considers necessary and possible.
These funds are actually managed and kept by the National Bank, often known as NABARD.
This system provides long-term financial backing and stability for agricultural and rural development.

Practical examples

1Every year, the Bank sets aside a portion of its earnings to help NABARD provide low-interest loans to farmers for new tractors.

2After a year of good profits, the Bank decides it is "feasible" to contribute 500 crores to the Stabilisation Fund to help rural areas recover from bad harvests.

FAQ

1. Which two funds receive contributions under Section 46A?

Under Section 46A of the Reserve Bank of India Act, 1934, money is paid into the National Rural Credit (Long Term Operations) Fund and the National Rural Credit (Stabilisation) Fund.

2. How often does the Bank contribute to the rural funds in Section 46A?

Section 46A of the 1934 Act requires the Bank to contribute to these funds every year.

3. Who maintains the funds mentioned in Section 46A?

According to Section 46A of the Reserve Bank of India Act, 1934, these funds are established and maintained by the National Bank.

Test yourself

Q1.Under Section 46A of The Reserve Bank of India Act, 1934, how is the amount of the annual contribution determined?

Q2.Which entity actually maintains the rural credit funds described in Section 46A of the 1934 Act?

Q3.What is the frequency of the contributions mandated by Section 46A of the Reserve Bank of India Act, 1934?

Q4.Comparing Section 46 and Section 46A of the 1934 Act, which statement is true about the source of the funds?

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