Reserve Bank of India Act, 1934 | Chapter IV

Section 46-A: Rural Credit Funds and Section 46-C: Industrial Credit Fund

Sections 46-A and 46-C of the Reserve Bank of India Act, 1934 deal with two different forms of institutional credit support. Section 46-A addresses RBI contributions to rural credit funds maintained by NABARD; Section 46-C establishes a separate National Industrial Credit (Long Term Operations) Fund for specified industrial and export-finance purposes.

ContentsSection 46-A: Rural credit funds Section 46-C: Industrial credit fund Statutory provisions Key distinctions Official resources

Section 46-A: Contributions to National Rural Credit Funds

Section 46-A requires the Reserve Bank of India to contribute each year such sums as it considers necessary and feasible to the National Rural Credit (Long Term Operations) Fund and the National Rural Credit (Stabilization) Fund. Both funds are established and maintained by the National Bank for Agriculture and Rural Development (NABARD), under Sections 42 and 43, respectively, of the NABARD Act, 1981.

Long-term operations fund

This fund is associated with supporting longer-term agricultural and rural development credit operations through NABARD's statutory functions. It is distinct from a direct loan facility offered by RBI to an individual farmer or business.

Stabilization fund

The stabilization fund is intended to support rural credit stability, including NABARD's statutory role in the rural credit system. Its legal uses and conditions are governed by the NABARD Act and applicable arrangements.

The wording "such sums of money as it may consider necessary and feasible" means Section 46-A does not itself prescribe a fixed annual rupee contribution. Amounts and implementation should be checked against RBI and NABARD financial disclosures.

Section 46-C: National Industrial Credit (Long Term Operations) Fund

Section 46-C(1) provides for a dedicated fund established and maintained by RBI. The statutory credits include an initial contribution of Rs. 10 crore and further sums contributed by RBI from year to year. The provision also contains a historical minimum contribution of Rs. 5 crore for each of the five years commencing with the year ending 30 June 1965, subject to Central Government authorization to reduce that amount. This is a historical funding condition, not a fresh minimum applicable to every present financial year.

Permitted applications under Section 46-C(2)

Subsection (2) restricts the application of money in the fund to the objects specified in the Act. The text supplied on the original page identifies lending or advances to the Export-Import Bank of India (Exim Bank), the Reconstruction Bank or the Small Industries Development Bank of India (SIDBI), as applicable, for their business, and purchasing their bonds and debentures. References to legacy institutions must be understood in their relevant statutory and historical context.

Textual caution: the original webpage shows clause labels (a) and (b) of Section 46-C(2) without any substantive wording. No missing clause text has been invented here. Readers should consult the current authoritative consolidation of the Act for omissions, repeals, amendments and operative scope.

Statutory text preserved from the original page

Section 46-A: Contribution to National Rural Credit (Long Term Operations) Fund and National Rural Credit (Stabilization) 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 (Stabilization) 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

Section 46-C: National Industrial Credit (Long Term Operations) Fund

(1) The Bank shall establish and maintain a Fund to be known as the National Industrial Credit (Long Term Operations) Fund to which shall be credited-

(a) an initial sum of ten crores of rupees by the Bank,

(b) such further sums of money as the Bank may contribute every year :

Provided that the annual contribution during each of the five years commencing with the year ending on the 30th day of June, 1965 shall not be less than five crores of rupees :

Provided further that the Central Government may, if the circumstances so require, authorise the Bank to reduce the said sum of five crores of rupees in any year.

(2) The amount in the said fund shall be applied by the Bank only to the following objects, namely :-

(a) (b)

(c) the making to the Exim Bank or the Reconstruction Bank or the Small Industries Bank, as the case may be, of loans and advances for the purposes of any business of the Exim Bank or the Reconstruction Bank or the Small Industries Bank, as the case may be ;

(d) the purchasing of bonds and debentures issued by the Exim Bank or the Reconstruction Bank or the Small Industries Bank, as the case may be.

How Sections 46-A and 46-C differ

Purpose: Section 46-A provides contributions to rural credit funds, whereas Section 46-C concerns a dedicated industrial credit fund.
Institutional structure: the two rural credit funds are maintained by NABARD; the industrial credit fund is established and maintained by RBI.
Contribution mechanism: Section 46-A leaves annual contributions to RBI's assessment of necessity and feasibility; Section 46-C specifies an initial contribution and historical funding provisions.
Use of funds: each fund is governed by its own statutory purposes and restrictions, not an unrestricted lending power.

Related legal framework

These sections appear in Chapter IV (General Provisions) of the RBI Act. For context, read Section 46 (Reserve Fund) and Sections 46-D and 47 (Housing credit fund and allocation of surplus profits). Section 46-B is not reproduced on the supplied page; the section numbering should not be taken to imply that every intervening provision is currently operative.

Official statutory and regulatory resources

The reproduced legislative extracts reflect the supplied page and should be checked against the current official text before legal reliance.