BANKING SYSTEM IN INDIA

Universal Banking in India

  • Definition: A ‘cafeteria’ approach offering retail, wholesale, and investment services, acting as a ‘full-service’ bank.
  • Recommendations:
  1. Narasimham Committee (1988)
  2. Khan Working Group (1998)
  • Disadvantage: Loose regulatory norms can derail the entire banking system.

1. Merchant/Investment Banks

  • Role:
  1. Help companies raise funds in the capital market.
  2. Provide advisory services on mergers and acquisitions.
  3. Underwrite new public issues floated by companies.
  • Deal exclusively with corporates, not with the general public.

2. Commercial Banks

  • Serve as financial intermediaries between depositors and borrowers.
  • Cater to short-term working capital requirements.

3. Scheduled Commercial Banks

  • Listed in the Second Schedule of the RBI Act, 1934.
  • Conditions:
  1. Paid-up capital and reserves > ₹5 lakh.
  2. Must satisfy RBI that their operations are not detrimental to depositors.
  • Privileges:
  1. Access to bank rate loans from RBI.
  2. Clearing house membership.
  3. Ability to rediscount exchange bills with RBI.
  • Obligations: Maintain required reserves.

4. Non-Scheduled Banks

  • Not listed in the Second Schedule of the RBI Act, 1934.
  • Key Features:
  1. No access to privileges available to scheduled banks.
  2. Required to maintain CRR, but can keep it with themselves.
  3. Includes:
    • Local Area Banks (LABs).
    • Foreign banks without branches in India.
    • Some Urban Cooperative Banks (UCBs).
  • Restrictions:
  • Limited branch expansion.
  • No loans from RBI via bank rate or Marginal Standing Facility (MSF).
  • No refinance from NABARD or SIDBI.

Differentiated Banking

  • Introduced based on recommendations of the Nachiket Mor Committee (2013).

Differentiated Banking

  • Definition: Banks that offer limited services and operate in niche segments.

A. Regional Rural Banks (RRBs)

  • Established: Under RRB Act, 1976, confined to specific regions.
  • Regulator: NABARD.
  • Development:
  • In 1997, allowed to lend outside target groups.
  • Owned by:
    • Centre: 50%.
    • State: 15%.
    • Sponsor Bank: 35%.
  • Amendment (2015): Allowed 49% private investment, but 51% ownership remains with Centre + State + Sponsor Bank.
  • Key Features:
  • Priority Sector Lending (PSL): 75%.
  • Not eligible for Marginal Standing Facility (MSF) or Liquidity Adjustment Facility (LAF) as their interest rates are regulated by RBI.

B. Local Area Banks (LABs)

  • Established: 1996.
  • Unique Feature: Only type of Non-Scheduled Banks in India, though eligible for inclusion in the Second Schedule.
  • Objective: Operate in rural and semi-urban areas to promote financial inclusion in backward and less developed districts.
  • Operational Scope:
  • Geographical restriction to three contiguous districts, with only one urban center per district.
  • Regulatory Details:
  • Registered under the Companies Act, 1956.
  • Licensed under the Banking Regulation Act, 1949.
  • Regulated by RBI (not NABARD).
  • Capital and Lending:
  • Minimum Capital: ₹5 crore.
  • PSL Requirement: 40% (at least 25% for weaker sections).

Comparison Between Small Finance Banks (SFBs) and Payment Banks (PyBs)

Similarities

  1. Regulatory Compliance:
  • CRR and SLR: Both maintain Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
  • Payment Banks: SLR consists of 75% in G-Secs + 25% in Scheduled Commercial Banks (SCBs).
  1. FDI Limit:
  • 49% under the automatic route, up to 74% with approval.
  1. Repo Market Participation:
  • Both can participate.
  1. Services:
  • Allowed to operate ATMs, appoint Business Correspondents (BCs), open branches, and issue debit cards.
  • Can sell Mutual Funds (MFs), pension schemes, insurance, and forex services but cannot use their own funds for these purposes.
  1. Branch Requirement:
  • At least 25% of branches must be in rural areas.

Differences

ParameterSmall Finance Banks (SFBs)Payment Banks (PyBs)
Client BaseFocuses on unserved and underserved customers like small and marginal farmers, micro and small industries.Targets small savings, remittances for migrant labor families, low-income households, unorganized sectors, and small businesses.
Deposit FeaturesNo limits on deposits.1. Cannot accept NRI deposits.
2. Accepts both time and demand deposits.
3. Maximum balance per customer: ₹1 lakh/year.
4. Cannot issue credit cards.
Priority Sector Lending (PSL)– 40% PSL as per commercial bank norms.
– 35% additional PSL as per their niche focus (total: 75% PSL).		1. Not applicable (as they do not give loans).
2. Must maintain 75% demand deposits in G-Secs or T-bills; maximum 25% can be placed with SCBs.
Future ScopeCan evolve into Universal Banks after 5 years of operation.In 2019, RBI permitted Payment Banks with 5 years of experience to apply for conversion into Small Finance Banks.
Call Money MarketNot explicitly mentioned.Now allowed to participate in the Call Money Market as both borrower and lender.

Note:

Payment Banks focus on promoting financial inclusion, especially for low-income groups, while Small Finance Banks aim to address broader credit and deposit needs of underserved segments.

C. Small Finance Banks (SFB)

  • RRR committee, 2009
  • Cannot: Large loans, set subsidiary to undertake non-banking financial service activities.
  • Who are eligible: NBFCs, MFIs, LABs, individuals with 10 years of experience in finance.

D. Payment Banks

  • Accept restricted deposit: ₹1,00,000.
  • FDI is allowed, at least 26% investment of Indians.
  • Can: Services like ATM, debit card, net banking.
  • Can NOT: Lend, credit card, NRI deposits, cross-border remittance, cannot form subsidiary to undertake non-banking activities.

INDIA POST PAYMENT BANK (IPPB)

  • T.S.R. Subramaniyam committee on postal network.
  • Companies Act, 2013.
  • 100% Equity of DoPost (under MoCommunication).
  • Who can open account:
    • Age: >10 years.
    • Zero balance a/c.
    • Also, current a/cs with post can be transferred to IPPB.
  • Initially: 1 post in each district (having license) >>> later ALL.
  • 3 types of accounts:
    1. SAFAL
    2. Sugam
    3. SARAL
  • NO ATM, but QR-based biometric cards.

E. Wholesale and Long Term Finance (WTLF) Banks

  • Only current account.
  • Fixed or Term deposits only above ₹10 crore.
  • Lending to:
    1. Infra projects.
    2. Small, medium, corporate business.
    3. Help PSL targets for banks (through PSL Certificates).

7. COOPERATIVE BANKS

PARAMETERCOMMERCIAL BANKSCOOPERATIVE BANKS
Banking Regulation ActYes (Regulated by RBI)Yes (from 1966) (Regulated by RBI)
CRR and SLRYesYes
MSF, PSLYesUCB – 40% (+10% – minority + 7.5% – micro enterprises)
Who can borrowAnyoneOnly members
Vote powerShareholding1 person 1 vote
Profit motiveYesNo profit, No loss
PresenceAll India, AbroadGJ, MH, AP
  • Set up: By either State (Cooperative Acts) or Central law (Multistate Cooperative Societies).
  • Regulation: Governed by the Banking Regulation Act, 1949, and the Banking Laws (Cooperative Societies) Act, 1965.
  • Urban Cooperative Banks (UCB):
  • Divided into Scheduled and Non-Scheduled categories.
  • Regulated by the RBI.
  • Deposits covered by DICGC up to ₹5 lakh.
  • Rural Cooperative Banks (RCB):
  • Regulated jointly by NABARD (ultimately under RBI).
  • Financial and Other Assistance: Provided by RBI, the Central Government, State Governments, and NABARD.
  • Hierarchy: State Cooperatives → District Banks (DCC) → Rural Cooperatives.
  • 2017: The government allocated funds to NABARD for implementing Core Banking Solutions (CBS) between Rural and District Cooperatives.

NON-BANKING FINANCIAL INSTITUTIONS

Development Financial Institutions (DFIs)

  • Definition: Institutions providing long-term finance for industries.
  • Key DFIs:
  1. IDBI
  2. ICICI
  3. IFCI
  • Changes Over Time:
  • 1991: DFIs abolished based on recommendations of the Narasimham Committee; AIFIs replaced DFIs.
  • 2020: The Finance Minister announced the establishment of Development Banks to provide long-term credit for capital-intensive investments.

1. ALL INDIA FINANCIAL INSTITUTIONS (AIFIs)

  • Regulated by: RBI.
ParameterEXIMNABARDNHBSIDBI
Year1982198219881990
RoleLoan/credit/finance to exporters and importers1. Rural Infra Dev Fund (RIFD): banks deposit PSL shortfalls
2. Indirect refinancing for farmers		1. Finance banks and NBFCs for housing projects
2. RESIDEX		1. Small Enterprises Devlopment Fund (SEDF): PSL shortfalls of foreign banks with <20 branches deposited here
BossGoI (100%)Earlier: 99.3% GoI + 0.7% RBI
2019: GoI (100%)		Earlier: RBI
2019: GoI (100%)		SBI + LIC + IDBI + other PSBs + Insurance companies
Regulatory AuthorityRRBs + Cooperative BanksApex institution for housing finance

PRIMARY DEALERS

  • Role: Operate in the “primary” market, directly buying G-Secs during RBI’s E-Kuber auctions and selling them in the secondary market.
  • Participation: Eligible to participate in Open Market Operations (OMO).
  • Licensing: Requires a license from RBI.
  • Total Primary Dealers: 21 (14 banks + 7 non-bank entities).

NON-BANKING FINANCIAL COMPANIES (NBFCs)

  • Definition: Engaged in activities like loans, advances, housing finance, and securities acquisition, but their principal business does not include agricultural, industrial, or immovable property activities.

Differences Between Banks and NBFCs:

ParameterBanksNBFCs
RegistrationBanking Regulation ActCompanies Act, 1956
Entry Capital₹500 crore₹5 crore for microfinance, ₹2 crore for others, ₹200 crore for reinsurers
SupervisionRBIVarious regulators
DepositsTime and Demand DepositsOnly Time Deposits (NBFC-D)
ChequebookAllowed (Payment Settlement Act, 2007)Not Allowed
Reserve RatioCRR and SLRNo CRR; SLR applicable only for NBFC-D
InvestmentCannot invest in share marketsCan invest in share markets
Loan RateMCLRVariable
Loan Recovery (SARFAESI)YesOnly for housing finance

NBFC Categories

  1. NBFC-ICC (Investment and Credit Company): Merger of Asset Finance Companies (AFCs), Investment Companies, and Loan Companies.
  2. Mutual Benefit Financial Company (MBFCs): Cooperative financial institutions.
  3. NBFC-Factor: Specializes in receivables factoring.

Classification by Deposits

  • NBFC-D: Accepts deposits but not NRI deposits, except those debited from NRO accounts.
  • NBFC-ND: Non-deposit-taking NBFCs.

Systematically Important Non-Deposit Core Investment Company (CIC-ND-SI):

  • Definition:
  • Asset size > ₹100 crore.
  • Holds ≥90% of its net assets in equity shares, preference shares, bonds, debentures, or loans in group companies.
  • Accepts public funds.
  • Regulated by RBI.

Notes:

  • Housing Finance Companies, Merchant Banking Companies, Stock Exchanges, Venture Capital Fund Companies, Nidhi Companies, Insurance Companies, and Chit Fund Companies are all categorized as NBFCs.

MUDRA BANK

  • Registration: Registered as an NBFC-ND and established as a subsidiary of SIDBI.
  • Initial Role: Initially proposed as a regulator for MFIs but later assigned to RBI and the Department of Company Affairs.
  • Purpose: Provides refinancing to all banks under the Pradhan Mantri Mudra Yojana (PMMY).
  • Responsibilities:
  1. Develop a robust credit delivery architecture for micro-businesses under PMMY.
  2. Prioritize enterprises led by SC/ST, first-generation entrepreneurs, and existing small businesses.

Pradhan Mantri Mudra Yojana (PMMY)

  • Objective: To provide funding to the Non-Corporate Small Business Segment (NCSBS).
  • Loan Coverage: Up to ₹10 lakh for non-corporate, non-farm micro and small enterprises.
  • Loan Providers:
  1. Commercial Banks (including foreign banks).
  2. RRBs.
  3. SFBs.
  4. Cooperative Banks.
  5. MFIs.
  6. NBFCs.
  • Loan Categories:
  • Shishu: Up to ₹50,000; no collateral; 1% interest for 5 years.
  • Kishor: Up to ₹5,00,000.
  • Tarun: Up to ₹10,00,000.
  • Implementation: Handled by the Department of Financial Services (also responsible for PMJDY, Atal Pension Yojana, PM Jeevan Jyoti Bima Yojana, and Suraksha Bima Yojana).

SHADOW BANKS

  • Definition: Operate similarly to banks but are not subject to stringent regulations, leading to less transparency.
  • Characteristics:
  • Higher cost of funding, greater risk-taking, and higher returns.
  • Not deposit-taking institutions; cannot create money.
  • Liabilities are not insured and have no access to RBI’s liquidity.
  • Examples: NBFCs, Chit Funds.

VARIOUS COMMITTEES

1. Narasimham Committee (1991 and 1998)

Recommendations (1991):

  1. Stop further nationalization of banks.
  2. Reduce SLR and CRR.
  3. Ensure a level playing field for public, private, and foreign banks.
  4. Identify select banks for global operations.
  5. Deregulate interest rates.
  6. Set up Asset Reconstruction Companies (ARCs) for bad loans.
  7. Introduce prudential norms for risk management.
  8. Rationalize and better target Priority Sector Lending (PSL).

2. P. J. Nayak Committee

  • Purpose: Review governance of bank boards (public and private).
  • Recommendations:
  1. Repeal Bank Nationalization Acts (1970, 1980) and SBI Act.
  2. Establish a Bank Investment Company (BIC):
    • Formed under the Companies Act, 2013, as a ‘core investment company.’
    • Transfer PSB shares to BIC and make banks its subsidiaries.
    • Rationale: BIC would have voting power to appoint bank Boards of Directors and grant autonomy to banks.
  3. Bank Appointments in PSBs:
    • Phase I: Bank Boards Bureau (BBB) to oversee appointments.
    • Phase II: BIC to manage the process.
    • Phase III: Grant appointment powers to PSB boards.
  4. Set fixed tenures:
    • 5 years for Chairpersons/MDs.
    • 3 years for Whole-time Directors.

BASEL NORMS (Basel Accords)

  • Definition: A set of recommendations for the regulation of banks and Systemically Important Financial Institutions (SIFIs).
  • Issued by: Basel Committee on Banking Supervision (BCBS).
  • Objective: Ensure banks have sufficient capital to meet obligations and absorb unexpected losses.

BASEL III

  • Introduction: Rolled out in 2013, with implementation up to 2019.
  • Risks Covered:
  1. Credit Risk: Banks must measure credit risk and maintain sufficient capital.
  2. Market Risk: Includes risks from market fluctuations (except for government securities).
  3. Operational Risk: Covers risks like fraud, security breaches, privacy violations, and environmental issues.

Two Components of Basel III:

A. Capital

  1. Pillars of Capital:
  • CRAR: Minimum Capital to Risk-Weighted Asset Ratio (CRAR) of 8%, plus an additional Capital Conservation Buffer of 2.5% for financial stress.
  • Counter-Cyclical Capital Buffer: Extra capital during economic booms to prevent unhealthy credit expansion.
  • Leverage Ratio: Capital measure / exposure measure (to account for unusual exposures).
  1. Risk Management and Supervision:
  • Banks to implement internal risk assessment processes.
  • Central banks to conduct review processes.
  1. Market Discipline:
  • Mandates disclosure of capital adequacy, risk exposure, and risk assessment procedures.

B. Liquidity

  1. Liquidity Coverage Ratio (LCR):
  • Stock of High-Quality Liquid Assets (HQLA) must withstand a liquidity crisis for 30 days.
  1. Net Stable Funding Ratio (NSFR):
  • Ratio of required stable funding to available stable funding, preventing the creation of long-term assets using short-term funding.

CAPITAL ADEQUACY NORMS (CRAR or Capital to Risk-Weighted Asset Ratio)

  • Definition: Percentage of a bank’s risk-weighted credit exposure.
  • Mandate:
  • RBI requires 9% CAR (international norm: 8%).
  • G-secs are subtracted from total assets to calculate CAR (since they are risk-free).
  • India’s Compliance:
  • Indradhanush Scheme: Government recapitalized banks to help meet Basel III norms by March 2019.
  • Needed due to low profitability and difficulty in raising equity.

VARIOUS ACTS AND STEPS

1. SARFAESI Act (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act)

  • Applicability: Loans above ₹10 lakh.
  • Empowers Banks to:
  1. Take possession of a borrower’s assets and sell them (2011 amendment allows banks to purchase assets if no buyer is available).
  2. Change management of those assets.
  3. Demand surrender of assets already sold to third parties by the borrower.
  4. Exclusions: Cannot take personal assets or agricultural land.
  • Appeal by Borrower:
  • To Debt Recovery Tribunal (DRT) (not civil courts).
  • If dissatisfied, appeal to Debt Recovery Appellate Tribunal (DRAT) (must deposit 50% of the pending loan).

2. Insolvency and Bankruptcy Code (IBC)

  • Who can initiate:
  • Financial creditors
  • Operational creditors
  • Corporate debtor
  • Employees
  • Shareholders
  • Committee of Creditors:
  • Composed of financial creditors.
  • For smaller firms:
  • Fast track Insolvency Resolution Process (IRP) of 90 days, extendable with 75% consent of financial creditors.
  • Liquidation Process:
  • Administered by an Insolvency Professional (IP).
  • Priority in Liquidation:
  • Worker salaries for up to 24 months take precedence over secured creditors.
  • Jurisdiction:
  • NCLT: For Companies and LLPs
  • DRT: For Individuals and Partnership Firms

3. Asset Quality Review (AQR)

  • 2015-16: Special inspection to ensure asset classification follows prudential norms.
  • Impact:
  • Banks reclassified stressed assets identified by AQR as Non-Performing Assets (NPA).

4. Prompt Corrective Action (PCA)

  • Purpose:
  • Allows RBI to impose restrictions on banks when certain risk thresholds are breached.
  • Thresholds for PCA:
  1. Asset Quality: Net NPA
  2. Profitability: Return on Assets (RoA)
  3. Capital: CRAR (Capital to Risk Asset Ratio)
  4. Leverage Ratio: Added as a 4th parameter
  • Trigger Points:
  • CRAR: 9%
  • Net NPA: 10%
  • RoA: 0.25%
  • Exemptions:
  • PCA doesn’t apply to Cooperative Banks, NBFCs, and Financial Market Infrastructure (FMIs).
  • For Cooperative Banks: Supervisory Action Framework (SAF) is applicable, akin to PCA.
  • Current Banks under PCA:
  • Only 6 Public Sector Banks (PSBs).
  • Corrective Actions Allowed:
  • Halt banking expansion
  • Stop dividend payments
  • Cap lending limits
  • Special audits
  • Restructure operations
  • Recovery plans
  • Bring in new management
  • Supersede bank boards
  • PCA for RRBs:
  • Managed by NABARD (since 2018).

5. Strategic Debt Restructuring (SDR)

  • Purpose:
  • Change in ownership as part of restructuring of distressed assets.

6. Stress Test

  • Purpose:
  • Analysis of a bank’s ability to withstand economic or financial crises.
  • Conducted by RBI.

7. Asset Reconstruction Company (ARC)

  • Purpose:
  • System to recover NPAs from the books of secured lenders and unlock value from distressed assets.
  • Licensing:
  • Licensed by RBI.
  • Empowered by:
  • SARFAESI Act, 2002.
  • Functions:
  1. Acquisition of financial assets
  2. Takeover or change of management
  3. Rescheduling debts
  4. Enforcement of security interest
  5. Settling dues with borrowers
  6. 2011 Amendment: Convert debt into equity
  • Funding for ARCs:
  • Raised via Security Receipts (SRs).
  • Only Qualified Institutional Buyers (QIBs) can purchase SRs (e.g., scheduled banks, mutual funds, venture capital, insurance companies, pension funds).
  • Foreign Investment:
  • 100% FDI allowed through the automatic route.

8. Sustainable Structuring of Stressed Assets (S4A)

  • Conditions:
  1. The project must be operational and generating revenue.
  2. Total loan must exceed ₹500 crore.
  3. 50% of the loan should be sustainable.

9. Indradhanush Scheme

  • Appointment of Executives:
  • Bring private sector executives into public banks.
  • Empowerment:
  • Provide autonomy and flexibility to banks.
  • Framework:
  • Key performance indicators for banks.
  • Professionalization and Depoliticization:
  • Professionalize the appointment process for bank executives (BBB framework).

10. Foreign Direct Investment (FDI) in Banks

  • PSBs:
  • FDI limit is 20%.
  • Private Banks:
  • FDI limit is 74%.
  • Up to 49% is automatic, beyond that, approval is required.
  • Voting Rights Cap:
  • Voting rights are capped at 10% for national interest.

11. Public Sector Asset Rehabilitation Agency (Bad Bank)

  • Concept:
  • Based on successful models in East Asian countries.
  • Special Purpose Vehicle (SPV) for handling distressed assets.
  • Funding Sources:
  1. Government Bonds
  2. Shares
  3. Disinvestment funds from PSUs
  4. Windfall gains from RBI (e.g., from demonetization)
  • Government Shareholding:
  • Government share cannot exceed 49%.
  • Debt to Equity Ratio:
  • Debt financing is used in combination with equity funding.

12. Recapitalization

  • Purpose:
  • To infuse capital into banks, particularly PSBs, to ensure compliance with regulatory norms (e.g., Basel III).
  • How recapitalization works:
    • Government infusion of capital to strengthen bank balance sheets.

1. Bad Loans

  • Standard Asset:
  • A performing asset that is not overdue.
  • Substandard Asset (NPA):
  • Asset for which neither interest nor principal has been paid for a specified period.
  • Classification Timeline:
  • Special Mention Account (SMA): < 12 months
  • Substandard Asset: 90 days
  • Doubtful Asset (DA1): After 1 year
  • DA2: 1–3 years
  • DA3: Beyond 3 years
  • Stressed Asset:
  • Assets showing weaknesses but still classified as standard. RBI allows restructuring.
  • Types of NPA:
  1. Overdraft and cash credit accounts out of order for >90 days.
  2. Agricultural advances overdue:
    • 2 crop seasons for short-duration crops.
    • 1 crop season for long-duration crops.
  3. Bills overdue >90 days.
  4. Expected payments overdue for >90 days.
  5. Non-submission of stock statements for 3 consecutive quarters in cash credit facilities.

2. Foreclosure and Securitization

  • Foreclosure:
  • Lender takes over mortgaged property when the borrower defaults.
  • Securitization:
  • Pooling a group of loans or mortgages and selling securities backed by these assets.

3. Prudential Norms

  • Purpose:
  1. Reflect the true position of the bank’s loan portfolio.
  2. Prevent portfolio deterioration.
  • Focus Areas:
  1. Income recognition.
  2. Asset classification.
  3. Provisioning for NPAs.
  4. Capital adequacy norms (CRAR).

4. Write-Off, Write-Down, Haircut

  • Write-Off:
  • Automatic once the asset crosses DA3 class.
  • Refers to NPAs that cannot be recovered without legal or recovery processes.
  • Haircut:
  • Measure to adjust capital adequacy.
  • Asset value reduced to reflect partial recovery.
  • Write-Down:
  • Partial write-off of a loan decided by the lender.

5. Priority Sector Lending (PSL)

  • Categories:
  1. Agriculture.
  2. Micro, Small, and Medium Enterprises (MSMEs).
  3. Export credit.
  4. Education.
  5. Affordable housing (loans ≤ ₹10 lakh).
  6. Social infrastructure.
  7. Renewable energy (loans ≤ ₹15 crore; hydro projects <25 MW).
  8. Others (e.g., road and water transport, retail trade).
  • Weaker Sections:
  • Distressed farmers indebted to non-institutional creditors.
  • Overdrafts in Jan Dhan accounts <₹10,000.
  • Distressed individuals indebted to non-institutional creditors (loans ≤ ₹10 lakh).
  • Targets:
  • Domestic Scheduled Commercial Banks: 40% of Adjusted Net Bank Credit (ANBC).
  • Regional Rural Banks (RRBs): 75% of ANBC.
  • Foreign Banks: 36% of ANBC.
  • Sub-Targets for Scheduled Commercial Banks: Category Sub-Target Agriculture 18% Micro Enterprises 7.5% Weaker Sections 10% (or 25% of PSL, whichever is higher).
  • Shortfall in PSL Targets:
  • Shortfalls must be deposited with NABARD’s Rural Infrastructure Development Fund (RIDF).
  • NABARD allocates these funds to state governments for rural development activities.

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