In pursuance of the Budget Announcement 2014-15, a new Fund namely “Long Term Rural Credit Fund” has been set up in National Bank for Agriculture & Rural Development (NABARD) for providing refinance support to Cooperative Banks and Regional Rural Banks, with an initial corpus of ₹ 5,000 crore, contributed out of shortfall in achievement of Priority Sector Lending (PSL) targets by Scheduled Commercial Banks. The main objective of the Fund is to boost capital formation in agriculture and rural economy.

This information was given by the Minister of State for Finance, Shri Jayant Sinha in written reply to a question in Lok Sabha.

Long Term Rural Credit Fund established to provide refinance support to cooperative and regional rural banks from PSL shortfalls. Establishment of a Long Term Rural Credit Fund at NABARD to provide refinance support to Cooperative Banks and Regional Rural Banks, financed by an initial corpus contributed from the shortfall in achievement of Priority Sector Lending targets by Scheduled Commercial Banks, intended to boost capital formation in agriculture and the rural economy.