42. National Rural Credit (Long Term Operations) Fund.—(1) The National Bank shall establish
and maintain a Fund to be known as the National Rural Credit (Long Term Operations) Fund.
(2) The Fund shall (in addition to assets and liabilities transferred under section 18)include,—
(a) such sums of money as the Central Government and the State Governments may contribute
from time to time;
(b) such sums of money as the Reserve Bank may contribute every year; and
(c) such further sums of money as the Board may contribute every year.
(3) The amount in the said Fund shall be applied by the National Bank only to provide financial
assistance by way of loans and advances under section 23, section 24, sub-section (1) of section 25 or
section 27 or for the purposes of section 26.
43. National Rural Credit (Stabilisation) Fund.—(1) The National Bank shall establish and
maintain a Fund to be known as the National Rural Credit (Stabilisation) Fund.
(2) The Fund shall (in addition to assets and liabilities transferred under section 18)include,—
(a) such sums of money as the Central Government and the State Governments may contribute
from time to time;
(b) such sums of money as the Reserve Bank may contribute every year; and
(c) such further sums of money as the Board may contribute every year.
(3) The amounts in the said Fund shall be applied by the National Bank only to provide loans and
advances under section 22.
44. Research and Development Fund.—(1) The National Bank shall establish and maintain a Fund
to be known as the Research and Development Fund, to which shall be credited—
(a) such sums of money as are transferable to this Fund in accordance with section 47;
(b) such sums of money as the Board may contribute every year to this Fund from out of its
annual profits; and
(c) such gifts, grants, donations or benefactions which the National Bank may receive and which
the Board may earmark for this purpose.
(2) The Research and Development Fund shall be expended on matters of importance to agriculture,
agricultural operations and rural development, including the provision of training and research facilities
and the 56[making of loans or advances or grants] under clause (iii) of section 38.
45. Reserve Fund and other Funds.—The National Bank shall establish a Reserve Fund 57[and other
Funds] as the Board may consider necessary by transferring such sums as it may deem fit, out of its
annual profits and out of receipts from gifts, grants, donations or benefactions, which it may receive.
46. Preparation of balance-sheet, etc., of National Bank.—(1) The balance-sheet and accounts of
the National Bank shall be prepared and maintained in such form and manner as may be prescribed.
1. Subs. by Act 55 of 2000, s. 26, for “making of grants” (w.e.f. 1-2-2001).
2. Subs. by s. 27, ibid., for “and such other Funds” (w.e.f. 1-2-2001).
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(2) The Board shall cause the books and accounts of the National Bank to be balanced and closed as
on the thirtieth day of June 58[or such other date in each year as the Central Government may, by
notification in the Official Gazette, specify].
59[Provided that with a view to facilitating the transition from one period of accounting to another
period of accounting under this sub-section, the Central Government may, by order published in the
Official Gazette, make such provisions as it considers necessary or expedient for the balancing and
closing of, or for other matters relating to, the books or accounts in respect of the concerned years.]
47. Disposal of surplus.—After making provision for bad and doubtful debts, depreciation of assets
and all other matters for which provision is necessary or expedient or which is usually provided for by
bankers, and for the Funds referred to in sections 42, 43 and 45, the National Bank shall transfer—
(i) for a period of fifteen years, following the accounting year during which the National Bank is
established, the amount remaining (hereafter in this section referred to as surplus) to the Research and
Development Fund under section 44; and
60[(ii) after the expiry of the said period of fifteen years, the Board shall, after making provision
for the Fund referred to in clause (i), disburse or spend the balance of the surplus in such manner as
may be approved by the Board.]
48. Audit.—(1) The accounts of the National Bank shall be audited by auditors duly qualified to act
as auditors under sub-section (1) of 61[section 141 of the Companies Act, 2013 (18 of 2013)] who shall be
appointed by the Central Government in consultation with the Reserve Bank, for such term and on such
remuneration as the Central Government may fix.
(2) The auditors shall be supplied with a copy of the annual balance-sheet of the National Bank and it
shall be their duty to examine it together with the accounts and vouchers relating thereto and they shall
have a list delivered to them of all books kept by the National Bank and shall at all reasonable times have
access to the books, accounts, vouchers and other documents of the National Bank.
(3) The auditors may, in relation to the accounts of the National Bank, examine any director of the
Board or any officer or other employee of the National Bank and shall be entitled to require from the
Board or officers or employees of the National Bank such information and explanation as they may think
necessary for the performance of their duties.
(4) The auditors shall make a report to the National Bank upon the annual balance-sheet and accounts
examined by them and in every such report, they shall state whether in their opinion the balance-sheet is a
full and fair balance-sheet containing all necessary particulars and properly drawn up so as to exhibit a
true and fair view of the state of affairs of the National Bank and in case they had called for any
explanation or information from the Board or any officer or other employee of the National Bank,
whether it has been given and whether it is satisfactory.
(5) The National Bank shall furnish to the Central Government and the Reserve Bank within four
months from the date on which the annual accounts of the National Bank are closed and balanced, a copy
of its balance-sheet as on the close of that year together with a copy of the profit and loss account for the
year and a copy of the auditors’ report and a report of the working of the National Bank during the
relevant year, and the Central Government shall, as soon as may be after they are received by it, cause the
same to be laid before each House of Parliament and cause the copies of the said balance-sheet, profit and
loss account and auditors' report to be published in the Official Gazette.
(6) Without prejudice to anything contained in the preceding sub-sections, the Central Government
may, at any time, appoint the Comptroller and Auditor General of India to examine and report upon the
accounts of the National Bank and any expenditure incurred by him in connection with such examination
and report shall be payable by the National Bank to the Comptroller and Auditor General ofIndia.
1. Subs. by Act 66 of 1988, s. 46, for “, each year” (w.e.f. 30-12-1988).
2. The proviso ins. by s. 46, ibid. (w.e.f. 30-12-1988).
3. Subs. by Act 55 of 2000, s. 28, for clause (ii) (w.e.f. 1-2-2001).
4. Subs. by Act 7 of 2018, s. 12, for “section 226 of the Companies Act, 1956 (1 of 1956)” (w.e.f. 15-3-2018).
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49. Returns.—The National Bank shall furnish, from time to time, to the Central Government and to
the Reserve Bank, such returns as the Central Government or the Reserve Bank may require.