Experts said RCBs can use the additional funds to play the rural economic recovery in the country by pushing credit growth. With better access to funds, RCBs are likely to extend their customer's loans at cheaper rates.

“The RBI’s latest regulations will act as a big facilitator for providing more credit in the rural areas at better terms and competitive rates, which in turn will support faster development of the rural economy,” said Jyoti Prakash Gadia, managing director at Resurgent India.