Section 40 in The National Bank For Agriculture And Rural Development Act, 1981
40. [ Deposits and investments
.-(1) The National Bank may invest its funds in promissory notes, stocks or securities of the Central Government or keep the moneys deposited with the Reserve Bank or with any agency of the Reserve Bank or with a State co-operative bank or a scheduled bank.(2)Notwithstanding anything contained in sub-section (1) or section 30-A, the National Bank may, for beneficial investment of its surplus funds, rediscount bills of exchange or promissory notes arising out of bona fide trade and commercial transactions and also lend repayable at call or short notice to a scheduled bank or any financial institution approved by the Reserve Bank, or invest in certificates of deposit and other instruments or schemes as may be approved by the Board.]
