(1) With effect from such date as may be fixed the State Government may constitute a Guarantee Fund in accordance with the provisions of Section 9 of the Act. The Uttar Pradesh Gram Vikas Bank shall contribute to such fund annually within three months of the close of a cooperative year a sum at the rate of one paisa per hundred rupees of the loan advanced during the proceeding co-operative year.
(2) Notwithstanding the provisions of sub-rule (1) when a Gram Vikas Bank is constituted and loan is advanced through such bank it shall contribute to the Guarantee Fund at the rate of half paisa per hundred rupees of loan advanced through it and the Uttar Pradesh Gram Vikas Bank may with the approval of the Registrar, reduce its contribution to the extent of the contribution made by me Gram Vikas Bank as aforesaid.
(3) The State Government may also contributed to the Fund from time to time such amount as it may deem fit.