Production Credit

This is a short-term refinance facility, aimed at supporting

Agricultural production operations and marketing of crops by farmers and farmers cooperatives

Marketing and distribution of inputs like fertilizers, seeds and pesticides

Production and marketing activities of village cottage industries, handicrafts, handlooms, powerlooms, artisans, small scale and tiny industries and other rural non-farm enterprises

Eligible institutions for this facility are State Cooperative Banks (SCBs) and Regional Rural Banks (RRBs). The period of credit is 12 months.

Short Term Credit

1. Seasonal Agricultural Operations (SAO)

In order to ensure availability of timely credit to farmers, banks follow production-oriented system of lending. The system has features like assessment of credit, needs based on area brought under cultivation, crop wise scales of finance, provision of credit for purchase of inputs like fertilizers and pesticides.

Refinance is provided for production purposes at concessional rate of interest to state cooperative banks (SCBs) and regional rural banks (RRBs) by way of sanction of credit limits. Each withdrawal against the sanctioned credit limit is repayable within 12 months.

New line of credit for financing short-term agricultural /allied and marketing activities

To provide liquidity to the cooperative banks and to boost credit flow to the agriculture sector, a new line of credit was introduced in 2003-04 encompassing loans for agricultural purposes against security of gold and security other than charge on crops, working capital credit for allied agriculture activities, working capital credit for procurement and distribution of agriculture inputs, marketing of agriculture/allied products, collection and marketing of minor forest produce etc and short-term credit support provided to cultivators for higher scales of finance for commercialisation of agriculture, exports and value addition.

2. Marketing of Crops

With a view to improve the flow of marketing credit to cultivators for augmenting their holding capacity and checking incidence of distress sale, NABARD encourages cooperative banks and RRBs to finance marketing of crops, through its refinance facility for this purpose. Each drawal against the sanctioned credit limit is repayable within a maximum period of 12 months.

3. Distribution of agri inputs

With a view to ensuring timely supply of agri inputs like fertilizers, pesticides etc. a line of credit is made available to cooperative banks for financing Apex/Primary Societies for stocking and distribution of agri inputs by way of sanction of yearly limits. Each drawal is repayable within a period of 120 days.

4. Pisciculture Activities

Refinance facilities is extended to cooperative banks and RRBs for meeting the working capital requirements of farmers in pisciculture activities by way of sanction of ST credit limits. Each drawal is repayable within 12 months.

5. Other than SAO (OSAO)

Refinance is available to cooperative banks for financing the working capital requirement of PWCS/Apex Weavers' Society, working capital requirements of industrial societies, financing individual rural artisans, etc. Each drawal against the sanctioned credit limit is repayable within 12 months. OSAO refinance is available to RRBs for financing production and marketing activities of artisans, village industries and also for financing persons belonging to weaker sections engaged in trade/business/services. Refinance support is also available to commercial banks for financing the working capital requirements of PWCS.

Refinance support is available to SCBs and CBs for meeting working capital requirements of State Handloom Development Corporations (SHnDCs).

Special Initiatives

Special line of credit for oilseeds and pulses production

Special line of credit for development of tribals in predominantly tribal areas

Liquidity support to cooperative banks and RRBs for providing relief to farmers in distress and farmers in arrears

Revision in methodology for fixing scale of finance