16 December 2025

NABARD provides long-term loans by way of reimbursement to State Governments under Section 27 of NABARD Act, 1981 for contributing to the share capital of cooperative credit institutions, viz. State Cooperative Banks (StCBs), District Central Cooperative Banks (DCCBs), Primary Agricultural Credit Societies (PACS)/Farmers Service Societies (FSS)/Large sized Adivasi Multipurpose Society (LAMPS), State Cooperative Agriculture and Rural Development Banks (SCARDBs) and Primary Cooperative Agriculture and Rural Development Banks (PCARDBs).

2. The operative period of assistance would be from 01 April 2025 to 31 March 2026 and would cover disbursements made by the State Govt. towards share capital contributions during the year 2025-26.

3. The above credit facility from NABARD to the State Govt. would be available at interest rate prescribed by NABARD from time to time.

4. While providing the share capital contribution, the State governments may keep the following in view:

(i) Need for promoting member driven cooperative credit institutions

The main objective of providing assistance to State Governments for contribution to the share capital of cooperative credit institutions is to enhance the Maximum Borrowing Power (MBP) of these institutions which is measured in terms of multiples of owned funds. This will drive these institutions into a position to undertake larger lending programmes for meeting the credit requirements of their constituents, particularly for agricultural loans. Further, to make the cooperative credit institutions a truly democratic member-driven and self-reliant institution, it is desirable to strengthen the member base and also the equity base of these cooperative credit institutions, by increasing the mobilization of share capital contribution from members.

Yours faithfully, member-driven and self-reliant institution, it is desirable to strengthen the member base and also the equity base of these cooperative credit institutions, by increasing the mobilization of share capital contribution from members.

(ii) RCBs CRAR non-compliant and identified under the Turn Around Plan initiative for RCBs.

Also providing assistance to State Govts for share capital contribution to RCBs for meeting the regulatory CRAR requirement and also to provide growth capital needed for turnaround of RCBs. This will enable these institutions to receive capital support, which is essential not only for meeting regulatory compliance requirements but also for strengthening their financial position and facilitating sustainable business growth. This will empower RCBs to enhance their lending capacity, particularly in priority sectors such as agriculture, rural development and small enterprises etc

(iii) Realistic assessment of share capital contributions by State Governments

State Governments may provide the share capital to various institutions after realistically assessing the quantum of assistance required taking into account their lending programme and the norms prescribed by NABARD regarding eligibility, ceiling on share capital contribution by State Government etc.

5. The State Governments may submit their applications for reimbursement (in the prescribed proforma) complete in all respects well in time to the concerned Regional Office of NABARD in the state within the operative period (April 2025 - March 2026).

6. The detailed Operational Guidelines are furnished in the Annexure.

7. Please acknowledge receipt of this circular letter to our Regional Office.

Yours faithfully,

(Dr. K S Mahesh)

Chief General Manager