Ref. No. NB.DoR.ST Policy / 899 / A-1( Gen) / 2018-19
06 July 2018
Circular No. 173 / DoR - 52 / 2018
The Managing Director,
All State Cooperative Banks
Provision of Short-Term (ST) refinance by NABARD to State Cooperative Banks for financing Seasonal Agricultural Operations (SAO) - Policy for F. Y. 2018-19
Please refer to our Circular No. 164/DoR-34/2017 dated 05 July 2017 communicating NABARD's policy for F. Y. 2017-18 on provision of refinance under Sec. 21(1) of NABARD Act, 1981 to State Cooperative Banks (StCBs) in respect of eligible Central Cooperative Banks (CCBs) for financing Seasonal Agricultural Operations. We advise that the ST (SAO) Policy for F. Y. 2018-19 has been finalized and the details thereof are mentioned in the Annexure I.
2. The quantum of ST (SAO) refinance would continue to be linked to Net NPA level of the StCB. Further, the norms which were operational during F. Y. 2017-18 would continue during F. Y. 2018-19 with following modifications:
a) The eligibility for quantum of refinance among other things, will be based on the net NPA position of StCBs as on 31.03.2017. NPA position as indicated in the statutory audit report will form the basis for eligibility. However, in the event of any variation in the net NPA position as indicated in the audit report and the Inspection Report of NABARD, the latter would be reckoned for determining the eligibility. The net NPA position at StCB level and not at the level of StCB branches will be reckoned for the purpose of eligibility of StCB. In case of providing direct refinance to DCCBs, net NPA position at DCCB level and not at the level of DCCB branches will be reckoned for the purpose of eligibility. In case, there is improvement / deterioration in any of the financial parameters as on 31.03.2018 [after completion of statutory audit], the same will be reckoned for eligibility of refinance limit.
b) The CRAR norms will be applicable to StCBs / CCBs. Accordingly, refinance will be available to licensed StCBs (scheduled / non-scheduled) / licensed CCBs complying with CRAR of 9% and above as on 31.03.2017.
i) In case of StCBs with CRAR of 9% and above but individual CCBs with CRAR less than 9%, no credit limit will be available on behalf of such CCBs.
ii) StCBs with CRAR less than 9% will not be eligible for fresh refinance.
iii) In case of StCBs with CRAR less than 9% but individual CCBs with CRAR of 9% and above, credit limit will be sanctioned directly to the CCBs against Government guarantee or against pledge of Government / approved securities / FDRs of scheduled banks. Detailed guidelines for providing refinance directly to the CCBs have already been issued vide our Circular No. 172 dated 09.09.2011.
iv) The audit of StCBs and CCBs for the year ending 31.03.2018 should be completed and the relevant report submitted to the concerned RO of NABARD by 30.09.2018. Drawals after 01.10.2018 will be permitted only to such StCBs and CCBs which have completed the audit for 2017-18 and submitted the relevant report to the concerned RO of NABARD.
c) Limits to non-scheduled StCBs: Non-scheduled StCBs which fulfill the CRAR criteria as mentioned above, will be eligible for sanction of credit limits against Government guarantee under Sec. 21(3)(a) of NABARD Act, 1981 or pledge of Government / approved securities under Sec. 21(2)(i) of Act ibid and / or pledge of FDRs of scheduled commercial banks under Sec. 33 of Act ibid.
d) Separate sub-limits under ST (SAO) credit limits for financing (a) cultivation of other crops (OC), (b) cultivation of oilseeds under National Mission on Oilseeds and Oil Palm (NMOOP - Oilseeds) in the identified districts (c) cultivation of pulses under National Food Security Mission - Pulses (NFSM – Pulses) in the identified districts and (d) production credit requirements of tribals under Development of Tribal Population (DTP) will be sanctioned by NABARD for the year 2018-19. Accordingly, the consolidated limit to be sanctioned to StCB will be segregated into sub-limits for SAO-OC, SAO-NMOOP, SAO-NFSM (Pulses) and SAO-DTP on the basis of CCB-wise Realistic Lending Program for respective purposes.
3. The rate of interest on NABARD refinance to StCBs will be 4.5% p.a. (subject to change, if any, by Govt. of India) if the Short-Term Cooperative Credit structure in the State together with their own involvement provide crop loan up to ` 3.00 lakh per borrower / farmer at 7% p.a. or less. The Bank is required to furnish undertaking as per Annexure II enclosed.
4. You are also advised to communicate to affiliated CCBs to ensure implementation of KCC scheme by issuance of RuPay Card to the borrowing members.
5. The refinance allocation for your bank for F. Y. 2018-19 will be communicated to you separately by our Regional Office (RO). You may submit an application for sanction of consolidated credit limit on behalf of all the eligible CCBs alongwith the first drawal, in the prescribed proforma to NABARD RO.
6. Please acknowledge receipt of this circular to our Regional Office.
(G R Chintala)
Chief General Manager