Considering the short term credit needs of farmers, small business units and micro enterprises, and the role played by the Small Finance Banks in purveying the same, it has been decided to extend refinance support to Small Finance Banks for short term loans, not exceeding a period of 12 months, under Section 21(1) read with Section 21(4) of NABARD Act 1981.
2. The purposes for which such refinance is sanctioned will include short term/ working capital loans for agriculture and allied sectors, non-farm sector including artisans, weavers, handicrafts etc. marketing of agri produce, agri inputs, non-farm produce etc. bonafide trade activities, etc.
3. The governing norms of Short Term refinance by NABARD and the eligibility criteria are furnished in Annexure I. The policy would continue till further advice.
4. SFBs may arrange to forward their applications for sanction of ST refinance as per the proforma enclosed (Annexure II), complete in all respects, to NABARD Head Office, with copy to NABARD Regional Office at the State where its Head Quarters is located.
5. Please acknowledge receipt of this circular.