Department of Refinance
1. Genesis
Reserve Bank of India (RBI) set up the Agricultural Refinance Corporation (ARC) in 1963 to work as a refinancing agency in providing medium term and long term agricultural credit to support investment credit needs for agricultural development. In 1975, ARC was renamed as Agriculture Refinance and Development Corporation (ARDC) to give focussed attention to credit offtake, development and promotion of the agricultural sector.
Upon its formation in 1982, NABARD took over the functions of the erstwhile Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of RBI and ARDC.
The Department of Refinance (DOR) deals with the short term and long term refinance functions of NABARD.
2. Core Functions of the Department
DOR mainly deals with
  • Short-term refinance for production credit activities contributing to food security
  • Medium–term and long-term refinance for investment credit activities for giving a boost to private capital formation in agriculture
  • DOR also acts as a subsidy channelizing agency for various Government of India schemes
A.    Short-term Refinance
NABARD provides by way of refinance, loans and advances repayable on demand or on the expiry of fixed periods not exceeding 12  months, to Cooperative Banks and Regional Rural Banks for production, marketing and procurement activities. The basic objective of short-term refinance provision is to supplement the resources of banks and to improve credit flow at the ground level. These activities include: 
  • Short-term refinance to State Cooperative Banks and Regional Rural Banks for seasonal agricultural operations
  • Short-term refinance to State Co-operative Banks and Regional Rural Banks for purposes other than seasonal agricultural operations such as rural marketing, fisheries sector, working capital for MSME, social infrastructure projects, etc. Refinance is also extended StCBs in respect of advances made to State and Apex Level Agencies engaged in wholesale procurement, stocking and distribution of fertilizers/ agricultural inputs, financing Bonafide Commercial or Trade transactions. 
  • Short-term refinance to Scheduled Commercial Banks, State Co-operative Banks and Regional Rural Banks for lending to weavers
B.    Long-term/Medium-Term Refinance
NABARD provides long-term and medium-term refinance to the following institutions to supplement their resources for providing adequate credit for supporting investment activities of farmers and rural artisans, etc.
Scheduled Commercial Banks
Regional Rural Banks
State Cooperative Banks
District Central Cooperative Banks
State Cooperative Agriculture and Rural Development Banks
Primary Urban Cooperative Banks 
NABARD Subsidiaries
North Eastern Development Finance Corporation Ltd. (NEDFI) 
Non-Banking Financial Companies (NBFCs) 
Non-Banking Financial Company- micro finance institutions (NBFC- mFIs) 
Small Finance Banks (SFBs)
The activities cover both farm sector as well as off-farm sector activities. The tenure of refinance is in the range of 18 months to 5 years.
C. Medium-term Conversion
NABARD provides medium term credit limits for conversion of short-term crop loans advanced for financing seasonal agricultural operations (SAO) to State Co-operative Banks and Regional Rural Banks for providing relief to the farmers whose crops have been damaged due to natural calamities. 
D.    Long-term loans to State Government
NABARD provides long-term (LT) loans to State Governments to contribute to the share capital of cooperative credit institutions. This reimbursement-based support is intended to encourage larger lending programmes by these cooperatives to meet the agricultural credit requirements.
E. Kisan Credit Card
GoI introduced Kisan Credit Card Scheme during 1998-99 to meet the production credit requirement of farmers in a timely and hassle-free manner. The scheme was further extended for the investment credit requirements of farmers viz. allied and non-farm activities in the year 2004.
The Kisan Credit Card scheme, as revised in 2013, aims at providing adequate and timely credit support from the banking system under a single window with flexible and simplified procedure to the farmers for their cultivation and other needs as indicated below:
a. To meet the short term credit requirements for cultivation of crops
b. Post-harvest expenses
c. Produce marketing loan
d. Consumption requirements of farmer household
e. Working capital for maintenance of farm assets and activities allied to agriculture
f. Investment credit requirement for agriculture and allied activities
The aggregate of components ‘a’ to ‘e’ above will form the short term credit limit portion and the aggregate of components under ‘f’ will form the long term credit limit portion.
From the year 2018-19, GoI has introduced KCC scheme for Animal Husbandry and Fisheries in order to provide short term working capital loans to Animal Husbandry and Fisheries farmers.
The scheme is under implementation in the entire country through the institutional credit framework involving Commercial Banks, Regional Rural Banks and Cooperatives. RBI monitors the scheme for Commercial Banks and NABARD for Regional Rural Banks and Cooperatives.
GoI is implementing a KCC saturation campaign from February 2019 in order to provide KCC to all eligible farmers in the country. Further, Department of Agriculture, Cooperation and Farmers’ Welfare, Ministry of Agriculture and Farmers’ Welfare, Govt. of India, has launched a campaign from 08.02.2020 to cover PM Kisan Samman Scheme beneficiaries who do not possess Kisan Credit Cards under KCC fold. 
As a part of the Prime Minister’s package for farmers, Hon’ble Finance Minister has announced a goal to cover 2.5 crore farmers under the second phase of KCC saturation scheme to facilitate credit to the farm sector. The Department of Animal Husbandry and Dairying, Govt. of India is also simultaneously implementing a special drive to provide KCC to 1.5 crore dairy farmers belonging to milk unions and milk producing companies and 1 crore fishers and fishermen. 
As on 10 September 2020, 38.05 lakh KCC have been issued with credit limit of Rs. 26844.56 crore by Cooperative and RRBs. This includes 1.76 lakh KCC to AH and fisheries with a credit limit of Rs. 1327.44 crore. 
F.  Interfacing for GoI Schemes
As the nodal agency for a number of schemes sponsored by the GoI, NABARD has acted/acts as an interface between various stakeholders. 
Capital Investment Subsidy Schemes
1. Agri-Clinics and Agri-Business Centers, MoA
2. Schemes under Animal Husbandry Sector 
3. National Project on Organic Farming
4. Solar Schemes, Ministry of New and Renewable Energy (MNRE) (schemes closed)
5. Agricultural Marketing Infrastructure (AMI) sub-scheme of ISAM, Ministry of Agriculture (MoA) (scheme closed) 
6.     New AMI Sub Scheme of ISAM (w.e.f. 22.10.2018)
Interest Subvention Scheme for Crop Loans, GoI
3. Broad Achievements of the Department at the National Level
Short Term Refinance
An amount of Rs.1,00,382.10 crore was disbursed as short–term refinance during the year 2019-20. Purpose-wise and agency-wise break up is given as under


Coop. Banks





Additional ST-SAO









Long Term Refinance:

An amount of Rs.78180.23 crore was disbursed under long-term refinance during the year 2019-20. Agency wise break up is given as under:
                                                                                                                                                            (Rs. Crore)



Scheduled Commercial Banks and SFBs


Regional Rural Banks


State Co-operative Banks


State Cooperative Agriculture and Rural Development Banks (SCARDBs)


NABARD Subsidiaries






Important Links:
Contact Information
Shri L R Ramachandran
Chief General Manager
3rd Floor, 'A' Wing
C-24, 'G' Block
Bandra-Kurla Complex, Bandra (East)
Mumbai 400 051
Tel: (91) 022-26524926
Fax: (91) 022-26530090