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Department of Refinance

The 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 short-term and long-term refinance functions of NABARD.

Core Functions of the DOR

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 (ST)

NABARD provides Co-operative Banks and Regional Rural Banks loans and advances, repayable on demand or on the expiry of fixed periods not exceeding 12 months, by way of refinance 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 for Seasonal Agriculture Operations - ST(SAO): Under this product, concessional refinance is available to State Cooperative Banks and RRBs through STCRCF (Short Term Cooperative Rural Credit Fund) and STRRBF (Short Term Regional Rural Bank (Refinance) fund) respectively, received from RBI, from the shortfall of the Priority Sector Lending of Scheduled Commercial Banks.
  • Additional ST(SAO):
    Additional Short Term Refinance for Seasonal Agriculture Operations, over and above the normal ST(SAO) limit is provided to StCBs, SCARDBs, RRBs and SFBs, through market borrowings to tide over the liquidity constraints arising due to increased ground level demand for credit, low accretion of deposits, and offset the delay in receipt of STCRC/ STRRB funds allocated by RBI/GoI, etc.
    From 2020-21 SFBs are also eligible to avail refinance under additional ST(SAO).
  • ST(Others):
    Under this scheme, short-term refinance is provided to State Co-operative Banks, Regional Rural Banks and Small Finance Banks, for purposes other than seasonal agricultural operations such as rural marketing, fisheries sector, workingcapital for MSME, social infrastructure projects, etc. Refinance is also extended to StCBs in respect to 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.
    SFBs are also eligible to avail refinance under ST(Others) from the year 2020-21
  • ST(Weavers)-Short-term refinance to Scheduled Commercial Banks, State Co-operative Banks and Regional Rural Banks for lending to weavers

B. Long-term Refinance

NABARD’s long-term refinance lays emphasis on investment credit which leads to capital formation through asset creation and promotes alternate employment opportunities in rural and semi urban areas by supporting to farm and off-farm sector activities.

NABARD provides long-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.

In order to give the investment credit in agriculture a boost, the Government of India set up ‘Long Term Rural Credit Fund’ created out of the shortfall of priority sector lending of scheduled commercial banks with NABARD for providing long term refinance support to Rural Cooperative Banks and RRBs at concessional rate against their term loans for agriculture activities.

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.

Further, Government of India has extended the KCC benefits to farmers engaged in Lac cultivation, Mulberry cultivation, Sericulture and Bee keeping from the year 2021-22.

The scheme is under implementation in the entire country through the institutional credit framework involving Commercial Banks, Regional Rural Banks and Co-operatives. RBI monitors the scheme for Commercial Banks and NABARD for Regional Rural Banks and Cooperatives.

KCC Saturation Drive

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 all PM Kisan Samman Scheme beneficiaries under Kisan Credit Cards. Adequate publicity and awareness campaigns were conducted under the campaign to ensure maximum coverage.

Phase-II of KCC Saturation

As a part of the Aatmanirbhar Bharat Package, the Government has announced to cover 2.5 crore farmers under the Kisan Credit Card (KCC) scheme with a credit boost of Rs.2 lakh crore through a special saturation drive. Department of Animal Husbandry and Dairying, Govt. of India also decided to simultaneously launch a special drive to provide KCC to 1.5 crore dairy farmers belonging to milk unions and milk producing companies and 1 crore fish farmers. All stakeholders are making concerted and sustained efforts to provide access to concessional credit, to the farmers.

Further on 08 November 2021, GoI had launched District Level Special KCC campaign for providing 1.37 crore KCC to Animal husbandry and Fisheries farmers.

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. The following schemes are currently under implementation

(i) Capital Investment Subsidy Schemes

1. Agri-Clinics and Agri-Business Centers
2. Agricultural Marketing Infrastructure Scheme a sub-scheme of ISAM

(ii) Interest Subvention Schemes of GoI
  • Interest Subvention Scheme for Crop Loans
  • Interest Subvention to Small and Marginal farmers against negotiable warehouse receipt
  • Interest subvention on working capital to Animal Husbandry and Fisheries
  • Interest subvention to women SHGs under DAY-NRLM
  • Interest subvention schemes for sugar mills

Broad Achievements at the National Level

Short Term Refinance

An amount of Rs.1,83,152.53 crore was disbursed as short–term refinance during the year 2023-24, out of which Rs.65,675.67 crore was provided as concessional refinance under STCRCF and STRRBF. Purpose-wise and agency-wise break up is given as under (Rs. Crore)

(Rs in Crore)

Purpose Coop. Banks RRBs Total
ST-SAO 50517.76 15157.91 65675.67
Additional ST-SAO 57659.07 21804.25 79463.32
ST-Others 26108.87 11824.88 37933.75
SFB - - 79.79
Total 134285.70 48787.04 183152.53

Long-Term Refinance:

An amount of Rs. 1,32,486.92 crore has been disbursed under long-term refinance during the year 2023-24, out of which concessional refinance of Rs.15,154.22 cr. was provided under LTRCF. Agency wise break up is given as under:

(Rs in Crore)

2023-24 2022-23
Agency Disb % Share Disb % Share
Commercial Banks 88,378.15 66.7% 74,928.76 70.0%
RRBs 13,460.61 10.2% 11,825.56 11.1%
StCBs 17,113.97 12.9% 12,955.13 12.1%
SCARDBs 2,100.65 1.6% 2,284.77 2.1%
NabSamruddhi 1,019.61 0.8% 578.87 0.5%
NABKISAN 1,479.18 1.1% 1,192.14 1.1%
NABFINS 1,934.75 1.5% 1,169.51 1.1%
NBFC including NBFC-mFI 7,000.00 5.3% 2,080.00 1.9%
State Govt. - - - -
Total 132,486.92 100% 1,07,014.74 100%

Important Links:

Contact Information

Dr. K S Mahesh
Chief General Manager
3rd Floor, 'A' Wing
C-24, 'G' Block
Bandra-Kurla Complex, Bandra (East)
Mumbai 400 051
Tel: (91) 022-68120017
E-mail Address:

Information under RTI – Section 4(1)(b)

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