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 18 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) 
  • 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.
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.
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 Centres, 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)
Interest Subvention Scheme for Crop Loans, GoI
3. Broad Achievements of the Department at the National Level
Short Term Refinance
An amount of Rs.79,704 crore was disbursed as short–term refinance during the year 2017-18. Purpose-wise and agency-wise break up is given as under
                                                                            (Rs. Crore)
Purpose StCBs RRBs
ST-SAO 45,000 10,000
Additional ST-SAO 15,308 4,828
ST-Others (Including Weavers) 3,150 1,418
Total 63,458 16,246

Long Term Refinance:

An amount of Rs.65,240 crore was disbursed under long-term refinance during the year 2017-18. Agency wise break up is given as under:
                                                                                                                                                            (Rs. Crore)
Agency Achievement
Scheduled Commercial Banks 40,000
Regional Rural Banks 11,537
State Co-operative Banks 7,086
State Cooperative Agriculture and Rural Development Banks (SCARDBs) 2,594
NABARD Subsidiaries 1,228
NBFCs 2,794
Total 65,240
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