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Functions are discharged within the overall framework of rules and regulations of NABARD,
guidelines received from GoI and RBI and norms/parameters prescribed in various policy circulars
issued by the
Department. The norms for various functions are outlined as follows:
1 Refinance- Long Term
1.1 Eligible Institutions
NABARD can give refinance assistance to Scheduled Commercial Banks, Regional Rural Banks, State
Cooperative Banks, State Cooperative Agriculture and Rural Development Banks, District Central
Cooperative Banks, Primary Urban Cooperative Banks, Small Finance Banks NBFCs/NBFC-MFIs, NABARD
Subsidiaries etc. or any other financial institution, approved by Reserve Bank of India (RBI).
1.2 Eligible Purposes
NABARD provides refinance for both Farm Sector and Non - Farm Sector activities.
1.3. Quantum of Refinance
Quantum is subject to eligibility prescribed in our refinance policy from time to time
1.4 Rate of interest on refinance
Rate of interest on refinance is reviewed from time to time taking into account the cost of
funds, market conditions etc.
1.5 Repayment Period
Repayment period is 3 years to 5 years and above
2 Refinance- Medium Term
2.1. Eligible Institutions- All Scheduled Commercial Banks,
Regional Rural Banks, State Cooperative Banks, State Cooperative Agriculture and Rural
Development Banks, District Central Cooperative Banks, Primary Urban Cooperative Banks, Small
Finance Banks NBFCs/NBFC-MFIs, NABARD Subsidiaries etc. or any other financial institution,
approved by Reserve Bank of India (RBI).
2.2 Eligible Purposes
All investment activities under medium term purposes related to agriculture and allied activities
are eligible.
2.3. Quantum of Refinance
Quantum is subject to eligibility prescribed in our refinance policy from time to time
2.4 Rate of interest on refinance
Rate of interest on refinance is reviewed from time to time taking into account the cost of
funds, market conditions etc.
2.5 Repayment period
Minimum repayment period is 18 months and maximum is 3 years
3.Long Term Rural Credit Fund:
The Fund was announced by GoI in the Union Budget 2014-15 to motivate Cooperative Banks and RRBs
to extend agriculture term loans to the farmers at concessional rate of interest. This fund has
been constituted with an initial allocation of Rs.5000 crore. During 2024-25 an amount of
Rs.8023.75 cr. has been allocated under this fund. NABARD is providing refinance facility to
Cooperative Banks and RRBs out of this fund to enable them to provide agriculture term credit at
concessional rate
4.Refinance-Short Term-
4.1-Short Term(Seasonal Agricultural Operations)
In order to ensure availability of timely credit to farmers, production-oriented system of
lending is followed by banks. The system has features like assessment of credit needs, provision
of credit for
purchase of inputs like fertilizers, pesticides etc. Crop-wise and district wise scales of
finance are fixed and adherence to seasonality in lending and recovery is ensured. Refinance is
provided for the
production purpose at concessional rates of interest to RRBs and to StCBs on behalf of District
Central Cooperative Banks (DCCBs) by way of sanction of annual credit limits. Each drawal
against the sanctioned
credit limit is repayable within 12 months.
4.2 Short Term Credit Refinance Fund: STCRC and STRRB
The refinance under Seasonal Agricultural Operations (SAO) is provided from Short Term
Cooperative Rural Credit Fund(STCRC) and Short Term RRB Refinance Fund (STRRB) allocated by
GoI/RBI out of shortfall in priority sector lending of Scheduled Commercial Banks
The fund is intended to augment resources of NABARD for extending short term (SAO) refinance to
cooperatives and RRBs. The corpus of the fund is contributed by scheduled commercial banks
having shortfall in achievement of priority sector target and sub-targets as decided by Reserve
Bank from time to time. Accordingly, banks contribute to the corpus announced in each year's
budget. NABARD supplements this fund with open market borrowing for extending ST(SAO) refinance
to cooperatives and RRBs. During the year 2024-25, an amount of Rs.32,079.11 crore has been
allocated under STCRC fund and Rs.7,023.74 crore under ST(RRB).
4.3 Additional ST(SAO)
In view of increase in demand of the Rural Financial Banks and to help them face the liquidity
constraints NABARD started a new line of credit during 2016-17 to provide Additional Short-Term
refinance for (SAO) to StCBs and RRBs over and above normal ST (SAO) limit.
4.4 ST(Others) and Weavers
The ST ( Others ) and Weavers limit is sanctioned to banks for providing short term credit for
purposes other than those covered under ST(SAO) viz. Agriculture and Allied Activities,
Marketing of crops,
Fisheries Sector etc and for meeting Working Capital requirement of Primary /Apex/Regional
Weavers Coop Society , State Handloom Development Corporation etc.
5. Refinance-Medium Term Conversion
Refinance facility is available to StCBs and RRBs against the loans converted/ rescheduled /
rephased of farmers affected by natural calamities under Medium term stabilization arrangement.
The conversion
facility in case of StCBs is shared by NABARD (60%), State Government(15%) and StCB (25%) and in
the case of RRBs the sharing ratio is NABARD (70%), Sponsor Bank (25%) and RRBs(5%).
6. Refinance – Short Term- Direct Refinance Assistance (DRA)
6.1 Eligible Institutions
The credit limit will be sanctioned to well governed and financially strong State Cooperative
Banks (StCBs) and District Central Cooperative Banks (DCCBs) with ‘A’ or ‘B’ category rating as
per the latest Inspection Report issued by Regional Office. Additionally, ‘C’ rated StCBs and
DCCBs may also be extended credit limit under DRA if it is secured against eligible collateral
security to the tune of 110% of the loan amount.
6.2 Eligible Activities
The refinance assistance under DRA can be extended against loans sanctioned to
individuals/agencies through branches/ PACS/ other societies for various purposes such as
Working Capital requirements, Repair and maintenance of farm equipment and other productive
assets, Storage/ grading/ packaging of produce, Post harvest and Marketing activities, Crop loan
(if individual requirement exceeds ?3 lakh), Participation in National Food Credit Consortium.
Credit limit to StCBs for on-lending to the DCCBs is not available under this product.
6.3. Extent of Refinance
The extent of refinance assistance available from NABARD to eligible banks is up to 100% of the
amount sanctioned by them for eligible purposes.
The financial assistance is available from NABARD to the extent of 75% of the credit limit
sanctioned by StCBs/CCBs to the sugar factory.
6.4 Nature of limit
6.4.1 Annual (with fixed and floating rates of interest upto 12 months)/ Quarterly Credit Limit
(Fixed rate 90 days)
6.4.2 Credit limit sanctioned will be in the nature of cash credit accommodation and the
cooperative banks may draw and repay as many times as required within 12 months from the date of
sanction, provided the loan outstanding in the account does not exceed the sanctioned credit
limit.
7. Interest Subvention under GoI Scheme for Financing of crop loan at 7% p.a.
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Long Term Loans are provided by NABARD to State Government for contribution of share capital to
cooperative credit institutions (StCBs /DCCBs/ SCARDBs /PCARDBs / PACS /FSS /LAMPS) for periods
upto 12 years in order to strengthen the share capital base of these institutions and thereby
increase their maximum borrowing power and enable them to undertake larger lending programmes;
subject to certain conditions.
8. Kisan Credit Card-
The Kisan Credit Card (KCC) scheme was introduced in 1998-99, as an innovative credit delivery
mechanism that aims at adequate and timely credit support from the banking system to the farmers
for their cultivation needs including the purchase of inputs in a flexible, convenient, and cost
effective manner. Banks have been advised to issue Kisan Credit Cards (KCC) to all eligible
farmers. The KCC Scheme has since been simplified with facilities like one-time documentation,
built-in cost escalation in the limit and facility of ATM enabled debit card etc. Under the
present guidelines of KCC, the limit is sanctioned for 05 years and the beneficiaries have ease
and flexibility in drawal and repayment. Besides, short term Agricultural loans, KCC can also be
availed to meet the working capital requirements for animal husbandary, fisheries etc.
The total KCCs issued by Cooperative banks and RRBs as on 31 March 2025 was 4,81,94,483 with
amount outstanding at Rs. 4,19,096.68 cr.
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