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 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
of interest on refinance is reviewed from time to time taking into account the
cost of funds, market conditions etc.
period is 3 years to 5 years and above
2 Refinance- Medium Term
2.1. Eligible Institutions- AllScheduled 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 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 2017-18 an amount of Rs.15000 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
4.1-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 CentralCooperative Banks (DCCBs) by way of sanction of annual credit limits. Each drawal against the sanctioned credit limit is repayable within 12 months.
This refinance is providedfrom 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
4.2 Short Term Credit Refinance Fund: STCRC and STRRB
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 2017-18 an amount of Rs.45000 crore has been allocated under STCRC fund and Rs.10000 crore under ST(RRB)
4.3 Additional ST(SAO)
In view of banks facing liquidity constraints due to reasons like drought conditions and increased demand, withdrawal of deposits by CCBs etc. NABARD has 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, during the year 2016-17 out of market borrowings by NABARD
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 thosecovered 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 Long Term loan to State Govt.
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.
7. Interest Subvention under GoI Scheme for Financing of crop loan at 7% p.a. –
The GoI had launched Interest Subventionscheme in the year 2006-07. As per the extant guidelines of GoI for the year 2017-18 Interest Subvention of 2% per annum is provided to Public Sector Banks ,Private Sector Banks (in respect of loans given by their rural and semi urban branches), Cooperative Banks and Regional Rural Banks on their own funds used for short term crop loans upto Rs.3,00,000/- per farmer provided the lending institutions make available short-term credit at the ground level at 7% per annum to farmers.
In addition to above, a scheme was introduced from 2009-10 for providing additional interest subvention to the prompt paying farmers wherein presently 3% Interest Subvention as an incentive to prompt payee farmers is given. This subvention is available to farmers on the short term production credit upto maximum amount of Rs.3.00 lakh availed during the year. Thus the prompt paying farmers are getting short term crop loans @4% per annum from various banks.
In order to discourage distress sale by farmers and to encourage them instead to store their produce in warehouses, the benefit of interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of upto six months after the harvesting of the crop at the same rate as available to crop loan against Negotiable Warehouse Receipts issued for the produce stored in warehouses accredited with Warehousing Development Regulatory Authority
To provide relief to farmers affected by natural calamities, an interest subvention of 2 per cent per annum will be made available to banks for the first year on the restructured loan amount. Such restructured loans will attract normal rate of interest from the second year onwards as per the policy laid down by the RBI.
8 Kisan Credit Card-
Kisan Credit Card Scheme has been launched in the country to facilitate flow of adequate credit to farmers in a hassle-free and timely manner. Some of theprovisions of the scheme are as under:
Wider delivery channels : Operations through Branch/Cheque facility/BCs/ATM (debit card)/POS/Mobile handsets
More clarity in assessing credit needs (inclusion of post harvest / household/consumption needs up to 10% + maintenance expenses up to 20%)
Cost escalation built in for assessing the limit – Notional hike of 10% for fixing credit limit from second year onwards
Moreactivities covered under Term Loan
Emphasis on financingJoint Liability Groups
One time documentation at first availment and thereaftersimple declaration from second year
Moving towards accessing online land record and creation of charge.
9. Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU-2014)
Under the scheme for extending financial assistance to sugar undertakings (SEFASU-2014), financing banks provide loans to sugar mills to clear cane price arrears of previous sugar seasons and settle cane price of current sugar season in a timely manner, as per fair and remunerative price (FRP) periodically fixed by the central government. State Bank of India (SBI) was appointed the nodal bank to manage the subsidy for onward reimbursement to respective banks. On behalf of cooperative banks and RRBs NABARD coordinates the claims with SBI for reimbursement
10. Revival, Reform and Restructuring Package for Handloom Sector
The revival, reform and restructuring (RRR) package for handloom sector is being implemented since 2011-12. Twenty-seven states have signed tripartite MoUs for the centrally- sponsored plan scheme with GoI and NABARD. Under RRR, 39 Apex Weaver’s Cooperative Societies (AWCS), 9642 Primary Weavers Cooperative Societies (PWCS), 6310 SHGs and 54226 individual weavers have been assisted since the beginning. To settle claims under the package an amount of ` 741.03 crore was released by GoI in four tranches
11.Capital Investment Subsidy Schemes-
NABARD is the pass through agency for channelizing subsidy for various Government Sponsored Schemes implemented by GoI furnished as under:
(i)Dairy Entrepreneurship Development Scheme
(ii)National Livestock Mission
(iii)Agri Clinics and Agri Business Centres
(iv)National project on Organic Farming
The norms for execution of subsidy programmes is given in point no. (xii)