Provision of Short-Term (ST) refinance to RRBs for financing Seasonal Agricultural Operations (SAO) - Policy for F.Y. 2021-22

Please refer to our Circular No. 219/ DoR-74/2020 dated 11 August 2020, communicating NABARD's policy for F. Y. 2020-21 for provision of short-term refinance to the Regional Rural Banks (RRBs) under Sec. 21(1) of the NABARD Act, 1981, for financing Seasonal Agricultural Operations (SAO). We advise that the eligibility criteria under ST (SAO) Refinance Policy for F. Y. 2021-22 will be based on internal risk rating norms as per the details given in Annexure I(para 3.2). This will enable RRBs to increase agriculture credit flow in rural areas and give a boost to affordable credit in specified districts (list enclosed) where the credit flow is comparatively low.

2.The rate of interest on refinance will be 4.5% p.a. during the year 2021-22, (subject to revision, if any, by Govt. of India) for only those RRBs which provide, including their own involvement, crop loans up to Rs 3.00 lakh per borrower at 7% p.a. or less. The Bank is required to furnish an undertaking to this effect as per Annexure II.

3.You may advise all the branches to accord top priority for implementation of KCC scheme by issuance of RuPay Card to the borrowing members. RRBs are also required to report the monthly progress with regard to KCCs on the ENSURE portal.

4.Refinance allocation for your Bank for the year 2021-22 will be communicated to you, by our Regional Office (RO). You may submit an application for sanction of credit limit along with the first drawal, as per the prescribed proforma to the concerned RO of NABARD.

5.Please acknowledge receipt of this letter to our Regional Office.

Annexure I

Provision of Short-Term refinance by NABARD to RRBs for financing Seasonal Agricultural Operations - Policy for F. Y. 2021-22

1. Operative period of ST (SAO) limit

The operative period of ST (SAO) limit for F. Y. 2021-22 is 01.04.2021 to 31.03.2022. ST (SAO) refinance will be provided to the Banks in respect of crop loans disbursed only during the operative period.

2. Sanction of consolidated limit

a. The limit will be sanctioned to Banks under Sec. 21(1) (i) read with Sec. 21(4) of the NABARD Act, 1981 against DPN executed by Bank.

b. RRB has to declare in writing, at the time of each drawal that the drawal preferred and the refinance already availed are against the loans provided by RRBs and are covered by adequate non-overdue loans. Banks are required to submit NODC statement to NABARD regularly either in physical form or through digitized platform.

3. Eligibility norms

3.1 Audit

The Audit of RRBs for the year 2019-20 should have been completed and the relative audit reports along with financial statements should have been submitted to the concerned Regional Office of NABARD for considering the loan application in the first quarter of the year. Further, the audit of RRBs for 2020-21 should be completed and the report submitted by 30.06.2021. Sanction/Drawals of refinance on or after 01.07.2021 will be permitted only to such RRBs, which have completed the audit and submitted the relevant audit report to the concerned RO of NABARD and subject to satisfactory position regarding the eligibility norms

3.2 Internal Risk Rating of RRBs by NABARD

3.2.1 To encourage more lending especially to the needy agricultural sector, it has been decided to waive the criteria of CRAR, Net NPA and Net Profit for RRBs and extend Short Term refinance to all RRBs whose internal Risk Rating Category is NBD1 to NBD7.

3.2.2 Risk rating of all RRBs will be done by NABARD based on the guidelines issued by RMD and RRBs obtaining Risk rating of NDB 1 to NDB 7 will be eligible for refinance under ST(SAO).

3.2.3 Risk rating will be assessed based on the financial as indicated in the statutory audit report. However, in the event of any variation between the audit report and the Inspection Report of NABARD, the latter will be reckoned for risk rating. In case of any reason beyond the control of the Bank, the bank is unable to fulfil the eligibility criteria, NABARD may consider a lower eligibility norms, with adequate comforts/ security.

3.3 Eligibility criteria during the first quarter ie. 1 April 2021 to 30 June 2021 will be based on the audited financial position of the bank as on 31.03.2020 or 31.03.2021 (if available). From 1st July 2021 to 31st March 2022, eligibility criteria will be based on audited financial position as on 31.03.2021. Sanction/Drawals on or after 01.07.2021 will be allowed only to such RRBs, which have completed the audit and submitted a satisfactory audit report to the concerned RO of NABARD, unless otherwise permitted as a special case.
3.4 Following the RBI instructions to improve the flow of credit to the priority sector by Banks, NABARD will utilize 25% of the corpus of the STRRB fund towards identified districts (list enclosed) where credit flow is comparatively low. The utilization in the identified districts will be monitored by NABARD by insisting the submission of quarterly MIS by RRBs in the attached format (Annexure III), within 7 days after completion of the quarter. In case of underutilization, if any at the end of the third quarter, the same may be reallocated to the other districts.

4. Quantum of refinance

4.1 The quantum of refinance for sanction will be as under:

4.1.1 General Region

Risk Rating of RRB by NABARD Eligible limit
As a percentage to the realistic lending program (RLP)
NBD1 – NDB4 20%
NBD5 – NDB7 15%
NBD8 – NDB9 Not eligible

4.1.2 RRBs in the North Eastern Region, Jammu & Kashmir, Sikkim, Himachal Pradesh, Uttarakhand and Andaman & Nicobar Islands, will be eligible for additional refinance of 25% as under:

Risk Rating of RRB by NABARD Eligible limit
As a percentage to the realistic lending program (RLP)
NBD1 – NDB4 45%
NBD5 – NDB7 40%
NBD8 – NDB9 Not eligible

4.1.3 RRBs in Eastern Region viz. Bihar, Orissa, West Bengal, Jharkhand, Chhattisgarh States and 28 districts in Eastern Uttar Pradesh (under BGREI scheme of Govt. of India) will be eligible for additional refinance of 5% over and above the applicable normal quantum of refinance, as under:

Risk Rating of RRB by NABARD Eligible limit
As a percentage to the realistic lending program (RLP)
NBD1 – NDB4 25%
NBD5 – NDB7 20%
NBD8 – NDB9 Not eligible
4.2Realistic Lending Program (RLP) for a year has been defined as the crop loans estimated to be disbursed during the year (i.e. not the outstanding which includes overdues). The RLP for the year 2021-22 may be arrived at, on the basis of average growth rate in crop loans disbursed during previous three years (taking into account the crop loans disbursed data for last four years). However, keeping in view the ground level realities and other facts, if any, NABARD may accept RLP which may be lower or higher than the RLP worked out by the Bank.

5. Merger of RRBs

In case of merged banks, the financial position of the new/ merged RRBs as on the date of notification/ merger based on special audit or the aggregate audit position as on 31.03.2020 of the erstwhile RRBs will form the basis for sanction of limit to such new RRB for the year 2021-22. Further, if the statutory audit position as on 31.03.2021 is available, the same will be considered for sanction of credit limit to the banks.

6. Purpose of Refinance

6.1 Purpose of refinance under this facility shall be to enhance disbursement of short term crop loans to small and marginal farmers.
6.2Financing of Tenant Farmers (TF) / Oral Lessees (OL)

Considering the importance attached by Govt. of India for financing of tenant farmers and oral lessees, NABARD has prepared Joint Liability Group Scheme and circulated amongst the banks. The banks should ensure maximum financing to TF / OL under this Scheme or otherwise.

6.3Sanction of sub-limits

For financing the below-mentioned activities, separate sub-limits under ST (SAO) credit limits will be sanctioned by NABARD for the FY. Accordingly, RRB may indicate credit limit requirements for the above purposes separately, in the credit limit application

a) Cultivation of other crops (OC),

b) Cultivation of oilseeds under National Mission on Oilseeds and Oil Palm (NMOOP- Oilseeds) in the identified districts,

c) Cultivation of pulses under National Food Security Mission – Pulses (NFSM – Pulses) in the identified districts and

d) Production credit requirements of tribals under Development of Tribal Population (DTP).

7. Rate of interest on Refinance

The rate of interest on refinance will be 4.5% p.a. during F. Y. 2021-22, subject to revision, if any, by Govt. of India, for only those RRBs which provide, including their own involvement, crop loans up to Rs 3.00 lakh per borrower at 7% p.a. or less. This will be applicable to refinance drawn 01.04.2021 onwards. Interest is payable at half-yearly rests on 01 October and 01 April, as hitherto. The Bank is required to furnish undertaking as per the Annexure II in this regard.

8. Operational discipline

8.1 Drawal and Repayment

The amount drawn against the limit are repayable on demand. However, each drawal on the credit limit would be treated as a separate loan and would normally be repayable in a period of 12 months from the date of drawal. Repayments (partial of full) before the expiry of 12 months may be accepted by NABARD with minimum notice of 15 working days or with interest payment of 15 days along with the principal. The notice period may, however, be waived in case the repayment is made 30 days after the date of drawal.

8.2 Drawal of refinance by RRBs under ST (SAO) limit will be restricted to applicable percentage of refinance of the loan issued during the FY.

Drawals by RRBs on the credit limits will be permitted subject to the availability of aggregate NODC under all sub-limits (instead of sub-limit wise NODC). For this purpose, RRBs are required to furnish to the concerned RO of NABARD, monthly NODC statement so as to reach latest by 20th of the succeeding month either physically or through digital platform. For sub-limit wise shortfall in NODC, no penal interest will be charged, if overall NODC is available.

At the time of each drawal, a certificate in the prescribed format, regarding the availability of aggregate NODC, as on the date of drawal will have to be furnished by the bank. Moreover, it may be ensured by the bank that on any day, total of normal ST (SAO) outstanding and the Additional ST (SAO) outstanding should not exceed the aggregate NODC available on that date.

8.4 RRBs should clear the deficit in NODC, if any, immediately, so as to ensure availability of adequate non-overdue cover for borrowings from NABARD. In case the deficit is not regularized within one month, from the date of occurrence of such deficit, the RRB concerned will have to pay additional interest of 1% on the amount of deficit in NODC, for the duration of the deficit, till the position is regularized.
8.5 Segregation of principal and interest in the loans outstanding

As hitherto, RRBs may continue to exclude the interest component (overdue / non-overdue interest) from the outstanding amount and report the principal loan amount only, both in their applications for credit limit and drawal application, for arriving at the eligibility for refinance support from NABARD. Besides as hitherto, only the principal portion of loans (issued, recovered, outstanding and overdue) should be reported in the monthly NODC statements.

8.6 Clearance of default

Banks which fail to honour their commitments to NABARD in repayment of principal, payment of interest and / or any other dues by the prescribed due dates, will not be eligible for any refinance facility from NABARD till the clearance of default in question. In the event of default in repayment of principal and /or payment of interest, the Bank will be liable to pay to NABARD interest on amount of default at 10% p.a. for the period for which the default persists. The penal interest rates are subject to revision from time to time.

8.7Right to inspection

NABARD reserves the right to inspect / get inspected the books of accounts of the bank.

8.8 Right to cause special audit

NABARD will have the right to cause special audit of the books of accounts and other relevant material of the Banks either by itself or through other agencies to ensure that the same are maintained as per the rules and regulations in force and the terms and conditions of refinance are adhered to by the bank.

8.9Excess drawal

NABARD will take a serious view in case of availment of drawals beyond permissible quantum of refinance on account of reporting of incorrect data about crop loan disbursement or of NODC. In such cases, NABARD may call back the excess refinance availed by bank within 3 days along with the penal interest of 1% pa.

9. End-use of limit

With a view to avoid diversion of funds, misutilization of interest subvention / crop loan and to ensure proper end use of funds for the purpose sanctioned, banks have been advised to follow the instructions contained in our Circular No. 175 / DoR-47 / 2015 dated 20 August 2015 which should be complied with.

10. Returns

As per the guidelines of STRRB fund information sought by RBI may be furnished to the Regional office of NABARD on quarterly basis in the prescribed format (annexure-IV) attached within 7 days after completion of the respective quarter.

Annexure II


The Chief General Manager / General Manager

Regional Office

Dear Sir,

We are aware that the rate of interest on refinance provided by NABARD for ST (SAO) during the F.Y. 2021-22 is 4.5% p.a. subject to change, if any, by Govt. of India / Reserve Bank of India / NABARD from time to time. We are also aware that the facility of interest subvention made available by Government of India, is also subject to change from time to time.

We undertake to abide by the change/s, if any, as may be made by the Govt. of India / Reserve Bank of India / NABARD from time to time.

Thanking you,

Yours faithfully


Designation: Chairman


Annexure III

NABARD Utilisation (amount disbursed) towards credit deficient districts (Amount in Rs. Cr.)

Sr. No State District STRRB FY2021-22
1 Andaman Nicobar Nicobar No RRB
2 Arunachal Pradesh Anjaw
3 Arunachal Pradesh Chunglang
4 Arunachal Pradesh Dibang Valley
5 Arunachal Pradesh East Kameng
6 Arunachal Pradesh East Siang
7 Arunachal Pradesh Kra Daadi
8 Arunachal Pradesh Kurung Kumey
9 Arunachal Pradesh Lohit
10 Arunachal Pradesh Longding
11 Arunachal Pradesh Lower Dibang Valley
12 Arunachal Pradesh Lower Siang
13 Arunachal Pradesh Lower Subansiri
14 Arunachal Pradesh Namsai
15 Arunachal Pradesh Pakke Kesang
16 Arunachal Pradesh Siang
17 Arunachal Pradesh Tawang
18 Arunachal Pradesh Tirap
19 Arunachal Pradesh Upper Siang
20 Arunachal Pradesh Upper Subansiri
21 Arunachal Pradesh West Kameng
22 Arunachal Pradesh West Siang
23 Assam Baksa
24 Assam Charaideo
25 Assam Chirang
26 Assam Dhemaji
27 Assam Dhubri
28 Assam Goalpara
29 Assam Hailakandi
30 Assam Hojai
31 Assam Karbi Anglong
32 Assam Kokrajhar
33 Assam North Cachar Hills
34 Assam South Salmara-Mankachar
35 Assam Udalguri
36 Assam West Karbi Anglong
37 Bihar Araria
38 Bihar Arwal
39 Bihar Aurangabad
40 Bihar Banka
41 Bihar Bhojpur
42 Bihar Darbhanga
43 Bihar Gaya
44 Bihar Gopalganj
45 Bihar Jamui
46 Bihar Jehanabad
47 Bihar Katihar
48 Bihar Khagaria
49 Bihar Kishanganj
50 Bihar Lakhisarai
51 Bihar Madhepura
52 Bihar Madhubani
53 Bihar Munger
54 Bihar Nalanda
55 Bihar Nawada
56 Bihar Paschimi Champaran
57 Bihar Purbi Champaran
58 Bihar Saharsa
59 Bihar Samastipur
60 Bihar Saran
61 Bihar Sheohar
62 Bihar Sitamarhi
63 Bihar Siwan
64 Bihar Supaul
65 Bihar Vaishali
66 Chhattisgarh Balod
67 Chhattisgarh Balrampur
68 Chhattisgarh Bastar
69 Chhattisgarh Bemetara
70 Chhattisgarh Bijapur
71 Chhattisgarh Dakshin Bastar Dantewada
72 Chhattisgarh Gariyaband
73 Chhattisgarh Jashpur
74 Chhattisgarh Kondagaon
75 Chhattisgarh Mungeli
76 Chhattisgarh Narayanpur
77 Chhattisgarh Sukma
78 Chhattisgarh Surajpur
79 Chhattisgarh Surguja
80 Chhattisgarh Uttar Bastar Kanker
81 Delhi North-East Delhi No RRB
82 Gujarat Dangs
83 Gujarat Dohad
84 Haryana Mewat
85 Jharkhand Chatra
86 Jharkhand Dumka
87 Jharkhand Garhwa
88 Jharkhand Giridih
89 Jharkhand Gumla
90 Jharkhand Jamtara
91 Jharkhand Khunti
92 Jharkhand Latehar
93 Jharkhand Pakur
94 Jharkhand Palamau
95 Jharkhand Sahebganj
96 Jharkhand Simdega
97 Lakshadweep Lakshadweep
98 Madhya Pradesh Alirajpur
99 Madhya Pradesh Anuppur
100 Madhya Pradesh Bhind
101 Madhya Pradesh Dindori
102 Madhya Pradesh Mandla
103 Madhya Pradesh Niwari
104 Madhya Pradesh Panna
105 Madhya Pradesh Sidhi
106 Madhya Pradesh Singrauli
107 Madhya Pradesh Tikamgarh
108 Madhya Pradesh Umaria
109 Maharashtra Gadchiroli
110 Manipur Bishenpur
111 Manipur Chandel
112 Manipur Churachandpur
113 Manipur Imphal East
114 Manipur Kakching
115 Manipur Kamjong
116 Manipur Kangpokpi
117 Manipur Noney
118 Manipur Pherzawal
119 Manipur Senapati
120 Manipur Tamenglong
121 Manipur Tengnoupal
122 Manipur Thoubal
123 Manipur Ukhrul
124 Meghalaya East Garo Hills
125 Meghalaya East Jaintia Hills
126 Meghalaya Jaintia Hills
127 Meghalaya North Garo Hills
128 Meghalaya South Garo Hills
129 Meghalaya South West Garo Hills
130 Meghalaya South West Khasi Hills
131 Meghalaya West Garo Hills
132 Meghalaya West Khasi Hills
133 Mizoram Champhai
134 Mizoram Kolasib
135 Mizoram Lawngtlai
136 Mizoram Lunglei
137 Mizoram Mamit (Satha)
138 Mizoram Serchhip
139 Nagaland Kiphire
140 Nagaland Longleng
141 Nagaland Mon
142 Nagaland Peren
143 Nagaland Phek
144 Nagaland Tuensang
145 Nagaland Wokha
146 Nagaland Zunheboto
147 Odisha Gajapati
148 Odisha Kandhamal
149 Odisha Kendrapara
150 Odisha Malkangiri
151 Odisha Nawapara
152 Odisha Nawrangpur
153 Sikkim West Sikkim No RRB
154 Telangana Komram Bheem (Asifabad)
155 Tripura Dhalai
156 Tripura Gomati
157 Tripura Khowai
158 Tripura Sepahijala
159 Tripura Unakoti
160 Uttar Pradesh Ambedkar Nagar
161 Uttar Pradesh Auraiya
162 Uttar Pradesh Azamgarh
163 Uttar Pradesh Ballia
164 Uttar Pradesh Balrampur
165 Uttar Pradesh Banda
166 Uttar Pradesh Basti
167 Uttar Pradesh Chandauli
168 Uttar Pradesh Deoria
169 Uttar Pradesh Farrukhabad
170 Uttar Pradesh Gonda
171 Uttar Pradesh Ghazipur
172 Uttar Pradesh Jaunpur
173 Uttar Pradesh Jyotiba Phule Nagar(Amroha)
174 Uttar Pradesh Kanpur Dehat
175 Uttar Pradesh Kaushambi
176 Uttar Pradesh Kushi Nagar
177 Uttar Pradesh Maharajganj
178 Uttar Pradesh Mau
179 Uttar Pradesh Pratapgarh
180 Uttar Pradesh Sant Kabir Nagar
181 Uttar Pradesh Shravasti
182 Uttar Pradesh Sidharthanagar
183 Uttar Pradesh Sitapur
184 Uttar Pradesh Sultanpur
185 Uttar Pradesh Unnao
186 Uttarakhand
187 Uttarakhand Rudraprayag
188 Uttarakhand Tehri Garhwal
189 West Bengal
190 West Bengal Jhargram
191 West Bengal Puruliya

Annexure IV

Quarter ended as on 30 Sept/31 December/31 March

State Name of the Bank Average amount of loan (Rs. In lakh) (%)Interest rate charged (%) Processing fees charged (Rupees)

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