Provision of Additional Short-Term (ST) refinance by NABARD to Regional Rural Banks for financing Seasonal Agricultural Operations (SAO) - Policy for F.Y.2021-22

Please refer to NB.DoR/25/A-1 (Gen)/2020-21 dated 15 April 2020 (Circular No. 102/DoR-30/2020) and subsequent amendments communicating policy for sanction of additional Short -Term (ST) refinance to Regional Rural Banks (RRBs) for financing Additional Seasonal Agricultural Operations for the FY 2020-21. The policy guidelines are being continued at present for theFY 2021-22 and the same is given in Annexure I. The total limit sanctioned under Additional Short-Term refinance will be upto 50% of the RLP including outstanding under normal ST (SAO) or as per para ‘4’ of Annexure-I.

2. RRBs can draw upto the eligible limit, including amount drawn under STRRB fund, of GLC or as the case may be,under this line of credit.

3. You may submit an application for sanction of Additional ST (SAO) credit limit, in the prescribed proforma to NABARD RO in your State.

4. Please acknowledge receipt of this circular to our Regional Office.

Annexure I

Provision of Additional Short-term (ST) refinance by NABARD to Regional Rural Banks (RRBs) for financing Seasonal Agricultural Operations - Policy for F. Y. 2021-22

1. Operative period of Additional ST (SAO) limit

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

2.Sanction of limit

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

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


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

3.2.1In keeping with the spirit to encourage more lending especially to the needy agricultural sector, it has been decided to waive the preliminary 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.

3.2.2Risk 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 Additional ST(SAO).

3.3Risk 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.

3.4Eligibility 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 special case.

4.Quantum of refinance

4.1 The quantum of refinance for sanction will be as under:
General Region
Risk Rating of RRB by NABARD Eligible limit
As a percentage of Realistic Lending Programme (RLP)]
NBD1 – NDB4 50%
NBD5 – NDB7 45%
NBD8 – NDB9 Not eligible
4.2RRBs in North Eastern Region, Jammu & Kashmir, Sikkim, Andaman & Nicobar Islands, Himachal Pradesh and Uttarakhand, will be eligible for an additional credit limit of 25% as under:
Risk Rating of RRB by NABARD Eligible limit
As a percentage of Realistic Lending Programme (RLP)]
NBD1 – NDB4 75%
NBD5 – NDB7 70%
NBD8 – NDB9 Not eligible
4.3 RRBs in Eastern Region viz. Bihar, West Bengal, Jharkhand, Odisha, Chhattisgarh States and 28 districts of Eastern Uttar Pradesh (under BGREI Scheme of Govt. of India) will be eligible for an additional credit limit of 5%, as under:
Risk Rating of RRB by NABARD Eligible limit
As a percentage of Realistic Lending Programme (RLP)]
NBD1 – NDB4 55%
NBD5 – NDB7 50%
NBD8 – NDB9 Not eligible

4.3The 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 RRB.

4.4The RRB may be allowed drawals upto 50% (net of the amount drawn under STRRB fund) of GLC or as the case may be under this line of credit.

4.5The limit will be available only for KCC crop loans issued upto ₹3 lakh at farmer level.

4.6The refinance under this line of credit will be reckoned as owned funds of the bank which is eligible for Interest subvention as per extant Interest Subvention Scheme guidelines of GoI.

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.Rate of interest on refinance

6.1Interest Rate

The interest rates on refinance will be as decided by NABARD from time to time. Interest is payable at half-yearly rests on 01 October and 01 April, as hitherto. In the event of bank repaying entire principal amount, the interest will be payable along with principal amount.

6.2Penal interest in case of default

RRBs which fail to honour their commitments to NABARD in repayment of principal, payment of interest and / or other dues by the prescribed due dates, will not be eligible for any type of refinance facility from NABARD. Resumption of refinance may be considered, only after the bank clears the default. In the event of default, penal interest rate of 2% p.a over and above the interest rate at which refinance was disbursed, will be charged on the defaulted amount and for the period for which the default persists. The penal interest rates are subject to revision from time to time.

7.Notice for 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 or 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. Operational discipline

Drawal of refinance by RRBs under Additional ST (SAO) limit will be restricted to applicable percentage of refinance of the loan issued during the year 2021-22.

8.2Excess 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% p.a.


Drawals by RRBs on the credit limits will be permitted subject to the availability of aggregate NODC (including that for normal limit). 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, physically or through digital platform.

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.

8.4Penal interest on NODC deficit

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 RRB fails to make good the deficit within one month from the date of occurrence of such deficit, additional interest @ 1% p.a. will be charged on the deficit in NODC for the duration of deficit i.e. till the date on which the amount of deficit is regularized.

Segregation of principal and interest in the loans outstanding

RRBs may 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, only the principal portion of loans (issued, recovered, outstanding and overdues) should be reported in the monthly NODC statements.

9.Clearance of default

RRBs 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.

10.Right to inspection

NABARD reserves the right to inspect / get inspected the books of accounts of the RRB,

11. 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 RRB 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.


All other terms and conditions applicable for providing refinance under ST(SAO) will be applicable to Additional ST (SAO) refinance too.


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