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Nabard to boost credit in countryside this fiscal through higher refinance, rural bank revamp
Mumbai | April 2022

Mumbai: Rural credit will get a boost this fiscal with the National Bank for Agriculture and Rural Development (Nabard) — the apex bank for the farm sector — targeting to grow its balance sheet by 15% again in FY23. Also, Nabard will revamp the recently capitalised regional rural banks (RRB) to improve credit delivery.

Addressing newspersons in Mumbai, Nabard chairman G R Chintala said that the bank’s balance sheet has grown 15% to Rs 7.6 lakh crore in FY22 from Rs 6.6 lakh crore in FY21. For the current fiscal, Nabard aims to increase its balance sheet to Rs 8.8 lakh crore, for which it plans to raise Rs 45,000 crore through the issue of bonds.

Speaking on the revamp of the RRBs, Chintala said, “The blueprint is almost ready. We will target each of these 22 RRBs and draw plans for the next five years. We will cover the HR areas also, and we will complete this exercise in six months.” In FY22, the government contributed Rs 4,084 crore towards the recapitalisation of RRBs. Of this Rs 3,197 crore has been released to 21 RRBs so far.

Chintala said that the apex bank had computerised the inspection operations of the rural state cooperative banks so that there was no time lag and Nabard could take corrective action in the same year. Nabard is also examining a proposal to have a rural distress index as recommended by a study on farm loan waivers. The objective is to measure agrarian distress by looking at the level of indebtedness and other inputs. Collecting granular data on rural distress is expected to help policy decisions.

Nabard, which largely lends to primary rural lenders, saw its loan portfolio increase by 12.9% to Rs 6.8 lakh crore as of March 31, 2022, from Rs 6 lakh crore in the preceding year. The outstanding borrowing was Rs 6.5 lakh crore against Rs 5.6 lakh crore as of March end in previous year.

It disbursed a concessional refinance of Rs 15,000 crore from the Long-Term Rural Credit Fund to RRBs and cooperative banks (CBs) to boost agriculture capital formation. It also extended refinance support of Rs 8,820 crore to the NBFC sector and Rs 3,447 crore to the small finance banks

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