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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. Interest Subvention under GoI Scheme for Financing of crop loan at 7% p.a. –
The GoI had launched Interest Subvention scheme in the year 2006-07. As per the extant guidelines
of GoI for the FY 2022-23 to 2023-24: Interest Subvention of 1.5% 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 and a sub-limit
upto Rs.2 lakh for working capital requirement of AH&F subject to a maximum limit of Rs.3 lakh.
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 @ 1.5% is available for banks making
them enable to extend loan upto six months to small and marginal farmers having Kisan Credit
Card after the harvesting of the crop and the loan is available 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. Ministry of Agriculture and Farmers Welfare, Govt. of India
vide their F. No.1-4/2020 – credit-I dated 25th August 2022 has modified the Interest Subvention
to banks. For FY 2022-23 to 2023-24: IS of 1.5% will be payable to Cooperative Bank, RRBs, SFBs,
Commercial Banks on their own funds used for Short Term loans for agriculture and allied
activities including animal husbandry, dairy, fisheries, bee keeping etc., provided the banks
lend at 7%.
2.Interest Subvention on working capital to Animal Husbandry and Fisheries
The GoI has earlier extended the Interest subvention Scheme on KCC issued to crop loan farmers to
the KCC issued to Animal Husbandry and Fisheries farmers from 2018-19. Interest subvention of 2%
to banks and 3% to farmers towards Prompt Repayment (for the FY 2022-23 & 2023-24 Interest
subvention of 1.5%) incentive is extended on short-term loans up to Rs2 lakh to animal husbandry
and fisheries farmers apart from the existing KCC for crop loans, provided the loans are
extended by banks @7% per annum. In case of farmers possessing KCC for raising crops and
involved in activities related to Animal Husbandry and/ or Fisheries, the Interest Subvention on
short-term loan is available on an overall limit of Rs.3 lakh per annum.
3. Scheme for Extending Financial Assistance to Sugar Mills for Enhancement and
Augmentation of Ethanol Production Capacity
As per the guidelines of the scheme, DFPD accords in principle approval to sugar mills for
implementation of projects under the scheme. Sugar mills have to approach banks for sanction of
bank loans for implementation of the projects. NABARD has been appointed as a Nodal Agency for
interacting with DFPD, Govt. of India and managing interest subvention under the Scheme.
Assistance under the Scheme: : Interest Subvention @ 6% per annum or 50% of the
rate of interest, whichever is lower, on the loans to be extended by bank shall be borne by the
Government of India for five years only, including one year moratorium period.
Eligible Institutions: All Public Sector Banks, Private Commercial Banks,
Scheduled Urban Cooperative Banks, Cooperative Banks, Regional Rural Banks, National Cooperative
Development Corporation (NCDC), IREDA and any other financial institutions which are eligible
for re-finance from NABARD are eligible to claim interest subvention under the Scheme on behalf
of eligible sugar mills. 4.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)Agricultural Marketing Infrastructure sub-scheme of Integrated Scheme for Agricultural
Marketing (ISAM)
(ii) Agri Clinics and Agri Business Centres (ACABC)
The norms for execution of subsidy programmes is given in point no. (xii)
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