Functions of Department

NABARD provides short-term refinance for various types of seasonal agricultural operations/production/marketing/ procurement activities.

1. Concessional refinance is provided in the form of a consolidated limit to State Cooperative Banks(SCBs) on behalf of all eligible District Central Cooperative Banks (DCCBs), and to Regional Rural Banks (RRB) for financing Seasonal Agricultural Operations (SAO) which covers such activities as are undertaken in the process of raising various crops and are seasonal in nature. The activities include among others, ploughing and preparing land, sowing, weeding, transplantation, applying inputs such as seeds, fertilizers, etc., and labour for raising and harvesting the crops. NABARD updates the crop loan manual periodically which guide bankers in financing.

2. NABARD also provides Short Term credit limits to State Cooperative Banks against pledge of Government securities for financing Seasonal Agriculture Operations. This facility helps the SCBs to get released their own resources locked up in Government/trustee securities and to utilise the resources thus released in financing SAO.

3. As per NABARD's refinance policy for seasonal agricultural operations in production credit, the banks are required to earmark 30% of their lending to small and marginal farmers.

4. Special Lines of Credit for Tribals: In consonance with the policy to step up credit to tribal population, a separate line of credit on liberal terms known as Development of Tribal Population has been extended in predominantly tribal areas.

5. From the year 2007-08, consolidated Short-Term(Others) limits would be sanctioned to SCB on behalf of eligible DCCBs for financing the following activity.

(i) Approved short term agricultural/allied and marketing activities which are not covered under normal credit covering secured advances.

(ii) Marketing of crops for affording reasonable opportunities for remunerative price to growers for their produce by enabling them to hold on to the produce for time being.  Such advances are permitted against pledge of agricultural produce kept in own godown also.

(iii) Working capital requirements of cottage, village, small scale primary Industrial Co-operative Societies (other than weavers) for production and marketing activities.

(iv) Working capital requirements of labour contract and forest labour co-operative societies for activity such as marketing, manufacturing or processing of goods and/or collection and marketing of minor forest produce and engaged in any one or more of the 22 approved broad groups of cottage and small scale industries.

(v) Working capital requirement of Rural Artisans (including weaver members of PACS/ LAMPS/FSS) for production and marketing or servicing activities of such rural artisans including weaver members of PACS/FSS/LAMPS engaged in any of the 22 broad groups of approved cottage and small scale industries or handloom weaving industry and working on a viable basis.

(vi)  Working capital requirement of Fisheries Societies/fishermen of PACS (for SCBs).

(vii) Procurement, stocking and distribution of chemical fertilisers and other agricultural inputs.

7. Refinance is provided  to RRBs for financing marketing of crops, pisciculture and certain approved purpose other than SAO i.e. financing production and marketing activity of artisans (including handloom weavers) and village, cottage, tiny sector industries, financing persons belonging to weaver section and engaged in trade/business/service activity including distribution of inputs for agriculture and allied activity and ST(Others) line of credit.

8. Refinance support in the form of consolidated limit to SCBs on behalf of eligible DCCBs for financing the working capital requirements of the Primary Weavers' Cooperative Societies (PWCS) for production and marketing of cloth.  For financing the individuals directly by DCCBs for meeting the working capital requirements of those engaged in the field of handloom weaving and self employed weavers groups organised on the pattern of SHG for the working capital requirements. 

9. Refinance support to State Cooperative Banks for financing procurement and marketing of cloth.

10. Refinance support to State Cooperative Banks for financing Trading in yarn by Apex/Regional Weavers' Cooperative Societies.

11. Refinance support to Scheduled Commercial Banks for financing working Capital requirements of Primary Handloom Weavers' Cooperative  Societies (PHWCS).

12. Refinance support to State Cooperative Banks/Scheduled Commercial Banks for financing working capital requirements of Stae Handloom Development Corporations (SHDCs) for production/procurement and marketing of Handloom goods and State Handicrafts Development Corporations (SHnDCs) for production/procurement and marketing of Handicrafts goods.  The scheme stands withdrawn for 2008-09.

13. Refinance support to all Commercial Banks, SCBs & RRBs for financing of Master Weavers.

14. Refinance support to all CBs, SCBs and RRBs for financing of Handloom Weavers Group

Medium Term Finance

15. Refinance facility is available to SCBs and to RRBs against the loans converted/ rescheduled / rephased of farmers affected by natural calamities under Medium term stabilization arrangement for periods varying from 3 years to 7 years. The conversion facility is shared by NABARD(60%), State Government(15%) and 25% to be shared by SCB and DCCB in mutually agreed basis.

In the case of RRBs the sharing ratio is NABARD (70%), Sponsor Bank (25%) and RRBs(5%).

Long Term Finance

16. Long Term Loans are provided by NABARD to State Government for contribution of share capital to cooperative credit institutions (SCBs /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.

17. Provision of Liquidity Support : NABARD provides refinance to SCB on behalf of DCCBs and to RRBs for providing liquidity support in respect of 31 identified debt stressed districts in the State of Maharashtra, Karnataka, Kerala, and Andhra Pradesh under Prime Minister's package of relief.

18. GoI Scheme for Financing of crop loan at 7% p.a. - Interest Subvention

Hon'ble Union Finance Minister had announced in his Budget Speech for the financial year 2006-07, the Government's decision to ensure provision of short term credit to farmers at 7% p.a. with an upper limit of Rs. 3 lakh on principal amount. The scheme envisaged suitable interest subvention to NABARD to provide concessional refinance to Cooperative Banks and RRBs. Govt. of India is also providing 2% interest subvention to banks on their own involvement in disbursement of crop loans upto Rs. 3.00 lakh at 7% p.a. during the year 2006-07, 2007-08, and the scheme continues during 2008-09. NABARD has been identified as the nodal agency for implementing the scheme in respect of Cooperative Banks and RRBs. NABARD has issued necessary guidelines to Cooperative Banks and RRBs for submission of their interest subvention claims to NABARD.

As per GoI scheme, interest subvention is available on the crop loans disbursed from the date of advance upto the date of repayment or upto the date beyond which the outstanding loan becomes overdue i.e. 31 March for Kharif and 30 June for Rabi, whichever is earlier.

Delegation of powers

The existing and revised  powers for  In- charges of ROs and senior executives at HO for sanction of various credit limits to SCBs and RRBs are as under:- 

( Rs. crore)

@ only MD is vested with unrestricted powers

Note :-

1. The delegation is subject to compliance with the policy circular and other instructions and within the overall budget communicated by H.O.

2. Limits requiring sanctions beyond powers proposed for ED will be sanctioned by MD and in latter's absence, by  Chairman.  

3. CGM, PCD, HO  is vested with unrestricted powers in sanctioning  various credit  limits to SCBs and RRBs in respect of ROs  headed by officers in Grade ' D '. as detailed under :-

4. In the absence of the CGM/GM/In-charge of an RO, the instructions contained in our circular letter No. NB.POD-1.OPR.5822/K.52/85-86 dated 28 June 1986 requiring the applications to be forwarded to the Head Office for sanction, shall remain in force.

5. For release of refinance,  provisions of FAD Manual  shall  be followed.

6. Sanctioning Committee at ROs
The composition of the  Committee  for sanctioning various ST/MT credit limits  to banks will be as under:

The earlier stipulation that officers of RDBS (Gr. E, D, C, B) should only be taken in sanctioning committee has since been removed.

PCD- Organisational Chart