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Provision of Short Term Refinance - Special Liquidity Facility
Please refer to the following circulars issued by NABARD communicating Short Term refinance policies:
 
(i) NB. DoR.ST.Policy /1255/A.1(Gen)/2019-20 (Circular No. 226/DoR - 61/2019) dated 24 July 2019,
(ii) NB.DOR/27/ A1. Gen/2020-21 (Circular No. 103/DOR-31/2020) dated 15 April 2020 
(iii) NB. DoR /33/A.1 (ST-Others)/2020-21 (Circular No. 107/DoR-32/2020) dated 16 April 2020. 
 
2. In the wake of the COVID-19 pandemic, RBI has made available a special liquidity facility (SLF) to NABARD for providing front ended liquidity support to RRBs, Cooperative Banks and MFIs with a view to ensure unhindered flow of credit from banks to farmers to carry out their agricultural operations smoothly. It has been decided to allocate the same among banks to ensure starting of lending operations in rural areas by them. The features of SLF lending are as under:
 
a. Eligible activities for which refinance is provided are as enumerated in above mentioned circulars.
 
b. NPA and CRAR norms would be as per our Additional ST (SAO) circular mentioned at para 1 (ii) above. However, if a bank is unable to fulfil the eligibility criteria on account of any reasons beyond its control, NABARD may consider to lower eligibility norms upto a maximum of 2% in case of CRAR and to the extent of NPA norms mentioned in circular at para 1 (i) above, on a case to case basis.
 
c. StCB wise quantum of refinance for sanction under this facility will be determined by NABARD considering the eligibility parameters indicated above as well as projected RLP of the bank for 2020-21 / Agricultural GLC of the previous year.
 
d. In order to facilitate front ending of the support, StCBs are allowed to draw upto the extent of net NODC available on date of the drawal or State wise/ Bank wise allocation made by NABARD, whichever is lower.  In case NODC is not available to the extent of NABARD’s allocation to the bank, drawal can also be made against interest accrued for the moratorium period extended in terms of RBI package advised vide letter No. RBI/2019-20/219-DOR.No.BP.BC.62/21.04.048/2019-20 dated 17 April 2020.
 
e. The interest rates on refinance will be as decided by NABARD from time to time. For the present it is 4.95% pa. The Interest is payable at half yearly rests on 01 October and 01 April. In the event of the bank repaying the entire principal amount, the interest will be payable along with principal amount.
 
f. In case StCBs fail to honour their commitments to NABARD, the penal interest would be applicable as in the case of ST(SAO) refinance, as indicated in our circular cited at para 1 (i) above.
 
g. StCB shall submit monthly NODC statement indicating DCCB-wise position separately for ST-Crop loans and ST(Others) by 20th of the succeeding month physically or through digital platform. It may be ensured that drawal under Special Liquidity Facility by the bank does exceed the aggregate net NODC available under the respective category. 
 
h. Refinance under this line would be in the form of Cash Credit as in the case of existing ST loans, payable within a maximum period of 1 year or as stipulated by NABARD during release of SLF.
 
i. Repayments (partial or full) shall be accepted by NABARD before the stipulated due date with a minimum notice of 7 working days.
j. All other terms and conditions will be as per our Additional ST (SAO) circular mentioned at para 1 (ii) above.
 
3. The funds released under this facility need to be used for fresh lending to farmers to meet their credit needs.
 
4.  You may arrange to forward applications for sanction of credit limits as per the format enclosed, complete in all respects, to the concerned Regional Offices of NABARD immediately, to facilitate timely sanction of limits. The Regional Office will process the application and forward the same to NABARD HO for sanction and disbursement under the facility.
 
5. Please acknowledge receipt of this circular to our respective Regional Office.
 
Yours faithfully
Jiji Mammen
Chief General Manager