Special Refinance Scheme in NABARD Watershed and Wadi Project Areas
Ref. No. NB.DoR /257 / PPS - 9/ 2020-2021       
20 July 2020
Cir. No. 199/ DoR – 69/2020
CEOs/MDs/Chairman of SCBs, RRBs, SFBs and StCBs
Dear Sir, 
Special Refinance Scheme in NABARD Watershed and Wadi Project Areas 
As you are aware NABARD has been implementing watershed development projects on participatory approach for conserving natural resources and Adivasi Development Projects, popularly known as “wadi” in tribal habitations across the country for more than two decades. The uniqueness of the watershed programmes is the peoples participation in planning and implementation the projects, monitoring as well as the financial management through community based organisations. All these projects are implemented with grant/ grant cum loan assistance by NABARD with the help of local NGOs. These developmental initiatives have transformed the natural and human resource endowments in compact areas and are conducive for absorption of higher capital and economic avocations. The main features of the wadi model are the economic upliftment of the farmers, through sustainable agriculture, social empowerment, improvement in quality of life including health and women empowerment. 
The major outcomes of the watershed development programme include increase in area under cultivation (up to 35%), improvement in productivity of various crops (29–53%), enhancement of groundwater recharge, change in net sown area and irrigated area, generation of additional employment, reduction in migration due to creation of employment, increase in cropping intensity and reduction in soil loss. In order to make efficient use of conserved resources and social capital formed viz. Village Watershed Committees (VWCs), Joint Liability Groups (JLGs), SHGs etc., it is felt that further investments by the farmers/tribals for taking up appropriate economic activities are required in watershed as well as wadi project areas. The spread of the Novel Coronavirus (COVID-19) pandemic has also severely impacted the lives of millions in the rural areas on account of lack of employment and livelihood opportunities due to lockdown. The severity of this problem has further been compounded due to reverse migration of labour force from urban areas to rural areas necessitating the need to create investment opportunities for rural youth in agriculture. Accordingly, a concessional refinance scheme has been conceived not only to encourage banks to lend to economic activities and create sustainable livelihood and employment opportunities in the rural areas but also to address the issues arising out of reverse migration.
In the above context, financing economic activities covering primary, secondary and tertiary sectors in watershed development project areas and micro agro processing activities for tribal farmers in wadi project areas supported by NABARD, it has been decided to extend concessional long term refinance support to all eligible banks/FIs at 3% to enable banks to deepen investmen credit to beneficiaries in these project areas. This will be a great enabler to banks in accelerating capital formation in agriculture. The refinance will be sanctioned under Automatic Refinance Facility (ARF) which shall enable banks to obtain financial accommodation from NABARD, without going through the detailed pre-sanction procedure formalities. However, Banks are expected to claim refinance to the extent of support provided to beneficiaries in identified watershed areas and beneficiaries of wadi projects supported by NABARD. Further, the banks have to maintain separate database for lending against such activities as per the banking plan. The detailed operational guidelines are furnished in the Annexure. 
We request you to widely canvass the scheme in your bank and take advantage of concessional refinance. We have advised our Regional Offices to share the details of our project areas in respective States and guide in preparation of Area development Plans / Banking Plans in identified clusters. 
We advise you to be in touch with our Regional offices for further guidance and information on the subject.
Yours faithfully
Chief General Manager
Encls :  2 pages