National Bank for Agriculture and Rural Development (NABARD) offers financing solutions with interest rates starting from 4.5% p.a. They offer short- and long-term refinancing along with direct lending. The tenure of the refinancing can range from 18 months to more than 5 years.

    What is NABARD?

    NABARD is a financial institution that was set up by the Indian government to promote sustainable agriculture and rural development in the country. The functions of NABARD include the propagation of technological innovations, financial and non-financial solutions, and institutional development.

    NABARD stands for National Bank for Agriculture and Rural Development


    Key Achievements of NABARD

    Some of the activities undertaken by NABARD for rural development include:

    • Provision of refinance support
    • Improving rural infrastructure
    • Preparation of credit plans at a district level and encouraging banks to achieve these targets
    • Supervision of Regional Rural Banks (RRBs) and Cooperative Banks
    • Development of sound banking practices within the economically backward sections of India
    • Training artisans to develop handicraft activities and offering them help in marketing their produce
    • The SHG Bank Linkage Project that was developed by NABARD has become one of the most noteworthy micro finance projects at a global level.
    • NABARD has designed the Kisan Credit Card that has benefitted crores of farmers in the country.
    • NABARD takes credit for having financed one-fifth of the rural infrastructure of India.
    • The institution pioneered watershed development for climate proofing.

    Interest Rate Charged by NABARD to Banks for Refinance under Different Schemes

    Particulars Interest Rate
    Short Term Refinance Assistance
    RRBs for financing crop loans 4.50%
    Commercial banks/RRBs in respect of their finance to PACs towards crop loans 4.50%
    State co-operative banks for financing crop loans 4.50%
    DCCBs directly financing crop loans 4.50%
    ST-Additional SAO/ST (others)/ST (others)/ST (SAO) - SCARDBs 7.35%
    StCBs/RRBs - Conversion of Short Term- crop loans into Medium Term loans (3% less than the interest rate charged by banks to ultimate beneficiaries subject to minimum interest rate at 8.10%) 8.10%
    Long Term Refinance Assistance
    State government for contribution to share capital of co-operative credit institutions 8..50%
    RRBs/StCBs/SCARDBs 8.35% to 8.45%
    Direct Lending
    Warehouse Infrastructure Fund
    State governments Bank Rate – 1.0%
    State government corporation Bank Rate – 1.50%
    Entities promoted by central/state government owned/assisted PLR + risk premium
    Other entities PLR + risk premium
    Current Bank Rate 4.25%
    Current PLR 7.75%
    Food Processing Fund
    State governments Bank rate – 1.50%
    Entities promoted by state governments (without government guarantee) PLR + Risk Premium
    Entities promoted by state governments (with government guarantee) Bank Rate – 1.50%
    Other Entities PLR + Risk Premium
    Current Bank Rate 4.25%
    Current PLR 5.80%

    Financial Initiatives of NABARD

    Let us take a look at the financial initiatives from the National Bank for Agriculture and Rural Development:

    Direct Finance

    This includes the following categories of credit:

    1. Loans for food parks and food processing units in specific food parks

    In 2014, the government announced a special fund for the provision of term loans at attractive interest rates to Designated Food Parks (DFP) and food processing units at food parks. An amount of Rs.2,000 crore was set aside through NABARD for the same.


    • Development of the food processing sector
    • Reduction in wastage of agricultural goods
    • Creation of employment opportunities in rural India

    Eligible entities for the loan

    • State Governments
    • Institutions promoted by the government
    • Joint ventures (JVs)
    • Cooperatives
    • Federations of Cooperatives
    • Special Purpose Vehicles (SPVs)
    • Farmers’ Producer Organisations
    • Companies
    • Corporates
    • Entrepreneurs

    2. Loans to warehouses, cold chain infrastructure, and cold storage

    This initiative supports the creation of infrastructure that can help in the storage of agricultural produce.

    Loan details – Loans are provided for the funding of projects that create storage infrastructure (with minimum aggregate capacity of 5,000 metric tonnes) for agricultural goods storage. This includes the following activities:

    • Construction of silos
    • Construction of warehouses
    • Construction of cold storage, bulk coolers, controlled atmosphere stores, reefer vans, quick freezing units, etc.
    • Upgradation or construction of Marketing Infrastructure Facilities of the APMC (Agricultural Produce Marketing Committee)
    • Modernisation and improvement of the existing storage infrastructure projects.
    • No minimum capacity for government and government owned bodies.

    The improvement of existing storage infrastructure facilities will be considered based on the merits of the case.

    Eligible entities for the loan:

    • State Governments
    • Government owned/assisted institutions, Cooperatives, Farmers’ Producers’ Organisations (FPOs), Federation of Cooperatives, Federation of Farmers’ Collectives, SPVs that are created under PPP mode, etc.
    • Cooperative Marketing Societies (CMS), Primary Agricultural Credit Societies (PACS), or other such entities
    • Companies, corporates, or individual entrepreneurs
    • Agricultural Produce Marketing Committees (APMCs)

    3. Loans to marketing federations

    Marketing federations undertake the following activities:

    • Procurement of agricultural products, including milk
    • Collection, storage, and value addition in select commodities
    • Marketing of these commodities

    NABARD provides short-term loans to marketing federations to support their daily operations.

    Loan details – This is a short-term credit facility (for less than 12 months) offered to meet the working capital requirements of marketing federations. The activities eligible for this loan are:

    • Marketing and procurement of agricultural commodities
    • Marketing and processing of agricultural produce
    • Collection, processing, and marketing of milk
    • Supply of agricultural inputs, such as animal feed

    Eligible entities

    The following entities are eligible for NABARD loans:

    • State or Central Government Agricultural Marketing Federations and Corporations
    • Dairy Federations and Cooperatives
    • Agriculture Federations and Cooperatives
    • Registered Companies

    Quantum of loan

    This varies based on the nature of the activity and the beneficiary:

    Borrower Loan amount
    Government Agro Marketing Federations and Corporations
    • 100% for procurement operations
    • 90% for other marketing initiatives
    Dairy Cooperatives or Federations, Agri Marketing Cooperatives or Federations, and Registered Companies Up to 75% of the working capital needs

    Interest rate

    The interest rate charged on the loan will be as decided by the Asset-Liability Management Committee (ALCO) of NABARD. It varies based on the type of borrower, security type, availability of guarantee, project type, and credit rating of the borrower.


    This varies based on the borrower’s rating and type of activity. The primary security is the hypothecation of stocks, assets, book debts, and receivables. The lender may request for additional security such as fixed deposits, unencumbered assets, guarantees, etc.

    Upfront Fee

    1% of the project cost to be considered as the upfront or appraisal fee.

    4. Rural Infrastructure Development Fund (RIDF)

    The eligible categories under RIDF include:

    • Agriculture and related industries
    • Social sectors
    • Rural connectivity

      Eligible entities

      The following entities are eligible for RIDF loans:

    • State governments or union territories
    • State-owned corporations
    • Government supported organisations
    • Panchayat Raj institutions, NGOs, Self-Help Groups (SHGs)

    The projects should be submitted for approval through the nodal department of the government.

    Mode of Finance- Sanctioned amount is released on reimbursement basis except for the mobilisation advance at 30% to North Eastern and Hilly States and 20% for other Indian states.

    Loan amount – The rural connectivity and social/agricultural projects are eligible for loans that come up to 80%-95% of the project cost.

    Interest rate – The interest rates are linked to the Bank Rate at the time of loan disbursal.

    Loan tenure– All loans availed can be repaid in equal annual installments within 7 years from the disbursal date. This is inclusive of a 2-year grace period. The interest amount is paid at the end of each quarter.

    Security – Loans are secured by mandates registered with the RBI or any other Scheduled Commercial Bank, TPN, unconditional guarantee from state governments, and acceptance of terms and conditions in the sanction letter.

    Penal Interest- The interest accrued on the outstanding amount is payable at the same interest rate applicable to the principal amount.

    5. Direct refinance assistance to cooperative banks

    As part of this scheme, financial assistance is offered to cooperative banks to help in the expansion of their lendable resources. This also assists in the diversification of banks into several types of business operations.

    Loan details

    The loans under this category can be classified into two types:

    • Short Term Multipurpose Credit Product – This includes the fulfillment of working capital requirements, repair, and maintenance of farm equipment. The storage, packaging, and grading of goods and associated marketing activities are covered under this product.
    • Assistance to Cooperative Banks to Lend to Sugar Factories - Refinance assistance is offered to cooperative banks so that the funds can be utilised by farmers for the procurement of sugarcane. The funding can be used for meeting other agricultural expenses as well.

    Eligible entities

    • The sanctioning of credit limit will be done only for financially strong A and B categories of CCBs and StCBs that are RBI licensed.
    • Banks should adhere to the following criteria to be eligible for the refinance solutions from NABARD for on-lending to sugar factories:
    • Sugar factories should have net worth that is positive
    • Accumulated losses should not be seen
    • There should be no violations of the CMA norms
    • Factories should not have defaulted on repayments historically
    • Annual accounts should be regularly audited
    • The account should be a standard asset

    Loan amount

    The maximum limit is 100% of the bank’s lending for the Short Term Multi-Purpose Credit Product. For the on-lending product, 75% credit is provided.

    Interest rate

    The interest rates vary from time to time based on the market conditions. Interest is paid with quarterly rests on the outstanding balance.


    • The security will be determined based on the risk rating of the bank. This is usually unencumbered fixed deposit receipts issued by Scheduled Banks.
    • For State Cooperative Banks, government guarantee or promissory notes can act as security.

    6. Support of producer organisations

    The following support initiatives are undertaken by NABARD under the Producers Organization Development Fund (PODF):

    • Credit support such as loans and grants for building capacity and linkages to markets.
    • Providing assistance to eligible agencies to conduct workshops.

    The key objective of PODF is to meet the continued requirements of Producers Organisations (POs) and to ensure that they are completely sustainable.

    Watershed Development Programme

    The Watershed Development Porgramme was created in NABARD with the objective of unifying and multipying watershed development programmes into a single national initiative by involving village level institutions and Project Facilitating Agencies (PFAs).

    Ministry of Agriculture, Government of India (GoI) and NABARD contributed Rs.100 crore each to create this program.

    Tribal Development Programmme

    A program NABARD is closely related to and which focuses on development of tribal groups in India. A corpus of Rs.50 crore was created for the same.

    7. NABARD Infrastructure Development Assistance (NIDA)

    This is a line of credit support that can be used for financing rural infrastructure projects. NIDA also offers additional products such as annuity-based offerings, PPP, mezzanine capital, etc. based on the borrower’s needs.

    Interest rate - The interest rate for the loan is variable as it is dependent on the risk profile of the borrower and the specifics of the project. The rates are also linked to the market borrowings of NABARD. Moratorium period of 2-4 years is available, based on project details.

    Repayment period - The repayment tenure is 15 years with repayment holiday of 2-4 years.

    Security - To be provided based on the project and the borrower’s risk profile.

    How to obtain funding under NIDA

    • The borrower is required to submit a Detailed Project Report (DPR) that covers the technical details of the project. The business plan will also be indicated there to give an overview of the financial viability of the borrower and the project.
    • The loan proposal is submitted to the Chief General Manager of the regional office in the state.

    8. Financing and development of PACS

    Primary Agricultural Credit Societies (PACS) are registered cooperative societies that offer credit and other types of services to its members. Assistance is available for activities related to the upgradation of agro-storage centres, agro-service centres, agro-processing centres, agri marketing and transportation facilities, and agri-information centres.

    Eligibility - PACS can be assisted under PODF, as it is a registered society with farmer memberships.

    Interest rate – The interest rate under PODF is a value fixed by ALCO (Asset Liability Committee).

    Repayment tenure – The maximum tenure is 9 years; this is inclusive of a 2-year grace period.

    9. Umbrella Programme for Natural Resource Management (UPNRM)

    NABARD has launched this programme to fund community-managed, sustainable rural livelihood initiatives that are NRM-based. These projects will have to pass an assessment at the Guiding Principles level. The interest rates for the funding under UPNRM will be based on the type of project, target groups, and channel partners.

    10. Alternative Investment Funds (AIFs)

    NABARD makes contributions to AIFs for the achievement of the following:

    • Complementing the current refinance and co-finance products of NABARD and other developmental activities.
    • Encouraging entrepreneurship in agricultural and rural development activities.
    • Facilitating the development of model units so that the rural poor can emulate it.
    • Encouraging investment in innovative activities in the rural development and agricultural sectors.
    • To help units that cannot upscale their operations due to lack of funds.
    • To assist units that are engaged in infrastructure development or employment generation activities.

    Eligible entities

    • The AIF should be registered under SEBI Regulations, 2012. Funds falling under Categories I and II of these regulations are eligible.
    • The maximum life period of the Fund should be 10 years.
    • Sector agnostic funds are usually eligible if these invest at 200% of NABARD’s commitment to the Fund in rural and agricultural development projects.
    • The structure of the Asset Management Company (AMC) should adhere to several statutory and regulatory requirements.
    • The portfolio companies must be preferably set up in rural areas.
    • Commitment periods should have been met by the previous funds.
    • The Investment Manager must have exempted NABARD from paying any additional premiums on joining the Fund after initial closing.
    • Investment Manager must hold experience in VCF/AIF business for at least 10 years and show good performance.
    • Investment Managers looking to commit to its first or second SEBI registered Fund will be considered as new Funds.

    11. Long Term Irrigation Fund (LTIF)

    This is an initiative of NABARD aimed at funding and fast tracking the completion of major and medium irrigation projects that have pending work.

    Eligible entities

    • State governments can borrow funds from NABARD under LTIF.
    • National Water Development Agency (NWDA) that functions under the Ministry of Water Resources can borrow from LTIF.

    Interest rate and tenure

    • The interest rate under LTIF is around 6%.
    • Repayment tenure can go up to 15 years. Moratorium period is 3 years.

    12. Pradhan Mantri Aawas Yojana

    Grameen (PMAY-G) - By the year 2022, the PMAY-G programme aims at setting up pucca houses for all families that are currently staying in kutcha houses. This is an undertaking of the Ministry of Rural Development (MoRD). Out of the complete financial requirement for the construction of these houses, a specific amount is expected to be met from budgetary sources. The remaining amount will be funded by NABARD.

    Refinance Offerings

    This includes the following categories of credit:

    1. Short term refinance

    The crop loan system of NABARD was set up for the disbursement of production credit for borrowers in the agricultural sector. This includes the following categories of operations:

    • Short-term – Seasonal agricultural operations – Refinance is provided by NABARD at concessional interest rates for production purposes to State Cooperative Banks (SCBs) and Regional Rural Banks (RRBs). Credit limits are sanctioned in this regard. The withdrawals made under the approved credit limit should be repaid in 12 months.
    • Short-term – Others – Funding under this category is provided for ST - Agriculture and allied activities, ST – Fisheries, ST – Marketing of crops, ST – Industrial cooperative societies (not including weavers), ST – Labour contract and Forest labour cooperative societies, ST – Rural artisans including weavers, ST – Stocking, purchase, and distribution of chemical fertilisers.

    Short-term – Weavers

    Refinance support is available as follows:

    • Working capital needs of Primary, Apex, or Regional Weavers Coop Society through state coop banks or DCCBs.
    • Working capital needs of Primary Weavers Coop Society through Scheduled Commercial Banks.
    • Working capital needs of State Handloom Development Corporation through Scheduled Commercial Banks and State Cooperative Banks.
    • Working capital and marketing needs of individual weavers, handloom weavers' groups, societies outside the coop fold, mutually aided coop societies, and master weavers through Scheduled Commercial Banks and RRBs.

    NABARD also provides medium-term credit limits as relief to farmers facing crop damage from natural calamities. The short-term loans would be converted to these medium-term credit limits when there is a loss of 33% or more.

    2. Long term refinance

    NABARD offers long-term and medium-term refinance solutions to banks so that it can be passed on to farmers and rural artisans. The following income generating activities will be covered under this refinance product:

    • Agriculture and associated activities
    • Small scale industries, artisans, handicrafts, non-farm sector, handlooms, and powerlooms
    • Initiatives of self-help groups and voluntary agencies that work among the poor people in rural India

    The technical feasibility and financial viability of the project is taken into consideration for providing refinance. Credit supervision of the institution is also a criterion for refinance.

    Eligible entities

    • State Cooperative Agriculture and Rural Development Banks (SCARDBs)
    • Regional Rural Banks (RRBs)
    • Commercial Banks (CBs)
    • State Cooperative Banks (StCBs)
    • District Central Cooperative Banks (DCCBs)
    • North East Development Finance Corporation (NEDFC)
    • State Agricultural Development Finance Companies (ADFCs)
    • Scheduled Primary Urban Cooperative Banks (PUCBs)

    The final borrowers of the loan may be individuals, companies, proprietary or partnership institutions, state-owned corporations, co-operative societies, etc.

    Loan tenure

    The maximum loan period is 15 years

    Extent of refinance

    Refinance will be provided to the extent of 95% - 100% of the eligible bank loans based on the purpose of the loan, location of investment, and the borrower.

    3. Schemes under off farm sector

    This includes the following three schemes:

    • Automatic Refinance Facility (ARF) - There are five compact programmes under this scheme:
    • Composite Loan Scheme (CLS) - Refinance under this scheme is provided to meet the working capital expenses of micro/small enterprises. The maximum refinance available under the scheme is Rs.10 lakh per unit.
    • Integrated Loan Scheme (ILS) - Refinance is provided to working capital and block capital for one operating cycle. Maximum refinance offered under this scheme is Rs.15 lakh per unit.
    • Self-Employment Scheme for Ex-servicemen (SEMFEX) - The scheme offers loans to encourage ex-servicemen to participate in agriculture and allied activities. Off-farm activities are also supported under this scheme.
    • Soft Loan Assistance for Margin Money (SLAMM) - This scheme provides financial aid to entrepreneurs who have the talent but are short on finances to meet margin requirements under relevant refinance schemes offered by NABARD.
    • Small Road and Water Transport Operators (SRWTO) - Financial help is provided under this scheme for the acquisition of transport vehicles that will be used in transporting industrial products or farm produce to marketing centers. This includes water transport units and passenger transport vehicles. Margin money may also be provided for specific cases, up to 10% of the vehicle’s cost.
    • Rural Housing - Under this scheme, NABARD provides refinance facility to banks to support rural housing for both agriculturists and non-agriculturists. This results in overall rural development.
    • Renewable Energy - In order to address India’s challenges associated with energy security, the Ministry of New and Renewable Energy (MNRE) has introduced a capital cum interest subsidy scheme. This programme will help in the creation of off-grid solar power harnessing devices through the use of photo voltaic technology. The devices can light up houses and provide heating. NABARD assesses the feasibility of the project and provides refinance for the same.

    Where is the head office of NABARD?

    The head office of the Department of Financial Inclusion and Banking Technology, Department of Refinance, Farm Sector Development Department, Institutional Development Department, and Off-Farm Development Department of NABARD is at the following address:

    4th Floor, 'E' Wing C-24, 'G' Block Mumbai - 400051. Bandra Kurla Complex, Bandra (East). Maharashtra.

    The Chief General Manager can be reached at 02226530024 and the email ID, dfibt@nabard.org.

    National Bank for Agriculture and Rural Development Regional Offices

    Listed below are some of the contact details of the regional offices of NABARD:

    State Address Contact Number
    Andhra Pradesh 1-1-61, RTC 'X' Roads, Musheerabad , Hyderabad - 500020 Hyderabad - 500020. Musheerabad. Andhra Pradesh. 0402-7613152
    Goa 3rd Floor, Nizari Bhavan, Menezes Braganza Road. Panaji. Goa. 0832-2420053/82770 72309
    Gujarat NABARD Tower, Opp. Municipal Garden, Post Box No. 8, Usmanpura Ahmedabad. Gujarat. 079-27552782
    Haryana Plot. No. 3, Sector 34-A, Post Box No. 7 Chandigarh. Haryana. 0172 5116801
    Karnataka 46, NABARD Towers, Kempe Gowda Road, Karnataka. Bangalore. 080-22130532
    Kerala Punnen Road, Statue Thiruvananthapuram. Kerala. 0471-2710600
    Madhya Pradesh E-5, Area Colony, Bittan Market, Ravishankar Nagar, Post Box No. 513 Bhopal. Madhya Pradesh. 07552464775
    Maharashtra 54, Wellesley Road, Shivaji Nagar, Post Box No. 5 Pune. Maharashtra. 02025541439
    Delhi 24, Rajendra Place Delhi - 110008. Delhi. 1141-539353
    Tamil Nadu 48, Mahatma Gandhi Road, Post Box No. 6074 Nungambakkam. Tamil Nadu. 04428276088
    West Bengal NABARD West Bengal RO, NABARD BHAVAN, Block DP-2, Sector V, Salt Lake, Kolkata-700092 West Bengal. 033-29861624

    What are the NABARD branches?

    NABARD has a wide coverage in India with a head office, regional offices in different states, and district offices in each state. It also has training establishments in Birbhum, Mangalore, and Lucknow. There is a sub-office in Srinagar and PMUs in Gujarat, Rajasthan, and Madurai. The addresses of the head of training establishments, sub office, and PMUs are as listed below:

    Training Establishments
    • BIRD Kolkata Abhilasha 1 6 Royd Street, Kolkata - 700016
      Kolkata. West Bengal. Contact No.: 8765751042
      Email Id : bird.kolkata@nabard.org
    • BIRD Campus, Behind Government Polytechnic for Women, Mangalore - 575008.
      Krishna Nagar Road, Bondel. Karnataka.
      Contact No.: 0824-2888501 Contact No.: 9969810594
      Email Id: bird.mangaluru@nabard.org
    • Sector H - LDA Colony, Kanpur Road. Lucknow - 226012. Kanpur Road.
      Uttar Pradesh. Contact No.: 91-522-2421954
      Email Id: bird@nabard.org
    • Sector H - LDA Colony Uttar Pradesh - 226012. Kanpur Road.
      Lucknow. Contact No.: 05222421065 Email Id: nbsc@nabard.org
    Sub Office JAMMU AND KASHMIR REGIONAL OFFICE Srinagar. Jammu & Kashmir.
    Contact No.: 2311471 Contact No.: 9419158090
    Email Id 1 : srinagar@nabard.org

    FAQs on NABARD

    1. What is the nabard full form?

      Ans: The full form of NABARD is National Bank for Agriculture and Rural Development.

    2. Who is the chairman of NABARD?

      Ans: Dr. G.R. Chintala is the chairman of NABARD since 27 May 2020.

    3. When was NABARD established?

      Ans: NABARD was established on 12 July 1982 through the merger of agricultural lending functions of RBI and the refinance functions of ARDC (Agricultural Refinance and Development Corporation). The organisation was set up with an initial capital of Rs.100 crore by the late PM Smt. Indira Gandhi. The paid-up capital of NABARD was at Rs.10,580 crore on 31 March 2018. NABARD is now completely owned by the Indian Government.

    4. What schemes are offered by NABARD?

      Ans: NABARD offers several financial, supervisory, and developmental schemes for the empowerment of rural India and for bringing about financial inclusion.

      • As part of its financial offerings, direct finance products and refinance schemes are provided to eligible borrowers.
      • The developmental activities include regulation and supervision of the functions of Regional Rural Banks and Cooperative Banks.
      • NABARD also conducts periodic inspections of state level cooperative units like Marketing Federations, Apex Weavers Societies, and State Cooperative Agriculture and Rural Development Banks.

      NABARD is a channel partner with the Government in schemes such as National Livestock Mission, Dairy Entrepreneurship Development Scheme, and Interest Subvention Scheme.

    5. What are the functions of NABARD?

      Ans: The primary function of NABARD is to touch all aspects of rural economy. Apart from providing financial support to the underserved population of the country, the institution also monitors the functioning and regulation of banks. Over the years, the products offered by NABARD have been a boon to millions of rural families across the country.

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