Multiple banks. Different interest rates. Call it a "conflict of interest".
The National Bank for Agricultural and Rural Development (NABARD) is India’s specialised bank that was set up after the recommendation from the CRAFICARD (Committee to Review Arrangements for Institutional Credit for Agricultural and Rural Department), arranged by the Reserve Bank of India (RBI). On 12th July of 1982, NABARD came into existence and replaced the ACD (Agricultural Credit Department), ARDC (Agricultural Refinance and Development Corporation and RBI’s RPCC (Rural Planning and Credit Cell). The apex development bank was established with an intention to provide focus and undivided attention to the credit problems rooting out of integrated rural development.
NABARD provides various refinance and direct finance options.
There are three categories of refinancing options from NABARD:
Agriculture in this modern age requires a huge recurring investment for seeds, insecticides, fertilisers and expensive agricultural machinery and equipment. For these needs, farmers require more than just credit arrangement should extend beyond such provision of credit. The crop loan or the production based lending was devised to analysing the requirements of funds based on the real cost and productivity.
The PCD or the Production Credit Department provides short term refinance facilities to clients for production, procurement and marketing activities. The details are as follows:
NABARD provides refinancing options to State Cooperative Banks and Regional Rural Banks for the purpose of production. Credit limits are sanctioned to these banks at concessional interest rates. The repayment tenure of the sanctioned credit limit is 12 months.
For times in which Cooperative Banks do not have the capacity to sufficiently fund PACS, a new product for refinancing was introduced in 2011-12. The refinance product can be used to finance PACs via RRBs and PSBs.
The loan limit is sanctioned to RRBs and SCBs.
Short Term refinance support is provided to weavers associations and societies through various banks:
| Entity & Requirement | Bank |
| Primary or Apex or Regional Weavers Coop Society – working capital | State Cooperative Bank or DCCBs |
| Primary Weavers Coop Society – working capital | Scheduled Commercial Bank |
| State Handloom Development Corporation – working capital | Scheduled Commercial Banks & State Cooperative Banks |
| Individual weavers, mutually aided cooperative societies, producer group companies, handloom weavers groups, master weavers – working capital and marketing | RRBs and Scheduled Commercial Banks |
Farmers whose crops get damaged owing to natural calamities can also look at getting financial support from NABARD. In this case, farmers can convert current short term agricultural loans into medium term loans. They can also reschedule or rephrase an existing MT loan. The total loan limit is sanctioned to SCBs and RRBs.
Long term loans are provided by NABARD as an investment credit that results in generating capital by the way of upgraded technology or improved techniques. The asset creation leads to an increase in productivity, production and income of entrepreneurs and farmers. This is referred to as long term loan as it is given for a duration of 3 to 15 years.
Long term loans are provided to the following sectors:
The institutions eligible for medium term refinance are:
There are various schemes under the ARS that can be broadly classified into five unique and compact schemes:
The MNRE (Ministry of New and Renewable Energy) has introduced a capital cum interest subsidy scheme for creating renewable sources of energy at small and domestic commercial level. NABARD serves as the agency that offers feasibility and refinance to the projects that are eligible.
NABARD provides investment credit to the eligible banks offering housing as well as business loans to the agriculturist and non-agriculturists of the rural areas.
NABARD had been granted Rs. 2000 crore as a special fund by RBI for providing credit to Food Parks, also known as agro-processing units. The fund is referred to as the Food Processing Fund – 2014-15. The fund is provided either directly or through other financing agencies via consortium arrangements.
The purpose of this fund is to aid in the development of the food processing sector in the country, create job opportunities and reduce wastage of agricultural produce.
Features of Food Processing Fund:
NABARD was allocated Rs. 5000 crore in 2014-15 to aid in building an infrastructure for the storage of agricultural commodities. The fund was labelled as the Warehouse Infrastructure Fund of 2014-15. The fund gives loans to private and public sectors for construction of cold storages, silos, warehouses and other cold chain infrastructure.
Features of Warehouse Infrastructure Fund:
Marketing federations and cooperatives are involved in procurement of agricultural products such as milk, etc. The federations carry out activities such as aggregation, value addition, storage and marketing of the agricultural commodity. NABARD provides timely short term financial support to meet the day to day requirements of these cooperatives and federations.
RIDF or Rural Infrastructure Development Fund was established at NABARD with an intention to provide low cost credit support to State Governments and corporations owned buy them. The loans could be availed for the purpose of expediting ongoing projects including soil conservation, medium to minor irrigation, watershed management and other rural infrastructure related projects.
NABARD offers loans or credit to Co-operative Banks (StCBs or DCCBs) through their product called the Short Term Multipurpose Credit Product or STMPCP. This lending scheme enables the above mentioned financial institutions to profit more by diversifying business operations by expanding their lendable resources.
NABARD has set up the Producers Organisation Development Fund (PODF) in an attempt to support producer organisations. NABARD offers credit support in the form of loans, grants, or both.
NIDA has been designed for financially supporting State Governments and organisations owned by the state government. NIDA provided credit support for longer repayment tenures and flexible terms. The NIDA funding is a term loan and provides up to a repayment tenure of 15 years.
PACS provides facilities such as agro-storage, processing, service, transportation and marketing to the farmers. NABARD supports some PACS who are identified by PODF’s committee.
The UPNRM project was launched to streamline NRM related interventions by integrating existing as well as future Indo-German NRM efforts of the NABARD. The initiative enables NABARD’s possibility to specialise in the country’s NRM issues.
A GST rate of 18% will be applicable on banking services and products from 01 July, 2017.
The National Bank for Agriculture and Rural Development recently got into a deal with Green Climate Fund to inject $100 million into a project that is created to unlock initiatives in the private sector to enhance solar power in India. Tata Cleantech Capital Ltd. will execute the project and the Green Climate Fund will be supported by the National Bank for Agriculture and Development, which works as the National Implementing Entity for the fund that is promoted by UNFCC to support developing countries with climate change, according to the bank. The agreement between the two parties was signed in Poland, and India – the host of the International Solar Alliance, has plans to create 100gw solar power capacity, adding that it is receiving support from Nabard to finance these projects as well as installations. Apart from the Green Climate Fund, Nabard is also the National Implementing Entity for Adaptation Fund of UNFCC and National Adaptation Fund for Climate Change.
20 December 2018
Rs.935 crore has been sanctioned to Karnataka by the National Bank for Agriculture and Rural Development as loan assistance for enhancing infrastructure in rural areas over the course of FY 2018-19, according to the chief general manager of the National Bank for Agriculture and Rural Development in Karnataka, PVS Suryakumar. Projects in the rural areas include the construction of mega market yards in Dasnapur, Karatgi and Rannebennur. There are 148 godowns and and 362 covered auction platforms included in the APMCS. Construction is also expected to extend to rural roads, with 108 veterinary hospitals, and 71 bridges also being constructed. The veterinary institutions covered will include 87 vet dispensaries, 4 polyclinics and 17 vet hospitals. As of this week, the National Bank for Agriculture and Rural Development has sanctioned an amount to the tune of Rs.14,537 crore to Karnataka.
20 December 2018
The National Bank for Agriculture and Rural Development (NABARD) has recently approved a total funding of Rs.65,635 crore in order to facilitate 93 irrigation projects that fall under the Pradhan Mantri Krishi Sinchayi Yojana (PMKSY).
In totality, a collection of 99 irrigation projects are currently being funded by NABARD. Out of these 99 projects, NABARD has successfully been able to prioritise 93 irrigation projects. The Chairman of NABARD recently stated that the projects will receive ample support given that the State Government disburses their shares of the fund and the active role played by the Union Water Ministry.
Further, NABARD Chairman went on to say that 18 irrigation projects have successfully been taken care of and 9 of them are about to get completed in the near future. According to the report, NABARD has, until now, disbursed Rs.23,402.72 crore for more than 80 irrigation projects in India.
Under PMKSY, more than half of the projects have been undertaken in the state of Uttar Pradesh. He also said that the general allocation of funds from the State Government usually takes more time, even though the Centre’s funds have been accumulated. In conclusion, the Chairman of NABARD hailed the State Government for having disbursed Rs.7,000 crore in total for all irrigation projects until now.
18 October 2018
The Karnataka regional office of National Bank for Agriculture and Rural Development (Nabard) had recently hosted a B2B Grameena Habba in Bengaluru for widening the market for rural artisans, weavers, craftsmen, rural entrepreneurs, and farmers' producer organisations. The bank has invited wholesalers and online marketing vendors to take part in this fest held at Premachandra Hall in Jayanagar. This fest worked as a platform for connecting producers with the marketers thus providing business to business interaction opportunity to the rural artisans. It also enabled them to improve their marketing network for better sustainability and business upgradation. The artisans got to know the consumer requirements and how to customise their products as per the current market trends. Nabard had procured a huge variety of products from various parts of Karnataka for this fest which includes Kausti embroidery saris, Mulaklmuru saris, Channapatna toys, organic millets and pulses, spices and dry fruits, and banana fiber products. As a matter of fact, Nabard lends its support to the rural artisans through its 'Gramya Vikas Nidhi' fund for promoting rural innovation, and sustainable rural livelihood options.
12 October 2018
Rs.335 crore was sanctioned by the National Bank for Agriculture and Rural Development under RIDF (Rural Infrastructure Development Fund) to the state of West Bengal. Allotted only last month, the fund is expected to be used for more than 150 minor irrigation projects as well as 23 flood protection projects, according to a statement that was recently released by the National Bank for Agriculture and Rural Development. The minor irrigation projections are set to be advantageous to over 20,000 hectares and cover more than three lakh people across almost 700 villages in 22 districts in West Bengal. The flood protection projects, on the other hand, are expected to address the issue of rapid bank erosion created by rivers, according to the statement released by the National Bank for Agriculture and Rural Development. The statement also said that implementing 23 flood protection projects is expected to save approximately 5,080 hectares of home stead and agricultural lands of farmers from more than 60 villages that fall under the erosion area.
27 September 2018
The Rajasthan Government has requested the National Bank for Agriculture and Rural Development (NABARD) to release interest subvention to the Rajasthan State Cooperative Bank. The government has also suggested creating a revolving fund to enable the Short-term Cooperative Credit Structure so that farmers can avail interest subvention in a timely manner.
This request is based on the Interest Subvention Scheme (ISS) implemented by the Government of India since 2006-07. This scheme allowed farmers to take short-term crop loans up to Rs.3 lakh at an interest rate of 7% p.a. The Government also introduced the Prompt Repayment Scheme (PRI) for all prompt payers. This provision offers crop loans at 3% p.a. for prompt payers where the repayment tenure is either one year from the disbursement date or as per the tenure fixed by the bank, whichever is earlier.
Currently, the Government of India provides funds for this scheme on a reimbursement basis which depends on the audited claims of the concerned banks. The Rajasthan Government has proposed the interest subvention request so that NABARD can provide funds in advance to the State Cooperative Bank.
8 September 2018
The Karnataka government is in talks with the National Bank for Agriculture and Rural Development (NABARD) in an attempt to increase the amount of the refinance limit. The idea behind this proposal is to help waive crop loans that farmers have taken from co-operative banks in the state.
The current limit set by NABARD for the refinance limit is 40% and the state is hoping to have that limit increased to 75%. According to Karnataka’s Minister for Co-operation, the increase in the refinance limit will provide an additional Rs.4,500 crore that will help ease some of the financial burden for farmers that do not fall under the scope of commercial public sector banks and co-operative banks. The additional amount would help include those farmers who have been left out of the loan waiver scheme.
5 September 2018
The honourable Prime Minister, in an interview, said that the government is working towards women empowerment as that is crucial for the progress of a nation. Women-led development is another area that the government will be focussing on, he said.
On the matter of financial inclusion of the women in the country, Modi said that the Pradhan Mantri MUDRA Yojana (PMMY) has been instrumental in providing more than 13 crore loans to eligible individuals, 70% of these being women. The National Rural Livelihoods Mission is also responsible for increasing the access to credit for eligible SHGs that include women.
Additionally, the Pradhan Mantri Awas Yojana has preference to female borrowers. These loan schemes have been useful for women’s empowerment in the country, said Modi.
4 September 2018
The Regional Office of National Bank of Agriculture and Rural Development (NABARD) in Itanagar organised a state-level workshop to sensitise the masses about the Dairy Entrepreneurship Development Scheme (DEDS). This workshop was attended by the senior officials of the Arunachal Pradesh Government, various representatives of the banks in the state, and farmers. The Animal Husbandry & Dairy Development Secretary, Mr. Bidol Tayeng, addressed the attendants during this workshop and stated that the dairy sector is likely to play a key role in helping the farmers double their income by the end of 2022. Furthermore, he also summarised the budget allocated by the State Government for the current financial year. He announced that the government has allocated sufficient amount of money for the ‘White Revolution’. This will include offering a provision of capital subsidy at 50% to livestock and dairy farmers, refurbishing Arun Dairy in Itanagar, and establishing a high-tech unit for cattle breeding in Arunachal Pradesh.
During the event, Mr. Tayeng highlighted how important it is for the concerned state government departments, the banks, and NABARD to work together in order to frame the guidelines and make the scheme a success in Arunachal Pradesh. He also stressed the fact that the DEDS beneficiaries should be monitored jointly by the NABARD, state governments, and banks. Furthermore, Mr. Tayeng welcomed the idea proposed by NABARD to develop the sector in clusters. General Manager of Regional Office, NABARD, Mr. Gyanendra Mani, spoke on the occasion and highlighted the importance of dairy and animal husbandry sector activities in impacting the livelihood pattern in the rural areas of the Arunachal Pradesh. Mr. Mani urged the officials to maintain transparency while implementing the DEDS and NLM schemes in order to ensure that the loans can be recovered in an effective manner.
25 August 2018
The National Bank For Agriculture And Rural Development (NABARD) recently organised a Dairy Entrepreneurship Development Scheme (DEDS) workshop in Udaipur, Tripura on 8 August 2018. The DEDS scheme has been revised and implemented on 1 September 2010. The workshop on Dairy Entrepreneurship Development Scheme was organised at a conference hall of Animal Resources Development Department (ARDD) in Udaipur city of Gomati district located in the state of Tripura. This workshop was attended by the Deputy Director of ARDD, Mr. Samarendra Das, and District Development Manager of NABARD, Mr. Khokan Dey, along with several executives from the different banks in the state. The main objective of the DEDS workshop was to create awareness regarding the scheme which offers assistance in setting up small dairy farms and other components that will drive structural change in the dairy sector. On behalf of NABARD, the workshop held at Udaipur has announced that the Department of Animal Husbandry, Dairying and Fisheries (DAHD&F) of the Government of India has introduced a pilot scheme in 2005-06 known as Venture Capital Scheme for Dairy and Poultry. The main objective of this scheme is to set up modern dairy farms for the production of fresh milk, encouraging heifer calf breeding, conserving a good breeding stock, etc. It also aims to bring structural changes in the unorganised sector to encourage farmers to take up initial milk processing at the village level. This will not only help improve the quality of milk, but will also help update the technology used to handle milk at a commercial scale. Furthermore, this scheme also promotes the generation of employment and introduction of better infrastructure for the unorganised segments. This scheme is expected to benefit farmers, entrepreneurs, corporates, and non-governmental organisations (NGOs) in addition to groups from the organised and unorganised sectors. Under the groups of organised sectors, this can benefit self-help groups, milk unions, dairy co-operative societies, milk federations, and many more.
24 August 2018
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