National Bank For Agriculture and Rural Development-11

www.reportjunction.
com
www.sansco.net
ANNUAL REPORT 2010-2011
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

ISIEmergingMarketsPDF in-spjainmr from 115.115.176.107 on 2013-09-02 17:18:09 EDT. DownloadPDF. Downloaded by in-spjainmr from 115.115.176.107 at 2013-09-02 17:18:09 EDT. ISI Emerging Markets. Unauthorized Distribution Prohibited.
www.reportjunction.com
www.sansco.net
www.sansco.net
Letter of Transmittal
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT Plot: C-24/G, Bandra-Kurla Complex Post Box: 8121, Bandra (East) Mumbai - 400 051 CHAIRMAN Ref.No.NB.Secy./ 697 / AR-1/2011-12 11 July 2011 20 Ashadha 1933 (Saka) The Secretary Government of India Ministry of Finance Department of Financial Services New Delhi- 110 001 The Governor Reserve Bank of India Central Office Mumbai- 400 001 Dear Sir In pursuance of Section 48(5) of the National Bank for Agriculture and Rural Development Act, 1981, I transmit herewith the following documents : i. A copy of the audited Annual Accounts for the year ended 31 March 2011 alongwith a copy of the Auditors Report and Two copies of the Annual Report of the Board of Directors on the working of st National Bank during the year ended 31 March 2011.
st
ii.
Yours faithfully
Prakash Bakshi
www.sansco.net
www.sansco.net
Board of Directors
Rakesh Singh Chairman
Directors appointed under Section 6(1)(c) of the NABARD Act, 1981
Dr. K. C. Chakrabarty
Lakshmi Chand
Shashi Rekha Rajagopalan
Directors appointed under Section 6(1)(d) of the NABARD Act, 1981
P. K. Basu
B. K. Sinha
Alok Nigam
Directors appointed under Section 6(1)(e) of the NABARD Act, 1981
R. K. Meena
A. K. Sinha
K. Jayakumar
M. I. Khandey
Dr. K. G. Karmakar Managing Director
www.sansco.net
www.sansco.net
Contents
Page No. NABARD at a Glance Key Data References Principal Officers Highlights .................................................................................................................................................................................... i I. Economic Environment .................................................................................................................................................... 1 Global Economy ........................................................................................................................................................... 1 Indian Economy ............................................................................................................................................................ 2 II. Development and Promotional Initiatives .................................................................................................................. 17 Credit Planning ........................................................................................................................................................... 17 Farm Sector ................................................................................................................................................................. 17 Rural Non-Farm Sector ............................................................................................................................................... 26 Financial Inclusion ...................................................................................................................................................... 28 Micro-Finance .............................................................................................................................................................. 30 NABARD Consultancy Services .................................................................................................................................. 34 Research and Development Activities ......................................................................................................................... 35 III. Business Operations ....................................................................................................................................................... 39 Production Credit ........................................................................................................................................................ 39 Investment Credit ........................................................................................................................................................ 43 Rural Infrastructure Development Fund ...................................................................................................................... 54 IV. Capacity Building of Client Institutions ..................................................................................................................... 63 Institutional Development ........................................................................................................................................... 63 Supervision of Banks .................................................................................................................................................. 76 V. Organisation, Corporate Governance and Management .......................................................................................... 79 Management ............................................................................................................................................................... 79 Human Resources Management ................................................................................................................................. 80 Administration and Other Matters ............................................................................................................................... 82 VI. Financial Performance & Management of Resources ............................................................................................... 87 Sources of Funds ......................................................................................................................................................... 87 Uses of Funds .............................................................................................................................................................. 89 Income and Expenditure ............................................................................................................................................. 90 Annual Accounts 2010-11 ...................................................................................................................................................... 91 Auditors Report ....................................................................................................................................................................... 92 Balance Sheet .......................................................................................................................................................................... 93 Profit and Loss Account .......................................................................................................................................................... 94 Schedules to Balance Sheet ................................................................................................................................................... 95 Cash Flow Statement ............................................................................................................................................................. 117 Consolidated Financial Statements 2010-11 ....................................................................................................................118 E-mail Addresses of NABARD Head Office Departments at Mumbai ................................................................... 124 Regional Offices/Cell/Training Establishments ................................................................................................................. 125 Abbreviations ........................................................................................................................................................................ 127
Boxes
1.1 Union Budget 2011-12: Highlights on Agriculture and Rural Development ................................................ 8 1.2 Working Groups for Twelfth Five Year Plan (2012-2017) .................................................................... 8 2.4 UPNRM Projects - A Success Story ............................ 25 2.5 Salient features of Natueco Farming (10 Gunta Model) ......................................................... 26 2.6 Dalbandhus of Tripura ................................................. 32 2.7 Findings of the Study on Organised Agri-food Retailing and Supply Chain Management ................. 36 3.1 Evaluation Studies on RIDF Projects : Feedback on Benefits Realised .......................................................... 61 3.2 NABARD Infrastructure Development Assistance ...... 62 4.1 Impact of GoI Revival Package for STCCS ............... 72 5.1 Repositioning of NABARD - Pilot interventions ........ 80
1.3 Task Force "to look into the issue of a large number of farmers, who had taken loans from private moneylenders, not being covered under the loan waiver scheme" : Recommendations .......................... 14 2.1 Mid-Course Evaluation of Watershed Projects supported under WDF ................................................. 18 2.2 Outcome of Village Development Programmes Phase I .......................................................................... 19 2.3 Exotic Vegetables in Low Cost Poly-houses .............. 20
www.sansco.net
Tables
Table 1.1 : Overview of Global Economy .............................. 1 Table 1.2 : Production of Cereals, Vegetables & Milk in the World ................................................. 2 Table 1.3 : Economic Indicators ............................................. 3 Table 1.4 : Sectoral Growth Rates of GDP ............................. 3 Table 1.5 : Trends in Exports and Imports ............................. 5 Table 1.6 : Trends in Rainfall and Water Storage ................... 5 Table 1.7 : Area Sown under Major Crops ............................. 6 Table 1.8 : Agency-wise Ground Level Credit Flow ............... 7 Table 1.9 : Sub-sector-wise Ground Level Credit Flow for Agriculture & Allied Activities ............................... 9 Table 1.10 : Production of Major Crops ................................ 10 Table 1.11 : Production, Consumption and Exports of Major Plantation Crops ..................... 11 Table 1.12 : Area and Production of Major Horticulture Crops . 12 Table 1.13 : Gross Capital Formation in Agriculture .............. 12 Table 1.14 : Agency-wise, Year-wise Kisan Credit Cards Issued .. 13 Table 1.15 : Minimum Support Prices for Major Crops ................ 15 Table 2.1 : Artificial Groundwater Recharge through dugwells 23 Table 3.11 : Tranche-wise Sanctions and Disbursements On-going RIDF XI to XVI ................................ 56 Table 3.12 : Utilisation Percentage under RIDF (I TO XVI) ... 57 Table 3.13 : Year/Tranche-wise Disbursements and Deposits received under RIDF ............................ 58 Table 3.14 : Cumulative Economic and Social Benefits of RIDF Projects ......................... 59 Table 3.15 : State-wise Benefits Estimated Under RIDF I to XVI . 60 Table 4.1 : Growth of PACS ................................................. 63 Table 4.2 : Growth of Short-Term Co-operative Banks ........ 63 Table 4.3 : Growth of Long-Term Co-operative Banks ........ 64 Table 4.4 : Working Results of Co-operative Banks ............. 64 Table 4.5 : Accumulated Losses ............................................ 64 Table 4.6 : Region-wise Working Results of SCB ................. 65 Table 4.7 : Region-wise Working Results of DCCB .............. 65 Table 4.8 : Region-wise Working Results of SCARDB ......... 66 Table 4.9 : Region-wise Working Results of PCARDB ......... 66 Table 4.10 : Composition of NPA of Co-operative Banks ..... 67 Table 4.11 : Percentage of Recovery of loans to Demand ..... 68 Table 4.12 : Frequency Distribution of Co-operative Banks according to Range of Loan Recovery Percentage ................................. 68 Table 4.13 : Frequency Distribution of States/UT according to Level of Loan Recovery of SCB and DCCB .................................................. 69 Table 4.14 : Frequency Distribution of States/UT according to Levels of Loan Recovery of SCARDB and PCARDB ...................................... 69 Table 4.15 : Elected Boards under Supersession ................... 70 Table 4.16 : Indicators of Performance of RRB ........................ 73 Table 4.17 : Region-wise Working Results of RRB ................. 74 Table 4.18 : Frequency Distribution of States According to Levels of Recovery of RRB ................................. 74 Table 4.19 : Status of Financial Inclusion - RRB .................... 76 Table 5.1 : Promotions Effected During the Year ................. 81 Table 5.2 : Total Staff Strength ............................................. 81 Table 6.1 : Sources of Funds .................................................. 87 Table 6.2 : Uses of Funds ...................................................... 89
Table 2.2 : Externally Aided on-going Projects ................... 24 Table 2.3 : Funds Utilisation - FIF and FITF ........................ 29 Table 2.4 : Progress of the Micro-Finance Programme ........ 30 Table 2.5 : Grant Assistance Extended to various Partners in SHG-Bank Linkage Programme ....... 31 Table 2.6 : Training of RFI Personnel ................................... 37 Table 3.1 : Short-Term Refinance (Production Credit) for the Last Five Years ........................................ 39 Table 3.2 : Sanction of ST(SAO) Credit Limits to SCB ...... 39 Table 3.3 : Sanction of ST(SAO) Credit Limits to RRB ...... 41 Table 3.4 : Rates of Interest on Refinance ............................ 42 Table 3.5 : Agency-wise Disbursements ................................ 44 Table 3.6 : Region-wise Disbursements ................................ 45 Table 3.7 : Sector-wise Disbursements ................................ 46 Table 3.8 : Projects Sanctioned under Cold Storages and Rural Godowns .................... 47 Table 3.9 : Units Financed and Completed under Refinance Support .............................................. 53 Table 3.10 : Sector-wise Projects and Amounts Sanctioned .. 55
Charts
Chart 1.1-(a) : Annual Average Inflation Rate for Major Sub-groups of WPI .................................... 4 Chart 1.1-(b) : Monthly Inflation Rate for Major Sub-groups of WPI .............................................. 4 Chart 3.1 Chart 3.2 : Financial Support by NABARD ......................... 39 : Agency-wise Share in Refinance Disbursements . 44 Chart 3.6 Chart 3.3 Chart 3.4 Chart 3.5 : Region-wise Share in Refinance Disbursements . 45 : Tranche-wise Sanction-RIDF I to XVI ................. 55 : Sector- wise Share in Amounts Sanctioned under RIDF ..................... 55 : Year-wise Disbursements under RIDF I to XVI ... 56
www.sansco.net
NABARD AT A GLANCE
(` crore) Sources of Fund 2011 2010 Net Accretion Capital 2,000 2,000 0 Cash and Bank Balances Collateralised Borrowing and Lending Obligation Investments in NRC(LTO) Fund 14,468 14,417 51 a) GOI Securities NRC (Stabilisation) Fund 1,577 1,566 11 b) ADFC Equity c) AFC Equity Deposits 277 505 (-)228 d) SIDBI Equity e) AICI Ltd. Bonds and Debentures 26,788 20,004 6,784 f) NCDEX Ltd. & MCX Ltd. g) Nabcons Borrowings from GoI 124 147 (-)23 h) Mutual Fund i) Biotech Venture Fund Borrowings from Commercial Banks 0 500 (-)500 j) Treasury Bills k) Commercial Paper Foreign Currency Loan 503 494 9 l) Non Convertible Bonds m) Equity Shares of other Institutions n) Debentures in Nature of Advance Certificate of Deposits 137 379 (-)242 Loans and Advances Commercial Paper 6,448 2,680 3,768 a) Production & Marketing Credit b) Conversion of Production Credit into MT Loans c) Liquidity Support Term Money Borrowings 110 763 (-)653 d) MT & LT Project Loans e) Interim Finance RIDF Deposits 67,878 59,869 8,009 f) LT Non-Project Loans g) Other Loans STCRC Fund 14,622 9,622 5,000 h) RIDF Loans i) Co-finance (Net of Provision) Fixed Assets Other Funds Total 6,171 1,58,872 7,593 1,36,292 (-)1,422 22,580 Others Assets Total 0 1,862 225 1 0 744 0 0 0 1,118 225 1 2,548 19 1 48 60 18 5 390 10 1,991 15 1 48 60 15 5 900 5 557 4 0 0 0 3 0 (-)510 5 11,218 9,628 Uses of Funds 2011 2010 Net Utilisation 1,590
Reserves & Surplus
11,863
10,675
1,188
228
228
Borrowings against STD
360
360
13,461
13,461
33,885
24,073
9,812
Collateralised Borrowing and Lending Obligation 0 215 (-)215
193 0 25,435 0 167 182 66,078 88
0 20 35,742 1 199 131 60,255 84
193 (-)20 (-)10,307 (-)1 (-)32 51 5,823 4
Other Liabilities
5,546
4,863
683
230 2,520
235 2,140
(-)5 380 22,580
1,58,872 1,36,292
www.sansco.net
KEY DATA REFERENCES

Page No. Particulars Unit Numerical Value 2009-10 Economic Indicators Overall GDP1 % Growth Agri GDP1+ % Growth Share of Agri GDP in total GDP % South-west Monsoon % deviation from normal North-east Monsoon GLC % increase Foodgrains production million tonnes Oilseeds production million tonnes Sugarcane production million tonnes Cotton production million bales++ KCC Issued million Development and Promotional initiatives Watersheds No. Tribal development projects No. FIPF- projects No. FTTF No. of projects Farmers Club No. of clubs NABARD-KfW Projects No. RIF- promotional programmes No. of projects REDP No. SCC Issued lakh FITF & FIF No. of projects SHG Loan Disbursed* lakh Consultancy Assignments - Contracted No. of projects R&D Fund - Sanction No. of projects Business Operations Financial Support by NABARD Refinance - ST Credit ST (SAO) - SCB No. Weavers - SCB No. - RRB No. ST (OSAO) - RRB Refinance - Investment Credit Farm Sector NFS SHG Co-financing projects No. RIDF Loans - Sanction No. of projects - Disbursement Capacity Building of Client Institutions ST Co-operatives SCB in profit @ No. DCCB in profit @ No. LT Co-operatives @ SCARDB in profit No. PCARDB in profit @ No. ST Co-operatives - NPA Position SCB - NPA @ % to loan O/S DCCB - NPA @ % to loan O/S LT Co-operatives - NPA Position SCARDB - NPA@ % to loan O/S PCARDB - NPA @ % to loan O/S RRB RRB in profit No. RRB - NPA Position % to loan O/S ^@@ Inspection of banks No. Co-operative banks@@ No. RRB@@ No. Financial Performance & Management of Resources Market Borrowings Total Financial Resources 8.0 QE 0.4 QE 14.6 (-)23 8 27.36 218.11 24.88 292.30 24.22 9.01 59 79 17 151 16,590 8 155 2,627 0.63 47 16.09 83 9 20 5 74 8 39,015 2010-11 8.5 RE 6.6 RE 14.4 RE 2 21 16.19 235.88 3rd AE 30.25 3rd AE 340.54 3rd AE 33.92 3rd AE 7.26 66 126 45 512 21,903 8 122 3,327 1.20 205 15.86 62 10 21 4 80 3 41,779 Amount (` crore) 2009-10 3,84,514 34,982 196 236 1.55 4.9 7 17.7 10.48 240 40.97 12,253 17.11 1.01 57,068 24,715 18,109 177 6,832 542 12,009.08 4,029 3,466 3,174 12 15,630 18,888 2010-11 4,46,779 43,370 220.57 373.97 5.47 44.97 135.75 11 12.34 514.26 120.10 14,453 24.13 1.09 60,483 34,196 23,759 215.75 9,799.69 600 13,485.87 5,055 3,446 2,545 14 18,314.88 12,060.04
1 2 2 4 5 7 9 10 10 10 13 18 20 20 21 21 24 26 27 27 29 30 34 35 39 40 40 41 41 42 46 46 46 46 55 55
64 64 64 64 65 65 66 66 73 73 76 76 76
26 321 12 343 11.91 18.02 30 42 79 3.72 343 282 61
28 323 11 307 9.08 13.00 33 43 79 3.50 302 260 42
395 1,603 404 220 5,764 17,928 4,948 4,742 2,515
463 1,545 97 154 4,469.16 16,015.45 5,627.56 4,867.04 3,470
87 87
25,254 1,36,292
34,747 1,58,872
RE : Revised Estimate + : Includes agriculture, forestry and fishing @ : Data pertains to financial years 2008-09 & 2009-10
1 : At Factor Cost at 2004-2005 prices ++: Of 170 kgs each ^ : Voluntary inspections * : Data pertain to 2008-09&2009-10
AE : Advanced Estamate @@ : Statutory Inspections
www.sansco.net
PRINCIPAL OFFICERS
(31 March 2011) EXECUTIVE DIRECTORS
S. K. Mitra
Amaresh Kumar
Dr. A. K. Bandyopadhyay
Dr. Prakash Bakshi
CHIEF GENERAL MANAGERS (Rural Development Banking Service)
V. Ramakrishna Rao
C. R. Patnaik (Odisha)
B. S. Shekhawat
R. Narayan (Tamil Nadu)
C. K . Gopalakrishna
P . Satish (Maharashtra)
K C Shashidhar (Kerala)
Pankaj Pandit (Uttarakhand)
Dr. Venkatesh Tagat (Karnataka)
S . C . Kaushik (Punjab )
P . Mohanaiah (Andhra Pradesh)
S. T. Raghuraman
Suraj Bhan
J. C. Mishra
D. P . Mishra (Uttar Pradesh)
M. V. Ashok (Jharkhand)
G. C. Panigrahi
S. G. Siddesh (Gujarat)
K . K. Gupta
S. Akbar (Madhya Pradesh)
A. K. Srivastava (Assam)
B. B. Nayak
S. Balan
H. K. Talreja (Haryana)
M. L. Sukhdeve (Jammu & Kashmir)
K. Muralidhara Rao (Rajasthan)
Dr. S. L. Kumbhare
P . C. Mishra
J. G. Menon
V. Mohan Doss (Bihar)
S. K . Singh
Niraj Kumar Gupta
A. D. Ratnoo (Himachal Pradesh)
M. V. Patro (NABCONS)
N. S. P . Rao (West Bengal)
www.sansco.net
K. S. Padmanabhan
R. Amalorpavanathan NBSC, Lucknow
Dr. H. N. V. Prasad
A. N. Rajwani
P . C. Sahoo (Chhattisgarh)
CHIEF GENERAL MANAGERS (Legal/Technical Service)
U. N. Srivastava (Legal)
Neeraj Kumar (Technical)
Dr. P . Renganathan (Technical)
OFFICERS-IN-CHARGE OF REGIONAL OFFICES/CELL TRAINING INSTITUTIONS
H. R. Dave (New Delhi)
A. P . Sandilya (Goa)
B. G. Mukhopadhyay (Arunachal Pradesh)
G. R. Chintala (Andaman & Nicobar Islands)
B. K. Dey (Sikkim)
M. M. Baheti (RTC, Mangalore)
Dr. P . M. Ghole (Mizoram)
Dr. U. S. Saha (Nagaland)
R. S. Jodha (Meghalaya)
R. Sundar (Tripura)
S. V. Nemlekar (Manipur)
P. L. Negi (Srinagar Cell)
www.sansco.net
Highlights
Economic Environment
1. The World Economic Outlook (WEO) of the 6. Total crop acreage under both kharif and rabi
International Monetary Fund has projected the growth in global output at 4.4 per cent in 2011, a decline of 0.6 percentage points relative to 2010. The Gross Domestic Product (GDP) of the country has registered a growth of 8.5 per cent in 2010-11 compared to a growth of 8.0 per cent in 2009-10. 2. The high growth trajectory of GDP has been
during 2010-11 indicated an increase of 9.40 million hectares over the previous year. The crop acreage under various crops during kharif 2010 was 103.90 million hectares, which was 6.88 million hectares more than the area covered during the corresponding period of kharif 2009. The major increase in area was under rice (2.3 million hectares). Area sown under rabi crops in 2010-11 was more by 2.52 million hectares, with growth in area under rabi foodgrains at 3.41 per cent. 7. The production of breeder and foundation seed is
facilitated due to a rebound in agriculture from 0.4 per cent during 2009-10 to 6.6 per cent during 2010-11. The contribution of agriculture sector to the GDP was 14.2 per cent during 2010-11, a marginal decline of 0.2 per cent, as compared to 2009-10. The livestock sector contributed 3.5 per cent to the GDP and 28.4 per cent to GDP from agriculture. 3. The overall inflation rate as measured by changes in the Wholesale Price Index on a monthly basis was 9.4 per cent during 2010-11 as compared to 3.6 per cent during the fiscal 2009-10. Food inflation was high due mainly to rise in prices of rice, vegetables, fruits, milk, eggs, meat and fish. 4. Agricultural exports increased from ` 81,750 crore
estimated at 1.1 and 18.5 lakh quintals, respectively, while certified/quality seed distribution was 321.36 lakh quintals during 2010-11. The irrigation potential created under all types of irrigation structures has increased from 81.10 million hectares in 1991-92 to 108.2 million hectares by March 2010. Utilisation was to the extent of 85 per cent. 8. As against the target of ` 3,75,000 crore of credit flow
to agriculture for 2010-11, the banking system disbursed during 2008-09 to ` 85,269 crore during 2009-10, registering a growth of 4.30 per cent. The percentage share of agriculture and allied products in the total exports was 9.9 during 2009-10 as compared to 9.0 in 2008-09. The share of food and allied products in the total imports of the country increased from 2.1 per cent in 2008-09 to 3.7 per cent in 2009-10. 5. The country as a whole received 912.8 mm of ` 4,46,779 crore, as on 31 March 2011, achieving 119.14 per cent of the target. Commercial Banks, Co-operative Banks and Regional Rural Banks (RRB) disbursed ` 3,32,706 crore, ` 70,105 crore and ` 43,968 crore, contributing 74 per cent, 16 per cent and 10 per cent respectively, of the total credit flow during 2010-11. 9. During 2010-11, 7.26 million Kisan Credit Cards
were issued by banks with sanctioned credit limit of ` 43,370 crore. Of the cumulative 100.93 million credit cards issued, as at the end of March 2011, 45.03 million cards were issued by commercial banks, followed by Banks. 40.70 million cards by co-operative banks and 15.20 million cards by Regional Rural
rainfall, which was 2.0 per cent more than the Long Period Average (LPA) during the South-West monsoon (June-September) 2010, as compared to 23 per cent less than the LPA in the corresponding period last year. Rainfall during the North-East monson was also 21 per cent more than the LPA.
i
www.sansco.net
10.
Out of ` 29,240 crore received under the
12. According to the 3rd Advance Estimates, the foodgrain production during 2010-11 has been estimated at 235.88 million tonnes, as compared to 218.11 million tonnes (final estimate) during 2009-10, registering an increase of over 8 per cent compared to the previous year. Area and production under horticulture crops increased from 20.7 million hectares and 214.7 tonnes, respectively, during 2008-09, to 20.9 million hectares and 223.1 million tonnes, respectively, during 2009-10. Indias global share in world production, on a two year average basis, as per Food and Agriculture Organisation (FAO) estimates, was 10.29 per cent for cereals, 9.23 per cent for vegetables and 15.81 percent for milk.
Agriculture Debt Waiver and Debt Relief Scheme 2008, the cumulative disbursements by NABARD was ` 29,071 crore against claims of ` 29,102 crore. The share of SCB, SCARDB and RRB stood at ` 18,289 crore, ` 3,810 crore and ` 6,972 crore, respectively. 11. The GCF in agriculture and allied sectors from ` 86,611 crore in 2005-06 to
increased
` 1,33,377 crore (at 2004-05 prices) in 2009-10. The GCF in agriculture and allied activities, as a proportion to GDP in the sector, increased from 14.57 per cent in 2005-06 to 20.30 per cent in 2009-10.
Development and Promotional Initiatives

Credit Planning
13. During the year, Potential Linked Credit Plans (PLP) were prepared for 624 districts in the country, to guide the banks in the credit planning excercise and for infrastructure development in 2011-12. State Focus Papers, presenting a comprehensive picture of the potential available in various sectors of the rural economy and critical infrastructure gaps to be bridged, were discussed with all State Governments and banks. these components were ` 350.03 crore and ` 33.18 crore, respectively. Under the Special Plan for Bihar component of the Rashtriya Sam Vikas Yojana (RSVY), a total of 79 projects covering an area of 84,444 ha., had been sanctioned, of which six are at Capacity Building Phase and 73 at Full Implementation Phase. A sum of ` 20.18 crore was disbursed during the year under the programme and the cumulative disbursement, as on 31 March 2011, stood at ` 34.17 crore. 16. The Climate Change Adaptation Project in implemented Trust is the by first of the its Watershed kind being
Farm Sector
14. During the year, 66 watershed projects were sanctioned, taking the cumulative number of such projects to 579, covering an area of 4.86 lakh ha., in 14 states, with a total commitment (loan and grant component) of ` 220.57 crore. Under the Prime Minister's Relief package for 31 distressed districts in four States, 71,127 ha., were taken up for implementation during the year, taking the cumulative area and financial commitment to 9.42 lakh ha., and ` 1,023 crore, respectively. 15. An amount of ` 152.26 crore and ` 3.18 crore were
Akole & Sangamner Talukas of Ahmednagar District, Maharashtra Organistion
considered under WDF. Swiss Agency for
It involves a total financial and Cooperation
outlay of ` 34.15 crore, with grant assistance from Development (` 10.80 crore) & NABARD (` 20.62 crore) and contributions from villagers (` 2.73 crore). The project is expected to develop a replicable model for Climate Change Adaptation in semi-arid and rainfed regions of the country.
disbursed under watershed projects as grants and loans during the year; the cumulative disbursements under
17.
The Village Development Programme is now
being implemented in 801 villages spread across 25
ii
www.sansco.net
States. The programme was completed in 115 villages and is under different stages of implementation in 686 villages.
respectively, were released for Sultanpur and Rae Bareli districts of Uttar Pradesh, during the year, taking the cumulative disbursements to ` 7.72 crore. ` 8.98 crore and An amount of ` 27.48 crore was
18.
During the year, financial assistance of ` 373.97
sanctioned for 2,816 units under Dairy Venture Capital Fund (DVCF), ` 28.57 crore for 342 units under Poultry Venture Capital Fund (PVCF) and ` 9.69 crore for 1,978 units under Dairy Entrepreneurship Development Scheme (DEDS). The cumulative sanctions as on 31 March 2011 stood at ` 174.39
crore under Tribal Development Fund was sanctioned for 126 projects benefiting 94,163 tribal families in various states. Cumulatively, ` 917.60 crore was sanctioned to 317 projects covering 2.50 lakh families. 19. During 2010-11, under Farm Innovation and
crore for 18,184 units under DVCF, ` 48.18 crore for 633 units under PVCF, and ` 9.69 crore for 1,978 units under DEDS. Under the programme of Artificial Groundwater Recharge through Dugwells, net subsidy of ` 280.637 crore was released by NABARD, for construction of 7.13 lakh Artificial Recharge Structures.
Promotion Fund (FIPF), 45 projects were sanctioned in 15 states, with grant assistance of ` 5.47 crore. Cumulatively, 123 projects were sanctioned with a financial support of ` 11.65 crore. Under the Farmers Technology Transfer Fund (FTTF), 512 diverse and innovative projects in 27 states were sanctioned during the year 2010-11 with grant assistance of ` 44.97 crore. 20. During the year, 21,903 Farmers' Clubs (FC) were launched, taking the total number of clubs to 76,708, as on 31 March 2011. Agency-wise, NGO promoted maximum number of clubs (13,599), followed by cooperative banks (2,922), commercial banks (2,733), RRB (2,215), State Agricultural Universites (SAU)/Krishi Vigyan Kendras (KVK) [255] and other agencies (179). During 2010-11, three Farmers' Training and Rural Development Centres (FTRDC) were provided a total grant assistance of ` 1.02 crore under FTTF. During the year, 282 exposure visits for 7,548 farmers were arranged in collaboration with select research institutes, KVK and SAU. 21. During the year, 44 projects covering 220
23.
NABARD received ` 132.27 crore during 2010-11
and disbursed ` 135.76 crore as grant assistance during the year under the Kreditanstalt fr Wiederaufbau (KfW) supported externally aided projects, which are at various stages of implementation.
Rural Non-Farm Sector

24. During the year, 122 innovative projects were
sanctioned under the NABARD-SDC Rural Innovation Fund, taking the cumulative number to 375. An amount of ` 10.42 crore was sanctioned for these projects, taking the cumulative sanctions to disbursement ` 49.28 crore. The during the year, including for projects
sanctioned earlier, was ` 14.42 crore.
25.
Under the 'Scheme for Strengthening of Rural
villages were launched with a financial commitment of ` 15.41 crore under Pilot Project on augmenting productivity of lead crops/activities through adoption of sustainable agricultural practices. 22. Under the Special Project on Livelihood Based ` 0.41 crore and ` 0.33 crore
Haats', grant support of ` 5.74 crore was sanctioned to 118 rural haats during 2010-11. Cumulative grant assistance was ` 13.19 crore for 307 rural haats across 23 States. A total of 113 clusters across 84 districts in 22 States had been approved during the year, while 3,327 Rural Entrepreneurship Development Programme (REDP) / Skill Development Programme
Development,
iii
www.sansco.net
(SDP) were supported with financial assistance of ` 12.34 crore. As many as 20 clusters are supported in the NER. Cumulatively, 17,859 REDP/SDP have been supported with grant of ` 83.35 crore.
29.
Under
the
Microfinance
Development
and
Equity Fund,
` 47.38 crore was released during 2010-
11, of which ` 29.95 crore was grant support for promotional activities and ` 17.43 crore for Capital Support / Revolving Fund Assistance to Micro Finance Institutions, as against ` 20.49 crore and ` 60.42 crore, respectively, in the previous year. During the year, grant assistance of ` 37.86 crore was sanctioned to various agencies for promoting and credit linking 81,890 groups, taking the cumulative assistance sanctioned to ` 146.22 crore for 5.81 lakh groups. Grant assistance of ` 51.06 crore was released during the year for the formation of 4.01 lakh SHG. Nearly 2.60 lakh SHG were credit linked.
26.
During the year, 1.20 lakh Swarojgar Credit
Cards (SCC) with credit limit of ` 514.26 crore were issued for facilitating hassle-free availability of credit for investment and working capital requirements of small / micro-entrepreneurs. The cumulative total of SCC was 12.12 lakh involving credit limit of ` 4,949.51 crore.
Financial Inclusion
27. RBI contributed ` 3.46 crore [` 3.05 crore towards Financial Inclusion Fund (FIF) and ` 0.41 crore towards Financial Inclusion Technology Fund (FITF)], during the year 2010-11, while the GoI contributed ` 30 crore each to the two Funds. NABARD contributed ` 30 crore (FIF) and ` 40 crore (FITF). An amount of ` 19 crore under FIF and ` 101.10 crore under FITF were sanctioned during the year. As on 31 March 2011, ` 38.66 crore for 150 projects under FIF and ` 122.41 crore under FITF for 55 projects had been utilised during have been sanctioned. 2010-11 for activities Under NABARD-UNDP collaboration, ` 173.22 lakh conducted by NABARD in seven focus states : Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh.
30.
Under
the
Rajiv
Gandhi
Mahila
Vikas
Pariyojana, 25,571 SHG were promoted, of which 14,979 were credit linked by end March 2011. In addition, 951 Cluster Level Federations and 26 Block Level Federations have been formed.
31.
An amount of ` 24.74 crore was sanctioned as
grant for promoting 1.25 lakh Joint Liability Groups across the country till March 2011. During the year, 1,606 Micro Enterprise Development Programmes were conducted for 37,138 members on various location-specific farm, non-farm and service sector activities. Cumulatively, 4,449 MEDP were conducted for 1.09 lakh participants.
Micro-Finance
28. There were more than 69.53 lakh savings-linked SHG and more than 48.51 lakh credit-linked SHG covering 9.7 crore poor households, as on 31 March 2010, under the microfinance programme. The share of outstanding bank loans to SHG as a percentage of bank loans to weaker sections by scheduled commercial banks (31 March 2010) was 16.3 per cent, compared to 15.8 per cent in the previous year.
32. for
NABARD continued to support the project implementing 'Micro-Finance Vision 2011'.
sanctioned to the Government of Arunachal Pradesh The project involves promoting and credit linking of 1,650 SHG at a cost of ` 39.15 lakh. An amount of ` 9.49 lakh has been released so far.
33.
NABARD Financial Services Ltd. disbursed an
amount of ` 50.64 crore to 2,019 groups through 31
iv
www.sansco.net
Business
Correspondents
(BC)
during
2010-11.
In
36.
During the year, grant assistance of ` 1.27 crore was
addition, disbursements to the extent of ` 1.50 crore were made to MFI and Federations, taking the aggregate disbursements during the year to ` 52.14 crore. Grant assistance of ` 153.18 lakh was released during the year to Centre for Microfinance Research (CMR) established by NABARD in Bankers Institute of Rural Development (BIRD), taking the cumulative assistance to ` 347.36
sanctioned to various universities, research institutes and other agencies for organising 131 seminars, conferences, symposia and workshops covering subjects/ areas related to agriculture and rural development including
agricultural marketing.
37. During the year, five Occasional Papers titled Kisan Credit Card, Infrastructure for Agriculture and Rural Development, Economics of sugarcane production and processing, Micro-finance for micro-enterprises and
lakh. Of the prioritised 27 themes for research, 6 have been completed and the remaining are ongoing.
NABARD Consultancy Services

34. NABARD the Consultancy wholly Services owned Pvt Ltd of
Promoting Rural non-farm sector were published. Under the NABARD Chair Professor Scheme, three Professors affiliated to IARI, Alagappa University and Xavier Institute of Management, Bhubaneswar were appointed by the Bank. 38. Grant assistance of ` 15.58 crore was utilised
(NABCONS),
subsidiary
NABARD, achieved ` 24.13 crore of contracts and executed `16.65 crore worth assignments during
2010-11; the profit after tax was ` 5.80 crore. During the current year, NABCONS its business by entering into significantlly diversified new areas of business,
from the Fund during the year on training of staff of client banks. During were the year, by 576 the training Training
viz., development of web based MIS for various State Government Programmes, monitoring of various
programmes
conducted
Establishments of the Bank for 14,667 participants. BIRD conducted a special on-location programme on Credit Planning and Development Finance for IAS probationers undergoing Phase I course, at the Lal Bahadur Shastri National Academy of Administration,
infrastructure projects in different states adjoining the international borders of the country, under Border Area Development Programme (BADP).
Research and Development Activities

35. During the year, ` 17.68 crore was utilised from
Mussorie and an in-house programme on financial system and development finance for probationers of the Indian Economic Service. RTC, Mangalore
the Research and Development Fund for supporting activities like research projects/studies (` 0.80 crore), seminars (` 0.80 crore), training/summer placement (` 15.77 crore), occasional papers (` 0.02 crore), NABARD Chair Professor Scheme (` 0.14 crore) and other activities (` 0.15 crore). The cumulative
organised an International Exposure Programme on Micro Finance for a batch of 14 officers from SANASA Development Bank, Sri Lanka during the year. 39. During the year 2010-11, the bank provided
technical and financial support to seven Junior Level Training Centres, 12 Agricultural Co-operative Staff Training Institutions and three Integrated Training Institutes to enable them to improve their training system.
disbursement stood at ` 136.19 crore. During 2010-11, ten research projects involving a grant assistance of ` 1.09 crore were sanctioned. Further, six projects/studies sanctioned earlier were completed during the year.
v
www.sansco.net
Business Operations
40. The total financial support extended by Population and ` 16.20 crore for National Pulses Development Programme. The aggregate limit for STOSAO sanctioned to RRB during 2010-11 was ` 600 crore, as against ` 542 crore in the previous year. The maximum utilisation was ` 598 crore. 45. The continuance of the interest subvention
NABARD during 2010-11 stood at `60,483 crore, registering a growth of 5.98 per cent over 2009-10.
Production Credit
41. The total production credit disbursed, at endDuring 2010-11, to 21 State March 2011, was ` 34,196 crore. credit limits were sanctioned
scheme was announced in the Union Budget 2010-11. Interest subvention of 1.5 per cent per annum was available to public sector banks, co-operative banks and RRB for deploying their own funds for crop loan upto ` 3 lakh per farmer, provided the ultimate borrower got such loans at 7.0 per cent interest rate per annum. Additional subvention of one per cent, announced in the year 2009-10 to those farmers who repaid crop loans promptly within one year of disbursement was enhanced to 2 per cent during 2010-11. During the year, an amount of ` 1,261.40 crore was disbursed as for subvention 2010-11 for has 2009-10. been Interest at subvention estimated
Short-term Seasonal Agricultural Operation (SAO) Co-operative Banks (SCB) aggregating `23,759 crore, as against `18,109 crore sanctioned to 20 SCB during 2009-10. The credit limits included ` 2,249.90 crore for the Oilseeds Production Programme, `210.97 crore for National Pulses Development Programme and `752.76 crore for credit requirements of tribals under the Development of Tribal Population. The maximum outstanding was `23,696.72 crore. 42. During 2010-11, Short-Term weavers credit
limits aggregating ` 215.75 crore were sanctioned to four SCB (Andhra Pradesh, Karnataka, Pondicherry and Tamil Nadu), as against ` 177.32 crore during 2009-10. Further, during the last three years, 4,607 Handloom Weavers Groups were formed by banks in various States. Of these, 1,989 HWG have been credit linked. 43. The scheme of extending ST refinance to State Agriculture and Rural Development
` 2,000 crore. 46. NABARD continued to act as nodal agency for
GoI package for restructuring of Term Loans of Co-operative sugar mills. Out of ` 170.14 crore received from GoI towards interest subvention, ` 169.94 crore was disbursed to 77 co-operative sugar mills in Maharashtra and Odisha. NABARD also acted as nodal agency for channelising the interest subvention to Co-operative Banks and RRB under the "Scheme for Extending Financial Assistance to Sugar Undertakings -2007". Out of ` 383.59 crore received from GoI towards interest subvention, ` 249 crore was released to 212 sugar mills operating in 11 states.
Co-operative
Banks for SAO was continued during the year. Refinance of ` 140.01 crore was extended to Kerala ( ` 79.39 crore) and Rajasthan ( ` 60.62 crore) SCARDB at 4.5 per cent interest rate for lending to the ultimate borrowers at 7 per cent. 44. During 2010-11, limits of ` 9,799.69 crore were
Investment Credit
47. During the year, the total investment credit (including co-finance) disbursed was ` 13,485.87 crore, as against the target of ` 12,980 crore. The achievement against target was 103.90 per cent. The growth in refinance disbursed during the year was 12.30 per cent over that of the previous year. The
sanctioned to 80 RRB under ST-SAO as against ` 6,832.13 crore sanctioned to 74 RRB in 2009-10. The limits included ` 820.31 crore for Oilseeds Production Programme, ` 201.23 crore for Development of Tribal
vi
www.sansco.net
policy of preferential treatment to states in NorthEastern, Eastern, was Hilly also Regions, extended to Sikkim and Lakshadweep Chhattisgarh
Under
the
scheme Grading
for and
Agricultural
Marketing 654
Infrastructure,
Standardisation,
projects with TFO of ` 978.45 crore were considered for sanction. Subsidy of ` 83.15 crore was released to the banks during the year. Cumulatively, 4,492 units involving TFO of ` 2,912 crore were granted subsidy of ` 274.03 crore. Subsidy of ` 1.49 crore was disbursed for 110 projects, involving a TFO of ` 7.75 crore under the Scheme for Agri Clinics and Agri Business Centres (ACABC). Cumulatively, 390 projects were sanctioned under the scheme involving TFO of ` 28.62 crore and release of subsidy of ` 5.38 crore. Under the Schemes on Animal Husbandry, an An amount of ` 1.69 crore was released as subsidy for poultry processing and sheep/goat rearing units. amount of ` 3.61 crore towards the subsidy
during 2010-11. RRB, SCB and SCARDB continued to be classified under A/B/C/D categories based on the level of Net NPA reckoned as a percentage to net loans and advances outstanding/ recovery performance and profitability. 48. Changing market conditions, impacting cost of
funds for NABARD, necessitated the revision of interest rates on refinance five times during the year. Interest rates, with effect from 07 February 2011 stood at 9.75 per cent for Commercial Banks, 9.25 per cent for RRB, 9.15 per cent for co-operative banks/ PUCB/ NEDFi, 8.15 per cent for ADFC/NABFINS and 10.5 per cent for NBFC. However, for NER, including Sikkim, the rate of interest for all agencies was pegged at 9.15 per cent. 49. Refinance distribution across regions varied
component, was released for 8,987 units under the Jawaharlal Nehru National Solar Mission. 52. Under National Project on Organic Farming
(NPOF), a total of 667 units (vermi-hatchery units-627, bio-fertilizers units-36 and fruit & vegetable waste compost units-13) had been sanctioned with net subsidy release of ` 12.45 crore till 31 March 2011. 53. During the year 2010-11, NABARD conducted
widely with the south accounting for the highest share (43%), followed by north (21%), central (14%) and other regions (22%). During the year, the major share of sector-wise refinance (25.6%), followed by was accounted for by NFS SHG (18.9%), Farm
Mechanisation (13.1%), Minor Irrigation (6.8%) and Dairy Development (6.8%). Of the total refinance disbursed, 43.80 per cent was for thrust areas. 50. During the year, MoU for co-financing were with 5 RRB in Andhra Pradesh and
seven evaluation studies covering four investments, viz., rural godowns, agricultural market infrastructure, agri-clinics Investment and agri-business Studies centres and and 8 solar Special homelighting system. Specific NABARD also conducted 16 (ISS)
executed
Studies (SS) covering farm and rural non-farm sectors.
a commercial bank. In all, MoU were executed with 27 banks. During the year, three new projects were sanctioned, taking the cumulative number of sanctioned projects to 51, with a total financial outlay to the extent of crore, respectively. 51. NABARD is the nodal agency for channelising (TFO) of ` 840.64 crore. The disbursement during 2010-11 was ` 14.00 crore. Cumulative sanction and disbursement were ` 240.35 crore and ` 153.64
Rural Infrastructure Development Fund

54. The annual allocation under the Rural Infrastructure Development Fund (RIDF) was ` 16,000 crore during 2010-11 taking the cumulative allocation to ` 1,16,000 crore. Additionally, a separate window was introduced in 2006-07 for funding rural roads component of Bharat Nirman Programme, with allocation of ` 18,500 crore, till 2009-10. The total allocation for RIDF, thus, stood at ` 1,34,500 crore, as on 31 March 2011.
subsidy, monitoring and coordinating with others under the Capital Investment Subsidy Scheme of GoI.
vii
www.sansco.net
55.
During 2010-11, a total of 41,779 projects
Haryana and Maharashtra (88%), Punjab and Gujarat (87%), and UP , Jammu & Kashmir (86%). The cumulative amount of loan sanctioned and disbursed to States in the North-Eastern region, including Sikkim, aggregated ` 6,328.24 crore and ` 3,293.18 crore, respectively, as at the end of March 2011.
involving loan amount of ` 18,314.88 crore was sanctioned under RIDF XVI, taking the cumulative number of projects to 4,44,162 and cumulative amount sanctioned to ` 1,21,888.40 crore. 56. During the year, disbursements were made to the tune of ` 12,060.04 crore. The cumulative disbursements under RIDF (I to XVI) and Bharat Nirman aggregated to ` 98,999.78 crore. The statewise analysis of ratio of disbursements to the approved phasing of sanctions revealed that Mizoram topped with 120 per cent, followed by Uttarakhand and Goa (100%), Meghalaya (90%), Tamil Nadu (89%),
57.
NABARD is exploring possibilities of funding
implementation of specific projects under the Public Private Partnership model. The bank is in the process of networking with the private sector and encouraging partnerships to bring about private sector competence and funds into the realm of rural infrastructure.
Capacity Building of Client Institutions

Institutional Development
58. The total membership of Primary Agricultural 60. The borrowings of State Co-operative
Agriculture and Rural Development Banks (SCARDB) as on 31 March 2010, decreased by 0.5 per cent over the previous year while that of Primary Cooperative Agriculture increased Rural Development Banks (PCARDB) Credit Societies (PACS) during 2009-10 stood at 12.64 crore, of which borrowing members were 5.98 crore, constituting 47.31 per cent of total membership. Both deposits and loans issued of PACS (as on 31 March 2010) showed increase of 34.45 per cent and 27.47 per cent, respectively, over the previous year. The borrowings of PACS, however, registered only a
by 2 per cent, during the corresponding
period. Loans issued by SCARDB and PCARDB increased by 19 per cent and 13 per cent respectively, while their loans outstanding increased by 4 per cent and 1 per cent, respectively, over the previous year.
marginal increase of 5.77 per cent over the previous year. 61. SCB as a group earned a positive net margin of 1.02 per cent during 2009-10 as compared to the net margin of 0.57 per cent during 2008-09. The DCCB, 59. The financial position of the SCB and District as a group, earned net margin of 1.80 per cent during 2009-10. During the year 2008-09, out of 19 Central Co-operative Bank (DCCB), as on 31 March 2010, indicate that while their deposits increased by 15 per cent each, the borrowings of SCB and DCCB increased by 12 per cent and 3 per cent, respectively, over the previous year. Loans issued by SCB 62. During 2010-11, under Co-operative
SCARDB, 13 had positive net margins and the remaining 6 had negative net margins. PCARDB in only 4 States had positive net margin.
decreased by 17 per cent and that of DCCB increased by 26 per cent. Loans outstanding of SCB and DCCB increased by 2 per cent and 24 per cent, respectively.
Development Fund (CDF), financial assistance of `6.43 crore was sanctioned and ` 6.05 crore disbursed.
viii
www.sansco.net
As on 31 March 2011, cumulative sanctions and disbursements were ` 98.17 crore and ` 87.57 crore, respectively. The balance in the Fund as on 31 March 2011 stood at ` 125 crore.
67.
Based on the recommendations of Amaresh
Kumar Committee, the GoI issued the RRB Service Regulations 2010. GoI also notified the RRB
Appointment & Promotion Rules 2010, in July 2010.
63.
The impact studies conducted
by
different
agencies on the implementation of GoI revival package for Short Term Co-operative Credit Structure in 10 States, revealed positive features like improved share capital position of PACS and DCCB, increase in volume of busines and credit flow of DCCB, reduction in NPA of PACS and DCCB, increased coverage of Small and Marginal Farmers and improved recovery rates of SCB and DCCB.
Supervision of Banks
68. During 2010-11, statutory inspection of 302
banks (31 SCB, 229 DCCB and 42 RRB) and voluntary inspections of 18 SCARDB and 3 Apex Societies, were conducted. The inspections brought out supervisory concerns relating to these institutions, which were communicated to the banks concerned, Registrar of Co-operative Societies, State Governments (in respect
64.
Post
amalgamation,
the
number
of
RRB
of cooperative banks) and Sponsor Banks (in respect of RRB) for corrective action.
operating in the country, as on 31 March 2011, stood at 82, with a network of 15,938 branches. During the year, the aggregate reserves of RRB, deposits and investments increased by 20 per cent each, while loans & advances (outstanding) increased by 22 per cent.
69.
During
the
year
2010-11,
twenty
DCCB
improved their financial position and recomplied with the provisions of Section 11(1) of B.R. Act,
1949(AACS). As on 31 March 2011, 68 banks (5 SCB 65. Financial results of RRB for the year 2010-11 and 63 DCCB) were not complying with the provisions of Section 11(1) of the B.R. Act, 1949(AACS), i.e., minimum capital requirement. Applications for grant
indicated that 79 out of 82 RRB had earned pre-tax profit to the extent of ` 3,470 crore. While all RRB in the Eastern, Western and Northern regions were in profit, one RRB each in the Central, North-Eastern and Southern region incurred losses. The recovery
of exemption in respect of 50 banks (1 SCB and 49 DCCB) were under the consideration of RBI/GoI.
performance of RRB was estimated at 80.03 per cent, as on 30 June 2010, as compared to 80.09 per cent as on 30 June 2009.
70.
Pursuant to the recommendations of Committee
on Financial Sector Assessment, RBI issued licences, based on revised norms, to 2 SCB and 49 DCCB during the year, thus, increasing the number of licensed banks to 246 (24 SCB and 222 DCCB) as on 31 March 2011. During the year, no SCB was included in the Second Schedule to the RBI Act, 1934. Thus, the number of scheduled SCB remained unchanged at 16.
66.
Regional Rural Bank have emerged as a strong
intermediary for Financial Inclusion in rural areas by opening a large number of No Frills accounts and financing under General Credit Cards (GCC). Total number of business accounts with RRB stood at 11.88 crore as on 31 March 2010.
ix
www.sansco.net
71.
Thirty-nine amalgamated RRB were included by
calculation of Demand and Time Liabilities (DTL) for maintenance of CRR / SLR.
RBI in the Second Schedule to the RBI Act, 1934, after they were found complying with Section 42(6)(a)(ii) of the Act. With this, the number of Scheduled RRB stood at 75 as on 31 March 2011. Inclusion of five more RRB in the Second Schedule to the RBI Act, 1934, was recommended to RBI in 2010-11.
73.
During the year, (i) RRB were permitted to
induct Nominee Director of NABARD on the Audit Committee of the Banks, with approval of the Board; (ii) a Model KYC / AML Policy was circulated to all RRB for adoption with suitable modifications and (iii)
72.
During the year, instructions / circulars were
clarifications were issued to RRB on Disclosure in Financial Statement in Half Yearly Review.
issued to SCB and DCCB on (i) issuing engagement letters to Statutory Auditors, specifying the areas to be covered, (ii) a questionnaire / check list for the use of concurrent auditors to ensure that all aspects are covered by the auditors while reviewing the Investment Portfolio of banks, (iii) fraud prevention measures and constituting Fraud Risk Management Group, (iv) a Model Know Your Customer (KYC)/Anti-Money
74. For a holistic and more effective approach towards supervision, especially in strengthening the internal checks and control systems in the supervised banks, NABARD continued to forge partnerships with other agencies under the GIZ-RFIP programme and with ICAI for preparation of Audit Manual for Co-operatives and RRB. NABARD also actively supported National
Laundering (AML) Policy for adoption, (v) detailed guidelines for inspection of DCCB, branches of SCB/ DCCB and affiliated societies and (vi) clarification on
Federation of State Co-operative Banks in revising the operational manuals for Co-operative Banks.
Organisation, Corporate Governance and Management

75. The Board of Directors met six times during the RBI. During the year, diagnostic and design phases under Project Reposition were completed.
year, while the Executive Committee and the Boards Projects Sanctioning Committee for Loans under RIDF, met thrice and seven times, respectively. The Audit Committee of the Board (ACB) as well as the Risk Management Committee of the Board (RMCB) met thrice during the year.
77. 13
th
Reserve
Bank
of
India
conducted
the
Financial Inspection of NABARD (with reference
to its financial position, as on 31 March 2010) from 01 November 2010 to 13 December 2010. Under RTI Act, 737 applications were provided requisite Ninety-four
76.
NABARD started the Project Reposition in
information within the stipulated time.
March 2010, with a view to networking resources, building capabilities and partnering institutions for bringing about effective integrated rural
appeals were responded to and 15 hearings on the appeals made to Central Information Commission were attended by officials of the Bank.
development in India. The project seeks to address the present day challenges without conflict with the long-term role mandated to NABARD by GoI and 78. A total of 2,131 officers were imparted training
through 103 programmes conducted during the year
x
www.sansco.net
by the National Bank Staff College, Lucknow. Further, 18 on-location programmes were conducted for 425 officers on various topics. During the year, 145 officers from NABARD, three from client institutions and 18 NGO participants were deputed for various Overseas programmes. Two batches of 10 senior officers each were deputed to a programme on Risk Management and Performance organised by World Savings Bank Institute and to RIPA, London.
providing compassionate appointment to dependents of ten deceased employees.
81.
Based
on
the
report
of
KPMG by
and
the BCG
subsequent
study
undertaken
(the repositioning consultant), the Bank finalised its future IT architecture and IT road map to be implemented in phases. These consist of the following: (a) Human Resources Management (Phase I), (b) Centralised Loan Management & Accounts (Phase II), (c) Business Processes (Phase III), (d) Enterprise Data Warehouse (Phase IV).
79.
During the year, 126 officers were appointed in
Grade A in the Rural Development Banking Service of the Bank. A total of 396 staff was promoted during the year. The total staff strength of the Bank, as on 31 March 2011, was 4,607. Of these, 18 per cent belonged to Scheduled Castes and 9 per cent to Scheduled Tribes. The strength of ex-servicemen and physically handicapped employees stood at 80 and 94, respectively.
82.
During
the
year
2010-11,
the
Inspection
Department of the Bank carried out inspection of 16 HO Departments, 22 Regional Offices and two Training Establishments, i.e., RTC Mangalore and NBSC Lucknow. Inspection Reports were issued and compliance ensured. 83. During the year, five Parliamentary Committees NABARD. Two RO, viz., Karnataka and
80.
Industrial relations in the Bank continued to be Three meetings each of
visited
harmonious during the year.
Chhattisgarh were notified under Section 10(4) of Official Languages Act by the GoI. Implementation Office, Department The Regional of Official
the Grievances Redressal Committee and the Appellate Committee were held during the year. Two pre-
Language, Ministry of Home Affairs, GoI awarded prizes to Andhra Pradesh RO, Maharashtra RO and RTC, Mangalore. During the year, 109 Potential-linked Credit Plans and 69 Inspection Reports were prepared/ issued in Hindi.
promotional training programmes for 120 SC/ST staff were conducted at training centres. Other benefits extended to SC/ST employees included granting
scholarship to 12 wards of the employees and
Financial Performance & Management of Resources

84. The total financial resources of NABARD 85. The paid up capital, as on 31 March 2011, was ` 2,000 crore against the authorised capital of ` 5,000 crore; with the share of GoI being 99 per cent and that of the RBI at one per cent. The amount of reserves and surplus increased by ` 1,188 crore, as on 31 March 2011.
increased to ` 1,58,872 crore, as on 31 March 2011, registering an increase of 16.57 per cent, over the previous year. Total market borrowings of ` 34,747
crore, as on March 31, 2011, constituted 21.87 per cent of the total resources of the bank.
xi
www.sansco.net
86.
The amount outstanding under the non-project
tax were at ` 1,824 crore and ` 1,279 crore respectively as on 31 March 2011, as compared to ` 2,272 crore and ` 1,558 crore respectively, in the previous year. The average cost of borrowings (interest expenditure as a per cent of average borrowings) decreased from 6.83 per cent per annum during 2009-10 to 6.64 per cent per annum during 2010-11. The capital to risk-
long-term (LT) loans granted to State Governments for contributing to the share capital of co-operative credit institutions, amounted to ` 167 crore as on
31 March 2011. There was a decrease of ` 32 crore as compared to the position as on 31 March 2010.
87.
The total income of NABARD during the year
weighted assests ratio (CRAR) was 21.76 per cent as on 31 March 2011, as compared to 24.95 per cent as on 31 March 2010.
amounted to ` 9,202 crore as against ` 7,965 crore for the year 2009-10. The profit before tax and profit after
xii
www.sansco.net
I
Economic Environment
The global economy witnessed a growth of 5.0 per cent in 2010, which is the highest in the post-crisis period. The Indian economy is also expected to regain the precrisis growth levels with the growth rate estimated at 8.5 per cent in 2010-11 as compared to 8.0 per cent in 2009-10. This broad based growth is due to the growth of 6.6 per cent in agriculture, 7.8 per cent in industry and 9.3 per cent in services. The impressive growth performance has enabled the per capita income (at 2004-05 prices) to increase from ` 33,731 during 2009-10 to ` 35,917 during 2010-11. Inflation, at 9.4 per cent during 2010-11, largely driven by primary food articles as against 3.6 per cent during 2009-10, has emerged as a major cause of concern.
Global Economy
1.2 The World Economic Outlook of the International Monetary Fund has projected growth in global output at 4.4 per cent in 2011, a decline of 0.6 percentage points relative to 2010. Economic growth in advanced economies was a modest 3 per cent in 2010 and is projected at 2.4 per cent in 2011. In the emerging and developing economies, the growth rate improved in 2010 as compared to 2009 and is expected to remain buoyant at 6.5 per cent in 2011. Economic growth of China (10.3 per cent) and India (10.4 per cent) rebounded in 2010 and it is estimated that the growth in China and India would be 9.6 per cent and 8.2 per cent, respectively, in 2011 (Table 1.1). 1.3 Commodity prices (both oil and non-oil) per cent for cereals, 9.23 per cent and 15.81 per cent for vegetables and milk, respectively (Table 1.2).
Table 1.1: Overview of Global Economy (Annual per cent change) Growth A. GDP (Real) a. World output b. Advanced Economies United States Euro Area (-)0.5 (-)3.4 (-)2.6 (-)4.1 (-)6.3 (-)0.8 2.7 7.2 9.2 6.8 1.7 0.1 5.2 5.0 3.0 2.8 1.7 3.9 8.4 7.3 9.5 10.3 10.4 6.9 1.6 6.2 4.4 2.4 2.8 1.6 1.4 4.9 6.5 8.4 9.6 8.2 5.4 2.2 6.9 2009 2010 2011*
i. i.
iii. Japan iv. Newly Industrialised Asian Economies c. Other Emerging and Developing Economies i. Developing Asia ii. China iii. India iv. ASEAN - 5** B. Consumer Prices a. Advanced Economies b. Other Emerging and Developing Economies C. World Trade Volume (goods & services) a. Imports by Emerging and Developing Economies b. Exports by Emerging and Developing Economies D. Commodity Prices a. Oil Prices b. Non-Fuel Prices * : ** : Projections
increased by 27.9 per cent and 26.3 per cent, respectively in 2010, due to strong global demand and supply shocks. The commodity prices are projected to remain high in 2011 due to continued robust demand and slow supply response to the market conditions. The consumer price inflation in the emerging and developing economies at 6.2 per cent in 2010 was attributed mainly to higher food prices and is expected to rise to 6.9 per cent in 2011. Comparatively, inflation in the advanced economies was 1.6 per cent in 2010 and is projected at 2.2 per cent in 2011. 1.4 As per the Food and Agriculture Organisation data, the world production of cereals decreased by 1.2 per cent; vegetables and milk increased by 2.44 per cent and 0.87 per cent, respectively, in 2009 as compared to 2008. Asia is a major producer of cereals (47.46%), vegetables (75.55%) and milk (35.83%). Indias share on a two-year average basis was 10.29
(-)8.3 (-)7.5 (-)36.3 (-)15.8
13.5 14.5 27.9 26.3
10.2 8.8 35.6 25.1
Includes Indonesia, Malaysia, Philippines, Thailand and Vietnam
Source: World Economic Outlook, IMF, April 2011
1
www.sansco.net
Table 1.2: Production of Cereals, Vegetables & Milk in the World, 2008 and 2009 (Million Tonnes) Country/Group 2008 India Africa Americas Asia Europe Oceania World
* Incudes Melons
Cereals 2009 248.81 158.67 634.18 1198.81 465.83 36.1 2493.61 % share in World@ 10.29 6.20 25.56 47.46 19.34 1.44 100 2008 91.73 64.10 81.56 744.48 93.81 3.43 987.37
Vegetables* 2009 92.77 63.68 81.71 765.55 97.07 3.44 1011.46 % share in World@ 9.23 6.39 8.17 75.55 9.55 0.34 100 2008 109.00 37.94 170.11 247.69 215.86 24.51 696.11
Milk % share in 2009 World@ 112.11 38.65 171.45 253.24 213.94 24.86 702.14 15.81 5.48 24.43 35.83 30.74 3.53 100
267.56 152.46 648.28 1182.29 504.39 36.4 2523.84
@ Share based on the average of 2008 & 2009

Source : FAOSTAT @ FAO Statistics Division, 21 June 2011
Indian Economy
A. Economic Scenario
a.
1.5 is estimated to grow at 2.9 per cent during 2007-08 to 2010-11 as against the Plan target of 4.0 per cent.
Gross Domestic Product

As per Revised Estimates, the Gross Domestic 1.6 Sectoral analysis of growth rates revealed an increase in agricultural growth by 6.2 per cent; decrease in services and industrial growth by 0.80 and 0.20 per cent respectively, during 2010-11 as compared to the previous year. The contributions of agriculture, industry and services to the GDP were 14.4, 27.9 and 57.7 per cent, respectively, during 2010-11 (Table 1.4).
Product (GDP) of the country has registered a growth of 8.5 per cent in 2010-11 as compared to 8.0 per cent in 2009-10 and 6.8 per cent in 2008-09 (Table 1.3). The high growth trajectory of the GDP has been facilitated due to a rebound in agriculture growth from 0.4 per cent during 2009-10 to 6.6 per cent during 2010-11. Industry and services registered a growth of 7.8 and 9.3 per cent, respectively, during 2010-11 as compared to 8.0 per cent and 10.1 per cent, respectively, during 2009-10. Against an average growth rate of 9.0 per cent envisaged in the Eleventh Five Year Plan, the average growth was 8.0 per cent for the period 2007-08 to 2010-11. The agriculture sector
b.
Consumption, Savings and Investments

The relative share of Private Final Consumption (PFCE) and Government Final
1.7
Expenditure
Consumption Expenditure (GFCE) (at 2004-05 prices),
2
www.sansco.net
Table 1.3: Economic Indicators (Annual percent change) Particulars Gross Domestic Product GDP from Agriculture & Allied Activities Foodgrains Production Industrial Production Inflation as measured by WPI Gross Domestic Savings (as % of GDP) Gross Domestic Investment (as % of GDP) Fiscal Deficit (as % of GDP) Imports Exports Trade Balance (as % of GDP*) External Debt (as % of GDP*)
QE: Quick Estimates *At current market prices Source: Economic Survey 2010-11; CMIE, May 2011; Central Statistical Organisation, GoI RE: Revised Estimates
2008-09 6.8 (-)0.1 1.0 3.2 8.0 32.2 34.5 6.0 20.7 13.6 (-)9.5 20.5
2009-10 8.0 (QE) 0.4 (QE) (-)7.1 10.5 3.6 33.7 36.5 6.3 (-)5.0 (-) 3.5 (-)7.9 18.1
2010-11 8.5 (RE) 6.6 (RE) 6.8 7.8 9.4 35.6 38.0 4.8 21.8 37.7 (-)6.06 -
as
estimated
by
Central
Statistical
Organisation,
2010-11. While private sector savings has remained virtually stagnant at 31 per cent, public sector savings increased from 0.5 per cent during 2008-09 to 2.1 per cent during 2009-10. The Gross Capital Formation (GCF), as a proportion of GDP, is estimated at 36.5 per cent with the contribution of public and private sectors at 9.2 and 24.9 per cent, respectively during 2009-10. Within the private sector, the investment rate for the corporate sector increased from 11.5 per cent in 2008-09 to 13.2 per cent in 2009-10 while that of the household sector declined from 13.1 per cent to 11.7 per cent.
Government of India increased by 8.60 and 4.76 per cent respectively in 2010-11 over 2009-10. The private expenditure on food items as a proportion to total private consumption, as per the Economic Survey, 2010, has been gradually declining since 2004-05 from 40.0 per cent to 32.6 per cent in 2009-10 while that of miscellaneous goods and services has been increasing.
1.8
The Gross Domestic Savings (GDS), as a
proportion of GDP is estimated to have increased from 33.7 per cent during 2009-10 to 35.6 per cent during
Table 1.4: Sectoral Growth Rates of GDP (2004-05 prices) Sector Agriculture & Allied Industry# Services Total GDP at factor cost 2006-07 3.7(17.2) 12.7(28.7) 10.2(54.2) 9.7(100.0) 2007-08 4.7(16.4) 9.5(28.8) 10.5(54.8) 9.2(100.0) 2008-09 (-)0.1(15.7) 4.4(28.1) 10.1(56.2) 6.8(100.0) 2009-10 0.4(14.6) 8.0 (28.1) 10.1(57.3) 8.0(100.0) 2010-11(RE) 6.6(14.4) 7.8(27.9) 9.3(57.7) 8.5(100.0)
Figures in parentheses indicate percentage shares in GDP RE: Revised Estimates #: Includes mining & quarrying, manufacturing, electricity, gas and water supply and construction Source: 1. Monthly Economic Report (April 2011), Ministry of Finance, GoI 2. Economic Survey 2010-11
3
www.sansco.net
c.
1.9
Inflation
A revised Wholesale Price Index (WPI) series
fuel & power has also risen by 5.43 per cent and 12.24 per cent, respectively (Chart 1.1 (a) & (b)).
with changes in weights and commodities, and with the base year as 2004-05 has been released. The WPI also includes an addition of 241 items in the commodity basket and increase in the number of price quotations from 1,918 to 5,482.
d.
Trade
1.12 Exports and imports are projected to grow by 22.5 and 13.2 per cent, respectively, during 2010-11. Agricultural exports increased from ` 81,710 crore
1.10 In order to give a clear picture of price behaviour of goods and services consumed by rural/ urban population, a new initiative of compiling
during 2008-09 to ` 85,211 crore during 2009-10, registering a growth of 4.28 per cent. Increase in agricultural exports has been mainly due to higher exports of basmati rice, unmanufactured tobacco, meat and meat preparations, castor oil and tea. The percentage share of agriculture and allied products in the total exports was 10.1 during 2009-10 as
Consumer Price Index (CPI) for rural and urban India has been undertaken. Inflation in Consumer Price Index for Rural Labour (CPI-RL) and Consumer Price Index for Agricultural Labour (CPI-AL) has declined from 14.96 per cent each in April 2010 to 8.96 and 9.14 per cent, respectively, in March 2011.
compared to 9.7 in 2008-09. The share of food & allied product imports in the total imports of the country also increased from 2.1 per cent in 2008-09 to
1.11 The overall inflation rate as measured by changes in the WPI on a monthly basis was 9.4 per cent during 2010-11 as compared to 3.6 per cent during the fiscal year 2009-10. The rise has been due to high prices in primary articles, which was recorded at 17.61 per cent. Food inflation has been mainly due to increase in prices of rice, vegetables, fruits, milk, eggs, meat and fish, condiments, spices and tea. WPI in the other major groups-manufactured goods and
3.7 per cent in 2009-10 (Table 1.5).
B. Agriculture & Rural Economy

a. Rainfall Situation
1.13 The country as a whole received 912.8 mm of rainfall, which was 2.0 per cent more than the Long Period Average (LPA) during the South-West monsoon (June-September) 2010 as compared to 23 per cent
4
www.sansco.net
Table 1.5: Trends in Exports and Imports (`'000 crore) Year Total Exports 456.4 571.8 655.9 840.8 845.5 1118.8 Agriculture & Allied Products 46.7 (10.2) 58.9 (10.3) 65.2 (9.9) 81.7 (9.7) 85.2 (10.1) Total Imports 660.4 840.5 1012.3 1374.4 1363.7 1596.8 Food & Allied Products 16.5 (2.5) 24.3 (2.9) 23.2 (2.3) 28.8 (2.1) 50.4 (3.7)
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11*
* Provisional; Figures in parantheses indicate percentage share to total Source: Economic Survey, Various Isssues; Ministry of Commerce & Industry, GoI
less than the LPA in the corresponding period in 2009. Apart from North-East India, where the rainfall was 18 per cent less than the LPA, rainfall received in all other divisions: Central, North-West and Southern Peninsula was more than the LPA. Out of the 36 sub-divisions, 5 recorded deficient rainfall during the South-West monsoon in 2010. 1.14 During the North-East monsoon (October-
monsoon had excess rainfall to the extent of 55 per cent above the LPA. In terms of spatial distribution, 25 sub-divisions recorded excess/normal rainfall and the remaining 11 sub-divisions recorded deficient rainfall during the North-East monsoon period (Table 1.6).
1.15 Total live water storage, in 81 major reservoirs across the country, at 104.68 billion cubic meters was 69 per cent of the Full Reservoir Level of 151.77 billion cubic metres by the end of December 2010 which was 32.18 per cent higher than the previous year's level of 79.19 billion cubic metres.
December), the cumulative rainfall received for the country as a whole was 153.2 mm, which was 21 per cent above the LPA as compared to 8 per cent more during the previous year. The core regions (Tamil Nadu, Kerala, coastal Andhra Pradesh, Rayalseema and south interior Karnataka) receiving North-East
Table 1.6: Trends in Rainfall and Water Storage Particulars South-West Monsoon* 2008 A. B. Cumulative rainfall (% variation from normal) Number of Sub- Divisions with Normal/Excess Rainfall Deficient/Scanty/No Rainfall C. Reservoir status (% of FRL$@) (-)2 32 4 73.2 2009 (-)23 13 23 58.6 2010 2 31 5 75.4 North-East Monsoon** 2008 (-)31 6 30 56.4 2009 8 23 13 52.1 2010 21 25 11 69
Normal: +/-19%; Excess: +20% or more; Deficient: -20 to -59%; Scanty: -60% or less; No Rain: -100% *: $: Cumulative position between 1 June and 30 September; Full Reservoir Level in 81 major reservoirs accounting for 67% of total reservoir capacity in the country as at the end of the season **: Cumulative position between 1 October and 31 December @: As on 30 September in the case of SW Monsoon and 31 December in the case of NE Monsoon Source: Indian Meteorological Department; CMIE, April 2011
5
www.sansco.net
b. Crop Acreage
1.16 Total crop acreage under both kharif and rabi during 2010-11 indicated an increase of 9.40 million hectares (Mha) over the previous year. The crop acreage under various crops during kharif 2010 was 103.90 Mha which was 6.88 Mha more than the area covered during the corresponding period of kharif 2009. The major increase in area sown was under rice (2.3 Mha). Increase in area sown under cotton, oilseeds and sugarcane increased marginally by 0.75, 0.10 and 0.86 Mha, respectively, in kharif 2010 as compared to the period of kharif 2009. Area sown under foodgrains during kharif 2010 was higher by 5.0 Mha as compared to kharif 2009. 1.17 The growth in rabi foodgrains during 2010-11
'Development
and
Strengthening
of
Infrastructure
Facilities for Production and Distribution of Quality Seeds' is being implemented since 2005-06 to ensure timely availability of quality seeds at affordable prices to farmers. The scheme has covered 1.31 lakh seed villages and 183.10 lakh quintals of certified/ quality seeds have been produced upto 2009-10. Breeder seed production and foundation seed production reached 0.94 lakh quintals and 11.46 lakh quintals, respectively during 2009-10, registering 26.96 and 18.27 per cent growth over the previous year. During 2010-11, the production of breeder and foundation seeds is estimated at 1.1 lakh quintals and 18.5 lakh quintals, respectively. Certified/quality seed distribution during 2010-11 at 321.36 lakh quintals was 14.8 per cent higher than the previous year.
was 3.87 per cent over the previous year. Area sown under all rabi crops was 65.79 Mha during 2010-11 as compared to 63.27 Mha in the corresponding period of 2009-10 (Table 1.7).
ii.
Chemical Fertilizers
1.19 Production of urea, Di-Ammonium Phosphate (DAP) and complex fertilisers increased by 5.98, 41.86 and 17.38 per cent, respectively during 2009-10 as compared to the previous year. Fertiliser consumption in nutrient terms increased by 6.33 per cent from 249.09 lakh tonnes during 2008-09 to 264.86 lakh tonnes during 2009-10. The per hectare consumption of fertilisers also increased from 127.2 kg to 135.3 kg during the same period. To meet the current level of fertiliser consumption, urea, DAP and Muriate of
c.
i.
Inputs Use in Agriculture

Seeds
1.18 The Indian Seed Programme involving Central/ State Governments, Indian Council of Agricultural Research, State Agricultural Universities, Co-operatives and private sector has been addressing the issue of low seed replacement rate. Besides, the scheme for
Table 1.7: Area Sown under Major Crops (Million hectares) Crop Kharif (a) 2009-10 Rice Wheat Coarse Cereals Pulses Total Foodgrains Oilseeds@ Cotton Sugarcane All crops 33.53 0.00 20.61 10.53 64.68 17.44 10.09 4.20 97.02 2010-11 35.86 0.00 21.21 12.60 69.68 17.54 10.84 5.06 103.90 2009-10 4.39 28.36 6.58 14.30 53.64 9.63 0.00 0.00 63.27 Rabi (b) 2010-11 4.39 29.40 6.18 15.72 55.72 10.07 0.00 0.00 65.79 Total (a+b) 2009-10 37.92 28.36 27.19 24.83 118.32 27.07 10.09 4.20 160.29 2010-11 40.25 29.40 27.39 28.32 125.40 27.61 10.84 5.06 169.69
@: Includes rapeseed & mustard, groundnut, safflower, sunflower, castorseed, nigerseed, soyabean, sesamum and linseed Source: Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India
6
www.sansco.net
Potash (MOP) were imported to the extent of 52.09, 58.89 and 52.86 lakh tonnes, respectively, during 2009-10. Import of fertilizers, which accounted for 10.60 per cent of total fertilizer consumption in 2000-01, increased to 34.53 per cent during 2009-10. 1.20 A nutrient based subsidy for phosphatic and potassic fertilisers to promote balanced use of fertlisers has been under implementation since April 1, 2010. The price of urea has been increased by 10 per cent while the price of other subsidized fertilisers is being maintained at current level. Additional subsidy on micro-nutrients like boron and zinc has also been introduced.
crore has been released under the scheme as on March 31, 2010. With a view to enhance the water use efficiency, the National Mission on Micro Irrigation (NMMI) was launched in June 2010 in addition to the Micro Irrigation Scheme to encourage the adoption of drip and sprinkler irrigation systems. The scheme has covered 2.27 lakh hectares under micro irrigation.
iv.
Credit
1.23 As against the target of ` 3,75,000 crore of credit flow to agriculture for 2010-11, the banking system disbursed ` 4,46,779 crore as on 31 March 2011,
achieving 119.14 per cent of the target. Commercial banks, Co-operative banks and Regional Rural Banks
iii. Irrigation
1.21 Total irrigation potential created under all types of irrigation structures has increased from 81.10 million hectares in 1991-92 to 108.2 million hectares by March 2010. Utilisation was to the extent of 85 per cent, leaving a gap of 15 per cent. 1.22 For extending assistance for incomplete
disbursed ` 3,32,706 crore, ` 70,105 crore and ` 43,968 crore, respectively, sharing 74 per cent, 16 per cent and 10 per cent of the total credit flow during 2010-11 (Table 1.8, also see Box 1.1 and 1.2).
1.24 During the period 2005-10, the Ground Level Credit (GLC) flow for agriculture and allied activities registered a Compound Annual Growth Rate
irrigation schemes, the Government of India initiated the Accelerated Irrigation Benefit Programme (AIBP) during the year 1996-97. As on 31 March 2010, 281 projects have been covered and 120 completed under the AIBP scheme. Further, the cumulative Central Loan Assistance/grant of an amount of ` 41,729.37
(CAGR) of 19.57 per cent. The growth rate for crop loans and term loans was 26.49 per cent and 7.56 per cent, respectively for the five year period (200506 to 2009-10). An analysis of the term loans during 2009-10 for the broad sub sectors indicated that Minor
Table 1.8: Agency-wise Ground Level Credit Flow (` crore) Agency 2006-07 2007-08 2008-09 2009-10 2010-11 2006-10# Co-operative Banks Regional Rural Banks Commercial Banks Total 42,480 20,435 166,485 229, 400 48,258 25,312 18,1088 254,658 45,966 26,765 228,951 301,908** 63,497 35,217 285,800 384,514 70,105 43,968 332,706 446,779 15.66 20.40 20.01 18.97 Growth Rate (%) 2009-10* 38.14 31.58 24.83 27.36 2010-11* 10.41 24.85 16.41 16.19
#: Compound Annual Growth Rate; *: Percentage change over previous year. Source: NABARD
** Includes ` 226 crore by other Agencies.
7
www.sansco.net
Box 1.1 Union Budget 2011-12: Highlights on Agriculture and Rural Development A. Agricultural Production and Productivity Allocation of ` 400 crore for realising Green Revolution in the Eastern Region (Assam, Bihar, Chhattisgarh, Jharkhand, Orissa and Eastern Uttar Pradesh) has been proposed. To increase the productivity of pulses, oil palm and millets, ` 300 crore each has been earmarked to promote 60,000 pulse villages in rainfed areas, bringing 60,000 hectares under oil palm plantation and covering 25,000 villages under millets respectively. Farm credit target has been raised from ` 3,75,000 crore in 2010-11 to ` 4,75,000 crore in 2011-12. Direct lending for agriculture and credit to be enhanced for small and marginal farmers. Interest subvention for timely repayment of loans enhanced from 2 per cent during 2010-11 to 3 per cent during 2011-12 making the effective rate of interest at 4 per cent. NABARDs capital base to be increased from ` 2,000 crore to ` 5,000 crore in a phased manner. ` 10,000 crore to be contributed to NABARD's shortterm Rural Credit Fund from the shortfall in priority sector lending by Scheduled Commercial Banks during 2011-12 for enabling NABARD to refinance short-term crop loans to co-operative credit institutions and RRBs at concessional rates. The Corpus of RIDF XVII raised from ` 16,000 crore to ` 18,000 crore. Banking facilities to all the identified 73,000 habitations having a population of more than 2,000 to be completed by 2011-12. 'Women's SHG's Development Fund' to be created with a corpus of ` 500 crore to promote SHG. 'India Microfinance Equity Fund' with a corpus of ` 100 crore to be created with SIDBI for providing equity to smaller MFIs.
C. Financial Inclusion/ Micro Finance
B. Agricultural Credit
D. Other Initiatives ` 3,000 crore to be provided to NABARD to provide support to handloom weaver co-operative societies which have become financially unviable due to nonrepayment of debt by weavers facing economic stress. To address the issue of storage of vegetables and fruits, 15 more Mega parks to be set up during 2011-12. New storage capacity of 150 lakh MT through private entrepreneurs and warehousing corporations has been augmented. ` 500 crore to be provided to RRBs during 2011-12 to enable them maintain a CRAR of at least 9 per cent as on March 31, 2012. Provision under Rural Housing Fund enhanced to ` 3,000 crore.
Box 1.2 Working Groups for Twelfth Five Year Plan (2012-2017) The excercise for the XIIth Five Year Plan (2012-17) has commenced with the setting up of several working groups on various sectors of the economy. A. The Working Group on Outreach of Institutional Finance, Cooperatives and Risk Management for Twelfth Five Year Plan has been constituted under the Chairmanship of Dr. Y. S. P. Thorat, former Chairman, NABARD for the formulation of the Twelfth Five Year Plan. Dr. Prakash Bakshi, Chairman, NABARD, is the Member Secretary for the Working Group. The specific Terms of Reference (ToR) are : (i) To review the flow of credit to agriculture and allied sectors during the XIth Plan, giving sub-sectoral analysis and recommend measures to increase the flow of credit at reasonable rates of interest throughout the country with special consideration of disadvantaged sections such as small and marginal farmers, women farmers, tenant farmers, oral lessees and landless labourers and assess the short-term and long-term credit requirements of agricultural credit during XIIth plan. (ii) To review the contribution and performance of credit cooperatives towards outreach of credit to agriculture and allied activities and recommend measures for their increased proactive participation. (iii) To study the performance, efficiency and adequacy of risk management policies, strategies and programmes being implemented for agriculture and allied sectors and recommend the course to be followed for risk management during XIIth plan as well as measures required to increase uptake and service levels of micro insurance products. (iv) To study the issues concerning micro-financing institutions such as their costs and rates of lending, their contribution in credit outreach and recommend future course of actions. B. The Working Group on Savings under the Chairmanship of Dr. Subir Gokarn, Deputy Govenor, RBI was constituted to estimate the savings in line with the broad macro economic parameters set for the Twelfth Five Year Plan. The Working Group constituted six sub-groups to deal with various sectors of the economy. The Sub-group on Flow of Private Investment for SME and Agriculture has been constituted under Shri. S.K. Mitra, Executive Director, NABARD as Convenor. The broad TOR of the Sub-Group is to estimate resources available for private investment, including infrastructure, and the likely flows for SME and agriculture. NABARD is providing the Secretariat for both the Groups.
8
www.sansco.net
Irrigation witnessed the highest annual growth of 63.43 per cent, followed by Fisheries (44.73 per cent), Land Development (27.09 per cent) and Farm Mechanisation (22.52 per cent) in GLC flow over 2008-09 (Table 1.9).
ii. Plantation Crops

1.26 Tea production in the country during 2010-11 has been estimated at 9.66 lakh tonnes as against 9.91 lakh tonnes achieved in 2009-10. Further, the export of tea from India during 2010-11 was 1.78 lakh tonnes as against 2.13 lakh tonnes in 2009-10. (Table 1.11).
d. Agricultural Production
i. Foodgrains & Non-foodgrains
1.25 According to the 3 rd Advance Estimates, the country's foodgrain production during 2010-11 was estimated at 235.88 million tonnes as compared to 218.11 million tonnes (final estimate) during 2009-10, registering an increase of 8.14 per cent over the previous year. During the year, production of all crops except jute & mesta was estimated to be higher, the maximum increase being for cotton at 40.04 per cent followed (19.85%), by oilseeds (21.58%), coarse cereals pulses (17.94%), sugarcane (16.50%), rice
1.27 Coffee is cultivated in an area of around 3.99 lakh hectares confined mainly to Southern India. The estimated coffee production for the year 2010-11 is 2.99 lakh tonnes, i.e., 0.99 lakh tonnes of Arabica and 2 lakh tonnes of Robusta. Export of Coffee at 3.22 lakh tonnes during 2010-11 was 65 per cent higher than that exported during 2009-10 (Table 1.11). 1.28 Despite not having regions geographically best
suited to growing natural rubber, India continued to record the highest productivity in the world with an average yield of 1,867 kg/ha. The production of Rubber (natural & synthetic) was 9.08 lakh tonnes during against 2010-11 9.38 (April, lakh 2010-February, tonnes during 2011) as 2009-10.
(5.63%) and wheat (4.29%). Production of Jute & mesta was expected to be lower by 11.26 per cent during 2010-11 as compared to the previous year (Table 1.10).
Table 1.9: Sub-sector-wise Ground Level Credit Flow for Agriculture & Allied Activities (` crore) Sl No. I. II. Crop Loan (ST-Production Credit) Term Loan (MT & LT Investment Credit) i. Minor Irrigation ii. Land Development iii. Farm Mechanisation iv. Plantation & Horticulture v. Animal Husbandry vi. Fisheries vii. Hi-tech agriculture viii. Others$ Total (I + II) 1,05,350 75,136 8,663 1,749 9,695 4,481 7,341 1,019 9,737 32,451 1,80,486 1,38,455 90,945 8,566 2,285 10,113 5,266 8,045 1,424 21,498 33,748 2,29,400 1,81,393 73,265 2,840 2,553 8,303 5,910 9,034 1,248 33,325 10,052 2,54,658 2,10,461 91,447 3,180 2,887 8,334 6,045 10,398 1,281 41,694 17,628 3,01,908 2,76,656 107,858 5,197 3,669 10,211 6,407 10,260 1,854 50,797 19,463 3,84,514 Sector/Sub-Sector 2005-06 2006-07 2007-08 2008-09 2009-10 Growth rate (%) 2005-10^ 26.49 7.56 (-)18.23 18.72 (-)0.89 8.9 9.7 11.53 48.68 (-)15.4 19.57 2009-10* 31.45 17.91 63.43 27.09 22.52 5.99 (-)1.33 44.73 21.83 10.41 27.36
$ : Others include storage/market yards, forestry/waste land development, RIDF, bullock and bullock carts, bio-gas and credit flow through private sector commercial banks. ^: Compound Annual Growth Rate; *: Percentage change over the previous year. Source: NABARD
9
www.sansco.net
Table 1.10: Production of Major Crops (Million tonnes) Year/Crop Rice Wheat Coarse Cereals Pulses Foodgrains Kharif Rabi Oilseeds Cotton# Sugarcane Jute & Mesta##
rd
2006-07 93.35 75.81 33.92 14.20 217.28 110.57 106.71 24.28 22.63 355.52 11.27
2007-08 96.69 78.57 40.76 14.76 230.78 120.95 109.83 29.75 25.88 348.18 11.21
2008-09 99.18 80.68 40.03 14.57 234.47 118.14 116.33 27.71 22.27 285.02 10.36
2009-10 89.09 80.80 33.55 14.66 218.11 103.95 114.16 24.88 24.22 292.30 11.81
2010-11* 94.11 84.27 40.21 17.29 235.88 118.39 117.48 30.25 33.92 340.54 10.48
*3 Advance Estimates; # Million bales of 170 kgs each; ## Million bales of 180 kgs each. Source: Agricultural Statistical Division, Ministry of Agriculture, Government of India; Economic Survey 2010-11.
The estimated export of natural rubber during the corresponding period was 29 ,851 tonnes against an import of 1,71,282 tonnes (Table 1.11).
1.30
The National Horticulture Mission (NHM), in
operation in 372 districts of the country, aims to promote holistic development of the horticulture sector through area based and regionally differentiated
iii. Horticulture Crops

1.29 Development of horticulture is recognised as an avenue for diversification in agriculture to address nutritional security, enhance employment opportunities and provide export earnings. Among the various horticulture crops, fruits and vegetables form the single largest sub-sector constituting about 92.3 per cent of the total horticultural production in the country.
strategies. Under the mission, an area of 16.57 lakh ha., has been brought under horticulture crops and an expenditure of ` 4,125.43 crore had been incurred upto 2009-10. Area and production under horticulture crops increased from 20.7 million hectares and 214.7 million tonnes, respectively during 2008-09 to 20.9 million hectares and 223.1 million tonnes, respectively, during 2009-10 (Table 1.12).
e.
1.31
Agriculture and Allied Sector

Agriculture and allied activities contributed to
14.6 per cent of GDP in 2009-10 with agriculture accounting for 12.3 per cent, followed by forestry and logging at 1.5 per cent, and fishing at 0.8 per cent.
i. Livestock and Poultry

1.32
Floriculture in Poly House
During
2009-10,
the
livestock
sector
contributed to 3.5 per cent of GDP and 28.4 per cent of GDP from agriculture and allied activities. As per the
10
www.sansco.net
Table 1.11: Production, Consumption and Exports of Major Plantation Crops (lakh tonnes) Year Prodn. 2006-07 2007-08 2008-09 2009-10 2010-11*
NA: Not Available
Tea Cons. 7.71 7.86 8.02 7.70 NA

*: Estimated
Coffee Exports 2.18 1.85 1.90 2.13 1.78 Prodn. 2.88 2.62 2.62 2.90 2.99 Cons. 0.85 0.90 0.94 1.02 1.08 Exports 2.49 2.19 1.97 1.95 3.22 Prodn. 9.52 9.31 9.61 9.38 9.08 $
Rubber Cons. 10.91 11.58 11.64 12.78 12.43 $ Exports 0.57 0.60 0.47 0.25 0.29
9.73 9.87 9.73 9.91 9.66
$: April 2010- February 2011
Source: Ministry of Commerce and Industry, GoI. Coffee Board, Tea Board and Rubber Board
18th Livestock Census 2007, the livestock and poultry population in the country were 529.7 million and 648.8 million, respectively. The production of milk was 112.5 million tonnes and the per capita availability of milk increased from 258 grams per day to 263 grams per day due to increase in milk production in the country during 2009-10 over 2008-09. The production of poultry meat was estimated to be 1.85 million tonnes and egg production at 59.8 billion during 2008-09. The per capita availability of eggs has been around 51 per annum.
f. Agro and Food Processing Sector

1.34 Agro and Food Processing sector is regarded as a promising sector of the Indian economy in view of its large potential for growth and its socio economic impact, specifically on employment and income
generation. Agro-processing helps in better utilization and value addition of agricultural produce. The Vision Document 2015 by the Ministry of Food Processing Industries has set a challenging target of trebling the size of processed food sector by 2015 through appropriate enabling policies. The export of processed
ii. Fisheries
1.33 Fishing, aquaculture and allied activities are
foods including processed fruits and juices increased from ` 3,176 crore during 2008-09 to ` 3,255 crore during 2009-10.
reported to have provided livelihood to over 14 million persons in 2008-09. During 2009-10, the fisheries sector contributed to 0.8 per cent of GDP and 6.4 per cent of GDP from agriculture and allied activities. Fish production is projected to reach 10 million tonnes by the end of 11th Five Year Plan from the base level of 6.87 million tonnes during 2006-07. During the period between 2007-08 and 2009-10, the total fish production in the country increased by 10.5 per cent and reached 7.85 million tonnes (2.98 million tonnes of marine fish and 4.87 million tonnes of inland fish). Export of marine products was 6.64 lakh tonnes valued at ` 9,921 crore during 2009-10 as compared to 6.02 lakh tonnes with a value of ` 8,608 crore in the previous year.
Paddy cum fish Cultivation
11
www.sansco.net
Table 1.12: Area and Production of Major Horticulture Crops (Area in million hectares and Production in million tonnes) Year Fruits Vegetables Area Flowers Total Horticulture 18.7 19.4 20.2 20.7 20.9 Fruits Production Vegetables Flowers Total Horticulture 182.8 191.8 211.2 214.7 223.1
2005-06 2006-07 2007-08 2008-09 2009-10
5.3 5.6 5.8 6.1 6.3
7.2 7.5 7.8 7.9 7.9
0.1 0.1 0.2 0.2 0.2
55.4 59.6 65.6 68.4 71.5
111.3 114.9 128.4 129.1 133.7
0.6 0.8 0.8 0.9 1.0
Source: National Horticulture Board
g.
Agricultural Marketing
States/Union Territories have
` 1,33,377 crore (at 2004-05 prices) in 2009-10. The GCF in agriculture and allied activities as a proportion to GDP in the sector increased from 14.57 per cent in 2005-06 to 20.30 per cent in 2009-10. But the GCF in agriculture and allied activities as a proportion of total GDP varied between 2.66 to 3.09 per cent during the same period (Table 1.13).
1.35 Seventeen
amended their APMC Acts for agricultural market reforms. Initiatives have been undertaken by GoI for setting up terminal market complexes for fruits, vegetables and other perishables in States that have amended their APMC Acts. Agricultural Marketing Information Network (AGMARKNET) provides internet connectivity to agricultural markets for establishing information network of prices and other market related information. under Agricultural for commodities trade valued and at ` 8,614.58 crore and ` 306.65 crore were certified Agmark domestic exports, respectively during 2009-10 as compared to ` 7,865.25 crore and ` 241.08 crore, resepectively, during 2008-09.
j.
Kisan Credit Card Scheme
1.38 Kisan Credit Card (KCC) scheme introduced in 1998-99 has eased the flow of credit to farmers (Box 1.3). During 2010-11, 7.26 million KCC were issued by banks with sanctioned credit limit of ` 43,370 crore as against 9.01 milion cards and credit limits of ` 34,982 crore during 2009-10. Of the cumulative 100.93 million credit cards issued, as at endMarch 2011, 45.03 million cards (44.62%) were issued
Table 1.13: Gross Capital Formation in Agriculture (at 2004-05 prices) (` crore) Year GCF in Agriculture & Allied Activities 2005-06 2006-07 2007-08 86,611 90,710 1,05,034 1,28,659 1,33,377 7.3 6.6 6.5 8.3 7.7 Ratio of GCF in Agriculture to (%) Total GCF GDP in Agriculture & Allied Activities 14.57 14.65 16.03 19.67 20.30 2.66 2.54 2.69 3.09 2.97 Total GDP
h. Commodity Futures
1.36 Agriculture commodity futures market includes 21 commodity exchanges in the country. The value of total trade in commodity futures market increased from ` 77,64,754 crore in 2009-10 to ` 119,48,942 crore in 2010-11 recording a growth of 53.89 per cent during the period. The value of agricultural commodities as a proportion to total trade in commodity futures market decreased from 15.68 per cent in 2009-10 to 12.18 per cent in 2010-11.
i. Capital Formation
1.37 Gross Capital Formation (GCF) in agriculture and allied sectors increased from ` 86,611 crore in 2005-06 to
2008-09 2009-10(QE)
QE: Quick Estimates
Source: Economic Survey 2010-11
12
www.sansco.net
Table 1.14: Agency-wise, Year-wise Kisan Credit Cards Issued (As on 31 March 2011) (million) Year 2006-07 2007-08 2008-09 2009-10 2010-11 Cumulative# Co-operative Banks 2.29 2.09 1.34 1.74 2.81 40.70 Regional Commercial Rural Banks Banks 1.41 1.77 1.41 1.95 1.78 15.20 4.81 4.61 5.83 5.31 2.67* Total 8.51 8.47 8.59 9.01 7.26
crore against the claims of ` 29,102 crore. The share of SCB, SCARDB and RRB stood at ` 18,289 crore, ` 3,810 crore and ` 6,972 crore, respectively.
l.
Agricultural Insurance
1.41 With a view to providing indemnity to farmers in the event of crop failure due to natural calamities, pests and diseases, the National Agricultural Insurance Scheme (NAIS) has been in operation since rabi 19992000. This scheme, based on 'Area Approach', is open to all farmers irrespective of their size of holding and is being implemented by 25 States and 2 Union
45.03 100.93
* Data for commercial banks available up to 30 June 2010 # Since inception of the Scheme, i.e., August 1998 Source: NABARD
by commercial banks, followed by 40.70 million cards (40.33%) by co-operative banks and 15.20 million cards (15.05%) by Regional Rural Banks (Table 1.14). 1.39 State-wise analysis of KCC issued as at endMarch 2011, revealed that Uttar Pradesh accounted for 17.9 percent of the total cards issued, followed by Andhra Pradesh (16.9 per cent), Maharashtra (9 per cent), Tamil Nadu (6.5 per cent), Karnataka and Madhya Pradesh (6 per cent each).
Territories. During the period from rabi 1999-2000 to kharif 2010, the total claims was to the extent of ` 20,437 crore as against an amount of ` 6,213 crore paid as permium by farmers. A Modified National Agricultural Insurance Scheme (MNAIS) has been notified in 34 districts covering 22 States during rabi 2010-11.
1.42
The pilot Weather Based Crop Insurance
Scheme (WBCIS) is under implementation since kharif
k.
Agricultural Debt Waiver and Debt Relief Scheme, 2008
2007 to provide insurance to farmers against adverse weather conditions affecting crop production. Between kharif 2007 and kharif 2010, 81 lakh farmers have
1.40 The Agricultural Debt Waiver and Debt Relief (ADWDR) Scheme, 2008 for farmers was announced in the Union Budget 2008-09 to address the
been
covered
under
the
pilot
scheme
and
` 639.19 crore has been released as premium for farmers. The Coconut Palm Insurance Scheme (CPIS) was launched on a pilot basis in selected areas of eight States, i.e., Andhra Pradesh, Goa, Karnataka, Kerala, Maharashtra, Odisha, Tamil Nadu and West Bengal during 2009-10. As on 30 July 2010, 27,023 farmers were covered under the scheme.
indebtedness of farmers and difficulties of the farming community, especially small and marginal farmers. NABARD implemented the Scheme as the nodal agency for co-operative banks and RRBs. About 192.59 lakh farmer borrowers of co-operative banks and RRBs are estimated to have benefited under the Scheme, of which small and marginal farmers,
constituting 83.5 per cent were the major beneficiaries. Out of ` 29,240 crore received under the Agriculture Debt Waiver and Debt Relief Scheme 2008, the cumulative disbursements by NABARD was ` 29,071
m. Minimum Support Prices, Procurement and Stock of Foodgrains

1.43 Minimum Support Price (MSP) for the major kharif and rabi crops, except cotton, was increased
13
www.sansco.net
BOX 1.3 Task Force "to look into the issue of a large number of farmers, who had taken loans from private moneylenders, not being covered under the loan waiver scheme: Recommendations The Government of India had constituted a Task Force (TF) headed by Shri Umesh Chandra Sarangi, the then Chairman of NABARD 'to look into the issue of a large number of farmers, who had taken loans from private moneylenders, not covered under the loan waiver scheme'. The TF submitted its report to the Ministry of Agriculture, Government of India in June 2010. The policy recommendations of the Task Force are delineated below: A. Relief measures for farmers not covered by Agricultural Debt Waiver and Debt Relief (ADWDR) Scheme, 2008 Banks and co-operative credit institutions may encourage farmers, who had defaulted on loans taken prior to 1 April 1997, to access fresh farm loans. B. Policy measures for addressing the issues of farmer indebtedness to moneylenders and on measures to provide relief to such farmers State Governments to continue to make available funds for interest rebate/refund for timely repayment. Interest subvention be made available when loans are rescheduled. A portion of the anticipated interest subvention amount be parked with banks at the beginning of the year (as in the case of subsidy oriented development schemes of GoI) and adjusted at the end of the year to incentivise banks to reach out to more farmers with crop loans. Insurance schemes be redesigned, using satellite imagery and ground truths, with the panchayat as the unit for arriving at crop loss. Budgetary support for developing weather insurance products to be provided. JLG to be formed on a 'mission mode' so as to enable the farmers to access collateral free loans from the banking system. State governments to recognise the existence of tenant farmers, oral lessees, sharecroppers and amend related laws appropriately. All India Debt and Investment Survey (AIDIS) and Situation Assessment Survey (SAS) be interspersed and undertaken every 5 years. Other cooperatives of marginalised farmers, especially for the supply of inputs, storage, processing and marketing and banks be encouraged to lend to these and other agro processing cooperatives. NBFC to be more closely monitored and their loans not to be automatically considered as 'priority sector' loans. User owned and not-for profit MFIs may be provided access to finance from banks. Stamp duty on agricultural loan agreements to be exempted. Farm Credit Rating Institution on lines of CIBIL to be set-up.
C. Kisan Credit Card (KCC): KCC be technology enabled, including the conversion to a smart card with withdrawals and remittances enabled at ATMs, points of sale, and through hand held machines. Banks need to have core banking solutions in place at the earliest, to enable technology to benefit the farmers. The KCC limit be fixed for five years, based on the bankers assessment of total credit needs of the farmer for a full year, and that the limit be operated by the borrower as and when needed, with no sub limits for kharif and rabi,or for stages of cultivation. Each withdrawal under KCC liquidated in twelve months. be allowed to be
Automatic renewal of and annual increase on credit limit to be linked to inflation rate . Financial literacy and counselling campaigns to be undertaken to increase awareness among farmers on KCC. Cards issued to women farmers be reported separately, and that for women members of SHG as well as of thrift and credit cooperatives with a good savings history be provided with specially designed credit cards by banks, with limits linked to the value of their unpaid labour on their own farms or on farms of relatives.
D. Legislation regulating loans from private moneylenders Severe deterrent/punishment for non-registration and for other violations of the law. Creation of redressal. a quasi-judicial authority for quick
Widening of definition of 'moneylender' to include all forms of for-profit closely held financial organisations lending money. Any other closely held entity whose lending rates are not subject to other laws, to be covered by the money lending law. Initiation of action on the grievance of an aggrieved person and the constitution of a grievance redressal committee at the district or Loan recovery mechanisms. Confidentiality of transactions for registered moneylenders.
14
www.sansco.net
Table 1.15: Minimum Support Prices for Major Crops (` per quintal) Crop Kharif Paddy (Common) Jowar (Hybrid) Bajra Maize Arhar Moong Groundnut in shell Soyabean (black) Cotton Sugarcane@ Rabi Wheat Gram Lentil Rapeseed/Mustard 750 ^^ 1445 1545 1715 1000 1600 1700 1800 1080 1730 1870 1830 1100 1760 1870 1830 1120 2100 2250 1850 580 ^ 540 540 540 1410 1520 1520 900 1770 80.25 645 ^^ 600 600 620 1550 $$ 1700 $$ 1550 910 1800 81.18 850 $ 840 840 840 2000 2520 2100 1350 2500 # 81.18 950 $ 840 840 840 2300 2760 2100 1350 2500 # 129.84 1000 880 880 880 3000 * 3170 * 2300 1400 2500 # 139.12 ** 2006-07 2007-08 2008-09 2009-10 2010-11
^ An additional incentive bonus of ` 40 per quintal was payable on procurement between 1 March 2006 to 31 March 2007 ^^An additional incentive bonus of ` 100 per quintal was payable over MSP $ An additional incentive bonus of ` 50 per quintal was payable over MSP
$$ A bonus of ` 40 per quintal was payable over MSP * Additional incentive of ` 5 per kg for arhar and moong sold to procurement agencies was payable during the harvest/arrival period of 2 months # Staple length (mm) of 24.5-25.5 & micronaire value of 4.3-5.1
@ Statutory Minimum Price (SMP) upto 2008-09; Fair & Remunerative Price (FRP) since 2009-10 ** At 9.5 per cent recovery, subject to a premium of ` 1.46 for every 0.1 per cent increase in the recovery above 9.5 per cent Source: Directorate of Economics & Statistics, GoI
during 2010-11 over the previous year (Table 1.15). Maximum increase in the MSP during 2010-11, was for arhar (30.43%) followed by lentil (20.32%), gram (19.31%), moong (14.85%), groundnut in shell
marketing season for wheat) at 22.7 million tonnes and 22.51 million tonnes, respectively, represents a decline of (-) 1.3 per cent and (-) 11.30 per cent as compared to the corresponding date last year. The stock of foodgrains (rice and wheat) held by the Food Corporation of India (FCI) and State Agencies as on January 1, 2011 was 47.1 million tonnes against the buffer norms including the strategic reserve of 25.0 million tonnes. The off-take of foodgrains (rice and
(9.52%), sugarcane (7.14%) and common paddy (5.26%). MSP for jowar, bajra and maize were raised by ` 40 per quintal. 1.44 The procurement of rice and wheat as on March 1, 2011 (kharif marketing season for rice and rabi
15
www.sansco.net
wheat) under Targeted Public Distribution System (TPDS) and other schemes at 25.2 million tonnes during April-September 2010-11 was 7.69 per cent higher than that at 23.40 million tonnes during AprilSeptember 2009-10.
accounts for about 45 per cent of the manufacturing output and 40 per cent of the total exports of the country. As per the 4 th Census of the MSME Sector, there were 28.5 million enterprises producing output valued at ` 8,80,805 crore and providing employment to 65.9 million persons during 2008-09. The sector
n.
Micro, Small & Medium Enterprises
contributes 8 per cent to the country's GDP. Initiatives taken for the development of MSME sector include the
1.45 Micro, Small and Medium Enterprises (MSME) contribute significantly to the economic growth by being inclusive, employment friendly and promoting equitable development. The major advantage of the sector is its employment potential at low capital cost. The sector manufactures more than 6,000 products, ranging from traditional to high-tech items. It is estimated that in terms of value, MSME sector
implementation of MSMED Act, 2006, reservation of 21 items for exclusive manufacture in micro and small enterprise sector, dereservation of certain items for providing opportunities to MSME for technological upgradation, promotion of exports and achieving economies of scale and providing competitive edge to these units under the National Manufacturing
Competitiveness Programme (NMCP).
16
www.sansco.net
II
Development and Promotional Initiatives
NABARD continued to support various innovative initiatives in addition to the Bank's ongoing activities. Various initiatives and programmes of the Bank during the year are detailed in this Chapter. Programmes of the Government of India and the State Governments, implemented in association with the banks for the development of agriculture and rural sectors are also discussed.
Credit Planning
2.2 There are 395 District Development Managers'
B. Integrated District Plans

2.4 NABARD was involved as a Technical Support Institution in the preparation of Integrated Development Plans under Backward Regions Grants Fund in 17 districts covering five states, viz., Andhra Pradesh, Jharkhand, Maharashtra, Tripura and Uttar Pradesh.
(DDM) offices of NABARD across the country. In addition, 106 districts are tagged to specific DDM districts to focus on credit planning, development and promotional activities in these districts.
A. Potential Linked Credit Plans C. State Focus Paper

2.3 In order to provide meaningful link between and credit planning for supporting 2.5 State Focus Papers, presenting a comprehensive picture of potential available in various sectors of the rural economy, critical infrastructure gaps to be filled in and linkage support to be provided by various Government departments, were prepared by the Regional Offices at the State Level, based on PLP. State Credit Seminars were organised for discussing with the officials from State Government departments and financial institutions to bridge the infrastructure gaps for facilitating potential credit flow. development
agriculture and rural development, NABARD prepares Potential Linked Credit Plans (PLP). During the year, PLP were prepared for 624 districts in the country to guide the banks in their credit planning exercise and infrastructure development for 2011-12. The sectorwise credit flow projections captured in the PLP were utilised for arriving at the credit flow target to agriculture sector and priority sector.
Farm Sector
A. Watershed Development
2.6 The objective of developing watersheds is to significantly mitigate the drought induced distress of farmers in the area. NABARD anchors four types of watershed development programmes in the country covering over 1.70 million hectare. These programmes are: Indo-German (IGWDP) Watershed Watershed in Development Andhra Programme Participatory Maharashtra, 2.7 The Watershed Development Fund was established in NABARD in 1999-2000 with an initial corpus of ` 200 crore. The Fund is replenished every year and was augmented during the year with ` 947.12 crore. The Fund had a balance of ` 1,897.69 crore, as on 31 March 2011. States, Prime Ministers package in four States, and Integrated (IWDP) in Commission. Watershed Bihar, Development by Programme the Planning supported
Pradesh, Gujarat and Rajasthan (See Section L), Development Programme under Watershed Development Fund (WDF) in 15
17
www.sansco.net
2.8
During the year, 66 watershed projects were to 579, covering of ` an area of crore. to Full
year, ` 152.26 crore and ` 3.18 crore were disbursed under watershed projects as grants and loans, respectively; the cumulative disbursements under these components were ` 350.03 crore and ` 33.18 crore, respectively. in Box 2.1. 2.11 The participatory watershed development Major findings of the mid-course evaluation of a few WDF supported projects are given
sanctioned, taking the cumulative number of such projects and During 4.86 lakh ha. in 14 states, with a total commitment (loan grant the component) year, 45 220.57 projects graduated
Implementation Phase (FIP), taking the number of such projects to 255. 2.9 Under the Prime Minister's Relief package for 31
programme being implemented by NABARD under the Special Plan for Bihar component of Rashtriya Sam Vikas Yojana (RSVY), aims to develop 80,000 ha. of wasteland in Aurangabad, Banka, Bhabua, Gaya, Jamui, Munger, Nawada and Rohtas districts of Bihar with an allocation of ` 60 crore. Under the programme, a total of 79 projects in an area of 84,444 ha. had been sanctioned, of which six are at Capacity Building Phase (CBP) stage and 73 at FIP stage. During the year, 24 projects graduated to FIP stage. A sum of ` 20.18 crore was disbursed during the year and the cumulative disbursement, as on 31 March 2011, stood at ` 34.17 crore.
distressed districts in the four States, viz., Andhra Pradesh, Karnataka, Kerala and Maharashtra (for developing 15,000 ha. of watershed annually over two years in each of these districts), 71,127 ha. were taken up for implementation during the year, taking the cumulative area and financial commitment to 9.42 lakh ha. and ` 1,023 crore, respectively.
2.10 The watershed projects are entirely grant based in distressed districts while the assistance is grant-cum-loan in non-distressed districts. During the
Box 2.1 Mid-Course Evaluation of Watershed Projects supported under WDF (a) Chipni-Bandhoni and Lodhwara Watershed Reduction in distress migration due to improved
Projects in Chitrakoot District of Uttar Pradesh Study by Dhan Foundation Gross cropped area increased as fallow land/waste land was brought under cultivation. Ground water levels during monsoon rose by 12-18 feet from pre-development work. Significant gains in crop yields were observed in bajra/ jowar/pulses (50%), followed by paddy (43%). Population of cross bred dairy animals increased from 12 to 37 in Chipni - Bandhoni; in Lodhwara, it was 21 to 57. (b) Teliki, Nethigutlapalli, Kothapalli, Kosuvaripalli Watersheds in Andhra Pradesh - Study by Action for Food Production (AFPRO) Area under sweet orange increased from 20 acres to 58 acres.
agricultural production and productivity. Agricultural income increased two fold.
(c) Chaitanya, Mabbugutta, GB Thanda, Gramajyoti Watersheds in AP - Study by Central Research Institute for Dryland Agriculture (CRIDA ) Seventy acres of fallow/cultivable wastelands brought under cultivation during Kharif. Productivity increased in green gram (36%) & red gram (42%); bengal gram (45%) & groundnut (18%) during rabi. Rabi cropped area increased from 136 ha to 404 ha. Milch animal population increased from zero to 294; area under horticulture increased from 2.50 ha to 16 ha.
18
www.sansco.net
Cooperation (SDC) (` 10.80 crore), NABARD (` 20.62 crore) and contributions from villagers (` 2.73 crore). The Watershed Organisation Trust (WOTR) is the implementing agency for the project.
C. Village Development Programme

2.13 The Village Development Programme (VDP) introduced in 2007-08, is meant to fulfil NABARD's mandate
High Density Mango plantation in Watershed of Barakar
of
bringing
about
integrated
rural
development through credit and promotional efforts. Under the programme, one village in each DDM district and five villages in each of the Pilot Project for Integrated Development of Backward Blocks (PPID) blocks are to be developed in an integrated and holistic manner. The programme is now being implemented in 801 villages spread across 25 States, through 482 Project Implementing Agencies (PIA), including Non Governmental Organisations (NGO), Farmers' Clubs (FC) and Krishi Vigyan Kendras (KVK). The programme was completed in 115 villages and is under different stages of implementation in 686 villages. The Programme has been upscaled with the launch of Phase II of the programme (from April 2010), envisaging coverage of 1500 villages. The outcome of implementing of VDP-I are highlighted in Box 2.2.
B.
Climate Change Adaptation Project in Akole & Sangamner Taluka of Ahmednagar District, Maharashtra
Ahmednagar, the largest district of Maharashtra,
2.12
lies in the direct rain-shadow of Western Ghats and is vulnerable to frequent droughts. The project, therefore, seeks to enable vulnerable rural communities in the Akole and Sangamner taluks of the district, to cope with the inpact of climate change. The project is expected to develop a replicable model for Climate Change Adaptation in semi-arid and rainfed regions of the country. The project, being the first of its kind to be considered by NABARD under WDF, involves a total financial outlay of ` 34.15 crore, with grant assistance from the Swiss Agency for Development and
Box 2.2 Outcome of Village Development Programmes - Phase I Ten Essential Areas had been identified to facilitate development of agriculture and allied sectors, with focus on crop productivity, storage, processing and marketing linkages. Towards this end, 6,634 training and Credit related interventions facilitated access to institutional credit with focus on financial inclusion, Kisan Credit Card (KCC) scheme and investment in agriculture sector. Financial inclusion varied from 50% to 100% in the VDP villages. Critical infrastructure needs identified during Participatory Rural Appraisal have been addressed by ensuring synergy and convergence through 1,921 infrastructure development projects involving a financial outlay of `193.61 crore. Adoption of solar home/street lighting in several villages under the programme, awareness on environment and publications in vernacular for the benefit of the village community.
awareness programmes had been organised for the benefit of 1.80 lakh farmers. Promotional interventions covered 1.55 lakh rural
people through training and capacity building, especially in allied and non-farm sector activities, institution building through promotion of Farmers Club (FC) and Self-Help Groups (SHG), organising rural
entrepreneurship development programmes, etc.
19
www.sansco.net
D. Tribal Development
2.14 The integrated (a small Tribal tribal Development development as the Fund projects core (TDF) with was wadi created in 2004 with a corpus of ` 50 crore to support orchard) component.
of which 51 projects with financial assistance of ` 2.55 crore have been completed. Some of the major completed projects include (i) promoting commodity based marketing of agricultural produce on cluster basis in Uttarakhand; (ii) system of wheat intensification in Himachal Pradesh, (iii) development of Bharath Chakra (animal drawn mechanical plough) in Tamil Nadu; (iv) post- harvest value addition of medicinal dehydration (v) and in aromatic solar of crops dryers Kisan produced in Bandhu through in Uttarakhand; Yojana
These projects provide sustainable livelihood for tribal families through orchard based farming along with social ` welfare measures (` to improve crore as their grant living and standards. During the year, financial assistance of 373.97 crore 355.56 ` 18.41 crore as loan) was sanctioned for 126 projects benefiting 94,163 tribal families in various states. The cumulative sanction was `917.60 crore, as on 31 March 2011, covering 2,50,493 families in 317 projects across 24 States/Union Territories (UT).
implementation
Moradabad, Uttar Pradesh; (vi) study of commercial viability of whole seed corn production of elephant foot yam in West Bengal; (vii) skill upgradation for small and marginal farmers through training and empowerment for production of exotic vegetables in low cost poly-houses in Tamil Nadu (Box 2.3); (viii) demonstration of Organic Farming using the Phosphate Rich Organic Manure technology in Rajasthan; and (ix) protected vegetable cultivation in Uttarakhand.
E. Farm Innovation and Promotion Fund

2.15 The corpus under Farm Innovation and Promotion Fund (FIPF) has been enhanced to ` 50 crore, from 1 April 2009. During 2010-11, 45 projects were sanctioned in 15 states, with grant assistance of ` 5.47 crore, The projects cover process activities for like (i) innovative participatory guarantee system as a low cost alternative for certification small and organic farmers; products marginal
Box 2.3 Exotic Vegetables in Low Cost Poly-houses A project on "Skill Upgradation for Small and Marginal Farmers for Production of Exotic Vegetables in Low-Cost Poly- houses" was sanctioned under FIPF to TVS Educational Society, Chennai. The project was implemented in Shoolagiri block in Krishnagiri district with NABARD assistance of ` 6.02 lakh. The major interventions under the project included construction of poly-houses, capacity building of farmers on low cost poly-houses, improved methods of vegetable cultivation, cultivation of exotic vegetables like coloured capsicum, broccoli, chinese cabbage, zucchini, lettuce, training on adoption of organic farming, installation of drip irrigation system, hand holding support for the farmers on construction of poly-houses and market and bank linkages. The impact of the project was visible with increased water use efficiency through drip, reduction in pest attack by 2530%, increase in yields of capsicum and lettuce by 100% vis-a-vis crops in open condition, reduced labour, off-season enhanced production, improved quality of the produce fetching premium prices (5-10 % increase) and capturing niche markets. The project, which was a demonstrative model, has trained 30 entrepreneurs (small and marginal farmers). The project is now being replicated in the states of Karnataka and Uttarakhand.
(ii) production, distribution and processing of organic milk; (iii) sustainable upscaling of weather insurance; (iv) mass propagation of selected species of bamboo through and innovative stage techniques based for rural resource for development; (v) standardisation of planting geometry growth fertigation patterns commercial cultivation of selected vegetables using drip irrigation system; (vi) identifying and developing sustainable strategies for combating twisting malady in onion; (vii) sustainable initiative for improving production & productivity of sugarcane; (viii) seed purification, multiplication and area expansion of Navara rice; (ix) demonstration and field adaptation of Phytotron Sugarcane Ripener technology innovation for quantitative and qualitative improvement in sugarcane production; (x) commercialisation of Anthurium and Heliconia; and (xi) promotion of Natueco farming across various states. Cumulatively, 123 projects were sanctioned with a financial support of ` 11.65 crore,
20
www.sansco.net
F.
Farmers' Technology Transfer Fund
Western (13.15%), and the Northern (11.39%) regions, while NER accounted for only 3.25 per cent. During 2010-11, NABARD launched a pilot project aimed at development of a cadre of farmers from amongst the members of Farmers' Clubs, trained in the areas of Technology Transfer, Credit Counselling and Market Advocacy. Bihar, As on 31 March 2011, 25 projects had Jharkhand, West Karnataka, Other Kerala, initiatives of been sanctioned in 12 states, viz., Arunachal Pradesh, Haryana, and Maharashtra, Odisha, Tamil Nadu, Uttar Pradesh, Uttarakhand included (i) Bengal. into a Entering Memorandum
2.16 Farmers' Technology Transfer Fund (FTTF) has been augmented to ` 100 crore from 1 April 2010. During the year, 512 diverse and innovative proposals for transfer of technology, were sanctioned with grant assistance of ` 44.97 crore in 27 states. The cumulative disbursement was ` 33.55 crore. Some of the major proposals sanctioned were: (i) setting up of Very Small Aperture Terminal (VSAT) based Village Resource security Centres and involving ISRO-VSAT; by (ii) food sustainable livelihood livelihood upscaling farming;
System of Rice Intensification (SRI); (iii) creating sustainable through organic (iv) providing Short Messaging Service (SMS) services to the Farmers' Clubs by Reuters Market Light (RML), (v) intensive cultivation of vegetables through drip irrigation system; (vi) demonstration of brackish water poly-culture technology for rural development; (vii) transfer of technology to farmers and livelihood improvement through formation of technology users' groups and formation of Joint Liability Groups (JLG); (viii) scientific sericulture; (ix) preparation of web based interactive packages for selected medicinal crops; (x) developing organic farming technology and package of practices for organic production of Navara rice; and (xi) establishing Farmers' Resource Centre (FRC).
Understanding (MoU) for convergence of Farmers' Club Programme with the developmental schemes of Government of Uttar Pradesh and (ii) engaging 432 FC as Business Facilitators (in 13 states) and four FC as Business Correspondents by banks. As an Information and Communication Technology (ICT) initiative, FC are being provided with information on weather, market prices, crop advisory, etc., through SMS on mobile phones (29,838 mobiles served till 31 March 2011). Three Farmers' Training and Rural Development Centres (FTRDC) were provided grant assistance of ` 1.02 crore under FTTF, as on 31 March 2011.
H. Capacity Building for Adoption of Technology

2.18 The 'Scheme for Capacity Building for Adoption
G. Farmers' Club Programme

2.17 The programme aims to organise farmers to facilitate accessing credit, extension services, technology and markets. During the year, 21,903 of Technology (CAT)' aims at capacity building of farmers for adopting new/innovative methods of farming, through training and exposure visits. During the year, 282 exposure visits for 7,548 farmers were arranged in collaboration with select research institutes, KVK and SAU. The areas covered were vermi-compost, organic farming, tissue culture, nursery management, off-season hybrid vegetable cultivation, vegetable production in poly-house, drip irrigation in medicinal plants, processing of horticulture produce, milk processing & manufacture of milk products, poultry farming, scientific cultivation of lac, etc.
Farmers' Clubs (FC) were launched, taking the total number of clubs to 76,708 as on 31 March 2011. Agency-wise, NGO promoted maximum number of clubs (13,599), followed by co-operative banks (2,922), commercial banks (2,733), RRB (2,215), State Agricultural Universities (SAU)/Krishi Vigyan Kendras (KVK) [255] and other agencies (179). An analysis of the region-wise distribution of clubs indicated that the Central region had the highest share (30.39%), followed by the Southern (21.87%), Eastern (19.95%),
21
www.sansco.net
I.
Pilot Project on Augmenting Productivity of Lead Crops
outlay of ` 27.22 crore, GoI released ` 23.67 crore; with the utilisation at ` 23.02 crore. While 100 Cattle Development Centres have been established in each state, 16 District Dairy Farmers' Associations have been formed in Uttar Pradesh and 13 in Bihar. As against a target of 80,000 families to be covered in each state, a total of 83,938 and 99,230 families were registered in Uttar Pradesh and Bihar, respectively. The number of pregnancies confirmed (under the Artificial Insemination component) was 3,20,296 and 2,51,294 in Uttar Pradesh and Bihar, respectively.
2.19 NABARD in 2009-10, had launched the 'Pilot Project on augmenting productivity of lead crops/ activities through adoption of sustainable agricultural practices'. cost The yield gap of crops would be bridged and value addition, resulting in through adoption of sustainable agricultural practices, reduction improved standards of living for the rural farming community. The project is to be implemented initially in 4-6 clusters of five villages per state, proliferating to 600-900 villages at the national level. As on 31 March 2011, 44 projects covering 220 villages were launched with a financial commitment of ` 15.41 crore.
ii.
Special
Project
on
Livelihood
Based
Development
2.23 The Special was Project on Livelihood under Based
J.
Financing Purchase of Land for Agriculture Purposes
Development
sanctioned
Swarnjayanti
Gram Swarozgar Yojana (SGSY) by GoI in 2006-07 for implementation in Sultanpur and Rae Bareli districts of Uttar Pradesh. The project aims at covering 8,000 Below Poverty Line (BPL) families under Multiactivity Approach for Poverty Alleviation (MAAPA) and 15,000 financially very needy youth under Demand Driven Skill Development (DDSD) through Livelihood Advancement two districts. Business The School cost of (LABS) the in the is project
2.20 The Scheme for "Financing Purchase of Land for Agriculture Purposes", under implementation since August 2001, aims to provide credit facility to SF/MF, share croppers and tenant farmers for purchase of agriculture land and fallow land with a view to increasing agricultural production and taking up diversified activities. During 2010-11, ` 20.55 crore bank loan was disbursed to 464 borrowers in 7 states with refinance of ` 18.99 crore.
` 14.97 crore for Sultanpur and ` 14.90 crore for Rae Bareli. NABARD is the project holder while BAIF and Dr. Reddy Foundation are the implementing agencies for the two components. During 2010-11, ` 0.41 crore and ` 0.33 crore were released for Sultanpur and Rae Bareli districts, respectively, taking the cumulative disbursement to ` 8.98 crore and ` 7.72 crore. (CDP) were
K. Government Projects
2.21 NABARD continued to implement/coordinate the following area specific projects of the Government of India (GoI).
i.
2.22
Cattle Development Projects

Cattle Development Projects
sanctioned in 2004-05 by GoI for implementation by Bharatiya Agro Industries Foundation (BAIF), Pune in 17 districts of Uttar Pradesh and 13 districts of Bihar. NABARD is the co-ordinating agency and facilitator for channelising funds, ensuring its utilisation, project supervision and monitoring. Against a total financial
iii. Dairy and Poultry Venture Capital Funds

2.24 Dairy Venture Capital Fund (DVCF) scheme was as Dairy Entrepreneurship Development
modified
Scheme (DEDS) with effect from 1 September 2010 by replacing interest free loan with capital subsidy. However, Poultry Venture Capital Fund (PVCF) continued in the
22
www.sansco.net
Interest Free Loan mode. During the year, an amount of ` 12 crore was received from the Ministry of Agriculture (MoA), GoI for DVCF, ` 25.69 crore for PVCF and ` 20.40 crore for DEDS. An amount of ` 27.48 crore was sanctioned for 2816 units under DVCF, ` 28.57 crore for 342 units under PVCF and ` 9.69 crore for 1978 units under DEDS. The cumulative sanctions as on 31 March 2011 stood at ` 174.39 crore for 18184 units under DVCF, ` 48.18 crore for 633 units under PVCF, and ` 9.69 crore for 1978 units under DEDS.
L.
2.26
Externally Aided Projects

NABARD received ` 132.27 crore during 2010-11
and disbursed ` 135.76 crore as grant assistance during the year under the Kreditanstalt fr Wiederaufbau (KfW) supported externally aided projects, which are at various stages of implementation (Table 2.2).
a.
Adivasi Development Programme in Gujarat and Maharashtra

KfW-NABARD-V-Adivasi Development
2.27 The
Programme in Gujarat is being implemented in
iv.
Artificial Groundwater Recharge through Dugwells
Valsad and Dangs districts through BAIF since 1994-95, with an outlay of ` 67.25 crore with components of mango and cashew nut wadi (small orchard), soil conservation, water resources development, women/landless family development and health. The programme covered 13,663 families from 162 villages against the target of 10,000 families. A total area of 5,153 ha., was brought under wadi, against the target of 4,047 ha.. KfW also sanctioned a grant assistance of 7 million (approx. ` 38.15 crore) for Phase II (2006-2014) of the programme, covering 4,700 families in these districts. Under this Phase, 5,922 families had been identified, 2,343 ha., of wadi established and 253 wadi tukadis (group of 8-10 wadi holders) formed, as on 31 March 2011. 2.28 The KfW NABARD Adivasi Development
2.25
The programme covered 1155 Blocks/Talukas in Karnataka, Madhya Pradesh, Maharashtra,
146 districts of seven states, viz., Andhra Pradesh, Gujarat, Rajasthan and Tamil Nadu, phased over three years, i.e., from 2007 to 2010. An estimated 44.54 lakh recharge structures was envisaged for construction adjacent to dugwells, at a total cost of ` 1,871.10 crore. Out of this, the subsidy to be distributed to the farmers/beneficiaries is ` 1,499.25 crore (Table 2.1). Out of the total funds of ` 1,536.75 crore received from the Ministry of Finance, GoI, net subsidy [including for IEC (Information, released by Education, Communication) activities]
NABARD was ` 280.637 crore, for construction of 7.13 lakh Artificial Recharge Structures. Programme in Maharashtra is under implementation in Nashik and Thane Districts, since 2000, with KfW
Table 2.1: Artificial Groundwater Recharge through dugwells Sl. State No. 1 2 3 4 5 6 7 Andhra Pradesh Gujarat Karnataka Madhya Pradesh Maharashtra Rajasthan Tamil Nadu Total Period : 2007-10 No. of Dug Wells (lakh) 7.37 5.59 1.54 3.60 3.28 10.65 12.51 44.54 Amount of subsidy for dug well recharge (` crore) 298.87 189.72 53.62 123.09 100.68 283.07 450.20 1499.25
assistance of 14.32 million ( ` 82.22 crore). The project covered 13,848 families against the target of 13,000 families and 4,975 ha. of the target of 4,047 ha.. wadi area against
b.
Indo-German Watershed Development Programmes

Indo-German Watershed Development
2.29 The
Programmes (IGWDP) introduced in Maharashtra, is an integrated programme implemented by Village Watershed Committees (VWC) in association with NGO for regeneration of natural resources. Phase I (1990-2000) and Phase II (2001-2007) of the
23
www.sansco.net
Table 2.2: Externally Aided on-going Projects (As on 31 March 2011) ( ` lakh) Sl. Name of the Project No. External assistance (million) Amount received by NABARD During 2010-11 Cumulative Disbursements made by NABARD During 2010-11 Cumulative
1.
KfW-NABARD V-Adivasi Development Programme in Gujarat (Phase I) 13.29 (+ 1.5 Suppl. Grant) 7.00 1310.31 8470.94 1108.41 8395.23
i. Adivasi Development Programme in Gujarat (Phase II) ii. iii. iv. v. vi. IX-Adivasi Development Programme in Maharashtra Indo-German Watershed Development Programme in Andhra Pradesh Indo-German Watershed Development Programme in Maharashtra (Phase III) Indo-German Watershed Development Programme in Gujarat Indo-German Watershed Development Programme in Rajasthan vii. KfW-Sewa Bank Project 2. i ii iii
14.32 8.69 19.94 9.20 11.00 4.09
1685.25 1402.14 2785.06 346.06 230.84 266.73
7595.85 2434.29 8495.56 789.91 642.12 960.74
1632.35 1307.47 3286.12 394.59 418.70 264.06
7576.87 2591.02 8683.86 816.87 872.70 951.13
KfW-Umbrella Programme for Natural Resources Management (UPNRM) Loan Grant Grant for Accompanying Measures FC Loan : 15.00 FC Grant : 1.4 Grant for Accompanying Measures : 3.00 FA of TC from GIZ 1.50 # Total 4738.86 82.484 286.837 5411.240 97.122 373.410 4765.454 80.804 263.726 6197.94 108.414 357.852
iv
Technical Component (TC) Assistance from GIZ
92.520 13227.091
92.520 35363.702
54.058
54.058
13575.742 36605.944
# Part of 8.5 million total TC grant support from GIZ Sewa: Self Employed Womens Association
FC: Financial Co-operation
programme
were
successfully
completed,
covering
c.
95 watersheds on 1.02 lakh ha. Under Phase III (2005-12), 114 projects have been sanctioned since January 2005. Of these, 10 projects were completed, 100 watersheds reached FIP and four projects were terminated.
Umbrella Programme on Natural Resources Management
2.30 The Umbrella Programme on Natural Resources Management (UPNRM) is a loan-cum-grant based Indo-German programme being implemented since 2007-08 by NABARD in collaboration with KfW and
24
www.sansco.net
GIZ
(formerly by
GTZ).
It
aims
at
boosting
rural
cumulative FC Loan, FC grant and AM received from KfW was ` 54.11 crore, ` 0.47 crore and ` 3.73 crore, respectively while ` 0.92 crore was received as TC from GIZ.
livelihoods
supporting
community
managed
sustainable natural resource management projects. The total fund envisaged under the programme is 30.90 million ( 19.40 million from KfW, 8.50 million from GIZ and 3.00 million from NABARD). During the year, 34 projects were sanctioned, with a financial assistance of ` 76.36 crore (` 71.72 crore as loan and ` 4.64 crore as grant). Cumulatively, 64 projects in 13 states and one UT (A & N Islands) have been sanctioned financial assistance of ` 155.75 crore (` 146.04 crore as loan and ` 9.71 crore as grant), as on 31 March 2011. A success story under UPNRM is given in Box 2.4. An amount of ` 50.32 crore (` 47.65 crore as loan and ` 2.67 crore as grant) was disbursed during the year, taking cumulative disbursements to ` 65.87 crore (` 61.98 crore as loan and ` 3.89 crore as grant) as on 31 March 2011. An amount of ` 47.39 crore as Financial Co-operation (FC) loan, ` 0.82 crore as FC grant, ` 2.87 crore as Accompanying Measures (AM) from KfW and ` 0.93 crore from GIZ under Technical Component (TC) were received during the year. The
M. New Initiatives
(a) System of Rice Intensification
2.31 System of Rice Intensification (SRI) is a
combination of simple agronomic and management practices that improve productivity. A project of 150 Model Units covering 28,800 ha and 84,000 farmers, was launched in June 2010 in 13 identified states for implementation over a period of three years, with total financial outlay of ` 25.68 crore. A total of 158 Model Units with a financial outlay of ` 22.35 crore was sanctioned, against which an amount of ` 5.83 crore was disbursed during the year. The Deptartment of Agriculture & Cooperation, MoA, GoI has agreed for financial convergence of SRI promotion programme with National Food Security in Mission (NFSM) programme districts. implemented identified NFSM-Rice
Box 2.4 UPNRM Projects - A Success Story Efficient Irrigation System in Doddaballapur Taluk of Bengaluru (Rural) District of Karnataka The project is based on a pilot developed by the Bangalore Electric Supply Company (BESCOM) in partnership with the US Agency for International Development (USAID/ India) wherein, the energy service company, Enzen Global Solutions Private Limited (ENZEN) has been engaged to replace the IP sets in 37 villages spread over five Gram Panchayats, viz., Melekote, Thubugere, Konaghatta, Rajaghatta & Hadonahalli in Doddaballapur Taluka of Bangalore (Rural) district of Karnataka. Under UPNRM, NABARD sanctioned a financial assistance of ` 3.28 crore [ ` 3.08 crore as term loan for replacing 647 irrigation pump sets and ` 0.20 crore as grant for Agriculture ENZEN. Demand Side Management (AgDSM)] to The project being implemented in PPP mode envisages a return for ENZEN and BESCOM in the ratio of 75:25, respectively, from the revenue generated out of energy savings. In this model, the farmer does not have to pay anything for getting his inefficient pump replaced with a New High Energy Efficiency Pump Set (NHEP). ENZEN will be paid by BESCOM, through the energy savings achieved. ENZEN will also benefit through the carbon
credits earned under the Clean Development Mechanism (CDM) to ensure return on its investment in NHEP. On an average, the project will generate an assured income of ` 122.44 lakh (75% of the same to accrue to ENZEN) out of energy savings from 647 pumpsets and the income from Certified Emission Reductions (CER) from the third year onwards, will be to the tune of ` 66.79 lakh per year.
25
www.sansco.net
(b) Pilot Project on Natueco Farming

2.32 Keeping in view the opportunities for replicating the Natueco Farming model, especially among small and marginal viz., farmers, Andhra pilot projects involving a financial outlay of ` 2.29 crore were launched in six States, Pradesh, Gujarat, Madhya Pradesh, Maharashtra, Tamil Nadu and West Bengal. Seventeen projects with a financial commitment of ` 0.87 crore were sanctioned. The salient features of Natueco farming are given in Box 2.5.
Box 2.5 Salient features of Natueco Farming (10 Gunta Model) Adoption of zero tillage with simultaneous cultivation of a combination of seasonal and perennial crops. High density planting and canopy management through pruning (roots and foliage) for optimising yield In-situ incorporation of entire crop residue and other biomass including weeds, which shall form the source of nutrients on decomposing. Watering of the plant to maintain moisture instead of irrigating the field
(c) Sustainable Sugarcane Initiatives

2.33 Sustainable Sugarcane Initiatives (SSI), developed
Border planting commercial use with herbs and tree species of
under ICRISAT-WWF Project for promoting farm-based methods to improve water productivity, aims at providing practical solutions to farmers in improving the productivity of land, water and labour. In addition, it reduces crop duration and provides factories a much longer crushing season, hence increasing employment. A proposal for promoting SSI technology was sanctioned by Karnataka Regional Office under FIPF, involving an outlay of ` 9.35 lakh during the year. Four workshops were also organised in Karnataka, Tamil Nadu and Maharashtra during the year, to understand the
Zero pesticide application, relying on pest and disease management by Nature Preference for local varieties of food and non food crops Total involvement of the family in production process
operational issues, needs of the farmers and working out effective linkages among the stakeholders. Based on the feedback, necessary guidelines are being framed for upscaling the programme.
Rural Non-Farm Sector

A. NABARD-SDC Fund
2.34 NABARD, in
Rural
Innovation
with the SDC
amount of ` 14.42 crore was disbursed during the year, taking the cumulative disbursement to ` 32.99 crore. Sixty-two projects had been successfully completed and 34 projects were in advanced stages of implementation.
collaboration
constituted the Rural Innovation Fund (RIF) from 1 October 2005, with a corpus of ` 140 crore. The setting up of the Fund is intended to support innovative and risk mitigating experiments in farm, non-farm and micro-finance sectors. During 2010-11, 122 innovative projects were sanctioned, taking the cumulative number to 375, as at end-March 2011. An amount of ` 10.42 crore (including supplementary assistance to projects sanctioned earlier) was sanctioned during the year taking the cumulative sanctions, till 31 March 2011, to ` 49.28 crore, against which an
B. Strengthening of Rural Haats

2.35 Haats' Under the 'Scheme for Strengthening of Rural introduced in 1999, grant grant support of of
` 5.74 crore was sanctioned to 118 rural haats during 2010-11. Cumulative assistance ` 13.19 crore has been sanctioned for 307 rural haats across 23 States.
26
www.sansco.net
C. Cluster Development
2.36 NABARD has been implementing the Cluster Development 1999-2000. Programme The under the National a Programme on Rural Industrialisation (NPRI) from programme encompasses comprehensive strategy aimed at holistic development of clusters and raising income levels and living standards of artisans through various planned interventions. A total of 113 clusters across 84 districts in 22 States had been approved, as on 31 March 2011. During the year, four programmes under
and Skill Development Programmes (SDP), since early nineties, as proven tools for generating selfemployment opportunities in rural areas. During the year, 3,327 REDP/ SDP were supported with financial assistance of ` 12.34 crore. Cumulatively, 17,859 REDP/SDP have been supported with grant of ` 83.35 crore. This included support extended to RUDSETI and other similar institutes for incurring capital and recurring expenditure.
E. Women Empowerment Programme

2.38 As on 31 March 2011, 201 Women
participatory clusters and two under intensive clusters were approved. As many as 20 clusters are being supported in the North Eastern Region alone and a large number of clusters are being promoted in less developed states like Chhattisgarh, Jharkhand, Odisha and Madhya Pradesh. In order to ensure smooth implementation and monitoring of the initiatives, capacity building programmes were organised for the participants from banks, government departments/ NGO/ VA etc. During 2010-11, four on-location cluster workshops were conducted, taking the total number of such programmes to 29. 2.39 During 2010-11, 320 marketing events/ Development Cells (WDC) were supported to address gender discrimination in credit and support services. A sum of ` 0.37 crore was disbursed for the purpose. Under Assistance to Rural Women in Non-Farm Development (ARWIND) scheme, grant support of ` 0.36 crore was released.
F.
Marketing
D. Rural Entrepreneurship Development and Skill Development Programmes

2.37 NABARD has been supporting Rural
exhibitions, were supported with a grant assistance of ` 2.59 crore. The Bank continued to co-sponsor SARAS Mahalaxmi Fair wherein 130 artisans and 61 agencies from 24 States participated in the 15-day long exhibition, which helped the artisans to realise sales of over ` 0.75 crore.
Entrepreneurship Development Programmes (REDP)
G. Swarojgar Credit Card Scheme

2.40 During the year, 1.20 lakh Swarojgar Credit Cards (SCC) having credit limit of ` 514.26 crore were issued for facilitating hassle-free credit for investment and working capital requirements of small/microentrepreneurs. The cumulative total of SCC was 12.12 lakh involving credit limit of ` 4,949.51 crore.
REDP training in in tailoring in NER
27
www.sansco.net
Financial Inclusion
2.41 The Financial Inclusion Fund (FIF) for meeting the cost of developmental and promotional interventions of financial inclusion, and Financial Inclusion Technology Fund (FITF) for meeting the cost of technology adoption, were set up in NABARD during 2007-08, as recommended by the Committee on Financial Inclusion (Chairman : Dr. C. Rangarajan). The corpus of each Fund is ` 500 crore, to be contributed by the GoI, The Reserve Bank of India (RBI) and NABARD in the ratio of 40:40:20 in a phased manner over five years. GoI and NABARD made initial contributions of ` 10 crore and ` 5 crore, respectively, to each of these Funds. GoI again contributed ` 10 crore for 2009-10 and 2010-11 to each of the Funds. As on 31 March 2011, the contribution to this corpus by GoI stood at ` 30 crore in each of the Funds, and by NABARD at ` 30 crore (FIF) and ` 40 crore (FITF). The RBI has decided to contribute to these Funds on a reimbursement basis. During the year 201011, RBI contributed ` 3.46 crore (` 3.05 crore towards FIF and ` 0.41 crore towards FITF), being its share of expenditure incurred upto July 2009. iii. Support is being made available from FIF for producing states, viz., and telecasting financial literacy programmes in Hindi, through Doordarshan, in six Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Rajasthan and Uttar Pradesh. The production and telecast of financial literacy programmes envisaged Doordarshan. in based regional on the is languages being is also with to experience extended ii. The Primary Agricultural Credit Societies (PACS) have been permitted to function as BC of Commercial Banks (CB) and RRB, as per RBI guidelines. However, PACS cannot function as BC of co-operative banks, till necessary guidelines are issued by RBI. Operations Ltd. (FINO)-Fintech Foundation would be available and the cost would be reimbursed through the bank engaging the BC/CSP.
Support
Agricultural Finance Corporation Ltd. (AFC) for promoting financial literacy among rural adults in West Bengal through SHG and FC.
A. Policy Initiatives
2.42 The following policy inititatives were taken during the year: i. The capacity building component for authorised functionaries of well-run SHG, to be identified by banks, would be supported under FIF. Business Correspondents (BC), being agents of banks, are expected to work at the 'last mile'. As such remuneration to BC is to be taken care of by the banks themselves. Also, pilot projects of Farmers' Clubs (FC) as Business Facilitator (BF) and SHG as BC/BF in one district have been extended to all villages having 2000 and more population in the command area of RRB. Financial support of ` 3,000 per BC or Customer Service Provider (CSP) for three-days training at ` 1,000 per day through Financial Information Network &
iv. NABARD is working with the Indian School of Microfinance for Women (ISMW) and has identified state level partners on modalities for alliance, monitoring systems and impact evaluation mechanism, for formulating a National Alliance on Financial Literacy.
Financial Literacy Camp
28
www.sansco.net
v.
As hardship areas need special attention, it has been decided to extend financial support to all the banks from FIF & FITF at 100 per cent the project outlay for eligible activities in the North Eastern Region, Andaman & Nicobar Islands, Chhattisgarh, Himachal Pradesh, Jammu & Kashmir, Jharkhand, Sikkim and Uttarakhand. (Andhra Ten districts, Bokaro, Rayagada are viz., East and [Khammam Deogarh, Sambalpur Pradesh); Malkangiri, which
cost, with the balance to be met by the sponsor banks and the RRB in the ratio of 50:10, respectively. RRB will be extended support for Information and Communications Technology (ICT) solutions in all villages having population of above 2,000 and falling in the command area of the RRB. viii. Support to Lead Banks to establish Financial Literacy and Credit Counselling Centres (FLCC) is extended, subject to certain conditions. ix. The following major proposals were sanctioned during the year under FIF and FITF: (i) project on Micro-Pension Model among SHG members and the Rural Poor, submitted by Invest India MicroPension Services (IIMPS), (ii) project for promoting finger print interoperability to IIT, Kanpur and (iii) installation of 25 ATM by Langpi Dehangi Rural Bank, Assam. The project submitted by Pension Fund Regulatory and Development Authority (PFRDA) and Dept. of Financial Services on 'Swavalamban Scheme' under New Pension System (NPS) was accorded in-principle approval.
Singhbum, Latehar, West Singhbum (Jharkhand); Gajapati, (Odisha)], considered
disturbed but do not figure in the list of 256 critically excluded districts are to be given the same priority as the 256 critically excluded districts. The existing quantum of support to CB, RRB and Cooperatives has been enhanced to 60, 80 and 90 per cent, respectively, of the project outlay. Fifty per cent of the sanctioned amount will be released in advance to meet the start-up expenses and to hasten the pace of implementation. vi. A simplified procedure linking the support (under FITF) to cost of Smart Cards or Point of Sale (POS) devices, at rates approved by the Advisory Board, was introduced for RRB and Cooperatives, replacing the present approach of Viability Gap Funding. This was also extended to CB in the North Eastern Region, Hilly Regions and those in the 256 excluded and 10 disturbed districts. vii. For implementing Core Banking Solutions (CBS) in 28 weak RRB in the first phase, support from FITF will be to the extent of 40 per cent of the total
B. Fund Utilisation
2.43 An amount of ` 19 crore under FIF and ` 101.10 crore under FITF were sanctioned towards Financial Inclusion during the year. As against the targets of ` 22 crore and ` 28 crore to be disbursed, respectively under FIF and FITF during 2010-11, ` 9.21 crore and ` 54 crore were disbursed under the funds (Table 2.3). The cumulative sanction as on 31 March 2011, was ` 38.66 crore for 150 projects under FIF and ` 122.41 crore for 55 projects under FITF.
Table 2.3: Funds Utilisation - FIF and FITF (1 April 2010 to 31 March 2011) (` crore) Name of the Fund Target for 2010-11 D FIF FITF TOTAL
S: Sanctioned
Commercial Banks S 0.15 2.72 2.87 D 0.70 0.41 1.11 S 2.31 97.75
RRB D 1.52 52.27 53.79
Cooperative Banks S 0.22 0.09 0.31 D 0.24 1.24 1.48 S
Others D 6.75 0.08 6.83
TOTAL S 19.00 101.10 120.10 D 9.21 54.00 63.21
22.00 28.00 50.00
16.32 0.54 16.86
100.06
D: Disbursed
29
www.sansco.net
C. NABARD-UNDP Collaboration for Financial Inclusion

2.44 UNDP-NABARD Financial Inclusion Fund has been established in NABARD to provide better access to financial products and services for reducing risks and enhancing livelihood for the poor, especially the
SC and ST, minorities and the displaced. Under the collaboration, ` 173.22 lakh had been utilised during 2010-11 for activities conducted by NABARD in seven focus states; Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh. The Annual Work Plan for 2011 (1 January to 31 December 2011) for NABARD is of the order of ` 228.55 lakh.
Micro-Finance
2.45 NABARD is instrumental in facilitating various activities under micro-finance sector at the ground level, involving all partners, viz., NGO, bankers, socially spirited individuals, other formal and informal entities and even government functionaries. This is done through training and capacity building of partners, promotional grant assistance to Self Help Promoting Institutions (SHPI), Revolving Fund 2.47 The Micro-finance Development and Equity Fund (MFDEF) is being utilised for promotion of various micro-finance activities such as formation and linkage of SHG through SHPI, training and capacity building of stake holders, capital and soft loan assistance to MFI,
2.46 As on 31 March 2010, there were more than outstanding to weaker sections by scheduled commercial banks, improved marginally to 16.3 per cent from 15.8 per cent in the previous year. The progress of the microfinance programme is given in Table 2.4.
A. Micro-finance Equity Fund
Development
and
Assistance (RFA) to Microfinance Institutions (MFI), equity/Capital Support (CS) to MFI to supplement their financial resources and 100 per cent refinance against bank loans for micro-finance activities.
livelihood propagation, studies, documentation, etc. During 2010-11, ` 47.38 crore was released, of which ` 29.95 crore was grant support for promotional activities and ` 17.43 crore for CS/ RFA to MFI, as against ` 20.49 crore and ` 60.42 crore, respectively, in the previous year.
69.53 lakh savings-linked Self Help Group (SHG) and more than 48.51 lakh credit-linked SHG covering 9.7 crore poor households under the micro-finance bank programme. As on 31 March 2010, the share of
loans outstanding to SHG, as a percentage to loans
Table 2.4: Progress of the Micro-Finance Programme (As on 31 March) (` crore) Sl. No. Particulars 2009 Number 1 Loans disbursed during the year Loans Outstanding 16,09,586 (2,64,653) 42,24,338 (9,76,887) 61,21,147 (15,05,581) Amount 12,253.51 (2,015.22) 22,679.84 (5,861.73) 5,545.62 (1,563.39) Self-Help Groups 2010 Number 15,86,822 (2,67,403) 48,51,356 (12,45,394) 69,53,250 (16,93,910) Amount 14,453.30 (2,198.00) 28,038.28 (6,251.08) 6,198.71 (1,292.62) Micro-Finance Institutions (MFI)* 2009 Number 581 Amount 3732.33 2010# Number Amount
779 10728.49 [88] [2665.75] 1659 13955.74 [146] [3808.20]
1915
5009.09
Savings Accounts with Banks
Figures in parentheses indicate the share of SHG covered under SGSY * : Actual Number of MFI provided with bank loans would be lower, as several MFI availed loans from more than one bank # : Figures in parentheses indicate the assistance of SIDBI to MFI
30
www.sansco.net
B. Support to Partner Agencies

2.48 NABARD continued to extend grant support to NGO, RRB, DCCB, FC and Individual Rural Volunteers (IRV) for promoting and nurturing quality SHG. New SHPI were identified even while continuing support to existing ones. During the year, grant assistance of ` 37.86 crore was sanctioned to various agencies for promoting and credit linking 81,890 groups, taking the cumulative assistance sanctioned to ` 146.22 crore for 5.81 lakh groups (Table 2.5). As on 31 March 2011, an amount of ` 51.06 crore was released resulting in formation of 4.01 lakh SHG. The Number of SHG credit linked during the year was 2.60 lakh.
rating agencies (CRISIL, M-CRIL, ICRA, CARE and Planet Finance). During the year, rating support of ` 17.66 lakh was provided to 14 agencies as against ` 15.83 lakh to 13 agencies during the previous year.
(ii) Capital Support and Revolving Fund Assistance to MFI

2.51 The RFA is provided to MFI, on a selective basis, for on-lending to the unreached poor. During the year, CS of ` 2.53 crore was sanctioned to nine agencies, taking the cumulative support to ` 27.40 crore for 41 agencies. During the year, RFA amounting to ` 15.18 crore was sanctioned to 20 agencies; the cumulative RFA
C. Capacity Agencies
2.49 In up-scaling NABARD order to support
Building
fine to tune the
of
the
Partner
strategies for and
sanctioned was ` 99.33 crore for 48 agencies.
micro-finance creation
sector,
E. Special Region
(i)
Initiatives
in
Backward
conducted
awareness
sensitisation programmes and arranged exposure visits for SHG members, NGO, bankers, trainers, Panchayat Raj Institution (PRI) representatives, NABARD officials, Government Officials and micro-entrepreneurs, throughout the year, entailing an expenditure of ` 10.08 crore during the year, as against ` 9.93 crore in the previous year.
Rajiv Gandhi Mahila Vikas Pariyojana
2.52 NABARD continued to support the Rajiv Gandhi Mahila Vikas Pariyojana (RGMVP), a special initiative of the Rajiv Gandhi Charitable Trust (RGCT), for promotion, credit linkage and federating of SHG in select districts of UP , in association with participating banks and implementing NGO. As on 31 March 2011, 25,571 SHG have been promoted, of which 14,979 have been credit linked. In addition, 951 Cluster Level Federations and 26 Block Level Federations have been formed.
D. Support to Micro-Finance Institutions

(i) Support to banks and MFI for rating
2.50 NABARD continued to provide grant assistance to CB and RRB for getting the MFI rated by accredited
Table 2.5: Grant Assistance Extended to various Partners in SHG-Bank Linkage Programme (As on 31 March 2011) (` lakh) Sanctions during the year Agency DCCB RRB NGO FC IRV Total No. 6 3 223 47 3 282 Amount 112.95 16.00 3601.03 12.62 43.92 3786.52 No of SHG 7850 1350 69165 1085 2440 81890 Cumulative Sanctions No. 108 120 2847 807 71 3953 Amount 793.31 445.44 12626.84 82.43 728.38 14622.40 No. of SHG 66955 49335 414338 7628 42923 581179 Cumulative Progress Amount released 287.22 193.05 4471.38 73.68 80.97 5106.30 SHG formed 47203 55548 268791 17321 12208 401071 SHG linked 31454 36610 175080 9642 6749 259535
31
www.sansco.net
(ii) Priyadarshini Project

2.53 The Programme for 'Rural Women
G. State Specific Support in North East Region

2.56 NABARD continued to support the project sanctioned to the Government of Arunachal Pradesh for implementing 'Micro-Finance Vision 2011'. The project involves promoting and credit linking of 1650 SHG at a cost of ` 39.15 lakh. An amount of Further, an ` 9.49 lakh has been released so far.
Empowerment and Livelihood in Mid-Gangetic Plains' called "Priyadarshini" envisages holistic empowerment of 1,08,000 poor women and adolescent girls through formation of 7,200 SHG. It covers four districts (Sultanpur, Bahraich, Shravasti and Rae Bareily) of Uttar Pradesh and two districts (Madhubani and Sitamarhi) of Bihar. The eight-year programme, with a project outlay of US $ 32.73 million is jointly funded by the International Fund for Agriculture Development (IFAD) and the GoI to the extent of US $ 30 million and US $ 2.73 million, respectively. During the year, the process of engagement of Resource NGO and Field NGO and establishment of Programme Implementing Units was completed.
amount of ` 33.66 lakh was also sanctioned to the Essomi Foundation Trust for setting-up a Resource Centre at Itanagar for providing policy, operational inputs, capability support and marketing linkages among groups. NABARD has released ` 5.452 lakh to the Trust up to 31 March 2011. NABARD also provided technical support to Tripura State Support Project on SHG. The project is being implemented by the Government of Tripura through the 'Dalbandhus' also (Box 2.6). As on 31 March 2011, 34,588 SHG have been promoted, which includes groups promoted by Dalbandhus.
F.
(i)
Scaling-up of Micro-Finance Programme: Special Initiatives

Financing of Joint Liability Groups
2.54 Exposure visits for Joint Liability Groups (JLG) for senior officers of the Bank were arranged during the year, in the districts of Alappuzha (Kerala), Vellore, Tiruvannamalai (Tamilnadu) and Mysore (Karnataka). An amount of ` 24.74 crore was sanctioned as grant for promotion of 1.25 lakh JLG across the country till 31 March 2011. During the year, banks disbursed a loan of ` 659.70 crore to 85,766 JLG taking the cumulative loan disbursed to ` 1,145.29 crore for 1,41,045 JLG.
Box 2.6 Dalbandhus of Tripura Dalbandhus are the backbone of the SHG movement in Tripura. They are socially motivated community resource persons, working for the betterment of the standard of District Rural Development Agency Gram Swarozgar Yojana living of the poor. They are engaged by Block Panchayats in consultation with (TSSPS) and (DRDA) under the Tripura State Support Project on SHG Swarnjayanti (SGSY) to form and nurture SHG. A dalbandhu is expected to form and nurture maximum 50 SHG in three years. At present there are 275 dalbandhus covering four districts of Tripura State. The tasks handled by dalbandhus include formation of SHG, maintenance of books of accounts, capacity building, grading of SHG and maintenance of SHG data. They are provided a fixed remuneration of ` 1,300 per month plus ` 500 towards TA/DA. Under the TSSPS, dalbandhus are provided incentives of ` 10 per SHG per month for a period of first 24 months for maintenance of books of accounts, ` 50 for formation of new SHG and ` 50 for first time credit linkage and ` 100 for repayment of first loan by SHG. NABARD, as a project partner under TSSPS, has undertaken the task of Capacity Building of Dalbandhus.
(ii) Micro-Enterprise Development Programme

2.55 NABARD had launched the Micro-Enterprise Development Programme (MEDP) during 2005-06 for skill upgradation and development of sustainable livelihoods/venturing MEDP were into for micro-enterprises 37,138 members by on members of matured SHG. During the year, 1,606 conducted various location-specific farm, non-farm and service sector activities. Cumulatively, 4,449 MEDP had been conducted for 1,08,656 participants.
32
www.sansco.net
H. Pilot Projects
2.57 In order to assess the suitability of various innovative initiatives and also enhance the sustainability of MF activities, NABARD continued to extend support for various pilot projects.
NABARD entered into an agreement on joint technical cooperation within the framework of the ongoing Rural Financial Institutions Programme (RFIP), with Remittances and Payments System being an additional component. The German Government had committed 5 million to this new component, subject to the positive outcome of a joint appraisal for identifying the concept, Linkage very deliverables for the and important institutional The
I.
SHG-Post Office Programme

results in of SHG-Post Nadu Office
2.58 The Programme
arrangements
envisaged
component.
Tamil
have
been
appraisal was launched in Odisha-Andhra Pradesh Corridor, Uttar Pradesh-Mumbai Corridor, Maharashtra Intra-state Corridor and Rajasthan-Gujarat Corridor. The team also studied the payment system in West Bengal. The Report of the Joint Appraisal is to be presented to GoI and RBI.
encouraging. The project utilises the vast network of Post Offices in rural areas for disbursement of credit to the rural poor, on an agency basis. NABARD has sanctioned an additional ` 200 lakh RFA to India Post for onward lending to SHG. A total of 2,819 SHG have opened zero interest savings accounts, of which 1,219 SHG have been credit linked by Post Offices, with loans amounting to ` 3.36 crore, as on 31 March 2011. The project is also being implemented in Meghalaya; RFA of ` 5 lakh for on-lending to 50 SHG in East Khasi Hills was sanctioned to India Post.
(ii) NABARD Financial Services Ltd.

2.60 Karnataka Agriculture Development Finance
Company Ltd. (KADFC) was restructured into an MFI, viz., NABARD Financial Services Ltd. (NABFINS), during 2007, to further the promotion of Micro-finance Sector. The major stakeholder is NABARD, with other shareholders being, Government of Karnataka, Canara Bank, Federal Bank and Dhanalakshmi Bank. NABFINS started its lending operations in November 2009. During 2010-11, it mobilised share capital to the extent of ` 9.70 crore, taking the total share capital to ` 16.01 crore. Direct lending to SHG was started in January In 2010. During 2010-11, to 2019 the groups of disbursed an amount of ` 50.64 crore through 31 BC. addition, disbursements extent ` 1.50 crore were made to MFI and Federations, taking the aggregate disbursements during the year to ` 52.14 crore. The cumulative number of loanee SHG was 2,044, as at end March 2011. All the processes, viz., grading of groups, acceptance of loan applications, disbursements, collection of repayments are done at the doorsteps of the SHG. Further, NABFINS follows a client friendly and low cost model and the lending rate of SHG has been kept at an annual rate of 12 per cent on reducing balance method.
J.
(i)
Other Developments
NABARD GIZ Study - Remittances
2.59 NABARD in association with GIZ conducted a study on 'Remittance Needs in India', which confirmed the magnitude and significance of the remittance issue and identified important points for the way forward.
Women members of SHG of Meghalaya engaged in candle making
33
www.sansco.net
(iii) Centre for Micro-finance Research

2.61 The Centre for Micro-finance Research (CMR)
research on 27 prioritised themes, of which, six research studies were completed and four reports published/uploaded on BIRD's website for the benefit of all stakeholders.
established by NABARD in BIRD in 2008 and four sub-centres in Guwahati, Patna, Chennai & Jaipur continued to conduct research on various themes of micro-finance across the country, for bringing out policy initiatives that would improve the design and delivery of various micro-finance products. The CMR brought out two issues of its half-yearly journal 'The Micro-finance Review' during the year. Grant assistance of ` 153.18 lakh was released by NABARD during the year to CMR, taking the cumulative assistance to ` 347.36 lakh. The sub-centres of CMR in Guwahati, Patna, Chennai and Jaipur undertook
(iv) APRACA Centre of Excellence

2.62 The APRACA Centre of Excellence (ACE) in
Linkage Banking set up in CMR as a leading centre of knowledge in Linkage Banking, prepared a training manual on SHG-Bank Linkage Programme (SBLP), for use in the training programmes of APRACA membercountries. During the year, a proposal for Pilot-testing of SHG-Bank Linkage in Cambodia was prepared and submitted to APRACA.
NABARD Consultancy Services

2.63 NABARD provides Consultancy Services Pvt. service Ltd. in contracting and executing assignments of ` 40 crore and ` 30 crore, respectively for the year 2011-12.
(Nabcons), the wholly owned subsidiary of NABARD, professional consultancy agriculture, allied activities and rural development to GoI, State Governments, CB, cooperative institutions, corporates, NGO, international organisations and other clients.
B. Business Highlights
2.65 During the current year, Nabcons has
significantlly diversified its business. It entered into new areas of business, viz., development of web based MIS for various of State Government infrastructure Programmes, projects in monitoring various
A. Financial Achievements
2.64 As against the target of contracting and executing assignments of ` 25 crore and ` 20 crore, respectively, during 2010-11, Nabcons achieved ` 24.13 crore and ` 16.65 crore, respectively. During 2010-11, the company earned ` 14.81 crore as professional fees on assignments executed, ` 0.72 crore as commission from mutual fund distribution and ` 1.76 crore as interest on investments. The Profit before Tax was ` 8.74 crore as against ` 6.65 crore during the previous year and net Profit after Tax was ` 5.80 crore as against ` 4.33 crore during the previous year. The company has targeted to achieve a business of ` 100 crore in the next three years. Accordingly, the company has fixed a business target of
different states adjoining the international borders of the country under the Border Area Development Programme (BADP). Nabcons also conducted an evaluation study of the scheme "Monitoring of Pesticide Residue at National Level" for MoA, GoI. The company has emerged as a major partner of NER States in third party monitoring of infrastructure projects and preparation of Detailed Project Reports (DPR) for various development initiatives of State Governments. It prepared DPR for two clusters under New Land Use Policy (NLUP) in Mizoram. The company also submitted MPLADS reports of 55 districts to the Ministry of Statistics and Programme Implementation (MoSPI), GoI.
34
www.sansco.net
Research and Development Activities

2.66 The Research and Development (R&D) Fund, set up in NABARD in 1982-83, provides grant support to select agencies for promoting applied research through projects/studies, training and upgrading skills of personnel of client institutions and disseminating research findings. The corpus of the Fund has been pegged at ` 50 crore since 2004-05, with the expenditure incurred being replenished every year through appropriation of profits. important in comparison to push factors, with agricultural development playing a catalytic role in the growth of non-farm activities in the rural areas, through production, market and input linkages. 2.71 The study on "Motorisation of Traditional Crafts and its Economic Impact - A Study of Bank Sponsored Units in Andhra Pradesh" gave insight into the role of technology in ameliorating poverty while evaluating the scheme. The value of catch was much higher for the motorised crafts as compared to the traditional crafts, reflecting the contribution of technology. The motorisation scheme has pulled most of the beneficiary households above poverty line. There is a potential for motorisation in Andhra Pradesh, as hardly 925 (7.91%) out of about 11,700 crafts have been motorised under the motorisation scheme from 2003-04 to 2007-08. 2.72 The Study on "Organised Agri-food Retailing and Supply Chain Management" brought out several findings with policy implications. The organised retail is poised to grow faster and reach ` 53,000 billion by 2020. Agri-retailing is around 18 per cent of the organised retail as of now, and is likely to have a lower share (12%) by 2020. The study has identified some of the major impediments, especially structural, for the growth of organised retail (Box 2.7).
A. Utilisation
2.67 During the year, ` 17.68 crore was utilised from the fund for supporting activities like research projects/ studies (` 0.80 crore), seminars (` 0.80 crore), training/ summer placement (` 15.77 crore), occasional papers (` 0.02 crore), NABARD Chair Professor Scheme (` 0.14 crore) and other activities (` 0.15 crore). The cumulative disbursement since inception, stood at ` 136.19 crore.
B. Sanctions under the Fund

i. Research Projects/Studies
2.68 During 2010-11, ten research projects involving a grant assistance of ` 1.09 crore were sanctioned. Further, six projects/studies sanctioned earlier were completed during the year. 2.69 The study on "Opportunities and Constraints of Organic Agriculture in North-East Hilly Region of India" brought out that although turmeric, ginger, pineapple, cashew and oranges have been identified as potential crops to be grown organically, other vegetable crops with higher market surplus and lower production and marketing risks could also be covered under organic farming. There is, thus, a need to develop the organic production technology for vegetable crops, which are more susceptible to diseases and insect-pests under inclement weather conditions. 2.70 The study on "Employment Diversification in an Agriculturally Developed Region of India - A Case Study of Punjab" upholds the rural non-farm sector as the engine of growth and rural poverty amelioration. Pull factors, however, were found to be more
ii.
Seminars, Conferences and Workshops
2.73 During the year, grant assistance of ` 1.27 crore was sanctioned to various universities, research institutes and other agencies for organising 131 seminars, conferences, symposia and workshops covering subjects/ areas related to agriculture and rural development, including agricultural marketing, measurement of productivity and efficiency, women empowerment through SHG, food security, financial derivatives with thrust on agri-commodity futures, poverty alleviation, green technology in dairy and food processing, plant physiology, physiological and molecular approaches, agri-business and food processing, veterinary parasitology, plant diversity, water partnership, future strategies for sericulture, etc. The grant support extended to the organisers enabled them to document the
35
www.sansco.net
Box 2.7 Findings of the Study on Organised Agri-food Retailing and Supply Chain Management NABARD sponsored from its R&D Fund, a study on organised agri-food retail in the country during 2009-10. The major findings of the study and recommendations are given below: Organised food retailing: Size and growth In 2008-09, agri-food retailing ( `150 billion) was 18% of organised retailing ( ` 855 billion) accounting for 5% of total retail. Retailing and organised food retailing are expected to grow @11% & touch ` 53,000 billion and ` 620 billion (12 % of the former) by 2020. Impediments to growth are non-profitability of organised food retailing, low consumer preference for organised retailers. Direct procurement from farmers beneficial for all stakeholders farmers, retailers and consumers. Very few retailers are engaged with farmers directly due to high involvement and relatively low margins and lack of scale Bankers Perception & Practice Quantum of lending unorganised retail is low. to both organised and Opportunity For NABARD: Direct role Promote farmers clusters; Facilitate partnerships between clusters, organised retailers and banks; Facilitate training and awareness among producers; Refinance rural infrastructure and Village level structures; Recommend priority lending status to lending to the organised retailers to the extent directly procured from farmers. Indirect role A. Support to consolidator: Help develop credit products to finance consolidators, which could result in direct benefit to farmers. e.g. long term finance for creation of storage and transport infrastructure and short-term working capital loans to the consolidators B. Training: Initiate special schemes to prepare intermediaries in the agri-value chain farmers and
Farmer Linkage
Recommendations for the Government Implement reforms in agricultural proposed in the Model Act. marketing as
Lending to unorganised is only against collateral. Bankers perceive moderate-yet-manageable risk. Lending to organised retailers is largely based on promoters credentials. No established template for measuring and evaluating risks in an organised retailer.
Organised retail sector has direct employment potential of about 1.88 lakh persons. Indirect employment in the supply chain is additional. Further, 50 to 53 per cent of the employment is for people with skill that can be imparted with a short and focussed intervention. Hence, facilitate its growth through lower transaction costs, encouraging direct linkage with producers and providing level playing field.
proceedings and publish background papers, thus, facilitating wider dissemination of the recommendations/ action points and initiate suitable policy interventions by concerned agencies.
iv. NABARD Chair Professor Scheme

2.75 The NABARD Chair Unit Scheme was revived during the year with the approval of the Board. Unlike the earlier scheme where institutions were identified first, candidates with proven track record are selected in the present scheme. Accordingly, three professors viz. Prof. B.C. Barah affiliated to Indian Agricultural Research Institute (IARI), New Delhi, Prof. A. Narayanamoorthy, affiliated to Alagappa University, affiliated Karaikkudi to Xavier and Prof. of Amar Nayak, Institute Management,
iii. Occasional Papers

2.74 NABARD continued its endeavour of publishing Occasional Papers (OP) to generate and disseminate information on policy issues related to agricultural and rural development. During the year, five OP on 'Kisan Credit Card', 'Infrastructure for Agriculture and Rural Development', 'Economics of Sugarcane Production and Processing', 'Micro-finance for Micro-enterprises' and 'Promoting RNFS under multi-stakeholder environmentDRIP' were published. Thus, a total of 56 OP were published since its inception in 1994-95.
Bhubhaneswar were appointed as NABARD Chair Professors for a period of three years, commencing from 01 January 2011.
36
www.sansco.net
v. Summer Placement Scheme

2.76 The Summer Placement Scheme is being since 2005-06 to enable students
viz., the Regional Training Centres at Bolpur and Mangalore and BIRD, Lucknow. It also supplements the efforts of other training institutions by providing technical support. During the year, 576 training programmes were conducted by the TE for 14,667 participants (Table 2.6).
implemented
selected from reputed agriculture and management institutes, to be associated with various projects/studies taken up by NABARD in agriculture and rural sectors. The students are assigned tasks/projects of relevance to the Bank for generating new ideas, products and services, which could be introduced for the benefit of its constituents. During the year, 70 students were assigned such projects and project reports were received. An expenditure of ` 0.19 crore was incurred under this Scheme, during the year.
E. Other Developments
2.80 BIRD conducted a special on-location programme on Credit Planning and Development Finance for IAS probationers undergoing Phase I course, at the Lal Bahadur Shastri National Academy of Administration (LBSNAA) Mussorie and an in-house programme on financial system and development finance for probationers of the Indian Economic Service (IES). A programme on credit aspects of rural development was conducted for the officials of KVK/
vi. Training Activities

2.77 Apart from extending grant assistance for
Govt. Departments involved in rural development. A Post-Graduate Diploma in Rural Banking (PGDRB) course was also started in order to build a competent cadre of professionals in the field of rural banking. This is going to be an essential qualification for a career in rural banking, in the days to come. A Certificate course for BC/ BF was launched in collaboration with Bank of Baroda 2.81 The first All-India Conference of Principals and
various R&D activities, an amount of ` 15.58 crore was utilised from the Fund during the year for capacity building of the staff of RFI.
C. Training and Sensitisation Programmes

2.78 NABARD continued to provide financial and other support to training institutions like Bankers Institute of Rural Development (BIRD), Lucknow, Regional Training Colleges (RTC) at Mangalore and Bolpur, National Institute of Rural Banking (NIRB), Bengaluru, Manpower Development & Management Institute (MDMI), Shillong, and Indian Institute of Bank Management (IIBM), Guwahati.
Directors of Co-operative Training Institutes (CTI) was held at BIRD, Lucknow to deliberate on the emerging training needs of co-operatives, the strategy for upscaling the activities of Centre for Professional Excellence in Co-operatives (C-PEC), development of reading material in local languages and other relevant issues. 2.82 Two studies, viz., 'Comparative study of performance of Krishna Bhima Samruddhi Local Area
D. Training of Personnel of RFI

2.79 NABARD provides advanced training to the RFI personnel through its three Training Establishments (TE),
Table 2.6: Training of RFI Personnel (Number) Institute 2008-09 BIRD, Lucknow RTC, Mangalore RTC, Bolpur Total 257 91 86 434 Programmes Conducted 2009-10 261 93 113 467 2010-11 377 106 93 576 2008-09 6616 2065 2268 10949 Personnel Trained 2009-10 6139 2474 2894 11507 2010-11 9645 2649 2373 14667
37
www.sansco.net
Bank and Andhra Pradesh Grameena Vikas Bank' and 'CBS implementation in Saurashtra Gramin Bank' were undertaken. A Training Need Assessment study in West Bengal State Co-operative Bank was completed. 2.83 RTC, Mangalore organised an International Exposure Programme on Micro-Finance for a batch of 14 officers from SANASA Development Bank, Sri Lanka. The College also conducted an on-location induction training programme for the probationary officers of South Indian Bank, Kerala. In view of the need for trained officers in co-operatives in the postrevival package era, the college prioritised capacity building of senior officers and branch managers of co-operative banks of select states and conducted 38 programmes during the year through a dedicated channel. During the year, the college also conducted new programmes, viz., Orientation programme for senior officers and branch managers of co-operative banks, Programme on Treasury Opportunities and Investment Management for General Managers and Senior officers of RRB, Awareness programme on PostWatershed approaches for Bankers, Programme on Financial Inclusion, Trainers Training Programme on Financial Inclusion, Exposure Programme for Financing of JLG, and Rating of MFI. The College also organised a Workshop for CEO and Senior Executives of SCB and DCCB of Karnataka, Andhra Pradesh and Tamil Nadu, to deliberate upon the operational problems/ issues in implementation of the recommendations of the revival package and the Working Group on Human Resources in Co-operative banks. An Orientation Programme on Official Language for senior officers of NABARD was organised by the College. 2.84 During the year, RTC Bolpur conducted 15 Orientation Training Programmes for Branch Managers of SCB and DCCB and a new programme on MicroFinance, besides an exclusive programme for West Bengal Minority Development and Finance Corporation. In addition, the College adopted Sambalpur DCCB in Odisha for providing comprehensive solutions to the DCCB staff. The College also directed its efforts towards women empowerment, in collaboration with Women Study Centre, Visva Bharati University and five training programmes were conducted during the year.
2.85 The C-PEC, set up at BIRD, Lucknow during the year 2008-09 in collaboration with GTZ (now GIZ), continued its efforts to make the training system of the Co-operative Credit Structure professional. During the year, 27 Co-operative (ACSTI), Training Institutions, which of included eight Agriculture Co-operative Staff Training Institutes five Regional Institutes Co-operative Management (RICM) and 14 Institutes of Co-operative Management (ICM) under the ambit of the National Council for Co-operative Training (NCCT), obtained Accreditation from C-PEC. Further, 29 Co-operative Training Institutes, 5 SCB and 7 DCCB
and 8 PACS were enrolled as Institutional Members of C-PEC. The Centre also launched the first course of Certified Trainer in Financial Co-operatives (CTFC) during the year for 36 Trainers of CTI. BIRD conducted a Training of Trainers programme on Standardised Banking Programme for Co-operatives (SBPC), for the trainers of CTI during the year, after which the first SBPC was launched at APCOB-CTI, Hyderabad.
2.86 NABARD has been extending funding support under the Scheme of Financial Assistance for Training of Co-operative Banks Personnel (SOFTCOB) to Junior Level Training Centres (JLTC) of SCARDB, ACSTI of SCB and Integrated Training Institutes (ITI), out of the Co-operative Development Fund (CDF). The scheme was revised during the year and extended up to 31 March 2013. The ACSTI, JLTC and ITI are now eligible for additional assistance from NABARD under the revised scheme, for linking their activities with C-PEC. During the year 2010-11, the bank provided technical and financial support to 7 JLTC, 12 ACSTI and 3 ITI to enable them to improve their training system. An amount of ` 5.95 crore was disbursed out of CDF, to these institutions for conducting 451 programmes, covering 9121 participants during 2010-11, as against ` 3.90 crore for 1019 programmes and 12,088 participants during 2009-10. 2.87 During the year, NABARD released grant
assistance of ` 0.05 crore to NIRB, Bengaluru for conducting 21 programmes for 220 participants.
38
www.sansco.net
III
Business Operations
The business operations of NABARD comprise 3.2 The total financial support extended by (a) providing refinance support to State Co-operative Banks (SCB), commercial banks, Regional Rural NABARD during 2010-11 stood at ` 60,483 crore, registering a growth of 5.98 per cent over 2009-10 (Chart 3.1).
Banks (RRB), Scheduled Primary Urban Co-operative Banks (PUCB) and Agriculture Development Finance Companies (ADFC) to supplement their financial resources for enhancing credit flow to agriculture and rural sectors, (b) providing loans to State
Governments for their Rural Infrastructure Projects under the Rural Infrastructure Development Fund (RIDF) and (c) co-financing viable projects with commercial banks, RRB, SCB & Non-Banking Finance Companies (NBFC). This chapter details the business operations and achievements of the Bank during the year.
Production Credit
A. Short-Term Refinance
3.3 The Short-Term Seasonal Agricultural Operations (ST-SAO) for refinance in terms of credit limits sanctioned and maximum outstanding, for the last five years, registered an average annual growth rate of 22.73 per cent and 28.27 per cent respectively (Table 3.1). utilisation of the sanctioned credit limit during the previous year by the banks (Table 3.2).
Table 3.2: Sanction of ST(SAO) Credit Limits to SCB for the year 2010-11 Region/ States Net NPA level (%) > 15 15 Eastern Region 10 > 10 Rest of India 10 > 10
NE:
Per cent utilisation in 2009-10 < > < > < > < > < > < > 90 90 90 90 90 90 90 90 90 90 90 90
Normal limit as % of RLP*
a. State Co-operative Banks

i. Support for Seasonal Agricultural Operations
NE/Hilly Region/ A & N Islands
3.4 The refinance assistance to co-operative banks for ST-SAO was linked to Net NPA and level of
Table 3.1: Short Term Refinance (Production Credit) for the Last Five Years (` crore) Year 2006-07 2007-08 2008-09 2009-10 2010-11 Credit Limits sanctioned 16089 18291 19627 25661 34375 SAO Average Outstanding 10480 14433 15951 17577 27247 Maximum outstanding 14168 (88.06) 16352 (89.40) 17212 (87.70) 24715 (96.31) 34196 (99.47)
50 55 40 45 45 50 40 45 40 45 35 40
Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,
Nagaland and Tripura. Hilly Region: Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Sikkim. Eastern Region: Bihar, West Bengal, Odisha, Jharkhand and Chhattisgarh. *: Realistic Lending Programme
Figures in the parentheses refer to percentage share
39
www.sansco.net
3.5
During 2010-11, ST-SAO credit limits were
norms extended to the North Eastern regions in the case of ST-SAO was made applicable for ST-Others also. The assessment norms hitherto followed, for different purposes continued. A consolidated ST (Others) limit was sanctioned to SCB on behalf of eligible DCCB.
sanctioned to 21 SCB aggregating ` 23,759 crore as against ` 18,109 crore sanctioned to 20 SCB during 2009-10. The credit limits included ` 2,249.90 crore for the Oilseeds Production Programme (OPP), ` 210.97 crore for National Pulses Development Programme (NPDP) and ` 752.76 crore for credit requirements of tribals under the Development of Tribal Population (DTP). The maximum outstanding was ` 23,696.72 crore during 2010-11, with a utilisation rate of 99.74 per cent.
iii. Support to Weavers

3.8 Refinance assistance for weavers credit limit
(short term) to co-operative banks for working capital requirements of Primary/Apex/Regional Weavers was linked to Net NPA level. Consolidated limits were sanctioned to SCB on behalf of the eligible DCCB. Relaxations in NPA norms as extended to the North Eastern regions in the case of ST-SAO were made applicable for weavers also. The refinance assistance for weavers credit limit (short term) to commercial banks for working capital requirements of co-operative societies for production and marketing of handloom products, individual weavers, handloom weaver groups and master weavers was also linked to Net NPA level. Scheduled commercial banks having Net NPA of less than 3 per cent, as on 31 March 2010, without accumulated losses, were considered eligible. Working capital requirements of weaver members of defunct weaver societies, mutually aided co-operative societies, societies outside the co-operative fold and producer group companies were also brought under the umbrella of refinance through RRB and Commercial
3.6 SCB in the northern region (Haryana, Himachal Pradesh, Punjab and Rajasthan) accounted for 36 per cent, SCB in the southern region (Andhra Pradesh, Karnataka, Kerala, Puducherry and Tamil Nadu), western (Gujarat and Maharashtra) and central regions (Madhya Pradesh, Uttarakhand and Uttar Pradesh) accounted for 22, 14 and 16 per cent, respectively, of the aggregate credit limits sanctioned. Eastern region (Bihar, Chhattisgarh, Odisha and West Bengal) accounted for 12 per cent. The share of refinance availed by the co-operative banks in the North-Eastern Region (NER) continued to be low despite relaxations. Meghalaya, Nagaland and Sikkim SCB were sanctioned credit limits aggregating ` 7.00 crore, which was fully utilised.
ii.
Support for Short Term (Others)
banks. Short term credit was also available to SCB and commercial banks for financing working capital of for State Handloom Development and production, procurement requirements Corporations
3.7 Refinance support is extended for Short-Term (ST) agriculture/ allied activities/ marketing of crops/ pisciculture / industrial co-operative societies (other than weavers)/ labour contract and forest labour co-operative societies (including collection of minor forest produce)/ rural artisans (including weaver members of PACS/ LAMPS/ FSS)/procurement and distribution of agricultural inputs and ST- Labour Contract Co-operatives engaged in civil work in rural areas under the ST (others). Those SCB with Net NPA not exceeding 10 per cent, as on 31 March 2009, were considered eligible for refinance. Relaxations in NPA
marketing of handloom products.
3.9
During 2010-11, ST (weavers) credit limits
aggregating ` 215.75 crore were sanctioned to four SCB (Andhra Pradesh, Karnataka, Puducherry and Tamil Nadu), as against ` 177.32 crore during 2009-10. Further, during the last three years, 4,607 Handloom Weavers Groups (HWG) were formed by banks in various States, viz., Odisha (1,366),
40
www.sansco.net
Andhra Karnataka Bihar (82)
Pradesh (498),
(1,220), Assam
Jharkhand Uttar
(500), Pradesh
Table 3.3: Sanction of ST(SAO) Credit Limits to RRB for the year 2010-11 Region/ States Net NPA level > 10 10 5 > 5 Per cent utilisation in 2009-10 NE/Hilly Region/ A & N Islands < 90 > 90 < 90 > 90 < 90 > 90 < 90 > 90 Rest of India 5 > 5 < 90 > 90 < 90 > 90 30 35 35 40 30 35 25 30 25 30 20 25 Normal limit as % of RLP*
(272),
(272), Madhya Pradesh (266), West Bengal (88), and other States (43). Of these, 1,989 HWG have been credit linked. The maximum outstanding during 2010-11 was ` 198.14 crore, as against ` 180.78 crore in the previous year.
b.
State Co-operative Agriculture and Rural Development Banks
Eastern Region
3.10 The scheme of extending ST refinance to State Co-operative Agriculture and Rural Development Banks (SCARDB) for SAO was continued during the year. Refinance of ` 140.01 crore was extended to Kerala SCARDB (` 79.39 crore) and Rajasthan SCARDB (` 60.62 crore) at 4.5 per cent interest rate for lending to the ultimate borrowers at 7.0 per cent.
c. Regional Rural Banks

3.11 The quantum of refinance to RRB was linked to Net NPA and utilisation of the sanctioned credit limit during the previous year. The details are given in Table 3.3.
NE: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura Hilly Region: Jammu and Kashmir, Himachal Pradesh, Uttarakhand, Sikkim. Eastern Region: Bihar, West Bengal, Odisha, Jharkhand and Chhattisgarh *: Realistic Lending Programme
Eastern Region were sanctioned credit limit of ` 37.72 crore, of which RRB in Assam, Meghalaya, Mizoram and Nagaland utilised 100 per cent.
3.12 During 2010-11, limits of ` 9,799.69 crore were sanctioned to 80 RRB under ST-SAO as against ` 6,832.13 crore sanctioned to 74 RRB in 2009-10. The limit included ` 820.31 crore for Oilseeds Production Programme (OPP), ` 201.23 crore for Development ` 16.20 of Tribal for Population Pulses (DTP) and
3.13 Consolidated limits were sanctioned to RRB for Short Term-Other than Seasonal Agriculture Operations (ST-OSAO) to the extent of 60 per cent of their Realistic Lending Programme (RLP) for eligible purposes like marketing of crops, fisheries, approved purposes like production and marketing activities of artisans (including handloom weavers), village/cottage/ tiny sector industries, financing persons belonging to the weaker sections engaged in trade/business/service activities including distribution of inputs for agriculture and allied activities. RRB having Net NPA upto 5.0 per cent were eligible for refinance. The aggregate limit for ST-OSAO sanctioned during 2010-11 was ` 600 crore, as against ` 542 crore in the previous year. The maximum utilisation was ` 598 crore (99%).
crore
National
Development
Programme (NPDP). Uttar Pradesh with a limit of ` 1,773 crore under ST(SAO) for RRB, accounted for the largest share of credit limit sanctioned, followed by Andhra (` Pradesh (` 1,316 Kerala (` crore), 904 Rajasthan crore) and
1,174.59
crore),
Karnataka (` 800 crore). The maximum outstanding was ` 9,703.03 crore, forming 99 per cent of the limit sanctioned during 2010-11. Five RRB in the North
41
www.sansco.net
B. Other Initiatives
a. Interest Subvention to Farmers
3.14 The continuance of the interest subvention scheme was announced in the Union Budget 2010-11. Interest subvention of 1.5 per cent per annum was available to public sector banks, co-operative banks and RRB for deploying their own funds for crop loans upto ` 3 lakh per farmer, provided the ultimate borrower got such loans at 7.0 per cent interest rate per annum. Additional subvention of one per cent, announced in the year 2009-10 to those farmers who repaid crop loans promptly within one year of disbursement, was enhanced to 2.0 per cent during 2010-11. Thus, the interest paid on crop loans by such farmers was effectively 5.0 per cent. This was to reward prompt payment by farmers, which in turn helped lending institutions by declogging their line of credit. Suitable interest subvention was given to NABARD for providing concessional refinance to SCB and RRB at 4.0 per cent and 4.5 per cent interest rates, respectively. Aggregate interest subvention of ` 1,220.78 crore was provided by GoI to NABARD, co-operative banks and RRB for the year 2008-09. During the year, an amount of ` 1261.40 crore was
disbursed for 2009-10. Interest subvention for 2010-11 has been estimated at ` 2,000 crore.
b.
GoI Package for Sugar Industry
3.15 NABARD continued to act as the nodal agency for the GoI package for restructuring of term loans of co-operative sugar mills. Out of ` 170.14 crore received from the GoI towards interest subvention, ` 169.94 crore was disbursed to 77 co-operative sugar mills in Maharashtra and Odisha. NABARD also acted as the nodal agency for routing the interest subvention to co-operative banks and RRB under "Scheme for Extending Financial Assistance to Sugar Undertakings - 2007". Out of ` 383.59 crore received from GoI towards interest subvention, ` 249 crore was released to 212 sugar mills operating in 11 states.
c.
Interest Rates on Refinance Assistance
3.16 The rates of interest on Short Term/ Medium Term (ST/MT) refinance to Co-operative Banks, RRB and Scheduled Commercial Banks and Long-term (LT) loans to State Governments for contribution to the share capital of co-operative credit institutions during 2010-11 are given in Table 3.4.
Table 3.4: Rates of Interest on Refinance (per cent) Sl. No. Purpose 1 2 3 4 5 6 7 8 9
*:
Agency SCB/RRB SCB SCB SCB Scheduled Commercial Banks RRB
Interest Rate 4/4.5 8.0 8.5 8.0 8.0 8.5 8.0 6.0 * 8.5
SAO SAO against pledge of securities ST (Others - other than weavers) ST (Weavers - Primary and Apex/ Regional Weavers Cooperative Societies) ST - Weavers - Financing of Primary Weavers Cooperative Societies ST- OSAO ST - Working capital requirements of SHDC MT (Conversion) loan LT loans to State Governments
SCB & Scheduled Commercial Banks SCB/RRB State Governments
3.0 per cent below the rate fixed for ultimate borrower, with a minimum of 6.0 per cent
42
www.sansco.net
Investment Credit
A. Refinance Policy and Eligibility Criteria
3.17 The policy of preferential treatment to NorthEastern, Eastern, was Hilly also Regions, extended to Sikkim and Lakshadweep Chhattisgarh client institutions operating in the NER and Sikkim, (ii) relax the Net NPA norms by 5.0 and 3.0 per cent, respectively, for the SCB and RRB in NER including Sikkim, Hill States (Jammu & Kashmir, Uttarakhand, Himachal Pradesh), Eastern region (Odisha, West Bengal, Andaman & Nicobar Islands, Bihar & Jharkhand) and Lakshadweep and refinance at 100 per cent of the eligible bank loan for all agencies and for all purposes in these regions. As a special initiative, these facilities were extended to Chhattisgarh state during 2010-11.
during 2010-11. Concessions included 100 per cent refinance and relaxation in eligibility criteria. RRB, SCB and SCARDB continued to be classified under A/B/C/D categories based on the level of Net NPA as a percentage to net loans and advances outstanding, recovery performance and profitability for availing the quantum of refinance. However, (i) SCB with Net NPA of more than 20 per cent (ii) SCARDB with recovery of less than 30 per cent, (iii) RRB with Net NPA above 15 per cent or deposit erosion of more than 20 per cent were considered ineligible for availing refinance during the year. Similarly, Commercial Banks / PUCB and North Eastern Development Finance Corporation Ltd. (NEDFi) with Net NPA of more than 3 per cent were considered ineligible for availing refinance during the year. SCARDB, SCB, RRB and ADFC are not required to pay prepayment charges. Commercial Banks and PUCB are required to pay prepayment charges even if the recoveries are actual. Activities like water harvesting and water conservation devices, seed production, tissue culture based production, nonconventional energy sources, small farm implements, financing in watershed and tribal development
C. Security Norms
3.19 The release of refinance to SCARDB as also to SCB/ DCCB for farm and non-farm sector activities is against government guarantee. However, the requirement of Government guarantee was waived for well performing SCB and DCCB on compliance of certain conditions. Refinance to Section 11(1) of BR Act, 1949, (AACS), non-compliant SCB/DCCB and to non-scheduled SCB was against government guarantee only. In the event of government guarantee not forthcoming, alternatives like pledge of government securities or fixed deposit receipts issued by scheduled banks/ well performing SCB/ DCCB were considered.
D. Interest Rates on Refinance

3.20 Changing market conditions impacting the cost of funds for NABARD necessitated the revision of interest rates five times during the year. The interest rates, with effect from 07 February 2011, was revised to 9.75 per cent for Commercial Banks, 9.25 per cent for RRB, 9.15 per cent for co-operative banks/ PUCB/ NEDFi, 8.15 per cent for ADFC/NABFINS and 10.5 per cent for NBFC. However, for NER, including Sikkim, the rate of interest for all agencies (except NBFC) was fixed at 9.15 per cent.
programmes areas were also included in Thrust Area. Refinance was provided at 100 per cent of the eligible bank loan for thrust areas in all regions.
B. Special Package for North Eastern and Other Regions

3.18 With a view to enhancing the credit flow to the NER and other specified regions, NABARD continued to (i) apply uniform interest rate on refinance to all
43
www.sansco.net
Table 3.5: Agency-wise Disbursements (` Crore) Agency Target SCARDB * SCB CB RRB PUCB ADFC Total 1987.00 801.00 5867.00 1879.00 1.00 10535.00 2008-09 Disb 1986.54 801.51 5867.19 1879.04 1.01 10535.29 % Share 18.86 7.61 55.69 17.83 0.01 100.00 Target 2290.00 1040.50 6085.50 1879.00 5.00 2009-10 Disb 2221.30 1251.95 6057.19 2457.46 16.14 5.05 % Share 18.50 10.43 50.44 20.46 0.13 0.04 100.00 Target 2160.00 1340.00 7052.00 2288.00 85.00 55.00 12980.00 2010-11 Disb 2351.85 1356.62 7348.49 2287.84 84.87 56.20 13485.87 % Share 17.44 10.06 54.49 16.96 0.63 0.42 100.00
11300.00 12009.08
*: Includes ST-SAO refinance released to SCARDB
E. Refinance Support
3.21 During 2010-11, the refinance disbursed
for 54.49 per cent of the total disbursement, as compared to 50.44 per cent of the total disbursement during the previous year (Table 3.5 / Chart 3.2).
(including ` 140.01 crore disbursed under ST-SAO to SCARDB) was ` 13,485.87 crore as against the target of ` 12,980.00 crore. The achievement against target was 103.90 per cent. The growth in refinance disbursed during the year was 12.30 per cent over the previous year.
b) Spatial Distribution of Refinance

3.23 Refinance disbursement across regions during the year varied widely with the highest share being in the south (43%), followed by north (21%), central (14%) and other regions (22%) (Table 3.6 / Chart 3.3). Agency-wise and state-wise disbursements indicated that around 90 per cent of the refinance disbursed to the SCB was in Andhra Pradesh, Gujarat, Punjab,
a)
Agency-wise Disbursements of Refinance
3.22 During 2010-11, commercial banks availed of refinance to the extent of ` 7,348.49 crore, accounting
Karnataka, Himachal Pradesh, Odisha and Rajasthan.
44
www.sansco.net
Table 3.6: Region-wise Disbursements (` crore) Region Target Northern North Eastern Southern Eastern Central Western Total 2636.00 174.00 1103.00 1526.00 797.00 4299.00 10535.00 2008-09 Disb. 2636.45 174.18 4298.91 1102.99 1526.02 796.74 10535.29* %Share 25.00 1.70 40.80 10.50 14.50 7.60 100.00 Target 2790.00 210.00 1185.00 1680.00 935.00 4500.00 2009-10 Disb. 2419.87 139.85 5967.89 891.07 1478.60 1111.79 %Share 20.20 1.20 49.70 7.40 12.30 9.30 100.00 Target 2835.00 266.00 1392.00 1718.00 965.00 5804.00 2010-11 Disb. 2810.70 265.82 5821.73 1405.35 1928.63 1253.64 %Share 20.80 2.00 43.20 10.40 14.30 9.30 100.00
11300.00 12009.08*
12980.00 13485.87*
*: Includes ST-SAO refinance released to SCARDB Northern : Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab and Rajasthan North Eastern : Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim Southern: Andhra Pradesh, Karnataka, Kerala, Puducherry, Tamil Nadu and Lakshwadeep Islands Eastern : A&N Islands, Bihar, Jharkhand, Odisha and West Bengal Central : Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Uttarakhand Western : Dadra & Nagar Haveli, Daman & Diu, Goa, Gujarat and Maharashtra
Ninety six per cent of the refinance disbursed to SCARDB was absorbed in the states of Uttar Pradesh, Kerala, Haryana, Punjab, Rajasthan, West Bengal, and Karnataka. The trends reflected the credit absorptive capacity of different category of banks in different states.
(18.9%), Farm Mechanization (13.1%), Minor Irrigation (6.8%) and Dairy Development (6.8%). Of the total refinance disbursed, 43.80 per cent was for thrust areas. The proportion of refinance to Minor Irrigation, Plantation and Horticulture and Dairy Development showed an increase, while there was decline in refinance (Table 3.7). for Farm Mechanization and SHG
c) Sector-wise Disbursements
3.24 During the year, the major share of refinance was accounted for by NFS (25.6%), followed by SHG
45
www.sansco.net
Table 3.7: Sector-wise Disbursements (` crore) Purpose Target Minor Irrigation Land Development Farm Mechanisation Plantation & Horticulture PF/ SGP/ AH-Others Fisheries Dairy Development Forestry Storage Godown & Market Yard SGSY Non-Farm Sector SC/ ST- Action Plan SHG Others Total 63.00 288.00 3135.00 125.00 2466.00 176.00 141.01 201.12 2706.79 28.94 2620.03 581.22 1.3 1.9 25.7 0.3 24.9 5.5 143.00 274.00 2852.00 91.00 803.00 1975.00 187.22 151.50 3465.99 2.30 3173.56 999.82 12009.08* 1.6 1.3 28.9 0 26.4 8.3 100.0 172.00 322.00 3115.00 130.00 795.00 2857.00 170.79 228.84 3446.40 12.63 2545.36 2026.68 1.3 1.7 25.6 0.1 18.9 15.0 100.0 331.00 301.00 63.00 1066.00 25.00 374.54 298.70 77.15 489.41 6.56 3.6 2.8 0.7 4.6 0.1 362.00 230.00 132.00 570.00 38.00 377.40 349.79 54.62 725.35 6.46 3.1 2.9 0.5 6.0 0.1 579.00 266.00 149.00 649.00 52.00 698.39 402.37 47.45 918.11 9.57 5.2 3.0 0.4 6.8 0.1 997.00 326.00 1173.00 2008-09 Disb 545.85 949.94 1514.03 Share % 5.2 9.0 14.4 Target 660.00 976.00 2194.00 2009-10 Disb 496.73 303.67 1714.66 Share % 4.1 2.5 14.3 Target 909.00 1168.00 1817.00 2010-11 Disb 920.61 295.69 1762.98 Share % 6.8 2.1 13.0
10535.00 10535.29*
100.0 11300.00
12980.00 13485.87*
*: Includes ST-SAO refinance released to SCARDB
F. Co-financing
3.25 During the year, MoU for co-financing was executed with 5 RRB in Andhra Pradesh and a commercial bank. In all, MoU were executed with 27 banks. During the year, three new projects were sanctioned, taking the cumulative number of sanctioned projects to 51, with a total financial outlay of
(i) (ii)
Construction of cold storages and onion godowns; Construction of rural godowns;
(iii) Development/strengthening of agriculture marketing infrastructure, grading and standardization; (iv) Establishment of Agri-clinic and Agri-business Centres (ACABC); (v) Bihar Ground Water Irrigation Scheme; and
` 840.64 crore. The disbursement during 2010-11 was ` 14.00 crore. The number of ongoing projects are 37. Cumulative sanctions and disbursements were ` 240.35 crore and ` 153.64 crore, respectively. b. (vi) Schemes on Animal Husbandry a. Establishment/modernization of Rural Slaughter Houses; Integrated Development of Small Ruminants and Rabbits; c. Scheme for Poultry Estates and Mother Units for Rural Backyard Poultry; d. e. f. Male buffalo calf rearing; Utilization of fallen animals; and Scheme on Pig Development
G. Capital Investment Subsidy Schemes

3.26 Since 1999-2000, NABARD is the nodal agency for various Capital Investment Subsidy Schemes (CISS) of the GoI, for routing subsidy, monitoring progress and co-ordinating with bankers & the GoI in respect of the following:
46
www.sansco.net
(vii) Scheme for installation of Solar Off Grid and Decentralised Applications under Jawahar Lal Nehru National Solar Mission (JNNSM) (viii) National Project on Organic Farming
allow private participation, the scheme is implemented in those States that have carried out market reforms. During the year, 654 projects with Total Financial Outlay (TFO) of ` 978.45 crore and bank loan of ` 639.84 crore were considered and subsidy of ` 83.15 crore was released to 14 states. Cumulatively, 4,492 units involving TFO and bank loan of ` 2,912 crore and ` 1,922.97 crore, respectively, were considered and subsidy of ` 274.03 crore was released.
(i) Cold Storages and Onion Godowns

3.27 The scheme was launched in 1999-2000 to promote creation of cold storage and scientific storage facilities for horticultural produce. As advised by the GoI, NABARD ceased to be associated with the implementation of the scheme from 1 May 2010 onwards.
(iv) Agri-Clinics and Agri-Business Centres

3.30 The Scheme was started in 2006-07 to provide fee based extension services to farmers and at the same time provide gainful employment to unemployed agriculture graduates in new emerging areas in
(ii) Rural Godowns

3.28 The Scheme was launched by the GoI in April 2001, to create scientific storage facility for farmers to avoid wastage, product deterioration and distress sales. NABARD continued to associate with the Scheme in administering the subsidy. The number of projects sanctioned under Cold Storages, Onion Godowns and Rural Godowns are detailed in Table 3.8.
agriculture sector. The guidelines of the scheme were revised during the year for widening the list of eligible candidates, enhancing the capital subsidy to 36 per cent of the TFO for general category agri-preneurs (44% for SC/ST, NE and Hill States) and dispensing with the interest subsidy. During 2010-11, a subsidy of ` 1.49 crore was disbursed for 110 projects, involving a TFO of ` 7.75 crore and bank loan of ` 6.02 crore. Cumulatively, 390 projects were sanctioned under the scheme involving TFO of ` 28.62 crore, bank loan of ` 22 crore and subsidy of ` 5.38
(iii) Agricultural Marketing Infrastructure, Grading and Standardization

3.29 The Scheme, operationalised since October
crore was released.
2004, aims at establishing/strengthening infrastructure for marketing, grading, standardization and quality certification of produce for agriculture and allied sectors. Being linked to the amendment of the Agricultural Produce Market Committee (APMC) Act to
(v) Bihar Ground Water Irrigation Scheme

3.31 The Commission, Scheme, GoI, promoted commenced by from the Planning to
2009-10
Table 3.8: Details of Projects Sanctioned under Cold Storages and Rural Godowns (` crore) Sl. No. 1 2 Cold Storage Rural Godowns Facility No. of Projects 93 2159 2010-11 TFO 200.35 550.79 Bank Loan 123.51 411.84 Subsidy 56.28 70.86 No. of Projects 1944 19715 Cumulative TFO 3100.94 4349.37 Bank Loan 1758.17 2915.91 Subsidy 499.86 649.83 Cumulative Capacity*
83.02 244
*Capacity: Lakh Metric Tonnes
TFO: Total Financial Outlay
47
www.sansco.net
provide
irrigation
facility
to
9.28
lakh
ha.
of
a. Scheme for Rural Slaughter Houses

3.33 The Scheme is being implemented on a pilot basis in three states, viz., Uttar Pradesh, Andhra Pradesh and Meghalaya for establishing/ modernizing slaughter houses in rural areas, with emphasis on hygiene, pollution control and value addition. Credit linked back ended subsidy upto a maximum of ` 2.00 crore would be available under the scheme. As on 31 March 2011, an advance subsidy amount of ` 0.10 crore was released for establishment of one poultry processing unit under the scheme.
agricultural land in Bihar by installing 4.64 lakh private shallow tubewells / dugwells with pumpsets over a period of three years. The scheme was to be implemented in all the districts of Bihar through CB and RRB, utilizing the balance amount of ` 231.67 crore, under Million Shallow Tubewell Programme (MSTP) that was closed on 31 March 2007. The Minor Water Resources Department, Govt. of Bihar is the nodal implementing department with the active support of NABARD, banks and other participating agencies. The back ended subsidy at 45 per cent of the project cost is to be released by NABARD through the financing banks. As on 31 March 2011, an amount of ` 48.30 crore was released to banks implementing the scheme.
b.
Scheme for Integrated Development of Small Ruminants and Rabbits
3.34 The Scheme aims to improve the quality of the existing breeds and to promote rearing and breeding on commercial basis. Under this scheme, 25 per cent viz., Small of the outlay (33.33% in NE States including Sikkim and Hill States) as back ended capital subsidy will be provided by NABARD for rearing/ breeding of sheep and goat and rearing of rabbit. Non-Governmental Organisations, identified by the SLSMC act as facilitators for organizing and training the beneficiaries, coordinating with local Animal Husbandry Department and banks and arranging for inputs and marketing of the animals. As on 31 March 2011, subsidy amount of ` 1.59 crore was released for establishment of 304 Sheep/ Goat rearing units under the scheme.
(vi) Schemes on Animal Husbandry

3.32 Three (b) animal husbandry schemes, of
(a) Establishment/Modernization of Rural Slaughter Houses, Integrated Development Ruminants and Rabbits and (c) Scheme for Poultry Estates and Mother Units for Rural Backyard Poultry launched by GoI during 2009-10 were implemented by NABARD during 2010-11. In addition, three animal husbandry schemes, viz., (a) Male buffalo calf rearing, (b) Scheme for Pig Development and (c) Utilization of fallen animals were launched by GoI during JulyAugust 2010. All these schemes will be implemented during the remaining period of XI Five Year Plan (2010-11 & 2011-12). The Department of Animal Husbandry, Dairying and Fisheries (DAHDF), MoA, GoI, is the nodal department for operating these schemes. subsidy NABARD will be administering the interest and capital subsidy and monitoring the
c.
Scheme Estates
for and
Establishment Mother Units
of for
Poultry Rural
Backyard Poultry
3.35 The Scheme aims at establishing poultry estates having upto 100 broiler/layer units on the lines of industrial estates, where all common infrastructure facilities, inputs supply and marketing arrangements are provided. Two pilot projects are proposed under the Scheme and preference is given to States that provide land and infrastructure for this purpose. The units will be eligible for interest free loans upto
progress of the scheme, besides providing refinance support to the eligible financing institutions for the term loan. A State Level Sanctioning and Monitoring Committee (SLSMC) was constituted by the State Animal Husbandry Department in association with NABARD in each State for sanctioning of the subsidy / interest subsidy/ interest free loans under these schemes.
48
www.sansco.net
50 per cent of TFO, to be routed through NABARD. During the year, two poultry estates have been sanctioned in Odisha and Sikkim. 3.36 Under the rural backyard poultry component of the scheme, interest free loan upto 50 per cent of TFO of the project is available for Mother Units (MU) where day old chicks of low input birds are reared for 4 weeks for distribution to the beneficiaries. This component of the scheme intends to promote rearing of low input breeds that will survive in rural areas and is intended for Below Poverty Line (BPL) beneficiaries. As on 31 March 2011, GoI has sanctioned 622 MU in Kerala, Bihar, Madhya Pradesh, Andhra Pradesh, West Bengal and Nagaland.
Back-ended capital subsidy at 25 per cent of the outlay (33.33 per cent in NE States, including Sikkim and hilly areas) is made available for establishment of commercial and industrial units.
e.
Scheme for Pig Development
3.38 With a view to encouraging commercial pig rearing by farmers to improve performance of native breed through during cross the breeding, year a scheme Under was the
launched
2010-11.
scheme, 25 per cent (33.33% in NER, including Sikkim and hilly areas) and 50 per cent of the outlay as back ended capital subsidy will be provided for pig breeding/ rearing/ fattening units and retail outlets/ facilities for live stock markets, respectively. As on 31
d.
Scheme for Salvaging and Rearing of Male Buffalo Calves
March 2011, subsidy of ` 1.49 crore was released for establishing 239 pig rearing units under the scheme.
3.37 During 2010-11, the Scheme GoI to assist farmers, NGO,
was launched by professionals and
f.
corporate bodies to rear male buffalo calves for meat production and recovery of hides. Under the Scheme, 100 per cent interest subsidy on short term loan will be provided for rearing of male buffalo calves (1 to 9 calves). An indicative unit cost of ` 6,400 per calf would be provided by banks as short term loan for rearing the calf up to its marketable age (12 months).
Scheme for Utilization of Fallen Animals
3.39 The Scheme, launched during 2010-11, aims at improving the quality of hides and skins from fallen animals and to convert other by-products into value added items. It also aims at reducing/checking
environmental pollution and bird hazard to aircrafts. Under the Scheme for the establishment of Carcass Utilization Centre (CUC) and Bone Crushing Unit, 90 per cent and 50 per cent respectively, will be provided as back of the ended capital will subsidy. facilitate
Implementation
scheme
compliance to the Infectious & Contagious Diseases in Animal Act, 2009 wherein, proper disposal of carcasses of animals is mandatory. The Department of Animal Husbandry, Dairying and Fisheries (DAHDF), MoA, GoI, is the nodal department for operating the scheme. NABARD will be administering the capital subsidy in respect of establishing bone crushing units,
Solar System
in case bank loan component is involved.
49
www.sansco.net
(vii) Scheme for Installation of Solar Offgrid & Decentralised Applications under Jawahar Lal Nehru National Solar Mission
3.40 The Ministry of New and Renewable Energy (MNRE), GoI launched a subsidy linked credit scheme on 1 November 2010, to promote commercial marketing of solar energy systems and devices by extending financial incentives in the form of capital subsidy (30% of the project cost) and subsidised interest (5%) on bank loans. The objective of the scheme is to promote off-grid applications of solar energy [both Photo-voltaics and Solar Thermal] to encourage replacement of non-renewable energy sources like fossil fuels, kerosene and diesel with solar energy to meet energy requirements. The scheme covers projects, specifically approved by MNRE, and provides for routing capital subsidy and subsidised interest on bank loans through NABARD. Banks are eligible to avail of hundred per cent of the loan outstanding as refinance from NABARD, on an automatic basis, at an interest rate of 2 per cent per annum. As on 31 March 2011, a subsidy amount of ` 3.61 crore was released for establishing 8,987 units.
compost units-13) have been sanctioned with net subsidy release of ` 12.45 crore (as on 31 March 2011), against receipt of ` 12.51 crore from GoI.
H. Evaluation Studies
3.42 During four the year, seven evaluation rural studies
covering agricultural
investments,
viz.,
godowns, and
market
infrastructure,
agri-clinics
agri-business centres and solar home lighting system, were conducted.
a. Rural Godowns
3.43 In Andhra Pradesh, the evaluation study report observed that farmers using rural godowns to store agriculture produce benefited by way of 10 to 14 per cent incremental income due to reduction in losses and realisation of better price. Regular repayment of loan was reported in 29 out of 56 sample cases, while the units sanctioned to State Warehousing Corporation (SWC) had become NPA as SWC had not paid installments of loan regularly under the scheme. The report suggests that while scrutinising the proposals under the subsidy scheme, preference may be given to those farmers who have smaller sized godowns.
(viii)
National Project on Organic Farming

3.44 In Karnataka, the evaluation study on rural
3.41 The Ministry of Agriculture, Govt. of India had launched a subsidy based National Project on Organic Farming (NPOF) in 2005 for commercial production of organic hatchery, inputs like bio-fertilisers, vermiculture fruit and vegetable waste compost units.
godowns was conducted in Bellary and Gulbarga districts. The findings of the study revealed that small and medium sized godowns constructed in the paddy growing tracts of Bellary and Gulbarga districts were exclusively utilised by the owner farmers for storing their own produce. Large godowns, especially those near the Gulbarga city, were either rented out to Karnataka SWC or to other farmers. Utilisation of godown capacity was hundred per cent in both Bellary and Gulbarga districts. Pulses dominated in storage accounting for 65 per cent of the storage space
The project has been extended by the GoI for the year 2010-11. However, the vermi-hatchery component of the scheme was discontinued with effect from 11 August 2010. The Project is being implemented by NABARD and National Centre of Organic Farming (NCOF). Workshops were organised to popularise the scheme. A total of 676 units (vermi-hatchery units627, bio-fertilizers units-36 and fruit & vegetable waste
50
www.sansco.net
created, followed by paddy in Gulbarga district. The monthly rent charged by farmers was ` 8 to ` 10 per quintal. The rate of interest charged by banks ranged from 9.5 per cent to 13.5 per cent. There is a huge storage gap, with a potential to construct storage godowns. The report specially recommends
3.47 The evaluation study of AMI scheme in Punjab covered investments like units for cleaning and waxing of kinnows, rice sortex plants and combine that
harvesters.
The
study
findings
indicated
infrastructure developed under the scheme benefitted owners, who were either large farmers or established entrepreneurs . Small and marginal farmers remained out of the domain of such infrastructure and had to
continuation of the scheme.
b.
Agricultural Marketing Infrastructure
depend on commission agents and midddlemen. The waxing units had improved price realisation for
3.45 An evaluation study of the Agricultural Marketing Infrastructure (AMI) scheme was conducted in Andhra Pradesh, covering major activities such as combine harvesters, seed processing and cotton ginning and pressing units. At farm level, the net gain to a farmer due to use of hired combine harvester was estimated at ` 2,400 per acre, mainly on account of savings in labour cost. The cash accruals were ` 726, ` 1,064 and ` 886 per tonne, respectively, for paddy processing units, maize processing units and maize drying units. Gross income per unit from cotton ginning units was ` 0.43 crore, while it was ` 0.23 crore for processing units. The study suggested the need to modernise old cotton ginning and processing units in the State.
kinnows and enhanced shelf life of fruits. This has attracted more number of farmers for cultivation of kinnows. Rice sortex plants had enhanced the export of basmati and long grain non-basmati rice from Punjab. Combine harvesters have become essential for harvesting crops in Punjab due to scarcity of labour and short time available between two crop seasons for harvesting. The study report recommends that
infrastructure for marketing of produce from allied activities like dairy, poultry, fisheries, floriculture, etc., needs to be developed to augment the area under integrated farming.
c.
study of AMI scheme in
Agri-Clinic and Agri-Business Centers
3.48 An evaluation study on Agri-Clinic and Agri3.46 The evaluation Business Centers (ACABC) was conducted in had Maharashtra covered investments such as combine harvesters, seed units and APMC regulated markets. The study reported positive Net Present Worth (NPW) and Internal Rate of Return (IRR) of more than 50 per cent for combine harvesters but negative NPW and IRR of 7 per cent for seed units. Combine harvesters played an important role in reducing the cost of harvesting, particularly wheat and paddy. In general, the infrastructure created under the AMI scheme has helped the farmers in selling their produce in bigger market areas, increasing the holding capacity of the farmers and getting higher prices through storage.
Himachal Pradesh. All the sample agri-preneurs
received 2 months training from Indian Society of Agri-business Professionals (ISAP) under the scheme. The units were sanctioned bank loan ranging between ` 5 lakh and ` 10 lakh. Their annual turnover ranged from ` 12 lakh to ` 1 crore, with an average profit margin of around 10 per cent. The agri-preneur units were able to attract farmers by providing good quality inputs, providing quality advice to the farmers
regarding proper use of inputs, especially fertilisers and pesticides, and consultancy services. The agribusiness centres have been successful in imparting
51
www.sansco.net
knowledge to the farmers on the new and scientific methods of farming, thus leading to an increase in the production per hectare and farm incomes. Highest employment generation of 10,950 person days per year was estimated for inputs supply units. The study suggests that in order to ensure long-term viability and sustainability of agri-preneurs, banks may engage them as Business Correspondents and use (BC) their and Business
Studies (SS) was introduced from 2010-11, and is based on the potential for the activity, its importance in the state/districts, the emerging areas and the need for such studies. During 2010-11, 16 ISS and eight SS covering farm and rural non-farm sectors were
conducted in association with financing banks and nodal Departments of State Governments.
Facilitators
(BF)
technical/advisory
J.
Physical Achievement
services for identification of prospective borrowers and for appraisal of loan applications. The agri-preneurs may be given preference over other general candidates for issuance of dealership licence for fertilizers, 3.51 The refinance disbursement supporting varied economic activities under various types of investments during the year are presented in Table 3.9. Under minor irrigation, 20,000 tubewells with pumpsets and 22,000 pumpsets on existing wells were financed
pesticides, insecticides, etc.
d. Solar Home Lighting System

3.49 The evaluation study of solar home lighting system (SHLS) in Barabanki district of Uttar Pradesh reported that the system could replace four kerosene lamps per household. Due to installation of SHLS, the quality of life had improved like for the sample washing
during the year. Tractor financing continued to be a major item of investment under farm mechanisation with 49,000 units financed during the year. During 2010-11, under land developement, an area of 38,000 ha., was developed. Under the animal husbandry sector, dairy farming and sheep/goat rearing showed an increase of 5.12 lakh animals. The poultry sector showed good growth with 2.80 crore birds being financed during 2010-11.
beneficiaries;
many
chores
cooking,
utensils, fodder cutting, seed preparation, etc., could be carried out even during night. There were other benefits like children being able to study during the night, use of mobile rechargers using solar power, etc. The only concern about the SHLS was the nonavailablity of after-sales-service.
K. Relief Measures for Poultry Units in West Bengal

3.52 The Government of India announced relief measures to the poultry units affected by Avian Flu in
I.
Investment Specific and Special Studies
West Bengal by way of interest subvention @ 4 per cent p.a on the outstanding non-overdue term loan
3.50 NABARD
has
been
conducting
Investment
and working capital loans as on 01 January 2008 for the period from 01 January 2008 to 31 March 2009. During 2010-11, an amount of ` 1.46 crore was released to 12 PCARDB, 7 DCCB and one RRB, covering 17,532 units in the state as relief measures.
Specific Studies (ISS) to identify the problems at the field level in the implementation of schemes, to estimate the benefits accruing from the investment, repayment performance, etc. Conduct of Special
52
www.sansco.net
Table 3.9: Units Financed and Completed under Refinance Support Sr. Investments No. Units Cumulative Units Financed (upto 31 March) 2010 1. Minor Irrigation i. ii. Tubewells with pumpsets @ Dugwells with pumpsets * 000 000 000 000 000 ha. 1,640 2,096 2,500 1,919 3,387 1660 2109 2522 1973 3425 1,621 2,083 2,469 1,882 3,319 1641 2095 2491 1936 3356 2011 Cumulative Units Completed (upto 31 March) 2010 2011
iii. Pumpsets on existing wells iv. Others ** 2. 3. Land Development*** Farm Mechanisation i. ii. Tractors Power tillers
000 000 000 000 ha. 000 ETPs 000 tonnes No. 000 animals 000 animals 000 animals lakh birds
1,476 168 766 2,324 3,21,700 18,898 3,559 16,261 38,758 1,712 2,029
1525 170 795 2388 3,21,984 18899 3665 16500 39031 1728 2309
1,440 163 758 2,274 2,65,800 18,711 3,526 16,031 38,299 1,703 1,997
1489 165 787 2338 2,66,084 18712 3932 16270 38572 1719 2278
iii. Other farm equipments 4. 5. 6. 7. 8. 9. 10. 11. 12. Plantation & Horticulture Forestry Storage Market Yards Dairy Development Sheep/ Goat Rearing Piggery Poultry Fishery i. ii. Mechanised Boats Other Boats
No. No. ha. 000 ha. 000 000
22,777 75,025 5,381 418 8,549 15,882
22780 75086 5389 421 8721 16255
22,094 73,805 5,318 413 8,368 15,224

ETP : Entire Trans-Planting.
22097 73866 5389 416 8558 15578
iii. Brackish Water Aquaculture iv. Fresh Water Aquaculture 13. 14. Non-Farm Sector Miscellaneous$
@ : Includes borewells with pumpsets.
* : Includes dug-cum-borewells with pumpsets,
** : Includes dugwells/ dugwells-cum-borewells, deep tubewells with pumpsets, dugwells with conventional lift, deepening/ renovation of wells, sprinkler, pipeline, storage/water harvesting tank, lift irrigation, drip, pump house, shallow tubewells/ million shallow tubewell programme, etc. *** : Includes soil conservation, saline/ alkaline soil, channels/ lining/ under ground pipeline, wasteland and farm development. $ : Includes bullock pairs, bullock carts, camels, camel carts, SHG, other activities under AH, Kisan bikes, sericulture, ACABC, soil/water testing, compost/ manure plants, gobar gas plants, vermiculture, SRTO, contract farming, AEZ, SC/ ST Action Plan, bee- keeping, etc. P: Provisional
Note: While estimating the completed units, appropriate adjustments have been made for units financed upto March 2011, but not likely to have been completed. It is possible that some of the units have turned out to be infructuous or remained incomplete beyond their normal gestation period.
53
www.sansco.net
Rural Infrastructure Development Fund

3.53 Development of rural infrastructure is imperative for agriculture and overall economic growth as also improving the quality of life. Rural Infrastructure Development Fund (RIDF) was instituted in NABARD during 1995-96. The main objective of the Fund is to provide loans to the State Governments and Stateowned Corporations to enable them to complete ongoing rural infrastructure projects. mechanisms; testing laboratories; hydel projects (upto 10 MW); village knowledge centres; infrastructure for Information Technology in rural areas; desalination plants in coastal areas; and setting up of KVIC industrial estates/centres. The loans are provided at 95 per cent of project cost for all states.
(ii) Social Sector

3.57 Social sector includes drinking water; public health institutions; construction of toilet blocks in
A. Funding
3.54 Domestic commercial banks contribute to the RIDF to the extent of their shortfall under priority sector lending to agriculture, as stipulated by the RBI. Started with ` 2,000 crore during 1995-96 (RIDF I), the annual allocation to the Fund has now reached ` 16,000 crore during 2010-11 (RIDF XVI), taking the cumulative allocation to ` 1,16,000 crore. Additionally, a separate window was introduced in 2006-07 for the funding rural roads component of the Bharat Nirman Programme, with allocation of ` 18,500 crore, till 2009-10. The total allocation for RIDF, thus, stood at ` 1,34,500 crore, as on 31 March 2011.
existing schools, especially for girls and "Pay & Use" toilets in rural areas, infrastructure for rural education; and construction of anganwadi centres. The loans for the above sectors are provided at 90 per cent of project cost for NE and Hill States and at 85 per cent for all other states.
(iii) Rural Connectivity

3.58 Rural Connectivity includes rural roads and rural bridges and loans for these sectors are provided at 90 per cent of project cost for NER and Hill States and at 80 per cent for all other states.
B. Broad Sectors/ Activities

3.55 The broad categories of projects covered under the RIDF are:
(i)
3.56
Agriculture and Allied Sectors

These include irrigation projects, soil
conservation, flood protection, watershed, reclamation of water logged areas; animal husbandry, plantation and horticulture, seed, agriculture and horticulture farms, forest development, fishing harbour/jetties,
riverine fisheries; market yards, godowns, marketing infrastructure; cold storages; grading/certifying
Rural Road under RIDF
54
www.sansco.net
C. RIDF Operations- Sanctions and Disbursements

3.59 During 2010-11, a total of 41,779 projects involving loan amount of ` 18,314.88 crore were sanctioned under RIDF XVI, taking the cumulative number of projects, as at end March 2011, to 4,44,162 and cumulative amount sanctioned to ` 1,21,888.40 crore. Tranche wise position of sanctions are given in Chart 3.4. Of the total amount sanctioned during the year 2010-11, rural road projects accounted for 33.5 per cent, followed by irrigation projects (20.1%),
social sector projects (19.7%), rural bridges (14.2%) and others (12.6%) (Table 3.10). Cumulative sanction, as on 31 March 2011, was highest for Rural roads (32.7%), followed by Irrigation (30.3%). Sector-wise cumulative sanctions are depicted in Chart 3.5. 3.60 The State governments had a total pool of projects of ` 1,21,888.40 crore, as on 31 March 2011, under various tranche (RIDF I to XVI). During the year, disbursements were made to the tune of ` 12,060.04 crore, as at end-March 2011. As per the phasing of projects under various tranche (RIDF I to
Table 3.10: Sector-wise Projects and Amounts Sanctioned (As on 31 March 2011) (` crore) Sector No. of projects RIDF XVI (2010-11) Share in total projects (%) 45.0 17.10 29.5 29.5 0.0 5.2 100.0 Amount Share in total amount (%) 20.1 14.2 33.5 19.7 0.9 11.7 100.0 No projects RIDF I to XVI (Cumulative) Share in total projects (%) 52.8 3.3 18.0 19.2 0.2 6.5 Amount Share in total amount (%) 30.3 11.6 32.7 14.1 1.8 9.6 100.0
Irrigation Rural Bridge Rural Roads Social Sector Power Agriculture related Total
18,784 1,369 7,152 12,304 11 2,156 41,779
3,675.59 2,604.32 6,138.34 3,600.22 158.58 2,137.80 18,314.85
2,34,427 14,705 80,160 85,387 761 28,722 4,44,162
36,914.27 14,088.02 39,876.99 17,213.76 2,138.77 11,656.38
100.0 1,21,888.40
55
www.sansco.net
Table 3.11: Tranche-wise Sanctions and Disbursements - On-going tranches RIDF XI to XVI (As on 31 March 2011) (` crore) Amount Tranche i. Closed Tranches (I to X) ii. Ongoing Tranches XI XII XIII XIV XV XVI Total Grand Total 8000 10000 12000 14000 14000 16000 74,000 1,16,000 29763 41774 36810 85428 38946 41779 2,74,500 4,44,162 8310.50 10377.15 12614.46 14726.35 15623.22 18314.85 79,966.56 1,21,888.40 8310.50 10377.15 12614.46 13310.52 9420.78 4109.11 58,142.52 1,00,064.36 7010.19 8000.73 8969.09 9252.67 6629.24 3731.44 43,593.36 80,499.78 84 77 71 70 70 91 75 80 Corpus 42000 No. of Projects 169662 Sanctioned 41921.84 Phased 41921.84 Disbursed 36906.42 Percent* 88
*: Disbursed as per cent to phased
XVI), the total amount sanctioned (phased) was ` 1,00,064.36 crore, against which disbursements aggregated ` 80,499.78 crore (Table 3.11/Chart 3.6). Six States (Andhra Pradesh, Uttar Pradesh, Gujarat, Tamil Nadu, Madhya Pradesh and Rajasthan) together accounted for nearly 50 per cent of total disbursements and 47 per cent of total sanctions. The state-wise analysis of ratio of disbursements to the approved phasing of sanctions revealed that Mizoram topped with 120 per cent, followed by Uttarakhand, Goa (above 99%), Meghalaya (90%), Tamil Nadu (89%), Haryana and Maharashtra (88%), Punjab and
Gujarat (87%), UP and Jammu & Kashmir (86%) (Table 3.12). Cumulative amount of loan sanctioned and disbursed to States in the North Eastern region, including Sikkim, aggregated ` 6,328.24 crore and ` 3,293.18 crore, respectively, as on 31 March 2011. The slow pace of utilization of loans under RIDF was due mainly to delay in administrative and technical approval by the State Governments, land acquisition problems, delay in obtaining statutory clearances and tendering process, inadequate budgetary support at State level, lack of co-ordination among implementing departments, etc.
D. Deposits/Repayments
3.61 The cumulative deposits received under RIDF stood at ` 95,784.63 crore, as on 31 March 2011. During the year, an amount of ` 13,056.22 crore was received as deposits from commercial banks. The details of year-wise and tranche-wise disbursements against deposits received are given in Table 3.13. An amount of ` 5,047.23 crore was received from state governments towards repayment of RIDF loans during 2010-11. The total RIDF loan outstanding, as on 31 March 2011, was ` 66,077.96 crore.
56
www.sansco.net
Table 3.12: Utilisation Percentage under RIDF (I TO XVI) (As on 31 March 2011) (` crore) Sl.No. 1 2 3 4 5 State Andhra Pradesh Karnataka Kerala Tamil Nadu Puducherry South Zone 6 7 8 Goa Gujarat Maharashtra West Zone 9 10 11 12 13 14 15 Haryana Himachal Pradesh Jammu & Kashmir Punjab Rajasthan Uttar Pradesh Uttarakhand North Zone 16 17 Madhya Pradesh Chhattisgarh Central Zone 18 19 20 21 Bihar Jharkhand Odisha West Bengal East Zone 22 23 24 25 26 27 28 29 Arunachal Pradesh Assam Manipur Meghalaya Mizoram Nagaland Tripura Sikkim North-East & Sikkim RIDF Total Bharat Nirman GRAND TOTAL Sanctions 13004.86 6416.23 3498.88 8228.53 239.08 31387.58 385.12 9386.04 7746.78 17517.94 3041.82 3114.90 4058.98 4527.16 7574.76 10316.79 2440.18 35074.59 1648.04 8731.16 10379.20 4906.83 3103.51 5770.87 7419.64 21200.85 736.23 2129.98 329.38 588.28 361.55 705.76 1002.98 474.08 6328.24 121888.40 18500.00 140388.40 Phasing 11300.24 5445.12 2816.37 7046.36 134.85 26742.94 298.98 8279.71 6090.11 14668.81 2287.98 2366.84 2954.28 3850.15 6555.52 8916.48 1392.61 28323.87 1509.02 7541.46 9050.48 3616.48 2403.92 4578.21 5674.46 16273.08 674.58 1925.71 326.73 357.18 166.62 501.77 764.98 287.61 5005.19 100064.36 18500.00 118564.36 Drawn 8985.44 4241.45 2302.41 6298.07 78.26 21905.62 297.59 7166.97 5336.25 12800.82 2019.45 2014.95 2537.14 3362.48 5197.41 7667.18 1389.58 24188.19 1264.42 5103.75 6368.17 2424.52 1740.95 3331.35 4446.98 11943.80 509.94 1347.26 54.58 321.53 200.79 293.04 371.44 194.60 3293.18 80499.78 18500.00 98999.78 Utilisation (%) 79.52 77.89 81.75 89.38 58.03 81.91 99.53 86.56 87.62 87.27 88.26 85.27 85.88 87.33 79.28 85.99 99.78 85.41 83.79 67.68 70.36 67.04 72.42 72.77 78.37 73.40 75.59 69.96 16.70 90.02 120.51 58.40 48.56 67.66 65.80 80.45 100.00 83.50
E. Monitoring of RIDF Projects

a. In-house Monitoring
timely completion and quality of assets being created. NABARD also undertakes monitoring of RIDF projects by exception. This two-pronged monitoring approach results in better implementation of projects, as various constraints are identified, reviewed and sorted out at
3.62 The primary responsibility of monitoring of RIDF projects is of State Governments for ensuring
57
www.sansco.net
Table 3.13: Year/Tranche-wise Disbursements and Deposits received under RIDF (As on 31 March 2011) (` crore) Year 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 BNP 2007-08 BNP 2008-09 BNP 2009-10 BNP 2010-11 Total Deposits 350.00 1,042.30 1,007.04 1,337.95 2,306.63 2,653.64 3,590.72 3,857.09 2,158.69 4,353.47 6,092.37 6,966.43 0.00 7,369.46 4,438.42 12,157.78 6,647.43 12,677.01 3,718.95 13,056.22 95,784.63 Disbursements 387.34 1,087.08 1,009.03 1,313.12 2,277.87 3,176.85 3,790.37 4,103.42 3,922.09 4,316.85 5,953.32 6,222.58 0.00 8,033.64 4,500.00 10,458.64 7,500.00 12,387.54 6,500.00 12,060.04 98,999.78 XVI Total XV XIV XIII Tranche I II III IV V VI VII VIII IX X XI XII Deposits 1,586.56 2,225.00 2,308.02 1,412.53 3,051.88 4,080.54 4,073.77 5,215.00 4,913.64 6,466.98 8,000.00 9,018.27 4,000.00 9,837.65 3,544.06 6,442.49 3,817.18 5,300.00 6,491.06 4,000.00 95,784.63 Disbursements 1,760.87 2,397.95 2,453.50 2,482.00 3,054.96 4,070.85 4,052.59 5,148.50 4,916.48 6,568.69 6,851.52 7,638.22 0.00 8,445.71 4,500.00 8,236.15 7,500.00 5,129.72 6,500.00 3,731.44 98,999.78
BNP: Bharat Nirman Programme
regular intervals. The High Power Committee (HPC) chaired by the Chief/Finance Secretary of the State, meets quarterly to review the pace of project implementation. The HPC, has proven to be an effective mechanism for monitoring and ensuring speedy and timely completion of projects. 3.63 During the year, 5,553 projects were monitored through field visits. Major observations/issues were taken up with the implementing departments and the Finance improving execution. Department the pace of and State Governments of the for quality project
damages. Standardization of cropping practices and awareness creation among farmers on upkeep of poly-houses were recommended. Monitoring of social sector projects in Karnataka indicated that there were problems of poor maintenance. Provision
b.
Monitoring Studies - Feedback
3.64 The monitoring visit to poly-house projects in Himachal Pradesh revealed that factors like, time overrun, improper opening of the ventilators, heavy rains and lack of awareness among farmers caused
Poly Houses under RIDF
58
www.sansco.net
for
electrification, were land not
toilet
and
water in
supply due
was to of
missing in primary school projects. In Haryana, road projects mining, completed time non-availability of stone, because of a ban on acquisition, non-availability adequate labour, forest clearance, etc.
F.
Capacity Building Support
3.65 During 2010-11, five Regional Business Meets were organized in five major regions to address various constraints in implementing RIDF, which
Hanging Bridge under RIDF
involves several processes like, project identification, area survey, project design, preparing Detailed Project Reports (DPR) mid-term appraisal (both technical and economic), monitoring and evaluation, quality testing, etc., through training and capacity building of officials/ staff involved in implementing RIDF, especially for those states that have comparatively lower off-take of RIDF because of their weak implementing apparatus. In addition, 45 regional awareness workshops have been conducted by Regional of Offices for and State other Government agencies. officials Finance
G. Economic/Social Benefits of RIDF Projects

3.66 Completed projects under RIDF realise the economic and social benefits in terms of: (i) creation of additional additional irrigation potential, for (ii) the generation rural of
employment
people,
(iii) contribution to the economic wealth of the country (GDP), (iv) all weather connectivity/ improved
connectivity to villages and marketing centers and (v) improvements in quality of life through better facilities in education, health and drinking water supply.
implementing Departments, agencies and user groups
Table 3.14: Cumulative Economic and Social Benefits of RIDF Projects S.No. 1 2 3 4 5 6 Particulars Irrigation potential (lakh ha.) Rural Roads (km) Rural Bridges (m) Gross Domestic Product ( ` crore) Recurring Employment (No.of jobs) Non Recurring Employment: A. Irrigation (lakh persondays) B. Rural Roads and Rural Bridges (lakh persondays) C. Others (lakh persondays) Power Sector A. Hydel Power Generation (MW) B. System Improvement to minimise T & D losses (lakh units/ year) Social Sector (People /Students benefited) A. Health Centres (lakh) B. Primary & Secondary Schools (lakh) C. Rural Drinking Water Supply (lakh) MW: Mega Watt T & D: Transmission and Distribution Additional benefits created 164.78 3,30,855.00 6,67,306.00 23,811.00 85,40,476.00 26,396.78 36,478.45 18,768.94 200.11 22315 581.43 94.83 1167.16
59
www.sansco.net
Table 3.15: Statewise Benefits Estimated Under RIDF I to XVI (As on 31 March 2011) State Irrigation (ha) Andhra Pradesh Arunachal Pradesh Assam Bihar Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Orissa Punjab Rajasthan Tamilnadu Tripura Uttar Pradesh West Bengal Sikkim Jharkhand Chhattisgarh Uttarakhand UT of Puducherry Total 1786202 0 317317 556578 54080 1210934 868590 104992 129849 455365 231338 1313447 655034 19550 7992 2990 7471 836501 496782 421644 270322 94893 4225908 1847915 40516 73571 341065 105368 1836 16478050 Potential Bridges (m) 47286 2473 52323 21598 1410 4346 2969 18261 15000 38955 29028 37881 54143 0 4250 283 759 73632 8543 2905 43971 32101 41373 25813 3258 57500 31603 15315 327 667306 Roads (km) 31017 1010 795 4371 258 19873 2512 7771 11082 35074 3915 13454 24506 0 1326 693 1622 5679 6993 51070 31301 4389 36371 12944 2533 7049 4303 8772 172 330855 Value Prodn. (` crore) 2662 0 348 701 45 1209 1835 398 190 1121 501 3610 1435 29 10 3 8 1777 755 738 275 50 3263 1960 29 210 475 174 1 23812 Recurring Employment (Numbers) 1952853 0 102400 231693 5284 1321078 167256 414939 97738 123605 79860 1063265 270236 8808 3621 1976 3727 441160 179077 98671 270786 11175 561833 914068 26462 90742 69618 27439 1108 8540478 Non-recurring Employment Irrigation Road+Bridges (lakh Persondays) 5058 0 84 311 81 1492 706 511 214 1673 330 3123 3127 20 61 12 22 1880 654 1268 534 72 1900 1485 98 303 828 224 327 26398 5450 233 816 1166 158 954 413 610 1359 2700 706 1454 2354 0 268 65 179 2566 828 2759 3274 1085 1538 2668 410 1006 448 975 37 36479 Others
3242 62 204 537 8 1076 165 316 161 874 339 344 191 147 64 22 267 260 783 2560 1246 472 706 3670 484 464 10 49 46 18769
60
www.sansco.net
The benefits generated, as at end March 2011, are presented in Table 3.14, Table 3.15 and Box 3.1.
implementing capacity, NABARD is exploring the possibilities of allowing implementation of specific projects under the public-private partnership (PPP)
H. RIDF: Looking Ahead

3.67 Despite funding lakhs of projects in irrigation, rural connectivity, and other vital sectors under RIDF, it is felt that the gigantic gap in rural infrastructure cannot be bridged by the state governments due to their limited budgetary resources and organisational structure. In order to leverage private resources and its
model (Box 3.2). Accordingly, a quick study was conducted by NABARD as well as State Governments during 2008-09. Based on the study results/feedback received and in consultation with GoI and RBI, NABARD as part of its repositioning exercise, is in the process of encouraging partnerships and network relations to bring about private sector competence and funds into the realm of rural infrastructure.
Box 3.1 Evaluation Studies on RIDF Projects : Feedback on Benefits Realised An econometric analysis for estimating the effect of infrastructure index (irrigation, connectivity, social sectors) on agricultural production and productivity was carried out for Chhattisgarh and Uttar Pradesh. Infrastructure index as an independent variable explained 54-78 per cent variation in agricultural productivity in the two states. Thus, the results substantiated that infrastructure projects supported under RIDF have positive impact on agricultural production and productivity. Major impact of Irrigation Projects was on increase in cropping intensity (10-42%) and yield (10-50%). Other benefits accrued from the sample irrigation projects were recharge of ground water, availability of drinking water, increase in allied activities like dairy, increase in land value, increase in employment generation per year (non-recurring employment in the range of 30 to 6,50,000 persondays and recurring employment the range of 40 to 2,38,370 persondays). Economic impact of Rural Roads & Bridges projects was observed in terms of increase in land prices, price of agriculture produce and cropping intensity, shift in acreage towards cash crops, employment generation, allied Economic benefits from Rural Water Supply Projects were in terms of time saved (1.87 hours per family) and adequate availability of safe drinking water in schools. Water availability for animals and savings of time had boosted dairy activity in the sample district. An average of ` 6.96 lakh was estimated to be the incremental income from enhanced dairy activity. Other non-tangible benefits like improvement in hygiene and environment were also reported. As many as 35,000 persondays of non-recurring employment and 930 persondays of recurring employment per year were generated by the sample projects. activities, etc., increase in crop yield for paddy (4-10%), wheat (3-8%) and sugarcane (10-20%). Wastage in
marketing of agricultural produce, especially perishables was also reduced due to reduction in distance and time in transportation. The Vehicle Operating Cost (VOC) came down due to reduction in distance and improvement in the quality of roads and bridges. Linkage by roads resulted in convenient access to hospitals, banks, schools and
administration. Non-recurring employment generation was in the range of 823 to 52,000 persondays per year and the recurring employment was in the range of 653 to 41,659 persondays per year for the sample projects.
Source : NABARD (2010)- Infrastructure for Agriculture Development Occasional Paper-53
61
www.sansco.net
Box 3.2 NABARD Infrastructure Development Assistance (NIDA)
The first NABARD Infrastructure Development Assistance (NIDA) loan has been sanctioned to the Karnataka State Warehousing Corporation, for construction of 1.06 lakh MT of storage space in 9 districts of the State, involving loan support of ` 42.12 crore. Depending upon need, Special Purpose Vehicles (SPV) set up under the PPP model and private entrepreneurs will also be considered on a case-to-case basis. Assistance will be provided based upon viability of the borrowing entity and its financial condition, including track record for execution of works and delivery of services related to the specific investment
being financed. NIDA
loan will typically be of long
tenure (7-15 years) and carry rates of interest which appropriately reflect the borrowers risk profile while ensuring business viability. The loans will be guaranteed against appropriate security and collateral. NABARD will also build-in appropriate Finance+ services like monitoring, quality assurance, programme management, capacity building, etc., to increase the sustainability of the investments in the long run. A dedicated fund Rural Infrastructure Promotion Fund has been created during the year with an initial contribution of ` 25.00 crore.
62
www.sansco.net
IV
Capacity Building of Client Institutions
The Co-operative Banks and Regional Rural Banks (RRB), which play a very crucial role in financial intermediation in agriculture and rural development, are vulnerable to disruptions created by economic shocks. capacity NABARD of these endeavours institutions to strengthen through the various
developmental and supervisory initiatives to enable them withstand such shocks effectively.
Institutional Development
A. Rural Co-operative Credit Institutions - Overview a. Performance
4.2 Credit The total membership of Primary Agricultural Societies (PACS) during 2009-10 stood at and that of DCCB increased by 3 per cent over the previous year. Loans issued by SCB decreased by 17 per cent and that of DCCB increased by 26 per cent during the year 2009-10, as compared to the previous year. Loans outstanding of SCB increased marginally by 2 per cent while that of DCCB increased by 24 per cent in 2009-10 as compared to the previous year.
1,264 lakh, of which borrowing members were 598 lakh, constituting 47.31 per cent of total membership. The membership as well as borrowing members declined during the year 2009-10. Both deposits mobilised and loans issued by PACS (as on 31 March 2010) registered an increase of 34.45 per cent and 27.47 per cent, respectively, over the previous year. The
borrowings of PACS also registered only an increase of 5.77 per cent over the previous year (Table 4.1).
4.4
In the Long Term Co-operative Credit Structure
(LTCCS), borrowings of State Co-operative Agriculture and Rural Development Banks (SCARDB), as on 31 March 2010, marginally decreased by 0.5 per cent over the previous year while that of Primary Co-operative Agriculture Rural Development Banks
4.3
An analysis of the financial position of the SCB
(PCARDB) marginally increased by 2 per cent during the corresponding period. Loans issued by SCARDB and PCARDB during the year 2009-10 increased by 19 per cent and 13 per cent, respectively, while the
and DCCB (Table 4.2) indicated that their deposits as on 31 March 2010, increased by about 15 per cent each; the borrowings of SCB increased by 12 per cent
Table 4.1: Growth of PACS (As on 31 March) (` crore) Particulars Number Membership (lakh) Borrowing Members (lakh) Owned Funds Deposits Borrowings Loans issued
Source : NAFSCOB
Table 4.2: Growth of Short-Term Co-operative Banks (As on 31 March) (` crore) Particulars 2009 Number Share Capital Reserves Deposits Borrowings Loans Issued Loans Outstanding
P : Data provisional * : Data for the year 2010 is repeated from: (i) 2008-09 for the states of Puducherry and Sikkim; (ii) 2007-08 for Jharkhand, Kerala (DCCB) and West Bengal; and (iii) 2006-07 for Bihar
2008 94,950 1,315 794 10,984 25,449 47,848 57,642
2009 95,633 1,323 765 11,806 26,245 48,938 58,787
2010 94,647 1,264 598 12,479 35,286 51,764 74,938
SCB 2010 P* 31 1,635 10,403 82,311 23,430 53,589 49,199 2009 370 6,452 22,719 1,28,434 27,588 90,006 99,462 31 1,570 10,256 71,272 20,971 64,779 48,382
DCCB 2010 P* 370 7,226 22,598 1,47,109 28,334 1,136,10 1,23,221
63
www.sansco.net
Table 4.3: Growth of Long-Term Co-operative Banks (As on 31 March) (` crore) Particulars Number Share Capital Reserves Deposits Borrowings Loans Issued Loans Outstanding SCARDB*@ 2009 20 814 3272 707 14773 2586 16279 2010P 20 817 3369 756 14701 3076 16879 PCARDB* 2009 697 1515 3236 467 12403 2054 11231 2010P 697 1513 3269 447 12592 2324 11377 Year 2008 2009 2010#
Table 4.5: Accumulated Losses (As on 31 March) (` crore) SCB# 428 404 574 DCCB # 6195 5204 5270 SCARDB * PCARDB $ 1263 1054 1188 3403 3631 4087
Data for 2009-10 Provisional. # Data for 2009-10 repeated in respect of SCB and DCCB from 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and West Bengal; from 2007-08 in Bihar, Jharkhand and Kerala (DCCB) * Data for 2009-10 repeated from previous year in respect of SCARDB and PCARDB in Bihar, Kerala, Maharashtra (SCARDB), Odisha, Tamil Nadu, Puducherry and Tripura
* : Data for 2009-10 repeated from 2008-09, for the states of Bihar, Kerala, Maharashtra (SCARDB), Odisha, Puducherry, Tamil Nadu and Tripura @ : Manipur SCARDB is defunct P : Data provisional
loans outstanding increased by 4 per cent and one per cent, respectively, over the previous year (Table 4.3).
aggregate profit of ` 154 crore, while 390 incurred an aggregate loss of ` 518 crore during the year, resulting in a loss of ` 364 crore (Table 4.4).
b.
i.
4.5
Working Results
Profitability
During 2009-10, 28 out of 31 SCB were in profit
4.6
The aggregate accumulated losses of all the tiers
of co-operatives in the short-term and long-term structures showed an increase as on 31 March 2010, as compared to 2008-09 (Table 4.5). 4.7 An analysis at the regional level showed that during 2009-10, the overall profits of SCB decreased by 22 per cent over the previous year (Table 4.6). Profits of SCB in Eastern Region marginally improved but in the North Eastern Region, it increased four fold compared to the previous year. Gujarat SCB in
aggregating ` 463 crore while the remaining 3 SCB were in loss (` 210 crore), resulting in aggregate profit of ` 253 crore. While 323 out of 370 DCCB earned profit of ` 1,545 crore, 47 DCCB incurred losses to the extent of ` 524 crore, resulting in a overall profit of ` 1,021 crore. Eleven SCARDB earned an aggregate profit of ` 97 crore, while eight incurred an aggregate loss of ` 155 crore, resulting in a loss of ` 58 crore. Out of 697 PCARDB, 307 earned an
Table 4.4: Working Results of Co-operative Banks (` crore) Agency Year Total (No.) In Profit (No.) Profit Amount In Loss (No.) Loss Amount SCB 2008-09 31 26 395 5 71 2009-10*P 31 28 463 3 210 2008-09 370 321 1603 49 261 DCCB 2009-10*P 370 323 1545 47 524 SCARDB $ 2008-09$ 20 12 404 7 88 2009-10$**P 20 11 97 8 155 PCARDB 2008-09# 2009-10#**P 697 343 220 353 342 697 307 154 390 518
* : Data for SCB and DCCB repeated from : (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu, West Bengal; (ii) 2007-08 in Bihar, Jharkhand and Kerala(DCCB). # : Data for 1 PCARDB and 4 PCARDB in West Bengal not available for 2008-09 and 2009-10, respectively $ : Manipur SCARDB is defunct. **: Data for year 2009-10 repeated from previous year for SCARDB and PCARDB in the states of Bihar, Kerala,, Maharashtra (SCARDB), Odisha, Puducherry, Tamil Nadu and Tripura. P : Data provisional
64
www.sansco.net
Table 4.6: Region-wise Working Results of SCB # (As on 31 March) (` crore) Region Profit/Loss (+)/ (-) 2008-09 Northern North-Eastern Southern Eastern Central Western All-India 105.39 14.50 125.77 43.29 69.17 (-)33.99 324.13 2009-10* 71.30 59.48 (-)30.76 44.01 45.56 64.06 253.65 Gross NPA 2008-09 347.02 435.01 1599.99 505.64 607.16 2268.67 5763.50 2009-10* 365.44 453.29 753.39 498.92 469.30 1928.82 4469.16 NPA as % to loans outstanding 2008-09 3.12 37.39 11.34 10.32 10.01 20.58 11.91 2009-10* 3.16 36.05 5.36 9.18 7.29 18.42 9.08 Recovery (%) (As on 30 June) 2008-09 2009-10* 97.29 49.23 95.03 86.82 92.97 83.26 91.78 97.93 45.47 93.90 86.83 92.42 81.59 91.22
# data for 2009-10 in respect of SCB in Bihar, Odisha, Puducherrry and Sikkim and West Bengal repeated from 2008-09 * Data for 2009-10 provisonal
Western region and Assam, Nagaland and Tripura SCB in North Eastern Region, which had incurred losses in the previous year turned around, earning profits in 2009-10. Haryana SCB in Northern region incurred loss during the year. While 10 SCB (Andaman & Nicobar, Andhra Pradesh, Chhattisgarh, Uttarakhand, Himachal Pradesh, Jammu and Kashmir, Goa, Meghalaya, Mizoram and Odisha) improved their profit as on 31 March 2010 over the previous year, 10 SCB (Madhya Pradesh, Uttar Pradesh, Chandigarh, Delhi, Punjab, Rajasthan, Maharashtra, Karnataka, Manipur and Tamil Nadu) showed declining trend in profits over the previous year. At the aggregate level, the non-
performing assets (NPA) in absolute terms as well as a percentage to the loans outstanding, as on 31 March 2010 registered decrease, probably due to an improvement in the recovery performance.
4.8
At the aggregate level, the number of profit
earning DCCB increased but were marked by a decline in their profits during 2009-10. The number of loss making DCCB decreased from 49 to 47 with the losses doubling from ` 261.14 crore in 2008-09 to ` 523.87 crore in 2009-10. In the case of DCCB, the overall profits of DCCB increased in Central and Western Regions but decreased in Northern and
Table 4.7: Region-wise Working Results of DCCB (As on 31 March)

(` crore) 2008-09 2009-10*# Gross NPA NPA % to Loans Outstanding 2010 Recovery % (As on 30 June) 2009 2010
Region
DCCB No.
Profit No. Amt. No.
Loss Amt.
DCCB
Profit
Loss Amt. Amt. 35.81 61.42 67.12 37.65 321.87
2009
2010 2009
No. No. No.
Amt. No. Amt. No. 113.01 447.50 76.36 314.28 593.38 8 9 14 9 7 47
No. Amt. Northern Southern Eastern Central Western All-India 73 80 64 104 49 370 69 71 50 90 41
No. Amt. 148.47 510.11 76.36 294.54 573.29 4 9 14 14 8 49 27.67 67.44 67.12 43.48 55.43 261.14 73 80 64 104 49
65 71 50 95 42
1806.63 5125.53 1136.44 3357.10 6501.97
1812.21 4334.58 1136.44 3134.98 5597.24
6.56 15.55 17.70 27.73 22.33
8.89 12.03 5.06 24.72 17.68 13.00
77.84 78.89
79.57 79.94
62.66 68.41 63.70 67.98 66.80 71.80 72.17 74.94
321 1602.77
370 323 1544.53
523.87 17927.68 16015.45 18.02
* Data for 2009-10 provisional. # Data for 2009-10 repeated from 2008-09, in respect of DCCB from Bihar, Jharkhand, Kerala and Odisha
65
www.sansco.net
Table 4.8: Region-wise Working Results of SCARDB *$ (As on 31 March) (` crore) Regions No. of Branches 2010 85 35 56 138 349 181 844 Profit/Loss(-) 2009 69.00 (-)2.56 20.95 (-)1.03 207.89 22.19 316.45 2010 50.02 (-)3.51 (-)61.65 7.06 (-)49.82 (-)0.03 (-)57.91 Gross NPA 2009 759.77 16.34 696.12 368.93 1724.69 1381.81 4947.65 2010 898.64 15.95 709.11 313.99 2265.76 1424.11 5627.56 NPA % 2009 13.86 51.99 18.97 40.26 39.21 77.57 30.39 2010 15.60 51.76 19.15 31.39 49.04 80.71 33.34 Recovery % to demand 2009 64.92 53.41 51.65 34.73 35.31 20.06 40.73 2010 58.00 54.45 56.85 36.47 37.48 19.54 40.88
Northern North Eastern# Southern Eastern Central Western All India Total
* Data for 2009-10 is provisional $ Data repeated for 2009-10 from 2008-09 in respect of SCARDB in Bihar, Kerala, Madhya Pradesh, Odisha, Puducherry, Tamil Nadu, Tripura and West Bengal # Manipur SCARDB is defunct
Southern Regions during the year 2009-10. The extent of profits of DCCB increased in Chhattisgarh, Uttar Pradesh, Jammu and Kashmir, Gujarat, Karnataka and Maharashtra. The percentage of NPA to loans outstanding in all regions improved, except in the Northern Region (Table 4.7).
4.10 During
2009-10,
profits
of
the
SCARDB
increased in Eastern Region. SCARDB in Southern and Western Regions slipped into loss making entities. In the NE Region, the losses of SCARDB increased. While profits of SCARDB in Chhattisgarh, Punjab and West Bengal Haryana, increased, profits of SCARDB in Pradesh and Uttar Pradesh Himachal
4.9
At the aggregate level, SCARDB incurred loss of
decreased. 4.11 During 2009-10, PCARDB in all regions
` 57.91 crore (Table 4.8) and PCARDB incurred loss of ` 518.06 crore (Table 4.9) during the year 2009-10. The number of profit making PCARDB decreased to 303 in 2009-10 from 343 in 2008-09.
recorded a decrease in the level of their profits over the previous year. While the loss making PCARDB in
Table 4.9: Region-wise Working Results of PCARDB@ (As on 31 March) (` crore) 2008-09 Region No. Profit No. Amt. 99 167 50 23 4 72.27 71.21 46.60 24.06 6.08 Loss Amt. 75.81 60.61 4.98 69.02 No. 2009-10# Profit No. Amt. 105 144 38 16 0 51.37 66.78 33.61 2.25 0.00 Loss No. Amt. 40 259 28 34 29 203.04 78.39 16.37 35.81 184.45 Gross NPA NPA % to Loans Recovery % Outstanding As on 30 June 2009 35.32 36.57 37.65 63.20 95.91 42.22 2010 34.73 36.14 23.11 56.69 98.85 42.78 2009 2010 39.14 41.19 50.15 48.18 56.29 46.27 37.64 37.48 7.97 20.83 39.48 40.60
No. 46 236 19 27
2009
2010
Northern 145 Southern 403 Eastern Central Western 70 50 29
145 403 70 50 29 697
1881.05 2287.87 1251.79 1300.80 249.33 745.75 614.21 174.29 623.47 480.61
25 131.88 353 342.30
All-India 697
343 220.22
303 154.01
390 518.06 4742.13 4867.04
@: Data for 2009-10 provisional. # : Data for 2009-10 repeated from 2008-09 in respect of PCARDB in Maharashtra, Odisha, Puducherry and Tamil Nadu
66
www.sansco.net
Central Region reported reduced lossess, PCARDB in other regions reported increased losses during 2009-10 over the previous year (Table 4.9).
as on 31 March 2010, increased to 33.34
per cent
from 30.39 per cent in the previous year, and marginally increased to 42.78 per cent from 42.22 per cent for PCARDB, during the corresponding period. The gross NPA of SCARDB and PCARDB were estimated at `5627.56 crore and `4867.04 crore, showing an increase of 14 and 3 per cent, respectively. The asset classification of NPA of SCB, DCCB, SCARDB and PCARDB are given in Table 4.10. 4.16 The non-performing assets in SCB was the lowest
ii
4.12
Costs and Margins

During 2009-10, SCB as a group earned an
overall return of 7.39 per cent while the cost of funds worked out to 5.30 per cent, resulting in a financial margin of 2.09 per cent (excluding miscellaneous income of 0.82 per cent). The average transaction cost and risk cost of SCB during the year worked out to 1.34 per cent and 0.55 per cent, respectively. SCB as a group earned a positive net margin of 1.02 per cent during 2009-10 compared to net margin of 0.57 per cent during 2008-09. 4.13. In the case of DCCB, the overall return on
in the Northern Region (3.16%), followed by Southern (5.36%) and Central (7.29%) Regions, and these regions had a lower percentage of NPA as compared to the all-India average of 9.08 per cent during 2009-10. In the Eastern (9.18%), Western (18.42%) and and North-Eastern (36.05%) regions, gross NPA was higher than the all-India average. SCB in Arunachal Pradesh, Bihar, Assam, Manipur, Tripura, Andaman and Nicobar, Chhattisgarh, Uttar Pradesh, Meghalaya, Mizoram, Nagaland, Himachal Pradesh, Jammu and Kashmir, Chandigarh, Kerala, Goa and Maharashtra continued to have high levels of NPA. In the case of DCCB, as compared to the all India average (13.00%), NPA in Eastern (5.06%), Northern (8.89%) and Southern (12.03%) regions were lower during
working funds was 7.52 per cent while the cost of funds was 5.05 per cent, yielding a financial margin of 2.47 per cent (excluding miscellaneous income of 2.57 per cent). The average transaction cost and risk cost, as a percentage to working funds were 1.89 per cent and 1.35 per cent, respectively during 2009-10. The DCCB, as a group, earned net margin of 1.80 per cent during 2009-10. 4.14 During the year 2008-09, out of 19 SCARDB, 13 had positive net margin and the remaining 6 had negative net margin. PCARDB in only 4 States had positive net margin.
Table 4.10: Composition of NPA of Co-operative Banks (As on 31 March 2010^) (` crore)
Asset SCB* DCCB* SCARDB#$ PCARDB# Classification Sub-Standard Doubtful Loss Assets Total NPA Provisions made 1412.35 2257.82 798.99 4469.16 4438.25 7084.92 6317.31 2613.22 16015.45 10871.25 12300.99 3460.93 2146.54 20.09 5627.56 1188.28 1445.56 2757.03 2081.84 28.17 4867.04 1040.60 1113.13
iii. Non-Performing Assets (Gross) and Recovery Performance

4.15 At the aggregate level, the percentage of gross NPA to total loans and advances outstanding in respect of both SCB and DCCB, improved to 9.08 and 13.00 per cent, as on 31 March 2010, from 11.91 and 18.02 per cent as on 31 March 2009, respectively. (Table 4.6 and 4.7) In absolute terms, gross NPA was estimated at ` 4,469.16 crore for SCB and ` 16,015.45 crore for DCCB, as on 31 March 2010, registering a decline of 22 and 11 per cent, respectively, over the previous year. The percentage of gross NPA to total loans and advances outstanding in the case of SCARDB,
Provisions required 2861.47
^ Data for 2009-10 Provisional * data for the year 2009-10 in respect of SCB and DCCB repeated from (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and West Bengal; (ii) 2007-08 in Bihar, Jharkhand and Kerala (DCCB) # Data for the states of Bihar, Kerala, Maharashtra (SCARDB), Odisha, Tamil Nadu and Tripura repeated from previous year $ Manipur SCARDB is defunct
67
www.sansco.net
2009-10. Haryana, Himachal Pradesh and Punjab had low levels of NPA, while they were very high for DCCB in Jharkhand, Uttar Pradesh, Chhattisgarh, Madhya Pradesh, Jammu and Kashmir, Gujarat, Maharashtra, Andhra Pradesh, Kerala, Tamil Nadu and West Bengal, as on 31 March 2010.
Table 4.11: Percentage of Recovery of loans to Demand (As on 30 June) Agency SCB DCCB # SCARDB* $ PCARDB* 2008 84.59 55.61 50.40 40.90 2009 91.78 72.17 40.73 39.48 2010* 91.22 74.94 40.88 40.60
4.17
The average loan recovery of SCB marginally
* Data Provisional for the year 2009-10. # Data for 2009-10 in respect of SCBs and DCCBs repeated from 2008-09 in Kerala (DCCB), Odisha, Puducherry, Sikkim, Tamil Nadu and West Bengal; from 2006-07 in Bihar; and 2007-08 in Jharkhand $ Manipur SCARDB is defunct
decreased to 91 per cent as on 30 June 2010, from 92 per cent as on 30 June 2009, while that of DCCB increased to 75 per cent as on 30 June 2010, from 73 per cent as on 30 June 2009 (Table 4.11). The loan recovery of Chhattisgarh SCB increased considerably to 80 per cent from 59 per cent, as on 30 June 2010. SCB in Uttarakhand, Haryana, Jammu & Kashmir, Rajasthan, Arunachal Pradesh and Tripura had improved their loan recovery performance. However, SCB in Uttar Pradesh, Chandigarh, Delhi, Himachal Pradesh, Andaman & Nicobar, Maharashtra, Assam, Manipur, Meghalaya and Nagaland showed during 2009-10. decline in recovery of loans
cent during 2008-09. The PCARDB in the Southern (48.18%) and Eastern (46.27%) regions registered higher levels of recovery. The loan recovery of SCARDB in Assam and Uttar Pradesh increased considerably to 36 per cent and 43 per cent, as on 30 June 2010, from 31 per cent and 38 per cent as on 30 June 2009. Low recovery performance and its declining trend were recorded by SCARDB in Chhattisgarh, Haryana, Madhya Pradesh, Punjab and Rajasthan. The loan recovery in respect of PCARDB in Chhattisgarh, Haryana, Himachal
4.18 The average loan recovery of SCARDB marginally improved from 40.73% in 2008-09 to 40.88% in 2009-10. In the case of PCARDB also, the recovery of loans during 2009-10 improved to 41 per cent compared to 39 per
Pradesh, Maharashtra and Punjab showed improvement, as on 30 June 2010, over the previous year. The loan recovery in respect of PCARDB had declined in Karnataka, Madhya Pradesh, Rajasthan and West Bengal.
Table 4.12: Frequency Distribution of Co-operative Banks According to Range of Loan Recovery Percentage (As on 30 June) (Number) Recovery (%) 2009 <40 >40 to <60 >60 to < 80 >80 Total 4 2 9 16 31 SCB (No.) 2010# 4 2 8 17 31 2009 102 82 101 85 370 DCCB (No.) 2010#@ 47 77 121 124 369 SCARDB (No.) $ 2009 * 9 2 6 2 19 2010^* 10 4 4 1 19 PCARDB (No.) 2009 382 173 98 43 696 2010** 337 205 113 42 697
* : Data provisional for the year 2009 # : Data for the year 2009-10 in respect of SCB and DCCB repeated from (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and West Bengal; (ii) 2007-08 in Bihar,Jharkhand and Kerala (DCCB); @: data for one DCCB in MP not available ^: Data for SCARDB and PCARDB in Bihar, WB, Kerala, Tamilnadu and SCARDB in Maharashtra repeated from previous year. $ : Manipur SCARDB is defunct.
68
www.sansco.net
Table 4.13: Frequency Distribution of States/UT according to Level of Loan Recovery of SCB and DCCB (As on 30 June 2010) Recovery (%) <40 SCB Arunachal Pradesh, Bihar, Manipur and Meghalaya (4) DCCB @ Bihar (5), Gujarat (3), Jharkhand (7), Karnataka (1), Madhya Pradesh (8), Maharashtra (2), Odisha (4), Tamil Nadu (1), Uttar Pradesh (12), Uttarakhand (1), West Bengal (3) (47)
>40 and <60%
Andaman & Nicobar and Jammu Andhra Pradesh (2), Bihar (10), Chhattisgarh (1), Gujarat (1), Haryana (5), Jammu and Kashmir (1), Jharkhand (1), Karnataka (4), Kerala (2), Madhya Pradesh (7), and Kashmir (2) Maharashtra (10), Odisha (4), Rajasthan (4), Tamil Nadu (3), Uttar Pradesh (16), Uttarakhand (1), West Bengal (5) (77) Assam, Chandigarh, Maharashtra, Mizoram, Nagaland, Sikkim, Tripura, Uttar Pradesh, (8) Andhra Pradesh (8), Bihar (6), Chhattisgarh (4), Gujarat (5), Haryana (14), Himachal Pradesh (1), Jammu & Kashmir (1), Karnataka (5), Kerala (3), Maharashtra (11), Madhya Pradesh (14), Odisha (4), Punjab(1), Rajasthan (15), Tamil Nadu (5), Uttar Pradesh (15), Uttarakhand (2), West Bengal (7) (121)
>60 and <80%
>80%
Andhra Pradesh, Chhattisgarh, Delhi, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Odisha, Puducherry, Punjab, Rajasthan, Tamil Nadu, Uttarakhand, West Bengal (17) 31
Andhra Pradesh (12), Bihar (1), Chhattisgarh (1), Gujarat (9), Himachal Pradesh (1), Jammu and Kashmir (1), Karnataka (11), Kerala (9), Madhya Pradesh (8), Maharashtra (8), Odisha (5), Punjab (19), Rajasthan (10), Tamil Nadu (14), Uttar Pradesh (7), Uttarakhand (6), West Bengal (2) (124)
Total
369
Data for the year 2009-10 in respect of SCBs and DCCBs repeated from (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and West Bengal; (ii) 2007-08 in Bihar, Jharkhand and Kerala; @: data for one DCCB in MP not available
4.19 The frequency distribution of loan recovery of banks in the co-operative structure are presented in Tables 4.12 to 4.14.
c.
Supersession of Elected Boards
4.20 NABARD, as a matter of policy, continues to emphasise the need for co-operative banks to be
Table 4.14: Frequency Distribution of States/UT according to Levels of Loan Recovery of SCARDB and PCARDB (As on 30 June 2010) Recovery < 40 % SCARDB Assam, Bihar, Chhattisgarh, Gujarat, Jammu & Kashmir, Madhya Pradesh, Maharashtra, Tamil Nadu (8) Haryana, Himachal Pradesh, Rajasthan, Odisha, West Bengal, Uttar Pradesh, Karnataka (7) Punjab, Tripura (2) PCARDB Chhattisgarh (2), Haryana (15), Karnataka (59), Kerala (3), Madhya Pradesh (29), Maharashtra (29), Odisha (26), Punjab (8), Rajasthan (16), Tamil Nadu (170), West Bengal (11) (368)
> 40 % and < 60%
Chhattisgarh (7), Haryana(4), Karnataka (77), Kerala (15), Madhya Pradesh (7), Odisha (11), Punjab (24), Rajasthan (15), Tamil Nadu (8), West Bengal (9) (177) Chhattisgarh (3), Himachal Pradesh (1), Karnataka (37), Kerala (20), Madhya Pradesh (2), Odisha (5), Punjab (29), Rajasthan (4), Tamil Nadu (2), West Bengal (2) (105) Karnataka (4), Kerala (8), Odisha (4), Punjab (28), Rajasthan (1), West Bengal (2) (47) 697
> 60% and < 80% > 80%
Kerala, Puducherry (2)
Total
19*
* Data in respect of Manipur SCARDB and Maharastra SCARDB not available ; Data in respect of SCARDB and PCARDB for the states in Bihar, West Bengal, Punjab, Kerala, Gujarat, and Maharashtra repeated from previous year
69
www.sansco.net
managed by duly elected Boards of Management. One of the covenants of the Memorandum of Understanding (MoU) executed by State Governments under the GoI revival package for STCCS stipulates that co-operative banks should be managed by duly elected Boards of Directors . Despite this, the practice of superseding elected Boards continued in some States. As on 31 March 2010, duly elected Boards were superseded in 9 SCB and 86 DCCB in the ST Structure, and in 6 SCARDB and in 265 PCARDB in the LT Structure (Table 4.15).
Act 1981, with an initial contribution of ` 10 crore, is replenished every year through contributions from NABARD's surplus. Assistance from the CDF is available to co-operatives in the form of soft loans/ grants for resource mobilisation, human resource development, capacity building and streamlining of operations, building up quality MIS, etc., which in turn contribute to their functional efficiency. During 2010-11, financial assistance of ` 6.43 crore was sanctioned and ` 6.05 crore disbursed (including disbursements against sanctions of previous years). As on 31 March 2011, cumulative sanctions and
d. i.
Development Initiatives of NABARD Development Action Plans / Memorandum of Understanding
disbursements were ` 98.17 crore and ` 87.57 crore, respectively. The balance in the Fund, as on 31 March 2011, stood at ` 125 crore.
4.21 The process of preparing institution specific Development Action Plans (DAP) and execution of MoU began in 1994-95. Three phases have been completed with PACS included during the third phase (2004-05 to 2006-07). The revised fourth phase of DAP/MoU (for both ST and LT structure), spanning from April 2007 to March 2012, is more institution specific and participative with close involvement of the Board of Directors and repositions NABARD, RBI and the Registrar of Co-operative Societies (RCS) as external facilitators. As on 31 December 2010, 21 SCB and 10 SCARDB and state governments concerned had executed DAP/MoU for 2007-12 (Phase IV) with NABARD. The DAP are regularly monitored and reviewed in the State Level Task Force (SLTF)/District Level Monitoring and Review Committee (DLMRC) meetings.
iii. Organisation Development Initiatives

4.23 Organisation Development Initiatives (ODI) being conducted by NABARD since 1994-95, is a re-engineering process, which facilitates RRB and Co-operative Banks in achieving sustainable
viability and financial inclusion. During 2010-11, ODI have been conducted in 18 Co-operative Banks (SCB and DCCB) and 2 RRB.
e.
i.
Other Developments
Core Banking Solution Project for Cooperative Banks
ii.
4.22
Co-operative Development Fund

The Co-operative Development Fund (CDF),
constituted in 1993 under Section 45 of NABARD

Table 4.15: Elected Boards under Supersession (As on 31 March 2010) Particulars Total Institutions (No.) Boards under Supersession (No.) Boards under Supersession (%)
*: Data provisional
4.24 NABARD has decided to offer support to cooperative banks in Core Banking Solution (CBS), under its repositioning initiatives. Cooperative Banks
SCB* 31 9 29
DCCB* SCARDB* PCARDB* 370 86 23 20 6 30 697 265 38
have been advised to express willingness to opt for the Application Service Provider (ASP) model of CBS. Under the project, NABARD would play the role of an advisor and facilitator and ensure that the interests of the banks are protected throughout the implementation process.
70
www.sansco.net
ii. Standard Audit Manual for PACS

4.25 NABARD-GIZ Rural Finance Institutions
the State Governments have released ` 816.77 crore as their share. During the year, ` 364.77 crore was released to DCCB as GoI share in respect of 1,314 ineligible PACS in Gujarat and Maharashtra.
Programme (RFIP) undertook the task of preparation of Standard Audit Manual for PACS through study visits to Gujarat and Orissa in May 2010. The objectives were: (i) Revising audit framework for PACS in consultation with the stakeholders; (ii) Developing a Model/Standard Audit Manual for PACS based on the revised audit framework; (iii) Developing audit rating tool for PACS; and (iv) Developing a training programme for PACS auditors on the revised audit system. In order to have a better understanding of the risk perceptions of PACS, a questionnaire was circulated and requisite information obtained from 467 PACS of 49 DCCB in 9 States. Based on this information, the draft audit manual for PACS is being prepared.
ii.
Legal Reforms
4.28 The participating States are required to amend their Co-operative Societies Acts (CSA) for securing the democratic character and autonomy of co-operatives and for their regulatory control by RBI. So far, twenty one States have amended their CSA. The draft amendments proposed by the remaining four States have been vetted by NABARD, even as previous amendments in two of these States are awaiting Presidential assent. Based on the amendments, the rules and bye-laws of the societies are being revised by the States.
f.
Revival Package for Short-Term Rural Co-operative Credit Structure
iii. Common Management
Accounting Information
System System,
and and
4.26 Twenty-five States (covering 96 per cent of the STCCS in the country), have executed the MoU with GoI and NABARD, for implementing the revival package integrated envisages through announced package provision Special by for of Audits, the units liberal GoI in 2006. the of The under STCCS legal/
Computerisation in PACS
4.29 The Accounting process System of adoption and of Common
(CAS)
Management
Information System (MIS) formulated for PACS is underway in 16 States, while in the remaining States where the MoU has been signed, the RCS concerned have been advised to adopt CAS on the lines suggested by NABARD. Training on CAS/ MIS has also been initiated. Once operationalisation of CAS/ MIS is complete and development of capacities to manually maintain the new system is achieved,
financial
assistance
introduction
institutional reforms and initiating measures to improve the quality of management.
i.
4.27
Special Audit and Release of Funds

Special audits of the units under STCCS, as
computerisation of CAS/MIS would start. The Core Software has been finalised by NABARD and sent to all 18 States that have opted for it. The revised guidelines for rolling out of software, training of PACS staff and hardware procurement were sent to all the implementing states and the process of dry run is being initiated in these States. Computerisation of PACS is in progress in Andhra Pradesh, Haryana and Tamil Nadu through software developed on their own. Gujarat, Punjab, Jammu & Kashmir and Uttarakhand are yet to decide on computerisation.
on 31 March 2004, were completed in 80,639 PACS across 25 States to arrive at the precise amount of losses after factoring in prudential provisioning norms and the sharing pattern. The special audit of DCCB has been completed in ten states and approval pending from SLIC in respect of three States. Special audits of SCB have been completed in 10 States. While an amount of ` 8,661.45 crore has been released by NABARD as GoI share for recapitalisation of 53,380 PACS in sixteen states till 31 March 2011,
71
www.sansco.net
iv.
4.30
HRD Initiatives
The package lays emphasis on training and Till date, training has been imparted to
have been trained; (ii) a new programme on Business Development and Profitability for PACS Secretaries in which 76 master trainers from 14 implementing States were trained at Bankers Institute for Rural Development (BIRD), Lucknow. These master trainers have trained 556 DLT from six implementing states. Further, 36,125 PACS staff in eight States have been trained under this module.
capacity building of Board Members and functionaries of STCCS. 330 master trainers from 23 States, who in turn have trained 2,595 District Level Trainers (DLT). As on 31 March 2011, training has been imparted to 81,037 Secretaries of PACS from 18 States, 1,12,354 elected Board Members of PACS from 14 States, 368 CEO of DCCB from 16 States, CEO of SCB in six NER States and 2,047 Directors of DCCB/ SCB from 14 States. In addition, training on CAS/ MIS has been provided to 70,899 PACS functionaries and 4,173 bank supervisors/ departmental auditors. During the year, the following new modules were rolled out: (i) a fiveday in-campus orientation programme for Branch Managers/ Senior Officers of DCCB/ SCB for business development/ diversification. As on 31 March 2011, 1,582 Branch Managers/Senior Officers of DCCB/ SCB
v.
Deposit Safety System for PACS
4.31 With a view to securing the deposits of PACS, which would provide them a better standing among members / clients and better access to finance, a draft Institutional Protection and Deposit Safety Scheme (IPDSS) for PACS was finalised and submitted to the Govt of India for approval, which is awaited.
vi.
4.32
Impact of the Revival Package

Reputed institutes like IIM, Bangalore and ISEC,
Bengaluru were entrusted with the task of conducting
Box 4.1 Impact of GoI Revival Package for STCCS A. Impact Studies Recap assistance has helped cleansing of Balance Sheet and improved share capital of both PACS and DCCB. Govt. share holding reduced to less than 25% of the total share capital in majority of the banks. Increase in volume of business and credit flow of DCCB (Average Annual Growth Rate (AAGR) of 4% and 8% in AP and Bihar, respectively) and of PACS (AAGR of 5% in MP, 37-106% in AP and 23% in Bihar). Reduction in NPAs of PACS and DCCB (AP, MP & Bihar). PACS making conscious efforts to improve/diversify business and earn profits. Increase in coverage of SF/MF by PACS. Elections conducted in all PACS and professionals being co-opted on their Boards. CEO of DCCB being appointed as per "Fit & Proper Criteria". CCS staff and Board Members imparted training under eight modules. CAS introduced and training imparted. B. World Bank Assessment CAS introduced and training imparted. Far reaching amendments to Co-operative Societies Act. Elections to all three tiers of the CCS Introduction of Fit & Proper criteria to the Boards and CEO of DCCB & SCB. Conduct of Statutory Audit by CA in DCCB & SCB. Training imparted country wide covering 2,40,000 (over 60,000 in World Bank funded states) Staff/Boards of DCCB trained in governance,
accounting and business planning. Ground level credit in the four states has increased by 120% in aggregate terms over March 2005. A 43% growth over March 2005 position farmers. Recovery rates of the DCCB/SCB have improved. has been
registered in the coverage of small and marginal
72
www.sansco.net
impact studies in six states, viz., Andhra Pradesh, Bihar, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu of the implementation of the revival package during the last 3 years. Similarly, World Bank also conducted monitoring studies in four states, viz., Gujarat, Haryana, UP and Odisha. The impact studies by the IIM and ISEC and the World Bank assessment have brought out a number of positive features (Box 4.1).
Table 4.16: Indicators of Performance of RRB (As on 31 March) (` crore) Particulars No. of RRBs (No.) Branch Network (No.) Share Capital Share Capital Deposit Reserves 2009 86* 15181 197.00 3959.30 6753.99 120189.90 12734.65 65909.92 67802.10 2010 82* 15480 197.00 3984.90 8065.26 2011 P 82 15938 197.00 3984.90 9678.31
g.
Revival of Long-Term Rural Co-operative Credit Structure
Deposits Borrowings Investments
145034.95 174041.94 18770.06 79379.16 27216.59 95245.99
4.33 The Task Force, constituted by the GoI under the Chairmanship of Shri G. C. Chaturvedi, to review the need for a separate package for Revival of Long Term Co-operative its report Credit to the Structure GoI on (LTCCS), submitted
Loans & Advances (Outstanding) Loans Issued RRB Earning Profit (No.) Amount of Profit (A) $ RRB incurring Losses (No.) Amount of Loss (B)
82819.10 101039.30
43367.13 80 1823.55 6 35.91 1787.64 2299.98 31
56079.24 79 2514.83 3 5.65 2509.18 1775.06 27
72903.01 79 3470.47 3 5.65 3464.82 1366.80 26
25 February 2010.
Announcement of the Package
by the GoI is awaited.
B. Regional Rural Banks

a. Financial Performance
4.34 Post amalgamation, the number of RRB
Net Profit (A -B) $ Accumulated Losses RRB with accumulated losses (No.) Recovery (%) NPAs to loans outstanding (%) Net worth
operating in the country was 82, with a network of 15,938 branches (Table 4.16) spread over 618 districts in twenty-six States and one UT (Puducherry). During the year under review, the aggregate reserves,
77.85 4.14 8610.31
80.09 3.72
80.03 3.50
10472.10 12566.52
deposits and investments of RRB increased by 20 per cent each while loans and advances (outstanding) increased by 22 per cent (Table 4.16).
* : Number reduced due to amalgamation $ : Before Tax P : Provisional
` 9,678 crore and ` 12,567 crore, respectively, in 4.35 Financial results of RRB for the year 2010-11 indicated that 79 out of 82 RRB had earned pre-tax profit to the extent of ` 3470 crore, compared to ` 2515 crore in 2009-10. The viability of RRB, as on 31 March 2011, is expected to improve as compared to the previous year. The estimated aggregate 2010-11. The accumulated losses of RRB decreased by 23 per cent over the previous year. The
performance of RRB varied widely across the regions in 2009-10. While all RRB in the Eastern, Northern and Western regions were in profit, one RRB each in Central, North-Eastern and Southern region incurred losses (Table 4.17).
reserves
and net worth of all the RRB increased to
73
www.sansco.net
Table 4.17: Region-wise Working Results of RRB (As on 31 March 2010) (` crore) Region RRB No. Profit Earning No. Northern North-Eastern Southern Eastern Central Western All India
P : Provisional
Loss Incurring No. 1 1 1 3 Amt. 2.98 0.22 2.45 5.65
Net Profit
Accumu lated Losses
Loans & Advances O/S
Gross NPA
Recovery (%) (As on 30 June) % 2009 2010P 85.69 72.47 82.83 74.58 75.45 76.64 88.70 74.82 81.40 73.10 75.01 77.36
Amt. 361.56 96.35 707.27 407.98 854.95 86.72 2514.83
Amount 361.56 93.37 707.05 407.98 852.50 86.72 2509.18 208.00 163.52 0.29 1235.56 86.92 80.77 1775.06 13255.65 3028.76 28472.27 13310.90 20790.35 3961.17 82819.10 268.21 196.77 600.17 933.70 905.93 180.04 3084.82
15 8 16 14 23 6 82
15 7 15 14 22 6 79
2.02 6.50 2.11 7.01 4.36 4.55 3.72
80.09 80.03
b.
Recovery Performance
recovery performance of RRB was
per cent but less than 80 per cent. Six RRB had recovery more than 40 per cent but below 60 per cent (Table 4.18).
4.36 The
estimated at 80.03 per cent, as on 30 June 2010, compared to 80.09 per cent, as on 30 June 2009 (Table 4.17). RRB as a group in the Northern and Southern region registered a recovery performance above the national average. A recovery of above 80 per cent was achieved by 39 RRB in the country, while 37 RRB had recovery levels ranging above 60
c.
Non-Performing Assets
4.37 The aggregate gross NPA of all RRB declined from 4.14 per cent as on 31 March 2009 to 3.72 per cent, as on 31 March 2010. Two regions, viz., Northern and Southern regions had NPA as
Table 4.18: Frequency Distribution of States According to Levels of Recovery of RRB (As on 30 June 2010) Recovery (%) < 40 > 40 and < 60 > 60 and < 80 0 6 37 Nil Bihar (1), Madhya Pradesh (1), Manipur (1), Odisha (1), Jharkhand (1), Karnataka (1) Andhra Pradesh (3), Arunachal Pradesh (1), Assam (1), Bihar (2), Chhattisgarh (2), Gujarat (1), Jammu & Kashmir (1), Jharkhand (1), Karnataka (2), Madhya Pradesh (5), Maharashtra (2), Meghalaya (1), Nagaland (1), Odisha (3), Tripura (1), Uttar Pradesh (7), West Bengal (3) >80 39 Andhra Pradesh (2), Assam (1), Bihar (1), Chhattisgarh (1), Gujarat (2), Haryana (2), Himachal Pradesh (2), Jammu & Kashmir (1), Karnataka (3), Kerala (2), Madhya Pradesh (2), Maharashtra (1), Mizoram (1), Odisha (1), Puducherry (1), Punjab (3), Rajasthan (6), Tamil Nadu (2), Uttar Pradesh (3), Uttarakhand (2) States
74
www.sansco.net
percentage to loans outstanding below the all-India average. The gross NPA level is expected to be at 3.50 per cent, as on 31 March 2011.
CBS by September 2011; (v) prepare time-bound plan for wiping out their accumulated losses and (vi) make concerted efforts for improving CRAR.
d.
Capital to Risk-Weighted Assets Ratio g.

upon the release of (i)
Human Resource Development

on the recommendations of the
4.38
Consequent
4.41 Based
recapitalisation assistance to RRB and (ii) funds under ADWDR Scheme, 2008, the Capital to Risk-Weighted Assets Ratio (CRAR) of RRB has improved. As on 31 March 2010, 53 out of 82 RRB had a CRAR of 9 per cent and above, while 6 RRB had CRAR between 7 and 9 per cent.
Amaresh Kumar Committee, the GoI issued the RRB Service Regulations, 2010. GoI also notified the RRB Appointment & Promotion Rules 2010, in July 2010.
h. Development Initiatives
i. Branch Expansion Programme/Core Banking Solution
e.
Capitalisation of RRB
4.39 After approving the major recommendations of the Committee on Capitalisation of RRB for 4.42 RRB were given a target of opening 2000 new In the current year, as on branches by March 2011.
maintaining CRAR (Chairman : Dr. K. C. Chakrabarty), the GoI had made a provision of ` 350 crore for 201011 in the Union Budget, for recapitalisation of RRB. Against this, the GoI had released its share of ` 61.71 crore to four RRB as on 31 March 2011.
31 March 2011, RRB had opened 463 new branches taking the cumulative number of branches of all RRB to 15938 spread over 618 districts, in 26 states and one UT. It is now compulsory for all new branches to be equipped with CBS. The sponsor banks are required to extend all necessary help in this regard,
f. Performance Review by Govt. of India

4.40 In continuation of the mechanism for reviewing the performance of RRB by GoI, introduced in 2007-08, a Review Meeting was held in July 2010, under the Chairmanship of Hon'ble Union Finance Minister. While appreciating the performance of RRB in the areas of deposit growth, priority sector and agricultural lending, reduction in NPA, etc., the Hon'ble Union Finance Minister also advised RRB to make earnest efforts to (i) achieve the goal of opening 2000 new branches by 31 March 2011; (ii) attain Gross NPA level of less than 5 per cent; (iii) draw Action Plan for achieving 100 per cent Financial Inclusion; (iv) bring all their branches under
including financial assistance, training, back office support, etc. RRB were directed by GoI to implement CBS in all their branches by September 2011. As on date, CBS has been fully implemented in 32 RRB and is in progress in other RRB.
ii. Financial Inclusion

4.43 The RRB have emerged as a strong
intermediary for Financial Inclusion in rural areas by opening large numbers of "No Frills' accounts and financing under General Credit Card (GCC). Total number of business accounts (deposit plus loan accounts) with RRB stood at 1188.83 lakh, as on 31 March 2010 (Table 4.19).
75
www.sansco.net
Table 4.19: Status of Financial Inclusion - RRB (As on 31 March 2010) (No. in lakh) Of total Loan Accounts, major areas of Financial Inclusion Year No. of Deposit Accounts 2007-08 2008-09 2009-10 758.02 935.54 1002.16 Of which, No-Frills Accounts 81.17 153.81 200.09 No. of Loan Accounts 171.20 170.66 186.67 GCC 2.35 3.22 4.12 SHG 7.20 8.04 8.97 KCC 69.84 67.87 83.72 Tenants 1.03 0.95 0.83 SSI, artisans, SCC & retail trade 20.78 19.64 21.28
Supervision of Banks
4.44 NABARD inspects SCB and DCCB in terms of the powers vested under Section 35(6) of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) and RRB under Section 35(6) of the Banking Regulation Act, 1949. NABARD also 4.45 During 2010-11, all the targeted statutory inspections of 302 banks (31 SCB, 229 DCCB and 42 RRB) and voluntary inspections of 18 SCARDB and conducts voluntary inspections of SCARDB, Apex level Co-operative borrowings Societies outstanding and from Federations it. having the 3 Apex Societies had been conducted. The inspections brought out supervisory concerns relating to these institutions, which were communicated to the banks concerned, RCS, State Governments (in respect of co-operative banks) and Sponsor Banks (in respect of RRB) for corrective action. NABARD also held discussions with the Board of Directors of SCB/DCCB/ RRB apprising them of the deficiencies found in the inspection and urging them to initiate immediate remedial action. Besides, meetings were also held with the CEO of the banks concerned, after 45 days of issue of Inspection Reports, to secure satisfactory compliance on core inspection findings. Supervisory ratings were also conveyed confidentially to the Top Management of the banks.
A. Operational Matters a. Inspection of Banks
Considering
unique nature of all these institutions, the supervisory role of NABARD, apart from ensuring conformity with banking regulations and prudential norms, is very comprehensive and holistic, encompassing inspections (on-site and off-site), portfolio studies, monitoring, guiding and facilitating functions. The periodicity of statutory inspections of all SCB, DCCB and RRB not complying with minimum capital requirements as stipulated under the B.R. Act, 1949 (AACS)/ RBI Act 1934 and voluntary inspections of all SCARDB
continue to be annual. The statutory inspections of those DCCB and RRB with positive net worth and voluntary inspections of Apex Co-operative Societies/ Federations are conducted biennially.
b.
Board of Supervision
4.46 The Board of Supervision (BoS) constituted by the Board of Directors of NABARD in 1999, met four
76
www.sansco.net
times in 2010-11. It reviewed (i) the functioning of SCB, DCCB and SCARDB as brought out in the inspections; (ii) the functioning of co-operative credit institutions in Andhra Pradesh, Punjab and Jharkhand; (iii) the working of RRB sponsored by SBI, Union Bank of India and Punjab National Bank; (iv) reports of frauds in the supervised banks; (v) the functioning of weak DCCB in Uttar Pradesh, Gujarat and Bihar; (vi) the status of submission (including delay) of Banks' compliance to inspection reports and delay in scrutiny of compliance by NABARD RO; (vii) the Scheduling of amalgamated RRB; (viii) the Exposure of SCB and DCCB to Marketing Societies; and (ix) major observations from the investment portfolio studies taken up in some of the banks.
in the Second Schedule to the RBI Act, 1934. Thus, the number of scheduled SCB remained unchanged at 16. 4.49 From its very inception, all RRB were included in the Second Schedule to the RBI Act 1934. However, amalgamated RRB, being new entities could become Scheduled Banks only with the approval of the RBI, on the basis of recommendations given by NABARD after conducting statutory inspection. Thirtynine amalgamated RRB were included by the RBI in the Second Schedule to the RBI Act, 1934, after they were found complying with Section 42(6)(a)(ii) of the Act, ibid. With this, the number of Scheduled RRB stood at 75 as on 31 March 2011. Inclusion of five more RRB in the Second Schedule to RBI Act, 1934, was recommended to RBI during 2010-11.
c.
i.
Health of Supervised Banks

Compliance with Minimum Share Capital Requirements
the year 2010-11, twenty DCCB
iii. Compliance Provisions
with
various
Statutory
4.50 As on 31 March 2011, five SCB and 63 DCCB 4.47 During did not comply with Section 22(3)(a) of the B.R.Act, 1949 (AACS), as regards their capacity to pay their depositors in full. Eight SCB and 186 DCCB did not comply with Section 22(3)(b) of the Act, ibid., as the affairs of these banks were conducted detrimental to the interests of their in a manner depositors. improved their financial position and recomplied with the provisions of Section 11(1) of B.R. Act, 1949 (AACS). As on 31 March 2011, 68 banks (5 SCB and 63 DCCB) were not complying with the provisions of Section 11(1) of the B.R. Act, 1949 (AACS), i.e., minimum capital requirements. Applications for grant of exemption in respect of 50 banks (1 SCB and 49 DCCB) were under the consideration of the RBI/GoI.
Similarly, out of the 16 Scheduled SCB, two were not complying with Section 42(6)(a)(i) of the RBI Act, 1934 as regards minimum capital requirement of ` 5 lakh, and four were not complying with Section 42(6)(a)(ii) of the Act, ibid., as the affairs of these banks were conducted in a manner detrimental to the
ii.
Grant of Licence/Scheduling of Banks

to the recommendations of the
4.48 Pursuant
interests of their depositors. As on 31 March 2011, out of 82 RRB, 75 complied with Section 42(6)(a)(i) of the RBI Act, 1934 while 56 complied with Section 42(6)(a)(ii) of the Act, ibid.
Committee on Financial Sector Assessment (CFSA) [Chairman : Dr. Rakesh Mohan], the RBI had revised the licensing norms for co-operative banks during October 2009. As on 31 March 2010, the number of licenced SCB and DCCB stood at 22 and 173, respectively. During the year, RBI issued licences to 2 SCB and 49 DCCB, thus, increasing the number of licensed banks to 246 (24 SCB and 222 DCCB), as on 31 March 2011. During the year, no SCB was included
B. Policy Decisions/Guidelines
a. Co-operative Banks
4.51 Keeping in view the relaxation in the licencing norms for co-operative banks, the norms for
77
www.sansco.net
compliance with Section 22(3)(b) of B R Act, 1949 (AACS) were also relaxed. During the year, the following important instructions/circulars were issued to SCB and CCB: (i) instructions advising the cooperative banks to issue engagement letters to Statutory Auditors, specifying the areas to be covered; (ii) a questionnaire/check list for the use of concurrent auditors to ensure that all aspects are covered by the auditors while reviewing the Investment Portfolio of banks; (iii) circular on fraud prevention measures and constituting Fraud Risk Management Group; (iv) a Model Know Your Customer (KYC) / Anti-Money Laundering (AML) Policy for adoption; (v) detailed guidelines for inspection of DCCB, branches of SCB/ DCCB and affiliated societies; (vi) clarification on calculation of Demand and Time Liabilities (DTL) for maintenance of CRR/SLR; and (vii) guidelines to RCS of all States and UT on opening of branches by DCCB, consequent to the amendment of Co-operative Societies Act as per GoI revival package for STCCS.
Hyderabad, to acquaint the Bank's inspecting officers with conducting of inspections in a Computerised Environment. Four Regional Supervision Seminars were conducted for the Bank's inspecting officers for discussing various issues involved in inspection of banks. A National Seminar on Audit was also conducted in Bengaluru in May 2010, to sensitise the auditors on issues relating to audit of co-operative banks. A seminar was conducted for Inspecting
Officers of DoS, for a better understanding of the deficiencies pointed out in the Inspection Reports (IR), to ensure submitting proper compliance, by the supervised banks, and to encourage issuing IR in Hindi.
D. Advisory to Regional Offices

4.54 The Bank's Inspecting Officers were advised to critically examine the management aspect of banks (especially weak banks), incremental NPA, systemic risks, KYC/ AML standards, etc., during the course of inspection, and highlight them in the inspection reports so as to draw the focussed attention of the management. With a view to addressing the problem of reconciliation of inter-branch and inter-bank accounts, Regional Offices were advised to convene a meeting of all SCB and DCCB under their jurisdiction, and prepare time bound action plan. Regional Offices were also advised to monitor the receipt of compliance reports and pursue with the supervised banks for their timely submission.
b.
Regional Rural Banks
4.52 During the year, (i) RRB were permitted to induct Nominee Director of NABARD in the Audit Committee, with the approval of the Board; (ii) a Model KYC/ AML Policy was circulated to all RRB for adoption with suitable modifications; and (iii) clarifications were issued to RRB on Disclosure in Financial Statement in Half-Yearly Reviews.
4.55 For a holistic and more effective approach towards supervision, especially in strengthening the internal checks and control systems in the supervised banks, NABARD continued to forge partnerships with other agencies under the GIZ-RFIP programme and with Institute of the Chartered Acccountants of India (ICAI) for preparation and Banks RRB. the National of Audit Federation in Manual also of revising for State the Co-operatives supported Co-operative NABARD actively
C. Supervisory Interventions
4.53 Six Regional Supervision Seminars on internal inspection and internal audit were conducted during the year, for Co-operative banks and RRB. Training / sensitisation programmes and workshops on Investment Management, Asset Liability Management (ALM), AML/ KYC, monitoring of frauds, prudential norms and CMA were conducted for the auditors and other personnel of SCB, DCCB and RRB. Two training programmes were conducted in IDRBT,
(NAFSCOB)
operational manuals for Co-operative Banks.
78
www.sansco.net
V
Organisation, Corporate Governance and Management
In order to align itself with the changing financial and credit markets, NABARD has initiated several steps to reposition itself and face the challenges for becoming an effective and sustainable development institution. Human Resources are an integral part in the change process of an organisation. Recognising this, the Bank continues its emphasis on capacity building of the staff by upgrading their skills and developing their expertise.
Management
A. Board of Directors
5.2 year, thrice The Board of Directors met six times during the while and the seven Executive times, Committee and The the Audit Secretary, Department of Agriculture, Government of Rajasthan was appointed as Director with effect from 20 January 2011 vice Shri. J. C. Mohanty. (e) Shri. A. K. Sinha, Agriculture of Production Bihar was
Sanctioning Committee for Loans under RIDF met respectively. Committee of the Board (ACB) as well as the Risk Management Committee of the Board (RMCB) met thrice during the year.
Commissioner,
Government
appointed as Director with effect from 27 July 2010, vice Shri. Letkhogin Haokip.
B. Senior Management
5.3 The following changes took place in the 5.4 Four Executive Directors manage the operations of the Bank. Dr. A. K. Bandyopadhyay was promoted as (a) Shri. Rakesh Singh, Additional Secretary (FS), Department of Financial Services, Ministry of Finance, Government of India was appointed as Chairman with effect from 03 December 2010 vice Shri. U. C. Sarangi, who demitted office on 02 December 2010 after completion of his term. Executive Director during the year. Shri P. L. Behera, Executive Director retired on 31 January 2011 and Dr. A. K. Bandyopadhyay, Executive Director retired on 31 March 2011. composition of the Board of Directors during the year:
C. Repositioning of NABARD
5.5 NABARD started the Project Reposition in March 2010, with a view to networking resources, building capabilities and partnering institutions for bringing about effective integrated rural development in India. The project seeks to address the present day challenges without conflicting with the long-term role mandated to NABARD by GoI and RBI. During the year, diagnostic and design phases were completed. The pilot and implementation phases have commenced (Box 5.1).
(b)
Shri. Lakshmi Chand and Smt. Shashi Rekha Rajagopalan were reappointed on the Board.
(c)
Shri. K. Jayakumar, Additional Chief Secretary (Home & Vigilance) and Agriculture Production Commissioner, Government of Kerala was appointed as Director vice Shri L. C. Goyal with effect from 03 September 2010.
(d)
Shri.
J. C.
Mohanty, of
Principal
Secretary, of
Department
Agriculture,
Government
Rajasthan was appointed as Director with effect from 27 July 2010, vice Shri Roshan Lal. Subsequently, Shri R. K. Meena, Principal
D. Inspection of NABARD
5.6 Reserve Bank of India conducted the 13 th Financial Inspection of NABARD (with reference to its
79
www.sansco.net
Box 5.1 Repositioning of NABARD - Pilot interventions Assisting the cooperative banks for setting up Core Banking Solution (CBS): NABARD has decided to offer support to cooperative banks by playing the role of an advisor and facilitator. It will aggregate the demand across banks and would assist them to identify a suitable product, negotiate with vendors on behalf of the banks and extend project management and advisory support during roll out of the product. The CBS would be offered on an Application Service Provider (ASP) model to co-operative banks. In this model, the banks would be responsible for setting up infrastructure facilities within the branch and HO. The CBS vendor will be responsible for developing and customising CBS and other application software, setting up and maintaining Data Centres/ Disaster Recovery Centres and for providing network connections. The vendor will also provide user training and data migration support. The process of signing Memorandum of Agreement (MoA) with the banks interested in joining CBS initiative has started. As on 31 March 2011, 135 Banks (SCB and DCCB) across 11 states and one UT have joined this initiative. Direct Lending to District Central Cooperative Banks (DCCB): A Short-term multi-purpose credit product has been designed for direct lending to DCCB, for meeting working capital and farm asset maintenance needs of the individual borrowers and affiliated PACS. This is being implemented on a pilot basis. During the year, one proposal involving credit limit of ` 100 crore was sanctioned. Adopting a comprehensive approach to financing and supporting producer organisations: NABARD has taken up a pilot initiative for supporting producer organisations, adopting a flexible approach to suit the needs of the producers. Two projects were taken up on a pilot basis and an amount of ` 1.96 crore was sanctioned under UPNRM for these. In order to give a special focus, the Producer Organisations Development Fund was set up during the year with an initial corpus of ` 50 crore, for meeting the financial requirements of this business vertical. Internal process redesign to enhance Human
Resource (HR) optimisation and improve turnaround time: Simplification of the existing administrative
processes, doing away delegation of powers complete migration to intervention to improve process in the Bank. with redundant practices, enhancing to reduce the reponse time and automation are the core areas of the functional efficiency of the work
financial
position
as
on
31
March
2010)
from
01 November 2010 to 13 December 2010.
E. Right to Information
5.7 The Bank has been complying with the statutory requirements of the Right to Information (RTI) Act 2005. During the year, 737 applications were received
and requisite information provided within the stipulated time. Ninety-four appeals were responded to and 15 hearings on appeals made to Central Information Commission were attended. Workshops were conducted for four major Regional Offices, viz., Andhra Pradesh, Bihar, Gujarat and Uttar Pradesh. Shri S K Mitra, Executive Director was designated as the Transparency Officer for the Bank.
Human Resources Management

A. Training and Skill Upgradation a. Staff Training
5.8 During 2010-11, officers (2,131) were imparted 18 on-location programmes were also conducted for 425 officers, covering topics like Tribal Development Fund (TDF), Funds & Risk Management, Treasury & Risk training on various topics through 103 programmes conducted by the National Bank Staff College (NBSC), Lucknow. Customised training on Co-financing, Software Development and System Analysis, Disaster Management, etc., was imparted to 78 officers. Further, Management, Futures Trading, on APRACAFinancial CENTRAB international programme
Inclusion, advanced training programme on SHG-Bank Linkage, etc. Besides, 424 officers were deputed for 126 off-the-shelf programmes, workshops, seminars and conferences organised by reputed institutions. National Bank Training Centre (NBTC), Lucknow and
80
www.sansco.net
Zonal Training Centre (ZTC), Hyderabad conducted 67 training programmes for 1075 Group B and C Staff and pre-promotional training programmes for Group B staff for promotion to the officer cadre.
d. E-learning
5.11 During the year, an E-learning programme for 235 officers was launched, in collaboration with the Harvard Business School, USA. The course is of oneyear duration from 01 July 2010 to 30 June 2011 and includes 16 compulsory and five optional topics, relevant to developmental and promotional institutions.
b. Overseas Training/Visits by Top Management

5.9 During the year, 145 officers from NABARD, three from Client Institutions and 18 participants from different Non-Governmental Organisations (NGO) were deputed for various overseas training programmes, exposure visits, seminars, meetings, etc. In addition, a batch of 10 senior officers was deputed to a programme on Risk Management and Performance in Brussels, Belgium, deputed organised to RIPA by the World Savings London Bank for Institute. Another batch of 10 senior officers was International, Programme on Implementing Sustainable Change and Programme on Managing People through Change. Dr. K. G. Karmakar, Managing Director, participated in the London Business Forum organised by London Business School, 2010 London on and in the Rehovot Sustainable
B. Staff Matters
a. Recruitment and Promotion
5.12 During the year, 126 officers were appointed in Grade A in the Rural Development Banking Service of the Bank. A total of 396 staff was promoted during the year, of which 18, 27 and 57 officers were promoted to Grade F, E and D, respectively. The details of the number of staff promoted to other Grades are presented in Table 5.1.
Table 5.1: Promotions Effected During the Year Particulars Total of which SC Officers from Grade B to C Officers from Grade A to B Group B to officers' cadre (Grade A) Total 103 121 70 294 18 21 11 50 ST 12 14 12 38
Conference
Inclusive
Development Initiatives organised at Weitz Centre, Israel, where he presented a paper on the topic Mainstreaming Financial Inclusion in India: Sustainable Initiatives. The Chairman, Shri Umesh Chandra Sarangi attended the 58 th EXCOM meeting and 17th General Assembly of APRACA held in Tashkent, Uzbekistan as well as the Alliance for Financial Inclusion (AFI) Global Policy Forum 2010 held at Bali, Indonesia. He also attended the 59 th EXCOM meeting of APRACA held in Paris.
b.
Staff Strength
5.13 The total staff strength of the Bank, as on 31 March 2011, was 4,607. Of these, 18 per cent belonged to Scheduled Castes and 9 per cent to Scheduled Tribes (Table 5.2). The strength of exservicemen and physically handicapped employees stood at 80 and 94, respectively, each constituting about 2 per cent of the total staff strength.
Table 5.2: Total Staff Strength Cadre Total SC Group A Group B Group C Total 2758 990 859 4607 407 123 306 836 of which ST 209 84 106 399
c. Support for Professional Studies

5.10 Under the modified Incentive Scheme, introduced in April 2008, to encourage staff to pursue professional studies through part time and distance learning courses, 26 staff members availed of the facility during the year. The major courses being pursued by the employees are Chartered Financial Analyst (CFA), Company Secretary (CS) and Master of Business Administration (MBA) from reputed institutions.
81
www.sansco.net
Administration and Other Matters
A. Industrial Relations
5.14 Industrial relations in the Bank continued to be harmonious during the year. Periodic discussions were held between the Management and the All-India National Bank Officers Association/All-India NABARD Employees Association. The Memorandum of
C. Welfare Measures for SC/ST Employees

5.17 The Bank continued to adhere to instructions
issued by GoI on reservation for SC/ST employees in recruitment and promotion. Quarterly meetings of the Senior Executives and Chief Liaison Officer with representatives of the Welfare Association of SC/ST employees were held at HO and RO. A team of
Settlement on wage revision and service conditions of the employees was signed between the Bank and the All India NABARD Employees Association on
officials from Banking Division, Ministry of Finance, GoI visited NABARD in May 2010 and reviewed the Reservation Policy implemented by the Bank. The 31 March 2011, on the basis of well-established principles of negotiations. The Memorandum became effective for a period of five years from 1 November 2007. The pay & allowances and service conditions of the officers of the Bank were also revised after discussions with the National Bank Officers Association.
team expressed satisfaction with the records maintained in this regard and appreciated the Bank for its favourable stance on reservation. Two pre-promotional training programmes for 120 SC/ST staff were
conducted at the training centres. Other benefits extended to SC/ST employees included granting
B. Transparency / Consultative Approach

i. Grievances Redressal System
scholarship to 12 wards of the employees and providing compassionate appointment to the
dependents of ten deceased employees.
D. Other Welfare Measures for the Staff

5.15 Three meetings each of the Grievances Redressal Committee and the Appellate Committee were held during the year. Seventeen grievances and six appeals were considered, of which 13 grievances and 4 appeals were disposed. 5.18 During the year, housing loans aggregating ` 39.65 crore were sanctioned to 343 employees. The disbursements against sanctions, including sanctions of previous year, amounted to ` 36.54 crore. The
fourteenth Annual Sports and Cultural Festival of the Bank, NABOTSAV was held at Bhubaneswar between
ii.
5.16
Joint Consultation Scheme for Officers

The Joint Consultative Committee [JCC]
21 and 25 November 2010.
5.19 The Communal Harmony Campaign Week and Flag Day were observed from 19 to 25 November 2010, as directed by the Ministry of Finance,
comprising representatives from Bank Management and National Bank Officers Association, met on 28 June 2010 for discussing issues of common interest in HR areas.
82
www.sansco.net
Government of India. During the year, two Workshops on Human Resources Management and Disciplinary Proceedings were conducted for 82 Senior Officers in Bengaluru and Kolkata. The Central Complaints
H.
Information Technology
Video Conferencing (VC) facility
5.22 The
inaugurated last year was used successfully during the current year for interviewing candidates for
Committee in HO and Committees in RO continued to function effectively for prevention of sexual harassment of women at workplace.
appointment and promotion. In addition, around 200 workshops/seminars/training conducted through VC. programmes were
The computer networking in
the Bank is being strengthened through installation of
F.
Library
latest switches. The existing Windows Operating System (OS) would be replaced by Linux OS in a phased
5.20 The Central Library in HO at present houses 27,333 English and 5,762 Hindi books, 69 NABARD publications, 66 RBI publications and 35 other
manner, and initially, it will be installed in 10 per cent of the newly purchased personal computers. The Banks intranet portal NABNET became more user friendly with an extensive search facility, during the year. The mobile version of NABNET was also
publications, besides 598 CD on various subjects.
G. Data Management
5.21 The revised and updated District Data Profile/ Banking Profile were included in the Potential Linked Plan (PLP) for 2011-12. Two data products, (i) MIS for Top Management giving the latest achievements in all major business and development areas and (ii) Star Performance Indicators indicating the comparative position of achievements by RO in important functional areas, were continued to be made available on NABNET (intranet of the Bank) and updated every month. Two new parameters, viz., achievements under Financial Inclusion Fund (FIF) and Financial Inclusion Technology Fund (FITF) vis--vis targets are to be introduced in the Star Performance during 2011-12. An innovative District Agricultural Development Indexation (DADI) model called the Clustering Method Model was successfully developed for comparing the status of agricultural development in the Districts of
launched in the year and can be accessed on web-enabled mobile phones. Based on the report of KPMG and the subsequent study undertaken by Boston Consultancy Group (BCG), the repositioning
consultant, the Bank finalised its future IT architecture and the IT road map to be implemented in phases, which consists of the following: (a) Phase 1 Human Resources Management (b) Phase 2 Centralised Loan Management & Accounts (c) Phase 3 - Business Processes (d) Phase 4 - Enterprise Data Warehouse. Phases 1 and 2 were started during the year and Project Management Groups were constituted for its implementation. For the project in Phase 1, a contract was awarded to the successful bidder and for the Phase 2 implementation, an Expression of Interest (EoI) was invited. The Enterprise Resource Planning (ERP)
software on Human Resource Management (HRM) would centralise, streamline and automate the entire HR operations across the Bank, including payroll and employee benefits. As a capacity building measure, the IT personnel of the Bank were exposed to the latest system/application software, database, viz. Oracle,
Maharashtra. One issue of NABSTATS, a bulletin of Statistical Information incorporating the performance of PACS, was also brought out during the year.
Windows Server 2008, Active Directory, etc.
83
www.sansco.net
I.
Office Premises/Residential Quarters
Tracker System, through which an applicant can track the status of any application submitted to NABARD for availing of services (grant/subsidy/soft loan, co-finance, etc.) under various schemes. This system became operational from 1 September 2010 and nine schemes have been initially introduced. Central Vigilance Cell, HO became a member of the Vigilance Study Circle, Mumbai, for exchange of views among Public Sector Undertakings on vigilance related matters. A Vigilance Awareness Week was observed in the Bank from 25 October to 1 November 2010.
5.23 Construction of office-cum-residence complex at Port Blair was completed during the year. Construction of Regional Office (RO)/Regional Training College (RTC) Buildings continued to be in progress at Bengaluru, Itanagar and Mangalore. The premises for Jammu RO, Punjab RO & Haryana RO, RTC Bolpur and Natural Resources Management Centre (NRMC), Kolkata, and residential quarters at Chandigarh and Lucknow are expected to enter construction phase during 2011-12. Plots for construction of RO Buildings at Raipur and Dehradun have been allotted by the
Chhattisgarh and Uttarakhand State Governments, respectively. Further, purchase of plots for office quarters Gangtok, is under Imphal process and in
K. Inspections and Concurrent Audits

5.26 During the year 2010-11, in accordance with the Annual Inspection Programme approved by the ACB, the Inspection Department of the Bank carried out inspection of 16 HO Departments, 22 Regional Offices and two Training Establishments, i.e., RTC Mangalore and NBSC Lucknow. On conclusion of the inspections and issue of Inspection Reports (IR), Flash Reports (FR) incorporating positive features, major areas of concern and SWOT analysis were submitted to the Top Management. Memoranda and synopses
buildings/residential Agartala, Dimapur,
Patna.
Construction of residential flats is progressing in Raipur and Ranchi. 5.24 The Bureau of Energy Efficiency (BEE) has awarded a certificate with Four Star rating for the Banks building at HO, determined on the basis of energy efficiency norms fixed by them. A project of converting solid waste into vermicompost was started in the Banks Kandivli staff quarters complex in Mumbai. Steps are on to replicate this in other staff quarters of the Bank.
of IR issued together with compliance were placed before the Management Committee (MC) and ACB for deliberation and guidance. The Concurrent Audit of Head Office Departments, continued to be out
J.
5.25
Vigilance
Four Preventive Vigilance Inspections of Regional
sourced to external auditors, while the concurrent audit of all RO/TE were undertaken by the Concurrent Audit Cells (CAC) set up in the respective RO/TE. The ACB reviewed the internal inspection/audit function in the institution - the system, its quality and
Offices were conducted by the Central Vigilance Cell (CVC), HO, to ensure that the systems and procedures were duly followed. In order to become more
transparent in its functioning and eliminating scope for corruption, an interface has been created on NABARD website (www.nabard.org) called Application Status
effectiveness with focus on the follow-up of major areas of concern in housekeeping. The Committee followed up on all the issues raised in the Statutory
84
www.sansco.net
Auditors report, inspection reports of RBI, etc., and interacted with the external auditors before the
ii. Parliamentary Committee on Papers Laid on the Table of the Rajya Sabha visited Mumbai,
finalisation of the annual financial accounts and report. The RMCB oversaw the functioning of the Credit Risk Management, Asset and Liability
Bengaluru, Chennai & Kolkata
from 20-27 June
2010. The Committee held discussions in Mumbai on 21 June 2010 regarding Delayed laying of Annual Reports and Audited Accounts of
Management, Operational Risk Management and other risks of the bank and guided in devising the policy and strategy for integrated risk management for containing various risk exposures of the Bank.
NABARD in Rajya Sabha. iii. The Third Sub-Committee of the Committee of Parliament on Official Languages inspected Central Government offices located in Delhi, Coimbatore, Salem, Bengaluru, Mumbai, Mehsana and
Inspection Department continued to monitor defaults by client institutions and apprise the Top Management of the status and follow up action initiated for recovery of default, on a fortnightly basis.
Ahmedabad from 21.10.2010 to 29.10.2010. It held discussions in Mumbai on 26 October 2010
L.
5.27
Public Relations
NABARD continued to disseminate its
regarding Progress of work related with Official Language - Rajbhasha iv. The Committee on Subordinate Legislation, Rajya Sabha visited Hyderabad and Chennai from 17-22 December 2010. It held discussions in Hyderabad on 18 Dec 2010 and in Chennai on 21 December 2010 regarding: (i) the RRB (Appointment and Promotion of Officers and Employees) Rules, 2010; (ii) Priority Sector Lending Schemes with special reference to micro-credit to farmers; and (iii)
programmes and activities through the print and electronic media. Guidance on matters of agriculture
and rural development was provided to a number of visitors, students, researchers and agri-preneurs
throughout the year.
The Bank also sponsored a
Coffee Table Book, Harvest of Hope, brought out by the Ministry of Agriculture, Government of India, as a tribute to the Indian farmers.
M. Visits of Parliamentary Committees

5.28 During the year, the following Parliamentary Committees visited NABARD: i. Parliamentary Standing Committee on Personnel, Public Grievances, Law & Justice visited Mumbai, Bengaluru & Chennai from 13-19 June 2010. The Committee held discussions in Mumbai on 15 June 2010 regarding Status of women employees, service conditions, protection against exploitation, incentives and other related issues. v.
Situation after the ADWDR Scheme, 2008.
The Committee on Government Assurances, Rajya Sabha, held discussions in Port Blair, Chennai and Kochi on 08, 10 and 11 February arising 2011, from:
respectively, regarding
Assurance
(i) Unstarred Question (USQ) No. 2053 dated 08.12.2009 regarding appointment on
compassionate ground in RRB; and (ii) USQ No. 3089 dated 23.04.2010 regarding time frame for debt waiver scheme.
85
www.sansco.net
N.
5.29
Promotion of Hindi
Hindi workshops were conducted during the
GoI.
Rajbhasha Shield for excellent work in Hindi
during 2009-10 was awarded to the best RO in Regions A, B & C, respectively and to one Training Establishment and two HO Departments. The Regional Implementation Office, Rajbhasha
year, to facilitate increased usege of Hindi in office work. Rajbhasha orientation programmes for senior officers were also conducted at RTC, Mangalore and NBSC, Lucknow. During the year, on-site inspections of four RO were undertaken, with a view to ensuring compliance with Rajbhasha Policy. Two RO, viz., Karnataka and Chhattisgarh were notified under Section 10(4) of the Official Languages Act, 1963 by
Department, Ministry of Home Affairs, GoI also awarded prizes to Andhra Pradesh RO, Maharashtra RO and RTC, Mangalore. During the year, 109 Potential Linked Credit Plans and 69 IR were prepared/issued in Hindi.
86
www.sansco.net
VI
Financial Performance & Management of Resources
NABARD, like any other financial organisation has put in place a sound financial resources management system. The management of funds by the Bank and its financial performance during the year are detailed in this Chapter. 6.2 The financial resources of NABARD (Table 6.1) previous year. The funds deployed for investment operations (including rural infrastructure development) and for production and marketing activities (including conversion) increased by ` 8,945 crore and ` 10,005 crore, respectively, as on 31 March 2011. The total market borrowings stood at ` 34,747 crore, as on 31 March 2011, constituting 21.87 per cent of the total resources of the bank.
increased to ` 1,58,872 crore, as on 31 March 2011, registering an increase of 16.57 per cent, over the
Sources of Funds
A. Capital, Reserves & Surplus
6.3 ` The paid up capital, as on 31 March 2011, was 5,000 crore; with the share of GoI being 6.4 The National Rural Credit (Long Term Operations) [NRC (LTO)] Fund and the National Rural Credit (Stabilisation) [NRC (Stab.)] Fund are utilised for
Table 6.1: Sources of Funds (` crore) Particulars 31.03.2010 Amount Share (%) Capital, Reserves & Surplus NRC (LTO) and (Stab.) Funds STCRC Fund Deposits RIDF Deposits Bonds & Debentures Certificates of deposits Term Money Borrowings Commercial Paper Borrowings from GoI Borrowings from CB* Foreign Currency Loan Borrowing under CBLO Borrowings against STD Other Liabilities/Funds Total
* CB : Commercial Banks
` 2,000 crore against the authorised capital of 99 per cent and that of RBI at 1 per cent. The amount of reserves and surplus increased by ` 1,188 crore, as on 31 March 2011.
B. National Rural Credit (Long Term Operations) and the National Rural Credit (Stabilisation) Funds
investment
operations of
and
for
conversion/ respectively.
reschedulement
31.03.2011 Amount Share (%) 13,863 16,045 14,622 277 67,878 26,788 137 110 6,448 124 0 503 0 360 11,717 8.7 10.1 9.2 0.2 42.7 16.9 0.1 0.1 4.0 0.1 0.0 0.3 0.0 0.2 7.4
short-term
credit,
These Funds are augmented by internal accruals and contributions made by the RBI. During the year, an amount of ` 62 crore was contributed to these Funds.
12,675 15,983 9,622 505 59,869 20,004 379 763 2,680 147 500 494 215 0 12,456
9.3 11.7 7.1 0.4 43.9 14.7 0.3 0.5 1.9 0.1 0.4 0.4 0.2 0 9.1
C. STCRC Fund
6.5 for With a view to augmenting NABARD's resources short-term credit facilities to Co-operative
Institutions, the Short-Term Co-operative Rural Credit (Refinance) [STCRC] Fund was set up in 2008-09 with contributions by scheduled commercial banks not
achieving their priority sector obligations. From an initial corpus of ` 4,622 crore, it was augmented with an additional allocation of ` 5,000 crore each for 2009-10 and 2010-11. The outstanding under the STCRC (Refinance) Fund, as on 31 March 2011, stoodat ` 14,622 crore.
1,36,292 100.0 1,58,872 100.0
87
www.sansco.net
D. Deposits
i.
6.6
iv.
Bhavishya Nirman Bonds
Term Deposits
The amount of term deposits and deposits
6.11 During the year, additional funds to the tune of ` 421 crore were mobilised under Bhavishya Nirman Bonds (BNB). The outstanding, as on 31 March 2011, stood at ` 4,975 crore as against the outstanding as on 31 March 2010 at ` 4,554 crore.
received from the tea, coffee and rubber companies aggregated ` 277 crore, as on 31 March 2011, as against ` 505 crore at the end of the previous year, reflecting a decrease of ` 228 crore during the current year. This was mainly due to redemption of term deposits of ` 344 crore during the year. However, tea, coffee and rubber deposits rose from ` 124 crore, as on 31 March 2010, to ` 228 crore as on 31 March 2011.
v.
NABARD Rural Bonds
6.12 No fresh bonds were issued during the year. The outstanding at the end of March 2011 stood at ` 24 crore.
ii. RIDF Deposits

6.7 During the year, RIDF Deposits from vi. Certificates of Deposits borrowings through Certificates of
commercial banks under RIDF VIII to XVI aggregated ` 13,056.22 crore, with repayments being ` 5,047.23 crore under RIDF VI to XVI. As on 31 March 2011, aggregate outstanding RIDF deposits stood at ` 67,878 crore, as against ` 59,869 crore at the end of the previous year, resulting in a net inflow of ` 8,009 crore, an increase of 13.4 per cent over the deposits held as on 31 March, 2010.
6.13 Fresh
Deposits (CD) of ` 137 crore were mobilised and ` 379 crore were redeemed during the financial year. The outstanding balance was ` 137 crore, as on 31 March 2011.
vii. Term Money Borrowings

6.14 Term Money Borrowings (TMB) of three to six months tenor were resorted to, in order to meet
E. Borrowings
i.
6.8
Capital Gains Bonds

Capital Gains Bonds aggregating ` 354.11 crore
short-term requirements. TMB worth ` 557 crore were raised and repayments to the tune of ` 1209 crore were made, leaving an outstanding of ` 110 crore, as on 31 March 2011, compared with the outstanding of ` 762 crore, as at the end of March 2010.
were redeemed during the year 2010-11 and the outstanding, at the end of March 2011, under this segment of borrowing was ` 7.53 crore.
ii.
6.9
Corporate Bonds
Corporate Bonds amounting to ` 9,320 crore
viii. GoI Borrowings

6.15 There were no borrowings from Government of India during the year 2010-11 whereas repayments of ` 23 crore, on maturity of loans drawn under various externally aided projects, were made. The outstanding in respect of borrowings from GoI stood at
were issued during the year while ` 2,513 crore were redeemed. The amount outstanding, at the end of March 2011, stood at ` 21,682 crore.
iii. Statutory Liquidity Ratio Bonds

6.10 Statutory Liquidity Ratio (SLR) Bonds worth nearly ` 90 crore were redeemed and the outstanding aggregated ` 99 crore, as on 31 March 2011.
` 124 crore, as on 31 March 2011, as against ` 147 crore, outstanding as on 31 March 2010.
88
www.sansco.net
ix.
Borrowings from Commercial Banks
hedged at an average annual cost of 1.54 per cent for 10 years.
6.16 There were no fresh borrowings during the year, but ` 500 crore of past borrowings were repaid in full.
xi.
6.18
Borrowings against Short Term Deposits

The investment policy of the bank was amended
x.
Borrowings in Foreign Currency
to allow borrowings against Short Term Deposits (STD) 6.17 An amount of ` 48 crore was drawn under KfW (UPNRM) which resulted in borrowings in foreign currency from KfW, Germany, aggregating ` 503 crore, as on 31 March 2011. The foreign exchange risk on this loan as well as interest payments have been fully placed by NABARD with other banks in order to meet liquidity requirements. As interest rates moved up, this option proved to be cheaper than raising resources through CP and CD. The outstanding borrowings against STD stood at ` 360 crore.
Uses of Funds
A. Short Term Loans, Medium Term (Conversion) Loans and Liquidity support
6.19 The ST (SAO) loans advanced to the SCB at ` 23,484 crore and RRB stood at ` 9,605 crore. Together with ST (OSAO) loans to SCB at ` 198 crore and RRB at ` 598 crore, the total outstanding ST loans increased to ` 33,885 crore at the end of the year. There has been a growth of 40.8 per cent in availing of refinance by credit institutions under this segment (Table 6.2).
Table 6.2: Uses of Funds (` crore) Particulars Amount Cash and Bank Balance Government Securities and other Investments CBLO Production and Marketing Credit Conversion of Production Credit into MT Loans Liquidity Support MT & LT Project Loans * LT Non Project Loans Loans out of RIDF Co Finance Loans(net of provision) Other Loans (including Interim finance) Fixed & Other Assets Total 9,628 3,785 0 24,073 0 20 35,742 199 60,255 84 133 2,373 1,36,292 31.03.2010 Share (%) 7.1 2.8 0 17.7 0 0.1 26.2 0.1 44.2 0.0 0.1 1.7 100.0 31.03.2011 Amount 10,537 5,868 228 33,885 193 0 38,896 167 66,078 88 182 2,750 1,58,872 Share (%) 6.6 3.7 0.1 21.3 0.1 0.00 24.5 0.1 41.7 0.1 0.1 1.7 100.0
* : Including the amount subscribed to Special Development Debentures of SCARDB, which are in the nature of Deemed Advances
89
www.sansco.net
B.
Project Loans under RIDF
E.
Co-finance Bank entered into agreements with
6.20 RIDF loans to State Governments stood at ` 66,078 crore, as on 31 March 2011, compared with ` 60,255 crore at the end of previous year, recording a net outflow of ` 5,823 crore during the year (Table 6.2). C. Non-Project Loans
6.23 The
commercial banks to co-finance various projects. The outstanding (net of provision), as on 31 March 2011, stood at ` 88 crore (Table 6.2). F. Other Loans
6.21 The amount outstanding under the non-project long-term (LT) loans granted to State Governments for contributing to the share capital of co-operative credit institutions, amounted to ` 167 crore on 31 March 2011. There was a decrease of ` 32 crore as compared to the position as on 31 March 2010 (Table 6.2). D. Investment Credit
6.24 Other loans extended out of different Funds (CDF, MFDEF, WDF, TDF, KfW UPNRM, FIPF, and NFS promotional activities) stood at ` 182 crore as on 31 March 2011 (Table 6.2). G. Investment of Surplus Funds
6.25 The surplus funds were deployed in Government 6.22 Refinance assistance extended to banks for medium and long term investment credit reached a level of ` 38,896 crore, as on 31 March 2011 as against ` 35,742 crore, at the end of previous year. During the year, refinance provided for investment credit activities grew by 8.83 per cent (Table 6.2). Securities and other Financial Instruments to the extent of ` 6,097 crore and amounts aggregating ` 9,002 crore were kept in the form of Short Term Bank Deposits to meet liquidity and contingency requirements, as on 31 March 2011.
Income and Expenditure

6.26 The total income of NABARD during the year amounted to ` 9,202 crore as against ` 7,965 crore for the year 2009-10. The profit before tax (PBT) and profit after tax (PAT) were at ` 1,824 crore and ` 1,279 crore, respectively, during the year, as compared to the PBT and PAT of ` 2,272 crore and ` 1,558 crore, respectively, in the previous year. The average cost of borrowings (interest expenditure as a per cent of average borrowings) decreased from 6.83 per cent per annum during 2009-10 to 6.64 per cent per annum during 2010-11, due mainly to redemption of high cost borrowings. An amount of ` 360 crore, ` 50 crore, ` 10 crore and ` 801 crore, respectively, were transferred to Special Reserve u/s 36(1) (viii) of IT Act 1961, NRC (LTO) Fund, NRC (Stabilisation) Fund and Reserve Fund. Further, an aggregate amount of ` 261 crore was transferred to various Funds, viz., Cooperative Development Fund, Research and Development Fund, Investment Fluctuation Reserve, FIF, FITF, FTTF and FIPF. 6.28 The Asset-Liability Management Committee (ALCO) of the Bank oversees the monitoring and management of market risk. ALCO also manages The liquidity/interest rate risks, as per the comprehensive ALM/liquidity policies approved by the Board. currency-wise sensitivity structural liquidity vis--vis and role of ALCO includes, inter-alia, reviewing the Bank's interest-rate limits positions prudential 6.27 The capital to risk-weighted assets ratio (CRAR) was 21.76 per cent, as on 31 March 2011, as compared to 24.95 per cent, as on 31 March 2010, as against a minimum 9 per cent stipulated by RBI.
Capital Adequacy
Asset-Liability Management
prescribed by the RBI/Board, monitoring results of periodical stress testing of cash flows and identifying a suitable ALM strategy.
90
www.sansco.net
Annual Accounts 2010-2011
91
www.sansco.net
P . Parikh & Associates

Chartered Accountants
AUDITORS REPORT
We have audited the attached Balance Sheet of NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT (the Bank) as at March 31, 2011 and the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto in which are incorporated the returns of 12 Regional Offices and 1 Training Centre audited by us. These offices and training Centre have been selected in consultation with the Bank in terms of notification no.F.No.1/14/2004-BOA dated January 03, 2011 issued by Government of India, Ministry of Finance, Department of Financial Services. Also incorporated in the Balance Sheet, Profit and Loss Account and Cash Flow Statement are the returns from 17 Regional Offices and 2 Training Centers which have not been subjected to audit. These unaudited offices account for 19.29% of advances (includes deemed advances as per Note B-14(c) of Schedule 18), 0.04% of deposits and term money borrowings, 17.97% of interest income (includes interest on deemed advances as per Note B-14(b) of Schedule 18) and 0.08% of interest expenses. These financial statements are the responsibility of the Banks management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. Subject to the limitations of the audit mentioned in paragraph 1 above, we report that: a. b. c. d. e. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit and have found them to be satisfactory; In our opinion, the transactions of the Bank which have come to our notice have been within the powers of the Bank; The returns received from the Regional Offices and Training Centres of the Bank have been found adequate for the purpose of our audit; The Balance Sheet and Profit and Loss Account have been drawn up in accordance with Schedule A and Schedule B of Chapter IV of the National Bank for Agriculture and Rural Development (Additional) General Regulations, 1984; In our opinion and to the best of our information and according to the explanations given and as shown by the books of the Bank: i. the Balance Sheet, read with Significant Accounting Policies and notes on accounts contain all necessary particulars and is properly drawn up in conformity with the accounting principles generally accepted in India so as to exhibit a true and fair view of the state of affairs of the Bank as at March 31, 2011; and the Profit and Loss Account, read with Significant Accounting Policies and notes on accounts, shows a true balance of the profit for the year ended on that date and is in conformity with accounting principles generally accepted in India; and
ii.
iii. the Cash Flow Statement gives a true and fair view of the cash flows of the Bank for the year ended on that date. Place: Mumbai Date: May 30, 2011 For and on behalf of P . Parikh & Associates Chartered Accountants Firm Registration No. 107564W Ashok Rajagiri Partner, Membership No.: 046070
HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009, Tel : 23443549, 23437853, Fax : 23415455, Website : www.pparikh.com
92
www.sansco.net
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT BALANCE SHEET AS ON 31 MARCH 2011
Sr. FUNDS AND LIABILITIES No. SCHEDULE As on 31.03.2011
(` in '000) As on 31.03.2010
1. 2. 3. 4. 5. 6. 7. 8. 9.
Capital (Under Section 4 of the NABARD Act, 1981) Reserve Fund and other Reserves National Rural Credit Funds Funds out of grants received from International Agencies Gifts, Grants, Donations and Benefactions Other Funds Deposits Bonds and Debentures Borrowings 1 2 3 4 5 6 7 8 9
2000,00,00 11862,72,33 16045,00,00 138,89,56 2601,89,23 3431,47,40 82776,67,53 26788,21,49 7681,29,10 5546,09,80 158872,26,44
592,09,63
2000,00,00 10674,59,96 15983,00,00 149,87,64 4706,76,57 2735,06,36 69996,02,03 20004,38,12 5177,79,68 4864,62,84 136292,13,20
563,65,54
10. Current Liabilities and Provisions Total

Forward Foreign Exchange Contracts (Hedging) as per contra
(` in '000) Sr. PROPERTY AND ASSETS No. 1 2 3 4 5 Cash and Bank Balances Investments Advances Fixed Assets Other Assets Total Forward Foreign Exchange Contracts (Hedging) as per contra Commitment and Contingent Liabilities Significant Accounting Policies and Notes on Accounts Schedules referred to above form an integral part of accounts As per our attached report of even date P . Parikh & Associates Chartered Accountants FRN. 107564W Ashok Rajagiri Partner : M. No. 046070 Mumbai Date : May 30, 2011 Rakesh Singh Chairman Dr. K C Chakrabarty Director Alok Nigam Director K. S. Padmanabhan Chief General Manager Accounts Department Mumbai : May 30, 2011 17 18 SCHEDULE As on 31.03.2011 107,65,26,79 193,29,50,93 126027,99,95 229,48,63 2520,00,14 158872,26,44 592,09,63 As on 31.03.2010 9628,33,75 17199,09,54 107092,24,68 234,71,82 2137,73,41 136292,13,20 563,65,54
10 11 12 13 14
K Jayakumar Director
93
www.sansco.net
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2011
Sr. No. INCOME 1 2 3 Interest received on Loans and Advances Income from Investment Operations/Deposits (Refer Note B-4 of Schedule 18) Other Receipts (Refer Note B-6 & B-30 of Schedule 18) Total "A" Sr.No. EXPENDITURE 1 2 3 4 5 6 Interest and Financial Charges (Refer Note B-5 of Schedule 18) Establishment and Other Expenses Provisions Depreciation Total "B" Profit before Tax (A - B) a) Provision for Income Tax b) Provision for Deferred Tax -( Asset) (Refer Note B-11 of Schedule 18) Profit after Tax Significant Accounting Policies and Notes on Accounts Schedules referred to above form an integral part of accounts PROFIT AND LOSS APPROPRIATION ACCOUNT 18 SCHEDULE 15 16 A 16 B SCHEDULE 2010-11 8169,13,99 943,23,85 89,63,23 9202,01,07 2010-11 6193,86,85 1126,09,88 35,60,34 22,57,98 7378,15,05 1823,86,02 460,00,00 84,65,00 1279,21,02
(` in '000)
2009-10 6653,31,46 1255,68,93 55,79,62 7964,80,01 2009-10 4988,45,58 547,97,74 132,62,06 23,29,36 5692,34,74 2272,45,27 647,00,00 67,19,00 1558,26,27
(` in '000) Sr.No. APPROPRIATIONS / WITHDRAWALS 1. 2.1 Profit for the year brought down Add: Withdrawals from funds against expenditure debited to Profit & Loss A/c a) Co-operative Development Fund (Refer Schedule 1) b) Research and Development Fund (Refer Schedule 1) c) Watershed Development Fund (Refer Schedule 5) d) Micro Finance Development and Equity Fund (Refer Schedule 5) e) Investment Fluctuation Reserve (Refer Schedule 1) f) Farm Innovation & Promotion Fund g) Financial Inclusion Technology Fund Withdrawals of funds which have been closed i) Foreign Currency Risk Fund (Refer Note B-18 of Schedule 18) ii) Soft Loan Assistance Fund for Margin Money (Refer Note B-18 of Schedule 18) iii) Agriculture & Rural Enterprise Incubation Fund (Refer Note B-18 of Schedule 18) Profit available for Appropriation Less: Transferred to: a) Special Reserves u/s 36(1) (viii) of IT Act, 1961 b) National Rural Credit (Long Term Operations) Fund c) National Rural Credit (Stabilisation) Fund d) Co-operative Development Fund e) Research and Development Fund f) Investment Fluctuation Reserve (Refer Schedule 1) g) Farmers Technology Transfer Fund h) Farm Innovation & Promotion Fund (Refer Schedule 1) i) Producers' Organization Development Fund (Refer Note B-17 of Schedule 18) j) Rural Infrastructure Promotion Fund (Refer Note B-17 of Schedule 18) k) Financial Inclusion Technology Fund l) MFDEF Reserve Fund m) Reserve Fund Total Refer Schedule 18 for Significant Accounting Policies and Notes on Accounts As per our attached report of even date P . Parikh & Associates Chartered Accountants FRN. 107564W Ashok Rajagiri Partner : M. No. 046070, Mumbai Date : May 30, 2011 Rakesh Singh Chairman 2010-11 1279,21,02 2009-10 1558,26,27
6,05,32 17,67,49 1,01,14 11,40,75 2,07,65 2,39,20 0 147,06,04 10,00,00 5,00,00 1481,88,61 360,00,00 50,00,00 10,00,00 6,05,32 17,67,49 116,07,65 33,55,54 2,34,20 50,00,00 25,00,00 10,00,00 0 801,18,41 1481,88,61
3,83,04 9,82,99 44,70,44 10,01,05 0 96,94 1,00,00 0 0 0 1628,60,73 350,00,00 400,00,00 10,00,00 3,83,04 9,82,99 30,00,00 64,58,40 96,94 0 0 0 80,00,00 679,39,36 1628,60,73
2.2
3.
K. S. Padmanabhan Chief General Manager Accounts Department Mumbai : May 30, 2011
Dr. K C Chakrabarty
Director
Alok Nigam
Director
K Jayakumar
Director
94
www.sansco.net
SCHEDULES TO BALANCE SHEET

Schedule 1 Reserve Fund and Other Reserves (` in '000) Sr. Particulars No. Opening Balance as on 01.04.2010 5902,73,39 50,00,00 74,80,53 145,00,00 125,00,00 10,00,00 5,00,00 147,06,04 4085,00,00 0 0 80,00,00 50,00,00 10674,59,96 9535,20,60 Additions/ adjustments during the year 0 0 0 0 0 0 0 0 0 0 0 0 5,00 5,00 0 Transferred From P&L Appropriation 801,18,41 17,67,49 0 116,07,65 6,05,32 0 0 0 360,00,00 50,00,00 25,00,00 0 2,34,20 1378,33,07 1154,02,32 Transferred to P&L Appropriation 0 17,67,49 0 2,07,65 6,05,32 10,00,00 5,00,00 147,06,04 0 0 0 0 2,39,20 190,25,70 14,62,96 Balance as on 31.03.2011
1 2 3 4 5 6 7 8 9 10 11 12 13
Reserve Fund Research and Development Fund Capital Reserve Investment Fluctuation Reserve Co-operative Development Fund Soft Loan Assistance Fund for Margin Money Agriculture & Rural Enterprise Incubation Fund Foreign Currency Risk Fund Special Reserves Created & Maintained u/s 36(1)(viii) of Income Tax Act, 1961 Producers' Organizations Development Fund Rural Infrastructure Promotion Fund MFDEF - Reserve Fund Farm Innovation & Promotion Fund Total Previous year
6703,91,80 50,00,00 74,80,53 259,00,00 125,00,00 0 0 0 4445,00,00 50,00,00 25,00,00 80,00,00 50,00,00 11862,72,33 10674,59,96
Schedule 2 National Rural Credit Funds (` in '000) Sr. Particulars No. 1. 2 Opening Balance as on 01.04.2010 Contribution by RBI 1,00,00 1,00,00 2,00,00 2,00,00 Transferred from P&L Appropriation 50,00,00 10,00,00 60,00,00 410,00,00 Balance as on 31.03.2011 14468,00,00 1577,00,00 16045,00,00 15983,00,00
National Rural Credit (Long Term Operations) Fund 14417,00,00 National Rural Credit (Stabilisation) Fund Total Previous year 1566,00,00 15983,00,00 15571,00,00
Schedule 3 Funds out of Grants received from International Agencies (` in '000)

Sr. No. Particulars Opening Grants received/ Balance as on adjusted during 01.04.2010 the year Interest credited to the Fund Exp./Disb./adjusted during the year Balance as on 31.03.2011
1 2 3 4
National Bank - Swiss Development Coop. Project Rural Innovation Fund (RIF) (Refer Note B-2 & 8 of Schedule 18) Rural Promotion Fund (Refer Note B-2 & 8 of Schedule 18) KfW - NABARD V Fund for Adivasi Programme Total Previous year
55,61,77 83,30,56 8,05,29 2,90,02 149,87,64 154,81,79
0 0 79,06 15,60,31 16,39,37 16,31,68
0 4,14,13 1,17 0 4,15,30 4,73,69
0 14,28,31 (-)33,97 17,58,41 31,52,75 25,99,52
55,61,77 73,16,38 9,19,49 91,92 138,89,56 149,87,64
95
www.sansco.net
Schedule 4 Gifts, Grants, Donations and Benefactions

(` in '000) Sr. No. A. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 B. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Capital Investment Subsidy for Cold Storage Projects - NHB Capital Subsidy for Cold Storage NHM Capital Subsidy for Cold Storage TM North East Credit Linked Capital Subsidy for Technology Upgradation of SSIs Capital Investment Subsidy for Rural Godowns On-farm Water Management for Crop Production Million Shallow Tubewell Programme - Bihar Bihar Ground Water Irrigation Scheme (BIGWIS) Cattle Development Programme Uttar Pradesh (Refer Note B- 8 of Schedule 18) Cattle Development Programme - Bihar (Refer Note B- 8 of Schedule 18) National Project on Organic Farming Integrated Watershed Development Programme Rashtriya Sam Vikas Yojana Centrally Sponsored Scheme on Integrated Development of Small Ruminants and Rabbits Rain Water Harvesting Scheme 19,59,17 9,66 4,31,44 12,00 14,21,96 1,92 2,63,15 199,65,41 3,84 1,09,49 2,24,74 10,01,18 3,00,00 83,11 43,84,47 0 11,12,24 11,11,11 96,03,00 0 0 0 1,90,10 0 0 25,00,00 2,00,00 0 0 0 0 0 0 0 0 0 8,98 9,28 0 0 0 0 44,24,97 0 11,05,72 11,16,88 70,86,02 1,92 0 16,76,38 1,76,31 19,31 2,18,52 20,78,63 1,55,45 (-) 6,82 19,18,67 9,66 4,37,96 6,23 39,38,94 0 2,63,15 182,89,03 26,61 99,46 6,22 14,22,55 3,44,55 89,93 KfW - NB - IX Adivasi Development Programme Maharashtra (Refer Note B- 8 of Schedule 18) KfW UPNRM - Accompanying Measures KfW NB UPNRM - Financial Contribution KfW UPNRM - Risk Mitigation Fund International Fund for Agriculture Development (IFAD) Priyadarshini GTZ - Uttarakhand Regional Economic Development KfW-NB-Indo German Watershed Development Programme Phase III - Maharashtra (Refer Note B- 8 of Schedule 18) Indo German Watershed Development Programme Andhra Pradesh (Refer Note B- 8 of Schedule 18) Indo German Watershed Development Programme Gujarat (Refer Note B- 8 of Schedule 18) Indo German Watershed Development Programme Rajasthan (Refer Note B- 8 of Schedule 18) KfW Umbrella Programme on Natural Resource Management Fund (Refer Note B- 3 of Schedule 18) NABARD Grant for Fixed Assets under NB-SDC HID Project GTZ-NABARD RFP - Financial Component NE Council Fund for Miscellaneous Training Programme KfW NB SEWA Bank Capitalisation of Rural Financial Institutions (RFIs) GTZ Rural Financial Institutions Program (RFIP) 6,69 (-)7,30 7,84 11,74 (-)19,11 86,39 3,53,07 0 27,54 0 9,18,96 6,60 0 1,98 0 42,18 16,85,25 2,86,84 82,48 52,94 5,82,80 0 27,85,06 11,64,69 3,46,06 1,93,75 1,55 0 0 50,00 2,66,73 74,24 18,84 1,07 0 0 0 0 5,80 71 53 1,78 0 0 0 0 0 0 16,32,36 2,63,73 9,32 52,94 97,25 0 31,41,60 11,64,67 3,73,98 1,95,53 0 0 (-)1,00 50,19 2,64,07 58,42 78,42 16,88 81,00 11,74 4,66,44 86,39 2,33 73 15 0 9,20,51 6,60 1,00 1,79 2,66 58,00 Particulars Opening Balance as on 01.04.2010 Grant received during the year Interest Credited to the Fund Adjusted against the expenditure Balance as on 31.03.2011
96
www.sansco.net
Schedule 4 Gifts, Grants, Donations and Benefactions

(` in '000) Sr. No. 15 16 17 18 19 20 21 22 Particulars Opening Balance as on 01.04.2010 64,47 16,34,61 7,58,50 77,07,92 5,00,53 2,21,27 41,98 Grant received during the year 0 12,00,00 (-)1,90,93 257,87,91 98,79,64 3,75,76 0 Interest Credited to the Fund 0 0 0 0 0 0 2,08 Adjusted against the expenditure 25,12 16,06,96 5,86 200,12,98 83,14,54 0 41,90 Balance as on 31.03.2011 39,35 12,27,65 5,61,71 134,82,85 20,65,63 5,97,03 2,16
Kutch Drought Proofing Project Dairy and Poultry Venture Capital Fund Poultry Venture Capital Fund Scheme for providing Financial Assistance to Sugar Undertakings - 2007 (SEFASU - 2007) Capital Subsidy for Agriculture Marketing Infrastructure, Grading and Standardisation Centrally Sponsored Scheme for establishing Poultry Estate Livelihood Advancement Business School Sultanpur, Uttar Pradesh (Refer Note B- 8 of Schedule 18) Livelihood Advancement Business School - Rae Bareli, Uttar Pradesh (Refer Note B- 8 of Schedule 18) Multi Activity Approach for Poverty Alleviation Sultanpur, Uttar Pradesh (Refer Note B- 8 of Schedule 18) Multi Activity Approach for Poverty Alleviation - BAIF - Rae Bareli, Uttar Pradesh (Refer Note B- 8 of Schedule 18) GTZ UPNRM Technical Collaboration CSS - on Pig Development Dairy Entrepreneurship development Scheme CSS - S & R Male Buffaloe calves CSS - JNN Solar Mission CSS - on Rural Slaughter Houses Capital Subsidy Scheme Agri Clinics and Agri Business Centres Artificial Recharge of Groundwater in Hard Rock Area ISSPUAF (4% Interest Subvention scheme - Avian Flu) United Nation Development Programme(UNDP) NABARD-Financial Inclusion Fund Agricultural Debt Waiver and Debt Relief Scheme (ADWDR)2008 Interest Subvention (Sugar Term Loan) Revival Package of Short Term Cooperative Credit Structure Cost of Special Audit Recapitalisation Assistance to Credit Cooperative Societies Technical Assistance Human Resources Development Implementation Cost Revival Package for Long Term Co-operative Credit Structure (LTCCS) Total Previous year
81,53
5,62
32,68
54,47
23
47,00
4,14
51,14
24
1,25,93 0 0 0 0 0 0 1,10,05 1256,16,00 0 (-)11,32 2930,24,82 7,31,37
0 92,52 1,50,00 20,40,00 1,92,00 35,00,00 20,33 1,89,34 0 1,68,00 1,62,37 1240,12,00 31,60,00
11,08 0 0 0 0 0 0 0 0 0 0 0 0
0 53,31 1,48,42 9,94,48 0 3,60,81 10,41 1,39,78 11,96 1,68,00 2,60,79 3750,51,57 38,71,73
1,37,01 39,21 1,58 10,45,52 1,92,00 31,39,19 9,92 1,59,61 1256,04,04 0 (-)1,09,74 419,85,25 19,64
25 26 27 28 29 30 31 32 33 34 35 36 C 1 2 3 4 5 D
160,047 19,135 320,979 525,539 54,126 200,000 47,067,657 51,103,245
(-)4,00,00 10,279,600 (-)160,000 (-)320,000 386,900 0 29,887,725 122,313,252
0 0 0 0 0 0 6,991 5,854
15,132 6,892,310 21,906 114,512 252,826 0 50,943,451 126,352,694
104,915 3,406,425 139,073 91,027 188,200 200,000 26,018,922 47,067,657
97
www.sansco.net
Schedule 5 Other Funds

(` in '000)
Sr. Particulars No. Opening Balance as on 01.04.2010 Additions/ Adjustments during the year Transferred from P & L Appropriation Interest Credited Expenditure/ Disb.during the year Transferred to P&L Appropriation Balance as on 31.03.2011
1 2
Watershed Development Fund Micro Finance Development and Equity Fund (Refer Note B- 8 of Schedule 18) Interest Differential Fund (Forex Risk) Interest Differential Fund (Tawa) Adivasi Development Fund Tribal Development Fund Financial Inclusion Fund (Refer Note B- 8 of Schedule 18) Financial Inclusion Technology Fund (Refer Note B- 8 of Schedule 18) Farmers Technology Transfer Fund Total Previous year
1102,83,73
865,86,01
81,25,55
151,25,40
1,01,14
1897,68,75
138,53,41
20,00,00
11,29,46
19,30,15
11,40,75
139,11,97
145,23,57
12,46,16
157,69,73
11,55 20,28 1150,82,67 45,10,45
0 7,60,03 51,89 13,05,23
0 0 0 0
0 0 0 4,15,86
1,55 2,50,00 96,83,63 9,20,90
0 0 0 0
10,00 5,30,31 1054,50,93 53,10,64
5 6 7
52,20,70 100,00,00 2735,06,36 2101,80,69
10,40,36 1,00,00 930,89,68 691,61,39
10,00,00 33,55,54 43,55,54 64,58,41
4,34,39 0 101,05,26 72,76,77
54,00,37 33,55,54 366,67,54 139,99,41
0 0 12,41,89 55,71,50
22,95,08 101,00,00 3431,47,41 2735,06,35
Schedule 6 Deposits
(` in '000)
Sr. Particulars No. 1 2 3 From Central Government From State Governments From Others a) Tea / Rubber / Coffee Deposits b) Term Deposits c) Commercial Banks (Deposits under RIDF) d) Short Term Co-operative Rural Credit Fund Total
As on 31.03.2011 0 0 228,29,61 48,46,15 67877,63,52 14622,28,25 82776,67,53
As on 31.03.2010 0 0 123,73,69 381,35,32 59868,64,77 9622,28,25 69996,02,03
Schedule 7 Bonds and Debentures

(` in '000)
Sr. Particulars No. 1 2 3 4 5 SLR Bonds Non Priority Sector Bonds Capital Gains Bonds Bhavishya Nirman Bonds NABARD Rural Bonds Total
As on 31.03.2011 98,99,70 21682,50,00 7,52,70 4975,19,52 23,99,57 26788,21,49
As on 31.03.2010 188,63,09 14876,00,00 361,64,40 4554,11,06 23,99,57 20004,38,12
98
www.sansco.net
Schedule 8 Borrowings
(` in '000)
Sr. Particulars No. 1 2 3 From Central Government Reserve Bank of India From Others : (a) In India (i) Certificate of Deposits (ii) Commercial Paper (iii) Borrowing under Collateralised Borrowing Lending Obligation (iv) Term Money Borrowings (v) Commercial Banks (vi) Borrowing aginst STD (b) Outside India (i) From International Agencies Total
As on 31.03.2011 123,97,71 0
As on 31.03.2010 146,76,07 0
136,86,14 6447,64,81 0 110,16,00 0 360,00,00 502,64,44 7681,29,10
379,45,90 2679,71,76 214,82,34 762,50,00 500,00,00 0 494,53,61 5177,79,68
Schedule 9 Current Liabilities and Provisions

(` in '000)
Sr. Particulars No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Interest / Discount Accrued Sundry Creditors Subsidy Reserve (Co-finance,Cold Storage) Subsidy Reserve - CSAMI under RIDF Provision for Gratuity (Refer Note B- 19 of Schedule 18) Provision for Pension (Refer Note B- 19 of Schedule 18) Provision for Encashment of Ordinary Leave (Refer Note B- 19 of Schedule 18) Unclaimed Interest on Bonds with RBI Unclaimed Interest on Bonds Unclaimed Interest on Term Deposits Term Deposits Matured but not claimed Bonds matured but not claimed Application money received pending allotment of Bonds Provisions and Contingencies (a) Amortisation of G. Sec. - HTM (b) For Standard Assets (c) Depreciation in value of investments - equity (d) Countercyclical Provisioning Buffer (Refer Note B- 27 of Schedule 18) (e) Sacrifice in interest element of restructured loans (f) Provision for Other Assets & Receivables Total
As on 31.03.2011 3527,97,31 401,73,28 93,89 1,45,00 17,44,81 934,44,01 5,07,12 0 3,90,27 41,96 5,48,20 20,06,38 50 0 594,57,00 3,36,93 25,51,00 0 3,72,14 5546,09,80
As on 31.03.2010 2489,39,46 972,40,01 40,15 91,80 1,62,25 690,04,64 -9,91,64 6,54 4,37,41 8 0 12,32,18 15,64,32 90,90,80 594,57,00 1,44,36 0 8,00 35,48 4864,62,84
Schedule 10 Cash and Bank Balances

(` in '000)
Sr. Particulars No. 1 2 Cash in hand Balances with : a) Reserve Bank of India b) Others (I) In India (i) Other Banks in India a) On Current Account b) Deposit with Banks (ii) Remittances in Transit (iii) Collateralised Borrowing and Lending Obligations (II) Outside India Total
As on 31.03.2011 7 38,85,26
As on 31.03.2010 12 25,45,41
801,32,40 90,02,46,14 694,44,37 228,18,56 0 107,65,26,80
533,94,82 9000,00,00 68,93,40 0 0 9628,33,75
99
www.sansco.net
Sr. Sr. No. 1
Particulars Particulars Government Securities
Schedule 11 Investments
as on as on 31.03.2011
as on(` in '000) as on 31.03.2010
a) Securities of Central Government (Refer Note B-7 of Schedule 18) [Face Value ` 2599,65,70 (` 1979,65,70)] [Market Value ` 2563,67,09 (` 1971,99,04)] b) Treasury Bills 2 3 (a) (b) (c) (d) Other Approved Securities Equity Shares in : Agricultural Finance Corporation Ltd. [1,000 (1,000) - Equity shares of ` 10,000 each] Small Industries Development Bank of India [1,60,00,000 (1,60,00,000) - Equity shares of ` 10 each] Agriculture Insurance Company of India Ltd. [6,00,00,000 (6,00,00,000) - Equity shares of ` 10 each] Multi Commodity Exchange of India Ltd. [1562500 (12,50,000) - Equity shares of ` 10 each] including 312500 Bonus shares allotted during the year National Commodity and Derivatives Exchange Ltd. [56,25,000 (53,61,850) - Equity shares of ` 10 each] Other Equity Investments (i) Coal India Ltd. [17389 (NIL) - Equity shares of ` 10 each] (ii) Power Grid Corporation of India Ltd. [28592 (NIL) - Equity shares of ` 10 each] (iii) Manganese Ore India Ltd. [11719 (NIL) - Equity shares of ` 10 each] (iv) Punjab & Sindh Bank [7958 (NIL) - Equity shares of ` 10 each] 4 (a) (b) 5 (i) (ii) (iii) (iv) 6 (a) (b) (c) (d) (e) (f) Debentures and Bonds Special development Debentures of SCARDBs (Refer Note B- 14 of Schedule 18) Non Convertible Bond Shareholding in subsidiaries and Joint Venture NABARD Financial Services Ltd. [84,00,000 (52,00,000) - Equity shares of ` 10 each] Agri-Business Finance [Andhra Pradesh] Ltd. [52,00,000 (52,00,000) - Equity shares of ` 10 each] Agri Development Finance [Tamil Nadu] Ltd. [52,00,000 (52,00,000) - Equity shares of ` 10 each] NABARD Consultancy Services Pvt. Ltd. [50,00,000 (50,00,000) - Equity shares of ` 10 each] Others Commercial Paper [Face Value `.1950,50,00 ( `.785,00,00)] Certificate of Deposit [Face Value `.700,00,00 (NIL)] Units of Liquid Mutual Funds (Refer Note B-22 of Schedule 18) SEAF - India Agri - Business Fund APIDC - Ventureast Life Fund III BVF (Bio-Tech Venture Fund) - APIDC-V Investment Total
` 8,40,00,000 ` 5,20,00,000 ` 5,20,00,000 ` 42,60 ` 25,73 ` 43,95 ` 9,55
2548,31,03
1991,50,09
0 0 1,00,00 48,00,00 60,00,00 1,25,00
0 0 1,00,00 48,00,00 60,00,00 1,25,00
(e) (f)
16,87,50
13,98,04
1,21,83
13461,16,56 225,00,00
13413,59,90 0
18,80,00 5,00,00
15,60,00 5,00,00
1861,99,91
744,16,51
6,80,42,26 390,11,34 37,50 4,98,00 5,00,00 193,29,50,93
0 900,00,00 0 0 5,00,00 17199,09,54
100
www.sansco.net
Schedule 12 Advances
Sr. No. 1 a) b) c) d) e) Particulars Refinance Loans Production & Marketing Credit Conversion Loans for Production Credit Medium Term Investment Credit- Non-Project loans Liquidity Support Other Investment Credit : i) Medium Term and Long Term Project Loans (Refer Note B-14 of Schedule 18) ii) Long Term Non-Project Loans iii) Interim Finance Direct Loans Loans under Rural Infrastructure Development Fund Other Loans: i) Co-operative Development Fund ii) Micro Finance Development Equity Fund iii) Watershed Development Fund iv) Tribal Development Fund v) KfW UPNRM vi) Farm Innovation & Promotion Fund vii) NFS Promotional Activities Co-Finance Loans (Net of provision) Total as on 31.03.2011 33884,82,33 193,21,67 0 0 25435,26,23 167,20,61 0 66077,96,22 3,11,68 89,23,20 32,09,56 3,47,16 53,11,82 40,75 50,00 87,58,72 12,60,27,99,95
(` in '000)
as on 31.03.2010 24073,45,36 0 0 20,00,00 22328,22,89 198,66,93 1,43,00 60255,45,15 3,13,05 85,76,60 29,35,54 1,01,84 11,74,20 39,80 0 83,60,32 10,70,92,24,68
2 a) b)
c)
Schedule 13 Fixed Assets

Sr. Particulars No. 1 LAND : Freehold & Leasehold (Refer Note B-13 of Schedule 18) Opening Balance Additions/adjustments during the year Closing Balance (at cost) Less: Amortisation of Lease Premia Book Value PREMISES (Refer Note B-13 of Schedule 18) Opening Balance Additions/adjustments during the year Closing Balance (at cost) Less: Depreciation to date Book Value FURNITURE & FIXTURES Opening Balance Additions/adjustments during the year Sub-Total Less: Cost of assets sold/written off Closing Balance (at cost) Less: Depreciation to date Book Value COMPUTER INSTALLATIONS & OFFICE EQUIPMENTS Opening Balance Additions/adjustments during the year Sub-Total Less: Cost of assets sold/written off Closing Balance (at cost) Less: Depreciation to date Book Value VEHICLES Opening Balance Additions/adjustments during the year Sub-Total Less: Cost of assets sold/written off Closing Balance (at cost) Less: Depreciation to date Book Value Total as on 31.03.2011 146,12,13 1,96,16 148,08,29 40,59,65 107,48,64 259,08,11 4,34,35 263,42,46 156,33,58 107,08,88 57,24,47 1,43,23 58,67,70 13,56 58,54,15 55,77,96 2,76,19 68,22,68 8,85,36 77,08,04 4,08,59 72,99,45 62,68,28 10,31,17 4,39,48 1,63,09 6,02,57 1,59,27 4,43,30 2,59,55 1,83,75 229,48,63 (` in '000) as on 31.03.2010 144,51,36 1,60,77 146,12,13 38,60,33 107,51,80 258,02,09 1,06,01 259,08,10 144,81,04 114,27,06 56,27,21 1,17,83 57,45,04 20,57 57,24,47 54,29,23 2,95,24 66,14,02 6,64,48 72,78,50 4,55,83 68,22,67 60,00,70 8,21,97 4,76,03 71,75 5,47,78 1,08,30 4,39,48 2,63,72 1,75,76 234,71,83
101
www.sansco.net
Sr. Sr. No.
Particulars Particulars
Schedule 14 Other Assets
as on as on 31.03.2011
as on (` in '000) as on 31.03.2010
1 2 3 4 5 6 7 8 9 10 11 12
Accrued Interest Deposits with Landlords Deposits with Government Departments and Other Institutions Housing loan to staff Other Advances to staff Advances to Landlords Capital Work in Progress [Purchase of Staff Quarters & Office Premises] Sundry Advances Advance Tax (Net of Provision for Income Tax) Deferred Tax Assets [Refer Note B-11 of Schedule 18] Expenditure recoverable from Government of India/International Agencies. Discount Receivable Total
1815,75,35 1,48,04 2,97,86 140,22,37 65,08,79 1,03 51,48,84 38,58,47 130,80,93 233,15,00 5,35,57 35,07,89 2520,00,14
1496,44,47 1,25,46 2,82,21 124,06,19 61,30,39 60 29,76,19 34,45,06 51,56,47 317,80,00 2,80,77 15,45,60 2137,73,41
Sr. Particulars Sr. Particulars No. 1
Schedule 15 Interest & Financial Charges
2010-11 2010-11
(` in '000) 2009-10
2 3 4
Interest Paid on a) Loans from Central Government b) Bonds (Refer Note B- 5 of Schedule 18) c) Tea / Coffee / Rubber Deposits d) Term Money Borrowings e) Term Deposits f) Financial Inclusion Fund g) Financial Inclusion Technology Fund h) Borrowings from International Agencies i) Commercial Paper (Refer Note B- 5 of Schedule 18) j) Borrowing aginst ST Deposit k) KfW UPNRM - Accompanying measures l) Short Term Cooperative Rural Credit Fund m) Deposits under RIDF n) Cattle Development Programme (UP & Bihar) o) Watershed Development Fund p) Micro Finance Development and Equity Fund q) Indo German Watershed Development Programme - Andhra Pradesh r) Indo German Watershed Development Programme - Rajasthan s) KfW - NB Indo German Watershed Development Programme Phase III - Maharashtra t) KfW - NB - IX Adivasi Development Programme u) Indo German Watershed Development Programme - Gujarat v) Corporate Borrowings from Banks and FIs in India w) Rural Innovation Fund x) Livelihood Advancement Business School RF Project Sultanpur, Uttar Pradesh y) Multi Activity Approach for Poverty Alleviation BAIF Project Sultanpur, Uttar Pradesh z) Livelihood Advancement Business School RF Project Rae Bareli, Uttar Pradesh aa) Multi Activity Approach for Poverty Alleviation BAIF Project Rae Bareli, Uttar Pradesh ab) Commitment Charges -KfW UPNRM Borrowings ac) Deposits / Borrowings ad) Discount Cost Paid on Certificate of Deposits Discount on Collateralised Borrowing and Lending Obligations Swap Charges Discount, Brokerage, Commission & issue exp. on Bonds and Securities Total
10,21,19 1680,25,58 10,86,63 21,06,65 22,78,08 4,15,86 4,34,39 22,58,86 247,82,46 31,11,00 1,07 259,76,37 3714,32,70 18,26 81,25,55 11,29,46 71 1,78 5,80 18,84 53 21,35,58 4,14,13 2,08 4,14 5,62 11,08 20,74 3 6,29,72 26,59,91 6,93,25 5,78,80 6193,86,85
24,32,78 1623,91,44 5,74,19 8,24,28 37,67,22 2,50,37 3,01,03 23,28,39 128,50,31 0 25 76,52,83 2872,36,36 14,19 62,14,80 5,10,57 1,50 68 15,74 5,24 1,35 44,28,77 4,71,54 3,62 3,35 6,36 6,26 0 7,48 45,05,22 9,50,04 6,69,26 4,20,16 4988,45,58
102
www.sansco.net
Schedule 16 A Establishment and Other Expenses

Sr. Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Particulars Particulars Salaries and Allowances (Refer Note B- 15 of Schedule 18) Contribution to / Provision for Staff Superannuation Funds Other Perquisites & Allowances Travelling & Other allowances in connection with Directors' & Committee Members' Meetings Directors' & Committee Members' Fees Rent, Rates, Insurance, Lighting, etc. Travelling Expenses Printing & Stationery Postage, Telegrams & Telephones Repairs Auditors' Fees Legal Charges Miscellaneous Expenses Expenditure on Miscellaneous Assets Expenditure on Study & Training [Including ` 7,58,70,397(` 5,97,79,097) pertaining to establishment expenses of Regional Training Centers] Expenditure on promotional activities under (i) Cooperative Development Fund (ii) Micro Finance Development and Equity Fund (iii) Watershed Development Fund (iv) Farm Innovation and Promotion Fund (v) Exp. for NFS Promotional Measures/ Activities Wealth Tax Total 2010-11 2010-11 5,86,57,40 3,27,61,90 22,96,15 13,35 1,08 20,82,98 24,49,56 2,81,21 8,48,85 6,55,87 8,06 17,86 40,77,59 44,37 33,46,06 2(` in '000) 2009-10 2,50,33,22 84,86,65 19,06,51 19,77 1,46 19,62,10 23,38,96 2,80,43 6,06,28 4,71,58 7,67 29,69 25,57,97 41,63 24,80,27
16
17
6,05,32 11,40,75 1,01,14 2,39,20 27,52,58 2,28,60 11,26,09,88
3,83,04 10,01,05 44,70,44 96,94 23,40,86 2,81,22 5,47,97,74
Schedule 16 B Provisions
Sr. Sr. No. 1 2 3 4 5 6 7 8 Particulars Particulars Provisions for : Amortisation of G. Sec Standard Assets (Refer Note B- 9 of Schedule 18) Non Performing Assets NB Gen Advices Depreciation in Investments G.Sec Depreciation in Value of Investment Account - Equity Sacrifice in interest element of restructured Accounts Other Assets / Receivable Total 2010-11 2010-11
(` in '000) 2009-10
0 0 32,90,00 (-)53,24 0 (-)5,08 (-)8,00 3,36,66 35,60,34
18,18,16 1,01,50,00 17,60,23 0 0 (-)67,92 (-)4,46,00 47,59 132,62,06
Schedule 17 Commitments and Contingent Liabilities

Sr. Sr. No. 1 2 (i) Particulars Particulars Commitments on account of capital contracts remaining to be executed Sub Total "A" Contingent Liabilities Claims against the Bank not acknowledged as debt. (Refer Note B-21 of Schedule 18) Sub Total "B" Total (A + B) As on As on 31.03.2011 37,81,29 37,81,29
As on(` in '000) As on 31.03.2010 60,44,33 60,44,33
0 0 37,81,29
3,36,60 3,36,60 63,80,93
103
www.sansco.net
Schedule 18
SIGNIFICANT ACCOUNTING POLICIES A.
1.
AND ENDED
NOTES FORMING PART MARCH 31, 2011
OF
ACCOUNTS
FOR THE YEAR
SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation
2.2 Issue expenses relating to floatation of bonds are recognised as expenditure in the year of issue of Bonds. 2.3 Dividend on investments is accounted for, when the right to receive the dividend is established.
1.1 The accounts are prepared on the historical cost convention and comply with all material aspects contained in the National Bank for Agriculture and Rural Development Act, 1981 and Regulations thereof, applicable Accounting Standards (AS) issued by the Institute of Chartered Accountants of India (ICAI) and regulatory norms prescribed by the Reserve Bank of India (RBI). Except otherwise mentioned, the accounting policies have been consistently applied by National Bank for Agriculture and Rural Development (NABARD / the Bank) and are consistent with those used in the previous year. 1.2 Preparation of financial statements as per Generally Accepted Accounting Policies (GAAP) requires the management to make several assumptions and estimates that affect reported results and the reported state of affairs of the Bank; the example of such cases include the estimated life of fixed assets, liability on account of employee retirement benefits, provision for anticipated losses, etc. Actual results could differ from such estimates. Such differences are recognized in the year of outcome of such results. 2. Income and expenditure
3.
Fixed Assets and Depreciation
3. 1 Fixed assets are stated at cost of acquisition, less accumulated depreciation and impairment losses, if any. The cost of assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Subsequent expenditure incurred on existing assets is capitalised only when it increases the future benefit from the existing assets beyond its previously assessed level of performance. 3.2 Expenditure incurred on assets purchased for the value not exceeding ` 5,000 per unit is charged to Profit and Loss Account. 3.3 Land includes free hold and leasehold land.
3.4 Premises include value of land, where segregated values are not readily available. 3.5 Depreciation on premises situated on free hold land is charged @ 10% p.a, on written down value basis 3.6 Depreciation on leasehold land and premises situated thereon is computed and charged @5% on written down value basis or the amount derived by amortising the premium/cost over the remaining period of lease hold land, on straightline basis, whichever is higher. 3.7 Depreciation on other fixed assets is charged over the estimated useful life of the assets ascertained by the management at the following rates on Straight Line Method basis: Type of Assets Furniture and Fixtures Computer Installations Office Equipments Vehicles Depreciation Rate 20% 32% 20% 20%
2.1 Income and expenditure are accounted on accrual basis except the following, which are accounted on cash basis: a. Interest on non-performing assets identified as per RBI guidelines. Income by way of penal interest charged due to delayed receipt of loan dues or noncompliance with terms of loan. Service Charges on loans given out of Micro Finance Development and Equity Fund, Watershed Development Fund. Expenses not exceeding ` 10,000 at each accounting unit under a single head of expenditure.
b.
c.
d.
104
www.sansco.net
Depreciation is charged for the full year, irrespective of the date of purchase of asset. No depreciation is charged on assets sold during the year.
5.9 Brokerage, commission, etc. paid at the time of acquisition, are charged to revenue. 5.10 Broken period interest on debt investment is treated as a revenue item. 5.11 Transfer of a security between the categories is accounted for, at lower of the acquisition cost/book value/market value on the date of transfer and depreciation, if any, on such transfer, is fully provided for.
4.
Intangible Assets and Amortisation
Intangible assets are recognized/amortised, as per the criteria specified in AS 26 Intangible Assets.
5.
Investments
5.1 In accordance with the RBI guidelines, Investments are classified into Held for Trading (HFT), Available for Sale (AFS) and Held to Maturity (HTM) categories (hereinafter called categories). 5.2 Securities that are held principally for resale within 90 days from the date of purchase are classified as HFT. Investments that the Bank intends to hold till maturity are classified as HTM. Securities which are not to be classified in the above categories are classified as AFS. 5.3 Investments categorized under HTM are car ried at cost and provision for depreciation/ diminution/amortisation, if any, in value of investments, is included under Current Liabilities and Provisions. 5.4 Provision for diminution, other than temporary, in the value of investments in subsidiaries under the category HTM is made, wherever necessary. 5.5 Profit on sale of investment categorized under HTM is recognized in Profit & Loss A/c and then transferred to Capital Reserve A/c. Loss on sale of investment categorized under HTM is recognized in Profit & Loss A/c. 5.6 Investments under AFS and HFT are marked to market scrip-wise at the rate declared by Primary Dealers Association of India (PDAI) jointly with Fixed Income Money Market and Derivative Association of India (FIMMDA), at prescribed intervals. While only net depreciation, if any, is provided for investments in the categor y classified as AFS, depreciation / appreciation is recognised in the categor y for investments classified as HFT. 5.7 Treasury Bills are valued at carrying cost.
6.
Advances and Provisions thereon
6.1 Advances are classified as per RBI guidelines. Provision for standard assets and nonperforming assets is made in respect of identified advances, based on a periodic review and in conformity with the provisioning norms prescribed by RBI. 6.2 In case of restructuring/rescheduling of advances, the difference between the present value of future interest as per the original agreement and the present value of future interest as per the revised agreement is provided for, at the time of restructuring/ rescheduling. 6.3 Advances are stated net of provisions towards Non-performing Advances.
7.
Foreign Currency Transactions
7.1 Foreign currency borrowings, which are covered by hedging agreements, are marked to market at every reporting date, the resultant gain, if any, is ignored and loss, if any, is provided for. The liability towards foreign currency borrowings at the prevailing exchange rate on the reporting date is mentioned under the Balance sheet as a contra entry. 7.2 Profit on cancellation of or renewal of currency SWAP agreement, if any, is accounted for on the final settlement of agreement; however, loss on such transactions is provided at the market rates, as on the date of Balance Sheet.
8.
Retirement Benefits
5.8 Unquoted Shares are valued at breakup value, if the latest Audited Accounts of the investee companies is available, or at ` 1/- per share as per RBI guideline.
8.1 The Bank has a Provident Fund Scheme managed by RBI. Contribution to the Fund is made on actual basis.
105
www.sansco.net
8.2 Provision for gratuity is made based on actuarial valuation, in respect of all employees including employees transferred from RBI. The amount of gratuity due from RBI, in respect of employees transferred from RBI, is accounted on cash basis. 8.3 Provision for Pension is made based on actuarial valuation. 8.4 Employers contribution to Provident Fund relating to the pension optees (part of Pension Fund) is maintained with RBI. 8.5 Provision for Encashment of Ordinary Leave is made on the basis of actuarial valuation. 9. Taxes on Income
the segment result. The expenses, which relate to the Bank as a whole and not allocable to segments, are included under Other Unallocable Expenditure. 10.3 Income, which relates to Bank as a whole and not allocable to segments is included under Other unallocable bank income. 10.4 Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities include those that relate to the Bank as a whole and not allocable to any segment. 11. Impairment of Assets
9.1 Tax on income for the cur rent period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of Income Tax Act, 1961 and based on expected outcome of assessments/appeals. 9.2 Deferred tax is recognized, on timing difference, being the difference between taxable income and accounting income for the year and quantified using the tax rates and laws that have been enacted or substantively enacted, as on Balance Sheet date. 9.3 Deferred tax assets relating to unabsorbed depreciation/business losses are recognised and carried forward to the extent that there is virtual certainty that sufficient future taxable income will be available against which, such deferred tax assets can be realized. 9.4 Other deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which, such deferred tax assets can be realized. 9.5 Provision for Wealth Tax is made in accordance with the provisions of Wealth Tax Act, 1956. 10. Segment Reporting
11.1 As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine: a) b) the provision for impairment loss, if any, required; or the reversal, if any, required for impairment loss recognized in the previous periods.
11.2 Impairment loss is recognized when the carrying amount of an asset exceeds recoverable amount. 12 Provisions, Contingent Liabilities and Contingent Assets
12.1 Provisions are recognised for liabilities that can be measured only by using substantial degree of estimation if: a) b) c) the Bank has a present obligation as a result of a past event; a probable outflow of resources is expected to settle the obligation; and the amount of the obligation can be reliably estimated.
12.2 Reimbursement, expected in respect of expenditure, which require a provision, is recognised only when it is virtually certain that the reimbursement will be received. 12.3 a) Contingent liability is disclosed in the case of : a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation,
10.1 Segment revenue includes interest and other income directly identifiable with / allocable to the segment. 10.2 Expenses that are directly identifiable with/ allocable to segments are considered for determining
106
www.sansco.net
b)
a present obligation when no reliable estimate is possible, and a possible obligation arising from past events where the probability of outflow of resources is not remote.
(` in crore)
Particulars Pledged for Business Segment (Securities) Pledged for Business Segment (Collateralised Borrowing and Lending Obligation) Face Value 55.00 (50.00) 2257.00 (1922.00) Book Value 54.81 (49.76) 2208.63 (1933.87)
c)
12.4 Contingent assets are neither recognized, nor disclosed. 12.5 Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.
B.
NOTES FORMING ACCOUNTS
PART OF THE
1. In ter ms of TAWA Command Area Development Project Agreement, the Interest Differential Fund is to be utilized for certain specified purposes. 2. In accordance with the Memorandum of Understanding entered into with the Swiss Agency for Development Cooperation, repayment of loan, service charges and other receipts made out of Rural Innovation Fund (RIF) are being credited to the Rural Promotion Fund (RPF). 3. In terms of the agreement with KfW, accretion/ income and certain expenditure under UPNRM have been charged to the fund. The loans granted out of the fund have been adjusted with direct loans. 4. Income under the head Income from Investment Operations / Deposits includes Discount and Commission, which was hitherto shown separately in the Profit and Loss A/c. 5. Subvention received/receivable from GOI amounting to ` 989.34 crore (` 794.67 crore), being the difference between the cost of borrowing by NABARD and the refinance rate, has been reduced from interest and financial charges. 6. Other receipts includes ` 54.49 crore (` 35.15 crore) received/receivable from GoI towards administration charges on providing refinance under interest subvention scheme to SCBs and RRBs, for financing Seasonal Agricultural Operations. 7. Investments in Government securities include the following securities pledged with Clearing Corporation of India Limited as collateral security for Business segments:
8. Interest at the rate of 6.00% (6.00%) per annum on unutilised balances of RIF, RPF, Watershed Development Fund, KfW NB IGWDP(Andhra Pradesh, Gujarat, Maharashtra and Rajasthan) and KfW NB IX Adivasi Development Programme has been credited to respective fund based on respective agreements. Further, interest at the rate of 8.80% (7.68%) per annum on unutilised balances of Micro Finance Development and Equity Fund, Cattle Development Programme (Uttar Pradesh & Bihar), LABs Revolving Fund (Sultanpur & Rae Bareli) and MAPA BAIF (Sultanpur and Rae Bareli), Financial Inclusion Fund and Financial Inclusion Technology Fund has been credited to the respective funds. The said interest is calculated based on the mid-month average outstanding of the respective funds, which was hitherto calculated on the closing balance of the respective funds. 9. Provision for Standard Assets which was hitherto provided at 0.50% on Direct Loans to State Governments and at 0.75% on Loans Guaranteed by State Government is now being provided as per the IRAC norms of RBI. The continuation of earlier methodology would have been resulted in an additional provision of ` 81.63 crore for the current year. 10. Pending receipt of confirmation of balance of Provident Fund Account in respect of employers contribution as on March 31, 2011 maintained with RBI, provision for pension is made after considering the balance of PF maintained with RBI as per the records available with the Bank. 11. The Bank has, during the year, in accordance with AS 22 Accounting for taxes on Income, recognized in the Profit and Loss account the difference of ` 84.65 crore between net deferred tax assets of ` 233.15 crore and ` 317.80 crore as at March 31, 2011 and March 31, 2010 respectively; as detailed below:
107
www.sansco.net
(` in crore) Sr. Deferred No. Tax Assets 1 Provision for Retirement Benefits made in the books but allowable for tax purposes on payment basis Depreciation on Fixed Assets Amortisation of G Sec Total 31 March 2011 181.18 31 March 2010 274.85
2 3
21.77 30.20 233.15
22.35 20.60 317.80
15. The salary and allowances of the employees of the Bank has been revised with effect from 01 November 2007. Pursuant to the salary revision, an amount of ` 277.09 crore is reckoned towards arrears of salary of which ` 177.34 crore pertains to the period November 2007 to March 2010 and an additional amount of ` 216.09 crore has been reckoned towards superannuation benefits of the employees, on estimated basis. 16. The tax liability of the bank for the AY 2002-03 amounting to ` 373.15 crore was assessed by the Income Tax department and fully paid by the bank. However, the bank has filed appeal against the taxability of NABARD for the AY 2002-03 with Income Tax Appellate Tribunal.
12. Provision for Deferred Tax on account of Special Reserve created u/s 36(1)(viii) of the Income Tax Act, 1961, is not considered necessary, as the Bank has decided not to withdraw the said reserve. 13. Land and Premises include ` 29.88 crore (` 33.82 crore) paid towards Office Premises and Staff Quarters for which conveyance is yet to be completed. 14. Pursuant to the directives of RBI, the project loans provided to SCARDBs by way of subscription to the Special Development Debentures (SDDs) floated by these agencies, are treated as under: a. classified as Investments and shown in Schedule 11 under the head Debenture and Bonds, which was hitherto shown as part of Medium Term and Long Term Project Loans, in Schedule 12 b. Interest earned on the same is shown as a part of Interest received on Loans and Advances in the Profit and Loss Account, treating them as deemed advances. c. Deemed Advances for the purpose of IRAC norms, Income recognition, capital adequacy and computation of ratios etc. d. The value of Allotment Letters / Debenture Scrips, yet to be received, as at the year end, aggregates to ` 238.15 crore (` 30.12 crore)
17. The bank has created two new funds out of its post tax profit viz. Producers Organizations Development Fund and Rural Infrastructure Promotion Fund with a corpus of ` 50 crore and ` 25 crore respectively during the year. 18. The Bank has transferred the outstanding balances of the following funds to Reserve Fund: a. Foreign Currency Risk Fund b. Soft Loan Assistance Fund for Margin Money c. Agriculture and Rural Enterprise Incubation Fund - ` 147.06 crore - ` 10 crore - ` 5 crore
19.
Disclosure required under AS 15 (Revised) on Employee Benefits is as under:
19.1 Defined Benefit Plans

Employees Retirement Benefit plans of the bank include Pension, Gratuity and Leave Encashment, which are defined benefit plans. The present value of obligation is determined based on actuarial valuation using the Projected Unit Cost Method, which recognizes each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
108
www.sansco.net
a.
Reconciliation of opening and closing balances of defined benefit obligations: (` in crore) Particulars Present value of defined benefit obligation at the beginning of year Current Service Cost Interest Cost Actuarial (gain)/ loss Benefits paid Present value of defined benefits obligations at the year end Pension 958.76(892.01) 22.76(20.65) 79.10(66.90) 207.42 (-10.01) -45.01(-10.79) 1223.03(958.76) Gratuity 221.20(250.53) 16.90 (15.27) 18.25 (18.79) 8.16(-25.60) -21.94(-37.79) 242.57(221.20) Leave Encashment 117.63(115.51) 6.54(3.73) 9.70(8.66) 17.67(2.19) -6.66(-12.47) 144.88(117.63)
b.
Amount recognized in the balance sheet as on 31 March 2011: (` in crore) Particulars Present value of defined benefits obligations as at the year end Fair value of plan assets as at the year end Liability recognized in the Balance Sheet as at the year end Pension (Partly Funded) 1223.03(958.76) Gratuity (funded) 242.57(221.20) Leave Encashment (Funded) 144.88(117.63) 143.66(127.55) $ 1.22(-9.91)
288.11(268.77) @ 227.85(220.00) 934.92(689.99) 14.72(1.20)
@ $ c.
Represents the Banks contribution towards PF for pension optees available with RBI. Represents the amount invested with Insurance companies towards the Liability for Leave Encashment. Expenses recognized in the Profit and Loss Account during the year: (` in crore)
Particulars Current Service Cost Interest Cost Actuarial (gain)/ loss Expected return on Plan Assets Expense recognized in the statement of Profit & Loss d. Actuarial assumptions:
Pension 22.76(20.65) 79.10(66.90) 172.83(-10.01) 274.69(77.54)
Gratuity 16.90(15.27) 18.25(18.79) 8.16(-25.60) -16.92(0.00) 26.39(8.46)
Leave Encashment 6.54(3.73) 9.70(8.66) 17.67(2.19) -12.26(-14.20) 21.65(-0.38)
Particulars Mortality Table (LIC) Discount rate (per annum) Salary growth (per annum) Withdrawal rate
Pension 1994-96 (Ultimate) 8.25% 4% 1%
Gratuity 1994-96 (Ultimate) 8.25% 7% 1%
Leave Encashment 1994-96 (Ultimate) 8.25% 7% 1%
109
www.sansco.net
19.2
The estimates of rate of escalation in salary
considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. 19.3 The aforesaid liabilities include liabilities of
21. The movement in Contingent Liability as required in AS 29 Provisions, Contingent Liabilities and Contingent Assets is as under: (` in crore)
Particulars Opening Balance Addition during the year Deletion during the year Closing Balance 2010-11 3.37 0.00 3.37 0.00 200910 3.37 0.00 0.00 3.37
employees deputed to subsidiaries. 19.4 The above information is certified by the actuary
and the provision for pension is recognized in the profit and loss account after considering the outstanding balance of the Banks contribution to the Provident Fund of pension optees.
22. Prior period items included in the Profit and Loss account are as follows: (` in crore)
Sr. Particulars No. 1 Depreciation Total 2010-11 2.895 2.895 200910 4.038 4.038
19.5
Defined Contribution Plan:
The bank contributes a defined sum of 10% on the basic salary for both pension optees and non pension optees every month towards Provident Fund. The contribution made for the pension optees forms part of the plan assets of pension scheme. The total contribution charged to Profit and Loss account during the year is ` 11.87 crore (` 11.69 crore) 20. In the opinion of the Banks management, there
23. Capital adequacy ratio of the Bank as on 31 March 2011 is 21.76% (24.95%) as against a minimum of 9% as stipulated by RBI.
24.
NPA on staff loans:

(` in crore)
2010-11 0.08 0.00 0.04 0.04 2009-10 0.07 0.03 0.02 0.08
Particulars Opening Balance Addition during the year Written Back during the year Closing Balance
is no impair ment to assets to which AS 28 Impairment of Assets applies requiring any provision. 25. Investments in Mutual Funds are as under:
(` in crore)
Sr. Name of the No. Mutual Fund 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Kotak Mahindra ICICI Prudential Canara Robeco IDFC UTI Money Market Tata DWS SBI IDBI Peerless Taurus UTI- Treasury advantage Birla Sun life Life Insurance Corporation Baroda Pioneer PRINCIPAL Deutsche L&T Total As at March 31, 2011 No. of units Book Market Value Value 31178095.5170 2069242.3680 25172008.7263 25159975.5110 310661.2930 276239.8430 2356602.6900 19254837.7780 285224.8670 28065186.0720 284381.6460 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 50.01 30.01 30.01 30.01 50.01 50.01 30.01 30.01 30.01 30.01 30.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 390.11 50.01 30.01 30.01 30.01 50.01 50.01 30.01 30.01 30.01 30.01 30.01 0.00 0.00 0.00 0.009 0.00 0.00 0.00 390.11 As at March 31, 2010 No. of units Book Market Value Value 44148228.8210 2919994.9850 71988360.6304 45799983.5330 969829.4780 294404.7780 0.0000 0.0000 0.0000 0.0000 0.0000 809238.4970 28607635.3200 80888127.7770 6420619.9960 34310340.1970 46191646.2350 33727478.7790 50.00 50.00 100.00 50.00 100.00 50.00 0.00 0.00 0.00 0.00 0.00 100.00 50.00 100.00 100.00 50.00 50.00 50.00 900.00 50.01 50.01 100.05 50.01 100.03 50.00 0.00 0.00 0.00 0.00 0.00 100.09 50.01 100.01 100.02 50.01 50.01 50.01 900.27
110
www.sansco.net
26. As per the information available with the Bank, there are no dues payable under Micro, Small and Medium Enterprises Development Act 2006. 27. In terms of RBI circular No. DBOD.No.BP .BC.87/ 21.04.048/2010-11 dated 21 April 2011, the excess amount of ` 25.51 crore of provision held for achieving Provision Coverage Ratio as on 30 September 2010 has been transferred to Countercyclical Provisioning buffer. 28. Figures in brackets pertain to previous year.
29.2 Asset Quality and Credit Concentration [Excluding Staff Advances]

(a) Net NPA position
31 March 2011 0.02136 31 March 2010 0.01559
Particulars
Percentage of Net NPAs to Net Loans & Advances
29. The following additional information is disclosed in terms of RBI circulars No.RBI/20092010/49 (DBOD.FID.FIC.2/01.02.00/201011) dated 01 July 2010.
(b)
Asset classification
(` in crore)
29.1 Capital
(a) Capital to Riskweighted Assets Ratio (CRAR)
(Per cent)
Particulars CRAR Core CRAR Supplementary CRAR 31 March 2011 21.76 20.43 1.33 31 March 2010 24.95 23.47 1.48
Classification
2010-11 Amount (%) 99.950 0.000 0.049 0.001 100.000
2009-10 Amount 120487.10 6.71 44.02 0.00 (%) 99.958 0.006 0.036 0.000
Standard Sub-standard Doubtful Loss Total
139459.40 0.00 68.13 1.02 139528.56
120537.13 100.000
(b)
Subordinated Debt
(` in crore)
31 March 2011 Nil 31 March 2010 Nil
(c)
Provisions made during the year

(` in crore)
Particulars Amount of subordinated debt raised and outstanding as Tier II Capital
Provisions against Standard Assets Non Performing Assets Investments (Net)
2010-11 0.00 32.90 1.93 460.00 494.83
2009-10 101.50 17.60 (-)0.68 647.00 765.42
(c)
Risk weighted assets

(` in crore)
31 March 2011 63515.55 20.30 31 March 2010 49921.32 25.18
Income Tax Total
Particulars On Balance Sheet Items Off Balance Sheet Items
(d)
Movement in Net NPAs

(` in crore)
2010-11 32.72 2009-10 30.31
(d)
Pattern of Capital contribution as on the date of the balance sheet

(` in crore)
31 March 2011 20 1,980 2000 1.00% 99.00% 31 March 2010 1,450 550 2000 72.50% 27.50%
Particulars (A) Net NPAs as at beginning of the year (B) Add: Additions during the year (C) Sub-total (A+B) (D) Less: Reductions during the year (E) Net NPAs as at the end of the year (C-D)
Contributor Reserve Bank of India Government of India Total
19.40 52.12 22.32 29.80
8.35 38.66 5.93 32.72
Note : Pursuant to notification No.F.No 11/16/2005-BOA dt 16.09.2010, issued by the Department of Financial Services, Ministry of Finance, Government of India, 71.50% of Share Capital of NABARD held by RBI has been transferred to Government of India.
111
www.sansco.net
(e)
Credit exposure as percentage to Capital Funds and as percentage to Total Assets

Category 2010-11 Credit Exposure as % to Capital Funds Total Assets 128.67 11.08 Not Applicable 378.64 32.59 Not Applicable 2009-10 Credit Exposure as % to Capital Funds Total Assets 145.41 13.57 Not Applicable 379.27 35.40 Not Applicable
I II III IV
Largest Single Borrower Largest Borrower Group Ten Largest Single Borrowers for the year Ten Largest Borrower Groups
(f)
Credit exposure to the five largest industrial sectors as percentage to total loan assets: Not Applicable
29.3 Liquidity
(a) (b) Maturity pattern of Rupee Assets and Liabilities Maturity pattern of Foreign Currency Assets and Liabilities (` in crore)
Sr. Item No. 1 2 Rupee Assets Foreign currency assets Total Assets 3 4 Rupee Liabilities Foreign currency liabilities Total Liabilities Less than or equal to 1 year 68088.65 (51280.08) 0.00 (0.00) 68088.65 (51280.08) 36715.00 (22607.89) 39.92 (10.15) 36754.92 (22618.04) More than 1 year upto 3 years 40360.96 (35053.14) 0.00 (0.00) 40360.96 (35053.14) 39438.72 (35939.57) 79.75 (64.71) 39518.47 (36004.28) More than 3 years upto 5 years 31910.59 (28992.26) 0.00 (0.00) 31910.59 (28992.26) 29124.49 (24755.17) 79.74 (109.06) 29204.23 (24864.23) More than 5 years upto 7 years 13478.17 (15363.61) 0.00 (0.00) 13478.17 (15363.61) 18524.70 (18416.73) 64.82 (109.07) 18589.52 (18525.80) More than 7 years 4410.44 (5007.03) 0.00 (0.00) 4410.44 (5007.03) 33943.27 (33482.22) 238.42 (201.55) 34181.69 (33683.77) Total #
158248.82 (135696.12) 0.00 (0.00) 158248.82 (135696.12) 157746.17 (135201.58) 502.65 (494.54) 158248.82 (135696.12)
Net of provision made as per RBI directives on Standard Assets as well as for diminution in value of Investments aggregating to ` 623.45 crore (` 596.01 crore)
29.4 Operating results

Particulars (a) (b) (c) (d) (e) Interest income as a percentage to average working funds Non interest income as a percentage to average working funds Operating profit as a percentage to average working funds Return on average Assets (%) Net Profit per Employee (Rs. in crore) 2010-11 6.22 0.10 1.25 0.88 0.27 2009-10 6.19 0.10 1.80 1.23 0.33
29.5 Movement in the provisions

(a) Provision for Non Performing Assets (Loan Assets)
(` in crore)
Particulars Opening balance as at the beginning of financial year Add: Provision made during the year (Incl. provision for PCR) Less: Write off, write back of excess provision Closing balance at the close of financial year 2010-11 31.96 23.73 16.34 39.35 2009-10 14.40 18.64 1.08 31.96
112
www.sansco.net
(b)
Provision for depreciation in investments

(` in crore)
2010-11 1.44 (2.12) 2.08 (0.00) 0.00 (0.00)
Particulars A Opening balance as at the beginning of the financial year B Add (i) Provisions made during the year (ii) Appropriation, if any, from Investment Fluctuation Reserve Account during the year C Sub Total [A+B(i)+B (ii)] D Less (i) Write off, Write Backs of excess provision (ii) Transfer, if any, to Investment Fluctuation Reserve Account Sub Total [D]
There are no loan accounts subjected to Corporate Debt Restructuring during the current year. 29.12 Disclosure on risk exposure in Derivatives
The Bank does not trade in derivatives. However, it has hedged its liability towards borrowings from KfW Germany to the extent of 93.63 million Euro and interest thereon for the entire loan period. Consequent upon hedging of foreign currency borrowings the same is shown at contracted value as per the Swap agreement. The Bank does not have any open exposure in foreign currency. The value of outstanding principal amount of hedge contract at the year-end exchange rate stood at ` 592.10 crore and the value of outstanding principal liability in the books of account stood at contracted value i.e. ` 502.64 crore. The quantitative disclosure in this regard is as under:
3.52 (2.12) 0.15 (0.68) 0.00 (0.00)
0.15 (0.68) 3.37 (1.44) Sr. Particulars No. 1 Derivatives (Notional Principal amount) A) For Hedging B) For Trading 2 Marked to Market Positions [1] a) Asset (+) b) Liability (-) 3 Credit Exposure [2] 4 Likely impact of one percentage change in interest rate (100*PV01) a) on hedging derivatives b) on trading derivatives 5 Maximum and Minimum of 100*PV01 observed during the year a) on hedging b) on trading 14.00@ NA NA NA NA 89.45 (69.12) 0.00 (0.00) 121.25 592.10 (563.66) NA
(` in crore)
Currency Interest Rate Derivatives Derivatives
E Closing balance as at the close of financial year (C-D)
29.6 Restructured accounts

During the current financial year five loan accounts outstanding to the extent of ` 22.10 crore have been rescheduled. All the said five loans are classified as Standard Asset. There is no Interest sacrifice on these reschedulements. The interest sacrifice on loans restructured during FY 2005-06 amounted to ` 31.08 crore. Interest sacrifice is reviewed at each balance sheet date and necessary provision is made or reversed. Accordingly, ` 0.08 crore ( ` 4.46 crore) was written back during the current financial year.
NA NA
NA NA NA
29.7 29.8 29.9
Assets sold to securitisation company/ reconstruction company : NIL (NIL) Forward Rate Agreements and Interest Rate Swaps : NIL (NIL) Interest Rate Derivatives : NIL NIL)
NA NA NA NA NA
29.10 Investments in Non Government Debt Securities : NIL (NIL) 29.11 Corporate Debt Restructuring (CDR)
113
@ If MIBOR rate decrease by 100 bps across tenure MTM gain would be reduced by ` 14 crore
www.sansco.net
29.13 Exposures where the FI had exceeded prudential exposure limits during the year : NIL (NIL) 29.14 Related Party Transactions
As the Bank is state controlled enterprise within the meaning of AS-18 "Related Party Transactions", the
details of the transactions with other state controlled enterprises are not given.
List of Related Parties:

Key Management Personnel: 1. 2. Shri Umesh Chandra Sarangi - Ex-Chairman Dr. K G Karmakar - Managing Director
(` in crore) Name of the Party Nature of Relationship Key Management Personnel-Ex-Chairman Key Management Personnel-Managing Director Nature of Transaction Remuneration including perquisites Remuneration including perquisites Amount of transaction during the year 0.18 (0.26) 0.24 (0.30) Outstanding
Shri U C Sarangi Dr. K G Karmakar
No amounts, in respect of the related parties have been written off/back, or provided for during the year. Related party relationships have been identified by the management and relied upon by the auditors.
29.15 Issuer categories in respect of investments made

(` in crore)
Sr. No. Issuer Amount Investment made through private placement (4) 79.13 (60.00) 123.00 (48.00) 150.00 (0.00) 23.80 (20.60) 10.35 (21.23) 386.28 (149.83) 'Below investment grade' Securities held (5) 'Unrated' Securities held 'Unlisted' Securities
(1) 1
(2) PSUs
(3) 80.34 (60.00) 123.00 (48.00) 150.00 (0.00) 23.80 (20.60) 2262.47 (1663.96) 3.37 (1.44) 2636.24 (1794.00)
(6) 19.13 (16.23)
(7) 79.13 (60.00) 48.00 (48.00)
FIs
3 4
Banks Private Corporate
Subsidiaries/Joint ventures
23.80 (20.60) 10.35 (21.23) 53.28 (41.83)
23.80 (20.60) 2262.47 (1663.96) 3.37 (1.44) 2410.03 (1794.00)
Others (Net of Provision) including Mutual Funds Provision held towards depreciation Total
0.00 (0.00)
114
www.sansco.net
29.16 Non performing investments:
NIL (NIL)
29.17 Disclosure on Repo transactions

(` in crore)
Particulars Minimum outstanding during the year 0.00 (0.00) 0.00 (476.02) Maximum outstanding during the year 0.00 (0.00) 0.00 (476.02) Daily average outstanding during the year 0.00 (0.00) 0.00 (1.30) Outstanding as on 31 March 2011 0.00 (0.00) 0.00 (0.00)
Securities sold under repo
Securities purchased under reverse repo
29.18 Concentration of Deposits, Advances, Exposure and NPAs

(a) Concentration of Deposits
(` in crore)
Total Deposits of twenty largest depositors Percentage of Deposits of twenty largest depositors to Total Deposits of the Bank 73671.25(57661.54)
29.19 Sector-wise NPAs

Sr. Sector No 1 2 Agriculture and allied activities Industry (Micro & Small, Medium and Large) Services Personal Loans Percentage of NPAs to Total Advances in that sector 0.00(0.00) 54.46(43.88) 0.00(0.00) 0.00(0.00)
89.00%(82.38%) 3 4
(b)
Concentration of Advances
(` in crore)
29.20 Movement of Gross NPAs

Particulars Gross NPAs as on 1st April of particular year (Opening Balance) Additions (Fresh NPAs) during the year Sub-total (A) Less:(i) Upgradations Amount in ` crore 50.73(44.71) 25.66(8.87) 76.39(53.58) 5.40(0.00) 1.84(2.85) 0.00(0.00) 7.24(2.85) 69.15(50.73)
Total Advances to twenty largest borrowers Percentage of Advances to twenty largest borrowers to Total Advances of the Bank
75077.75(67384.61)
53.81%(55.82%)
(c)
Concentration of Exposure
(` in crore)
Total Exposure to twenty largest borrowers/ customers Percentage of Exposure to twenty largest borrowers/customers to Total Exposure of the bank on borrowers/customers
75077.75(67384.61)
(ii) Recoveries (excluding recoveries made from upgraded accounts) (iii) Write-offs Sub-total (B) Gross NPAs as on 31st March of following year (closing balance) (A-B)
50.32%(51.94%)
(d)
Concentration of NPAs
(` in crore)
29.21 Overseas Assets, Revenue: NIL (NIL)
NPAs
and
Total Exposure to Top four NPA accounts
50.71(32.02)
29.22 Off-balance sheet SPVs sponsored (which are required to be consolidated as per accounting norms) : NIL (NIL)
115
www.sansco.net
29.23 Information on Business Segment

(a) Brief Background
The Bank has recognized Primary segments as under: i) Direct Finance: Includes Loans given to state governments for rural infrastructure development, co-finance loans and loans given to voluntary agencies/non-gover nmental organisations for developmental activities.
Development Banks, State Coop. Banks, Regional Rural Banks etc. as refinance against the loans disbursed by them to the ultimate borrowers. iii) Treasury: Includes investment of funds in treasury bills, short-term deposits, government securities, etc. iv) Unallocated: Includes income from staff loans and other miscellaneous receipts and expenditure incurred for the developmental role of the bank and common administrative expenses.
ii) Refinance: Includes Loans and Advances given to State Governments, Commercial Banks, Land
(b)
Information on Primary Business Segment

(` in crore)
Direct Finance Refinance 4,086.49 (3,393.58) 1,567.59 (1,198.23) 74,643.27 (61,222.81) 69,320.39 (55,128.33) Treasury 943.24 (1,255.69) 912.21 (1,227.10) 15,316.71 (12,985.48) 266.47 (239.82) Unallocated 86.68 (19.59) -924.63 (-525.00) 2,502.96 (1,564.42) 20,376.54 (20,281.86) Total 9,202.01 (7,964.80) 1,823.86 (2,272.45) 1,58,872.26 (1,36,292.13) 1,58,872.26 (1,36,292.13)
Segment Revenue
4,085.61 (3,295.94) 268.69 (372.12) 66,409.32 (60,519.42) 68,908.87 (60,642.12)
Segment Results
Total carrying amount of Segment Assets Total carrying amount of Segment Liabilities Other Items : Cost to acquire Segment Assets during the year Amor tization & Depreciation
0.00 (0.00) 0.00 (0.00) 32.90 (17.96)
0.00 (0.00) 0.00 (0.00) (-)0.08 (96.37)
0.00 (0.00) 0.00 (18.18) (-)0.05 (-0.68)
18.22 (11.21) 22.58 (23.29) 100.21 (73.34)
18.22 (11.21) 22.58 (41.48) 132.98 (186.99)
Non Cash Expenses
(c) Since the operations of the Bank are confined to India only there is no reportable secondary segment.
30.
Previous year's figures have been regrouped / rearranged wherever necessary.
As per our attached report of even date P . Parikh & Associates Chartered Accountants FRN. 107564W Ashok Rajagiri Partner : M. No. 046070, Mumbai Date : May 30, 2011 Rakesh Singh Chairman K. S. Padmanabhan Chief General Manager Accounts Department Mumbai : May 30, 2011
Dr. K C Chakrabarty
Director
Alok Nigam
Director
K Jayakumar
Director
116
www.sansco.net
National Bank for Agriculture and Rural Development Cash Flow for the year ended 31 March 2011
Particulars 2010-11
(` in '000)
2009-10
(a) Cash flow from Operating activities Net Profit as per Profit and Loss a/c before tax Adjustment for: Depreciation Provisions and Amortisations Provision for Non performing Assets Provision for Standard Assets Provision for sacrifice in interest element of Restructured Loan Profit / Loss on sale of Fixed Assets Interest credited to various Funds (including addition/ adjustment made to Interest Differential Fund) Other Expenses Income from Investment (including Discount Income) Expenditure from various Funds Operating profit before changes in operating assets Adjustment for net change in: Current Assets Current Liabilities Increase in Loans and Advances (Including Housing Loan & Other Advances to Staff Cash generated from operating activities Payment of Income Tax Net cash flow from operating activities (A) (b) Cash flow from Investing activities Income from Investment (including Discount Income) Increase / Decrease in Fixed Asset Increase / Decrease in Investment Net cash used / generated from investing activities (B) (c) Cash flow from financing activities Grants / contributions received Proceeds of Bonds Increase / Decrease in Borrowings Increase / Decrease in Deposits Net cash raised from financing activities (C) Net increase in cash and cash equivalent (A)+(B)+(C ) Cash and Cash equivalent at the beginning of the year Cash and cash equivalent at the end of the year 1. Cash and cash equivalent at the end of the year includes : Cash in hand Balance with Reserve Bank of India Balances with other Banks in India Remittances in Transit Inter fund transfer Collateralised Borrowing and Lending Obligations Total
1823,86,02 22,57,98 2,78,34 32,90,00 0 (-)8,00 4,64 118,36,63 0 (-)938,79,85 (-)5492,54,83 (-)4430,89,07 (-)373,55,50 6,81,46,96 (-)19035,55,28 (-)23158,52,89 (-)539,24,46 (-)23697,77,35 943,23,85 (-)17,39,41 (-)2087,23,63 (-)1161,39,19 3925,65,16 6783,83,37 2503,49,41 12780,65,51 25993,63,45 1134,46,91 628,33,75 17,62,80,66 2010-2011 7 38,85,26 8,01,32,40 6,94,44,37 0 2,28,18,56 17,62,80,66
2272,45,27 23,29,36 17,97,83 17,60,24 1,01,50,00 (-)4,46,00 (-)20,91 91,59,97 0 (-)1255,68,93 (-)12801,23,53 (-)11537,16,70 4037,11,93 679,38,95 (-)21785,29,44 (-)28605,95,26 (-)793,21,30 (-)29399,16,56 1255,68,93 (-)10,63,15 (-)808,31,58 436,74,20 12928,14,79 (-)3699,24,94 1584,85,53 1786889,68 28682,65,06 (-)279,77,29 908,11,05 6,28,33,75 2009-2010 12 25,45,42 5,33,94,81 68,93,40 0 0 6,28,33,75
Previous year's figures have been regrouped/ rearranged to conform to the current year's presentation, wherever necessary.
As per our attached report of even date P . Parikh & Associates Chartered Accountants FRN. 107564W Ashok Rajagiri Partner : M. No. 046070, Mumbai Date : May 30, 2011 Rakesh Singh Chairman K. S. Padmanabhan Chief General Manager Accounts Department Mumbai : May 30, 2011
Dr. K C Chakrabarty
Director
Alok Nigam
Director
K Jayakumar
Director
117
www.sansco.net
Consolidated Balance Sheet Profit and Loss Account & Cash Flow of NABARD & its Subsidiaries
(NABCONS, ADFT, ABFL, NABFINS)
2010-2011
118
www.sansco.net
P . Parikh & Associates

Chartered Accountants
Auditors' Report on Consolidated Financial Statements

To the Board of Directors NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT 1. We have examined the attached Consolidated Balance Sheet of NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT (the Bank) and its Subsidiaries as at March 31, 2011, the Consolidated Profit & Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Banks management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatement. An audit also includes assessing the accounting principles used and significant estimates made by the management as well as evaluating overall financial statements. We believe that our audit provides a reasonable basis of our opinion. We did not carry out the audit of financial statements of subsidiaries of the Bank. The total Assets and total Revenues in respect of these subsidiaries are ` 192.23 crore and ` 23.51 crore respectively. The financial statements in respect of three subsidiaries viz. Agri Development Finance (Tamil Nadu) Ltd., NABARD Consultancy Services Limited and Agri-Business Finance (AP) Ltd., being unaudited, any adjustments to their balances could have consequential effects on the attached Consolidated Financial Statements, the impact of which is not ascertained. These financial statements have been certified by the managements of the respective subsidiary companies and have been furnished to us. In our opinion, in so far as it relates to the amounts included in respect of the Subsidiaries in Consolidated Financial Statements is based solely on such management certified financial statements, We report that the Consolidated Financial Statements have been prepared by the Bank in accordance with the requirements of Accounting Standard (AS) 21 Consolidated Financial Statements issued by the Institute of Chartered Accountants of India and on the basis of the separate audited/ certified financial statements of the Bank and its Subsidiaries included in the consolidated financial statements. We report that on the basis of the information and explanations given and on the consideration given of separate audited/certified financial statements of the Bank and its Subsidiaries and subject to our comment in Para 3 above, we are of the opinion that the said consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India. i. in the case of the Consolidated Balance Sheet, of the state of affairs of the Bank as at March 31, 2011;
2.
3.
4.
5.
ii. in the case of the Consolidated Profit and Loss Account of the consolidated results of operations of the Bank for the year ended on that date; and iii. in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Bank for the year ended on that date. Place: Mumbai Date: May 30, 2011 For and on behalf of P . Parikh & Associates Chartered Accountants Firm Registration No. 107564W Ashok Rajagiri Partner, Membership No.: 046070
HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009, Tel : 23443549, 23437853, Fax : 23415455, Website : www.pparikh.com
119
www.sansco.net
National Bank for Agriculture and Rural Development Consolidated Balance Sheet as on 31 March 2011
(` in '000) Particulars As on 31.03.2011 As on 31.03.2010
FUNDS AND LIABILITIES Capital Reserve Fund and Other Reserves National Rural Credit Funds Funds Out of Grants received from International Agencies Gifts, Grants, Donations and Benefactions Other Funds Minority Interest Deposits Bonds and Debentures Borrowings Current Liabilities and Provisions TOTAL FUNDS AND LIABILITIES PROPERTY AND ASSETS Cash and Bank Balances Investments Advances Fixed Assets Other Assets TOTAL PROPERTY AND ASSETS As per our attached report of even date P . Parikh & Associates Chartered Accountants FRN. 107564W Ashok Rajagiri Partner : M. No. 046070 Mumbai Date : May 30, 2011 Rakesh Singh Chairman Dr. K C Chakrabarty Director Alok Nigam Director K Jayakumar Director K. S. Padmanabhan Chief General Manager Accounts Department Mumbai : May 30, 2011 1,08,81,89,37 1,93,05,80,92 12,60,31,30,66 2,29,99,83 25,29,49,75 15,89,78,50,53 96,94,91,33 37,64,99,64 12,05,12,26,31 2,34,98,90 21,42,96,67 13,63,50,12,85 20,00,00,00 1,18,88,71,64 1,60,45,00,00 1,38,89,56 26,01,94,77 34,31,47,40 21,69,85 8,27,76,67,53 2,67,87,24,84 76,81,29,09 56,05,55,85 15,89,78,50,53 20,00,00,00 1,06,95,52,59 15983,00,00 149,87,64 47,08,08,54 27,35,11,98 13,42,23 6,99,96,02,03 2,00,04,38,12 51,76,83,03 48,87,86,69 13,63,50,12,85
120
www.sansco.net
National Bank for Agriculture and Rural Development Consolidated Profit and Loss Account for the year ended 31 March 2011
(` in '000) Particulars Income: Interest Received on Loans and Advances Income from Investment operations Other Receipts TOTAL INCOME Expenditure: Interest and Financial Charges Establishment and other expenses Depreciation Provisions TOTAL EXPENDITURE Profit before Income Tax Provision for Income Tax Deferred Tax Asset Adjustment Short / (Excess) provision for Income Tax in earlier years Profit after Tax Share of Profit / Loss in Subsidiaries attributable to Minority Interest Profit available for Appropriation Appropriations: Profit as above Add: Withdrawals from various funds against expenditure debited to P/L A/c / transfer of funds which have been closed Total Profit Available for Appropriation Transferred to: Special Reserve u/s 36(I)(viii) of the Income Tax Act, 1961 National Rural Credit (Long Term Operations) Fund National Rural Credit (Stabilisation) Fund Co-operative Development Fund Research & Development Fund Investment Fluctuation Reserve Producers' Organisation Development Fund Rural Infrastructure Promotion Fund Financial Inclusion Technology Fund Farmers Technology Transfer Fund Farm Innovation and Promotion Fund MFDEF Reserve Fund Reserve Fund Total 360,00,00 50,00,00 10,00,00 6,05,32 17,67,49 116,07,65 50,00,00 25,00,00 10,00,00 2,34,20 33,55,54 0 808,24,38 1488,94,58 350,00,00 400,00,00 10,00,00 3,83,03 9,82,99 30,00,00 0 0 0 64,58,41 96,94 80,00,00 684,80,26 1634,01,63 202,67,59 1488,94,58 70,34,45 1634,01,62 1286,26,99 1563,67,17 6194,38,06 1135,57,54 22,67,16 35,79,92 7388,42,68 1835,77,20 463,67,98 84,93,30 0 1287,15,92 88,93 1286,26,99 49,88,46,50 5,54,72,01 23,33,50 1,32,71,75 5,69,92,376 2281,10,90 649,54,88 67,17,34 0 1564,38,68 71,51 1563,67,17 8170,20,18 946,91,62 107,08,08 92,24,19,88 66,54,03,24 1259,46,96 66,84,46 79,80,34,66 2010-11 2009-10
121
www.sansco.net
Additional Notes to Consolidated Accounts

1. 2. 3. Consolidation has been done pursuant to the listing agreement with stock exchange. Financial statement in respect of Agri Development Finance (Tamilnadu) Ltd, NABARD Consultancy Services Limited and Agri Business Finance (AP) Ltd. are unaudited. Details of the subsidiaries: Country of Incorporation India India India India Proportion of Ownership 52.10 47.82* 52.47 100.00
Name of the Subsidiary Agri Development Finance (Tamilnadu) Ltd. Agri Business Finance (AP) Ltd. NABARD Financial Services Limited NABARD Consultancy Pvt. Ltd.
*NABARD controls the Board of Directors of Agri Business Finance (AP) Ltd.and hence considered as a subsidiary. 4. The financial statements of the company and its subsidiary companies are combined on a line to line basis by adding together expenses after fully eliminating intra-group balances and intra-group transactions in accordance with Accounting Standard - (AS) - 21 -"Consolidated Financial Statement" Depreciation on fixed asset is provided on Written Down Value Method (WDV), at the rates specified in Schedule XIV to the Companies Act, 1956 by Agri Development Finance (Tamilnadu) Ltd and Agri Business Finance (AP) Ltd., whereas NABARD Financial Services Ltd. and NABARD consultancy services (Private) Limited has provided depreciation on fixed assets by adopting Straight Line Method (SLM) at the rates specified in Schedule XIV to the Companies Act, 1956 on prorata basis. Thus the Accounting Policy followed by subsidiaries for depreciation are different from the Accounting Policy for depreciation followed by NABARD in the preparation of Consolidated Financial Statements. Thus out of the total depreciation of ` 22.67 crore (23.34 crore) included in the Consolidated Financial Statement, 0.14% (0.18%) of that amount is determined based on depreciation provided by following WDV / SLM at the rates as specified in Schedule XIV to the Companies Act, 1956. Income on foreign assignments by NABCONS is accounted on "receipt" basis. The amount of such fees receivable is not material. Disclosures as required under AS-17 "Segment Reporting" in consolidated financial statements are as under: (` in crore) Financial Year 2010-11 (Consolidated) Segment Revenue Segment Results Total carrying amount of Segment Assets Total carrying amount of Segment Liabilities Other Items : Cost to acquire Segment Assets during the year Amortization & Depreciation Non Cash Expenses (other than above) 0.06(0.03) 33.10(18.06) 0.00 0.00(0.00) -0.08(96.37) (0.10) 0.00(18.18) -0.05(-0.68) 18.54(11.27) 22.61(23.30) 100.21(73.34) 18.54(11.37) 22.67(41.52) 133.18(187.09) Direct Finance 4090.85(3298.75) 271.38(374.13) 66434.55(60538.90) 68934.10(60661.60) Refinance 4086.49(3298.75) 1567.59(1198.23) 74643.27(61222.81) 69320.39(55128.33) Treasury 943.24(1255.69) 912.21(1227.10) 15316.71(12985.48) Unallocated 103.63(32.32) -915.41(-518.36) 2583.97(1602.94) Total 9224.20(7980.35) 1835.77(2281.11) 158978.51(136350.13) 158978.51 (136350.13)
5.
6. 7.
266.47(239.82) 20457.56(20320.38)
Note: There are no reportable secondary segments for the bank and its subsidiaries 8. Previous Year figures have been regrouped / rearranged wherever necessary
As per our attached report of even date P . Parikh & Associates Chartered Accountants FRN. 107564W Ashok Rajagiri Partner : M. No. 046070 Mumbai Date : May 30, 2011 Rakesh Singh Chairman Dr. K C Chakrabarty Director Alok Nigam Director K. S. Padmanabhan Chief General Manager Accounts Department Mumbai : May 30, 2011 K Jayakumar Director
122
www.sansco.net
National Bank for Agriculture and Rural Development Consolidated Cash Flow Statement for the year ended 31 March 2011
Particulars During 2010-11
(` in '000)
During 2009-10
(a) Cash flow from Operating Activities Net profit as per P & L a/c before tax Depreciation Provisions and Amortisations Provision for Non performing Assets Provision for Standard Assets Provision for Sacrifice in interest element of restructured loan Interest credited to various funds Other expenses Income from Investment Profit / Loss on sale of Fixed Asset Expenditure from various funds Operating profit before working capital changes Adjustment for net change in: Current Assets Current liabilities Increase/Decrease in Loans and Advances Cash generated from operating activities Payment towards Income tax Net cash flow from operating activities (A) (b) Cash flow from Investing Activities Income from Investment Increase / Decrease of Fixed Assets Increase / Decrease in Investments Net cash used in investing activities (B) (c) Cash flow from Financing Activities Proceeds of Bonds Increase / Decrease in Borrowings Increase / Decrease in Deposits Grants / contributions received Dividend paid Net cash raised from financing activities (C) Net increase in cash and cash equivalent (A)+(B)+(C) Cash and cash equivalent at the beginning of the period Cash and cash equivalent at the end of the period Cash and cash equivalent at the end of the period includes : Cash in hand Balance with Reserve Bank of India Balances with other Banks in India Remittances in Transit Collateralised Borrowing and Lending Obligations Total
As per our attached report of even date P . Parikh & Associates Chartered Accountants FRN. 107564W Ashok Rajagiri Partner : M. No. 046070, Mumbai Date : May 30, 2011 Rakesh Singh Chairman
1835,77,20 22,67,16 2,78,34 32,90,00 0 (-)8,00 118,36,63 0 (-)938,79,85 4,64 (-)5492,54,83 (-)4418,88,71 (-)377,80,87 717,32,21 (-)19087,50,88 (-)23166,88,25 (-)541,65,19 (-)23708,53,44 943,23,85 (-)17,72,70 (-)2087,33,45 (-)1161,82,30 6793,53,37 2555,88,70 12762,20,26 3925,65,06 (-)58,30 26036,69,09 1166,33,35 649,24,34 1815,57,69 2010-11 10 38,85,26 854,09,40 694,44,37 228,18,56 1815,57,69
2281,10,90 23,33,50 17,97,83 17,60,24 101,50,00 (-)4,46,00 91,59,97 (-)58 (-)1255,68,93 (-)20,90 (-)12801,23,53 (-)11528,47,50 4033,86,71 698,41,86 (-)21790,01,01 (-)28586,19,94 (-)795,74,81 (-)29381,94,75 1255,68,93 (-)10,80,04 (-)808,60,63 436,28,26 (-)3699,24,94 1591,33,43 17863,32,63 12928,20,41 (-)58,50 28683,03,03 (-)262,63,45 911,87,80 649,24,34 2009-10 22 25,45,42 554,85,30 68,93,40 0 649,24,34
K. S. Padmanabhan Chief General Manager Accounts Department Mumbai : May 30, 2011
Dr. K C Chakrabarty
Director
Alok Nigam
Director
K Jayakumar
Director
123
www.sansco.net
E-mail Addresses of NABARD Head Office Departments at Mumbai

Chairman's Secretariat Executive Director (S.K.Mitra)'s Secretariat Executive Director(Amaresh Kumar)'s Secretariat Executive Director(B.S. Shekhawat)'s Secretariat Accounts Department Central Vigilance Cell Corporate Planning Department Central Statistical Information Dept. Department of Economic Analysis & Research Department of Co-operative Revival & Reforms Department of Information Technology Department of Supervision Development Policy Department-Farm Sector Development Policy Department-Non-Farm Sector Finance Department Financial Inclusion Department General Administration Department Rajbhasha Prabhag Human Resources Development Department Human Resources Management Department Inspection Department Institutional Development Department Investment Credit Department Law Department Micro Credit Innovations Department Premises Department Production Credit Department Secretary's Department Public Relations State Projects Department Technical Services Department Repositioning Department Nabcons chairman@nabard.org ed1@nabard.org ed3@nabard.org ed4@nabard.org ad@nabard.org cvc@nabard.org cpd@nabard.org csid@nabard.org dear@nabard.org dcrr@nabard.org dit@nabard.org dos@nabard.org dpd.fs@nabard.org dpd.nfs@nabard.org fd@nabard.org fid@nabard.org gad@nabard.org rajbhasha@nabard.org hrdd@nabard.org hrmd@nabard.org id@nabard.org idd@nabard.org icd@nabard.org law@nabard.org mcid@nabard.org pd@nabard.org pcd@nabard.org secy@nabard.org pro@nabard.org spd@nabard.org tsd@nabard.org nabrepo@nabard.org nabcons@nabard.org
Telephone Nos.
Reception : 022-26539895/96/99; PRO : 022-26530071; Protocol & Security : 022 - 26539046
124
www.sansco.net
Regional Offices / Cell / Training Establishments

REGIONAL OFFICES
ANDAMAN & NICOBAR NABARD Complex VIP Road Port Blair - 744 103 Tel No. : (03192) 233308 Fax No. : (03192) 237696 E-mail : portblair@nabard.org GOA Third floor, Nizari Bhavan Menezes Braganza Road Panaji - 403 001 Tel No. : (0832) 2220490, 2430504 Fax No. : (0832) 2223429 E mail : panaji@nabard.org KARNATAKA 113/1, Jeevan Prakash Annexe J.C. Road, P. B. No. 29 Bengaluru - 560 002 Tel No. : (080) 22225241/44 Fax No. : (080) 22222148 E mail : bangalore@nabard.org nabbng@dataone.in MIZORAM Ramhlun Road (North) Bawngkawn Aizawl - 796 014 Tel No. : (0389) 2343428, 2305290 Fax No. : (0389) 2340815 E mail : aizawl@nabard.org
ANDHRA PRADESH 1-1-61, RTC Cross Roads Musheerabad Hyderabad - 500 020 Tel No. : (040) 27685555, 27612651 Fax No. : (040) 27611829 E-mail : hyderbad@nabard.org
GUJARAT NABARD Tower Opp. Municipal Garden Usmanpura Ahmedabad - 380 013 Tel No. : (079) 27552257-59 Fax No. : (079) 27551584 E mail : ahmedabad@nabard.org
KERALA Punnen Road, Statue P. B. No. 220 Thiruvananthapuram - 695 001 Tel No. : (0471) 2323529, 2323590 Fax No. : (0471) 2324358 E mail : trivandrum@nabard.org
NAGALAND NSCB Head Office Administrative Bldg, 4th Floor, West Wing Khermahal, Circular Road Dimapur - 797 112 Tel No. : (03862) 234063, 235600 235601 Fax No. : (03862) 227040 E-mail : dimapur@nabard.org NEW DELHI NABARD Tower 24 Rajendra Place New Delhi - 110 125 Tel No. : (011) 25818733 25721723 Fax No. : (011) 41539187 41539185 E mail : delhi@nabard.org
ARUNACHAL PRADESH Bank Tinali, VIP Road Opposite State Bank of India Itanagar - 791 111 Tel No. : (0360) 2215967 Fax No. : (0360) 2212675 E mail : itanagar@nabard.org
HARYANA Plot No.3, Post Box No. 7 Sector - 34 'A' Chandigarh - 160 022 Tel No. : (0172) 5046703, 5046728 Fax No. : (0172) 5046784 E mail : haryana@nabard.org
MADHYA PRADESH E-5, Arera Colony, Bittan Market Ravishankar Nagar Post Office Bhopal - 462 016 Tel No. : (0755) 2463341/69 2466695 Fax No. : (0755) 2466188 E mail : bhopal@nabard.org nabmpro@dataone.in
ASSAM Opposite Assam Secretariat G.S. Road, Post Box No.1 Dispur, Guwahati - 781 006 Tel No. : (0361) 2235661 2238004 to 025 Fax No. : (0361) 2235657 E mail : guwahati@nabard.org nabassam@dataone.in
HIMACHAL PRADESH NABARD Bhavan, Block No. 32 S.D.A. Complex, Kasumpti Shimla - 171 009 Tel No. : (0177) 2624373 2624379 Fax No. : (0177) 2622271 E-mail : shimla@nabard.org nabardsm@dataone.in
MAHARASHTRA 54, Wellesley Road Post Box No. 5, Shivaji Nagar Pune - 411 005 Tel No. : (020) 25541083 25542090 Fax No. : (020) 25542250 E-mail : pune@nabard.org
ORISSA 'Ankur', 2/1, Nayapalli Civic Centre Bhubaneswar - 751 015 Tel No. : (0674) 2553884 Fax No. : (0674) 2552019 E mail : nabbhu@sancharnet.in bhubaneswar@nabard.org
BIHAR Maurya Lok Complex Block B, 4th & 5th floor Dak Bungalow Road Patna - 800 001 Tel No. : (0612) 2223985 Fax No. : (0612) 2238424 E mail : patna@nabard.org pat_nab@dataone.in CHHATTISGARH 1st & 2nd Floor, Pithalia Complex K.K. Road, Fafadih Chowk Raipur - 492 009 Tel No. : (0771) 2888496/99 Fax No. : (0771) 2884992 E mail : raipur@nabard.org nab_rpr@dataone.in
JAMMU & KASHMIR B-II, 4th South Block Bahu Plaza Complex, P.B. No. 2 Jammu - 180 012 Tel No. : (0191) 2472355, 2472620 Fax No. : (0191) 2472337 E mail : jammu@nabard.org
MANIPUR Leiren Mansion Opposite Lamphel Supermarket Lamphelpat, Imphal - 795 004 Tel No. : (0385) 2410706, 2416192 Fax No. : (0385) 2416191 E-mail : imphal@nabard.org
PUNJAB Plot No.3, Sector 34-A Post Box No. 7 Chandigarh - 160 022 Tel No. : (0172) 5046700, 5046701 Fax No. : (0172) 5046702 E mail : chandigarh@nabard.org
JHARKHAND Opp. Adivasi College Hostel Karamptoli Road Ranchi - 834 001 Tel No. : (0651) 2361107 Fax No. : (0651) 2361108 E-mail : nabardjh@dataone.in
MEGHALAYA 'U' Pheit Kharmihpen Building Plot No.28(2), 2nd & 3rd Floor Dhankheti, Shillong - 793 003 Tel No. : (0364) 2221602, 2503499 2501518 Fax No. : (0364) 2227463 E mail : shillong@nabard.org nabard_shg@dataone.in
RAJASTHAN 3, Nehru Place Tonk Road, Post Bag No. 104 Jaipur - 302 015 Tel No. : (0141) 2740821, 2743416 Fax No. : (0141) 2742161 E mail : Jaipur@nabard.org
125
www.sansco.net
SIKKIM Om Nivas, Church Road Post Box No. 46 Gangtok - 737 101 Tel No. : (03592) 203015, 220478 Fax No. : (03592) 204062 E mail : gtk@dataone.in gangtok@nabard.org
TRIPURA Palace Compound (East) Uzirbari Road, Post Box No.9 Agartala - 799 001 Tel No. : (0381) 2229644 2229633 Fax No. : (0381) 2224125 E mail : agartala@nabard.org
UTTARAKHAND 113/2, Hotel Sunrise Building 2nd & 3rd Floor, Post Bag No.139 Rajpur Road Dehradun - 248 001 Tel No. : (0135) 2748611 Fax No. : (0135) 2748610 E mail : dehradun@nabard.org nabarddoon@dataone.in WEST BENGAL Abhilasha, 2nd floor Post Box No.9083, 6, Royd Street Kolkata - 700 016 Tel No. : (033) 22552255, 22667943 Fax No. : (033) 22494507 E-mail : nabardkol@dataone.in kolkata@nabard.org
TAMIL NADU 48, Mahatma Gandhi Road Post Box No.6074, Nungambakkam Chennai - 600 034 Tel No. : (044) 28276088, 28304444 Fax No. : (044) 28275732 E mail : chennai@nabard.org
UTTAR PRADESH 11, Vipin Khand Gomti Nagar Lucknow - 226 010 Tel No. : (0522) 2304530 Fax No. : (0522) 2304531 E mail : lucknow@nabard.org
CELL
SRINAGAR Opp. Amar Singh College Gate Gogji Bagh Srinagar - 190 008 Tel No. : (0194) 2310280 Fax No. : (0194) 2310479
TRAINING ESTABLISHMENTS
BOLPUR Regional Training College NABARD, Bolpur Lodge Bolpur 731 204 Birbhum (West Bengal) Tel No. : (03463) 252812, 252783 Fax No.: (03463) 252295 E-mail : nabbol@rediffmail.com LUCKNOW Bankers Institute of Rural Development Section 'H', L.D.A. Colony Kanpur Road Lucknow - 226 012 Tel No. : (0522) 2421137/54, 2421055 Fax No.: (0522) 2421047, 2421176 E mail : bird@bsnl.in bird@sancharnet.in LUCKNOW National Bank Staff College Sector 'H', LDA Colony Kanpur Road Lucknow - 226 012 Tel No. : (0522) 2421052 Fax No.: (0522) 2421035 E mail : nbsc@nabard.org LUCKNOW National Bank Training Centre Sector D/S, Sitapur Road Opp. Mandi Samiti, Aliganj Lucknow 226 020 Tel No. : (0522) 2757564, 2757610 Fax No.: (0522) 2757566 E-mail : nbtc@sify.com
MANGALORE Regional Training College NABARD, Post Box No. 1117 Manjusha Building Above Automatrix Showroom Near KSRTC Bus Stand Bejai Church Road Bejai, Mangalore - 575 004 Tel No. : (0824) 2225836, 2225844 Fax No.: (0824) 2225835 E mail : rtc.mangalore@nabard.org
HYDERABAD Zonal Training Centre NABARD, 10-1-128/4 NABARD Officers Quarters Masab Tank Hyderabad - 500 028 Tel No. : (040) 23375006 Fax No.: (040) 23375007 E mail : nabard7_hyd@dataone.in
126
www.sansco.net
LIST OF ABBREVIATIONS
AS AAGR A & N Islands AACS ACABC ACB ACE ACSTI ADFC ADWDRS AEZ AFC AFI AFPRO AFS AgDSM AGMARKNET AH AIBP AIDIS ALCO ALM AM AMI AML APCOB-CTI APMC APRACA ARWIND ASP ATM BADP BAIF BC BCG BEE BESCOM BF BIRD BNB BoS BPL C-PEC CA Accounting Standards Average Annual Growth Rate Andaman & Nicobar Islands As Applicable to Co-operative Societies Agri Clinic and Agri Business Centres Audit Committee of the Board APRACA Centre of Excellence Agriculture Co-operative Staff Training Institute Agriculture Development Finance Company Agricultural Debt Waiver and Debt Relief Scheme, 2008 Agricultural Export Zone Agricultural Finance Corporation Ltd. Alliance for Financial Inclusion Action for Food Production Available for Sale Agriculture Demand Side Management Agricultural Marketing Information Network Animal Husbandry Accelerated Irrigation Benefit Programme All India Debt and Investment Survey Asset Liability Management Committee Asset Liability Management Accompanying Measures Agriculture Marketing Infrastructure Anti-Money Laundering Andhra Pradesh State Cooperative Bank-Cooperative Training Institute Agricultural Produce Market Committee Asia-Pacific Rural and Agricultural Credit Association Assistance to Rural Women in Non-Farm Development Application Service Provider Automated Teller Machine Border Area Development Programme Bharatiya Agro Industries Foundation Business Correspondents Boston Consultancy Group Bureau of Energy Efficiency Bangalore Electric Supply Company Business Facilitators Bankers Institute of Rural Development Bhavishya Nirman Bonds Board of Supervision Below Poverty Line Centre for Professional Excellence in Cooperatives Chartered Accountant CAC CAGR CARE CAS CAT CB CBP CBS CCS CD CDF CDM CDP CEO CER CFA CFSA CIBIL CISS CMA CMIE CMR CP CPI CPI-AL CPI-RL CPIS CRAR CRIDA CRISIL CRR CS CSA CSP CTFC CTI CUC CVC DADI DAHDF DAP DCCB DDM DDSD Concurrent Audit Cell Compound Annual Growth Rate Credit Analysis & Research Limited Common Accounting System Capacity Building for Adoption of Technology Commercial Banks Capacity Building Phase Core Banking Solution Co-operative Credit Structure Certificate of Deposit Co-operative Development Fund Clean Development Mechanism Cattle Development Projects Chief Executive Officer Certified Emission Reduction Chartered Financial Analyst Committee on Financial Sector Assessment Credit Information Bureau (India) Limited Capital Investment Subsidy Scheme Credit Monitoring Arrangement Centre for Monitoring of Indian Economy Centre for Micro-finance Research Commercial Paper Consumer Price Index Consumer Price Index for Agricultural Labour Consumer Price Index for Rural Labour Coconut Palm Insurance Scheme Capital to Risk-Weighted Assets Ratio Central Research Institute for Dryland Agriculture Credit Rating Information Services of India Limited Cash Reserve Ratio Capital Support/Company Secretary Co-operative Societies Act Customer Service Provider Certified Trainer in Financial Cooperatives Co-operative Training Institute Carcass Utilisation Centre Central Vigilance Cell District Agricultural Development Index Department of Animal Husbandry, Dairying and Fisheries Di-Ammonium Phosphate/ Development Action Plan District Central Co-operative Bank District Development Manager Demand Driven Skill Development
127
www.sansco.net
DEDS DLMRC DLT DPR DRDA DRIP DTL DTP DVCF ENZEN EoI ERP EXCOM FC FCI FIF FIMMDA FINO FIP FIPF FITF FLCC FR FRC FSS FTRDC FTTF GAAP GCC GCF GDP GDS GFCE GIZ GLC GoI GTZ HFT HO HPC HR HRM HTM HWG IARI
Dairy Entrepreneurship Development Scheme District Level Monitoring and Review Committee District Level Trainers Detailed Project Reports District Rural Development Agency District Rural Industries Project Demand and Time Liabilities Development of Tribal Population Dairy Venture Capital Fund Enzen Global Solutions Private Limited Expression of Interest Enterprise Resource Planning Executive Committee Farmers Clubs/Financial Co-operation Food Corporation of India Financial Inclusion Fund Fixed Income Money Market and Derivatives Association of India Financial Information Network & Operations Ltd. Full Implementation Phase Farm Innovation and Promotion Fund Financial Inclusion Technology Fund Financial Literacy and Credit Counselling Centres Flash Reports Farmers Resource Centre Farmers Service Societies Farmers Training and Rural Development Centres Farmers Technology Transfer Fund Generally Accepted Accounting Policies General Credit Card Gross Capital Formation Gross Domestic Product Gross Domestic Savings Government Final Consumption Expenditure Deutsche Gesellschaft fur Internationale Zusammenarbeit Ground Level Credit Govt. of India Deutsche Gesellschaft fur Technische Zusammenarbeit Held for Trading Head Office High Power Committee Human Resource Human Resource Management Held to Maturity Handloom Weavers Groups Indian Agricultural Research Institute
IAS ICAI ICM ICRA ICRISAT-WWF
ICT IDRBT IEC IES IFAD IGWDP IIBM IIM IIMPS IIT IMF IPDSS IR IRR IRV ISAP ISEC ISMW ISRO-VSAT ISS IT ITI IWDP JCC JLG JLTC JNNSM KADFC KCC KfW KVIC KVK KYC
Indian Administrative Service Institute of Chartered Accountants of India Institutes of Cooperative Management Investment Information and Credit Rating Agency of India International Crops Research Institute for the Semi-Arid Tropics - World Wide Fund for Nature Information and Communications Technology Institute for Development & Research in Banking Technology Information, Education, Communication Indian Economic Service International Fund for Agriculture Development Indo-German Watershed Development Programme Indian Institute of Bank Management Indian Institute of Management Invest India Micro-Pension Services Indian Institute of Technology International Monetary Fund Institutional Protection and Deposit Safety Scheme Inspection Reports Internal Rate of Return Individual Rural Volunteers Indian Society of Agri-business Professionals Institute for Social and Economic Change Indian School of Micro-Finance for Women Indian Space Research Organisation Very Small Aperture Terminal Investment Specific Studies Information Technology Integrated Training Institute Integrated Watershed Development Programme Joint Consultative Committee Joint Liability Groups Junior Level Training Centres Jawaharlal Nehru National Solar Mission Karnataka Agriculture Development Finance Company Ltd. Kisan Credit Card Kreditanstalt fur Wiederaufbau (German Development Bank) Khadi and Village Industries Commission Krishi Vigyan Kendras Know Your Customer
128
www.sansco.net
LABS LAMPS LBSNAA LPA LT LTCCS M-CRIL MAAPA MBA MC MDMI MEDP MF MFDEF MFI Mha MIS MNAIS MNRE MoA MOP MoSPI MoU MPLADS MSME MSP MSTP MT MU Nabcons NABFINS NAFSCOB NAIS NBFC NBSC NBTC NCCT NCOF NE NEDFi
Livelihood Advancement Business School Large-sized Adivasi Multipurpose Society Lal Bahadur Shastri National Academy of Administration Long Period Average Long Term Long Term Co-operative Credit Structure Micro-Credit Ratings International Limited Multi-activity Approach for Poverty Alleviation Master of Business Administration Management Committee Manpower Development & Management Institute Micro-Enterprise Development Programme Micro-Finance Micro-finance Development and Equity Fund Micro Finance Institution million hectares Management Information System Modified National Agricultural Insurance Scheme Ministry of New and Renewable Energy Ministry of Agriculture/ Memorandum of Agreement Muriate of Potash Ministry of Statistics and Programme Implementation Memorandum of Understanding Member of Parliament Local Area Development Scheme Micro, Small and Medium Enterprises Minimum Support Price Million Shallow Tubewell Programme Medium Term / Metric Tonne Mother Units NABARD Consultancy Services Pvt. Ltd. NABARD Financial Services Ltd. National Federation of State Cooperative Banks National Agricultural Insurance Scheme Non-Banking Finance Company National Bank Staff College National Bank Training Centre National Council for Cooperative Training National Centre of Organic Farming North Eastern North Eastern Development Finance Corporation Ltd.
NER NFS NFSM NGO NHEP NHM NIDA NIRB NLUP NMCP NMMI NPA NPDP NPOF NPRI NPS NPW NRC(LTO) NRMC NRC(Stab.) ODI OP OPP OS PACS PAT PBT PCARDB PDAI PFCE PFRDA PGDRB PIA PLP POS PPID PPP PRI PUCB PVCF RBI RCMB RCS REDP
North-Eastern Region Non-Farm Sector National Food Security Mission Non-Governmental Organisation New High Energy Efficiency Pumpset National Horticulture Mission National Infrastructure Development Assistance National Institute of Rural Banking New Land Use Policy National Manufacturing Competitiveness Programme National Mission on Micro Irrigation Non Performing Asset National Pulses Development Programme National Project on Organic Farming National Programme on Rural Industrialisation New Pension System Net Present Worth National Rural Credit (Long Term Operations) Natural Resources Management Centre National Rural Credit (Stabilisation) Organisational Development Initiative Occasional Paper Oilseeds Production Programme Operating System Primary Agricultural Credit Societies Profit After Tax Profit Before Tax Primary Co-operative Agriculture and Rural Development Bank Primary Dealers Association of India Private Final Consumption Expenditure Pension Fund Regulatory & Development Authority Post Graduate Diploma in Rural Banking Project Implementing Agency Potential Linked Credit Plan Point of Sale Pilot Project for Integrated Development of Backward Blocks Public Private Partnership Panchayat Raj Institution Primary Urban Co-operative Bank Poultry Venture Capital Fund Reserve Bank of India Risk Management Committee of the Board Registrar of Co-operative Societies Rural Entrepreneurship Development Programme
129
www.sansco.net
RFA RFI RFIP RGCT RGMVP RICM RIDF RIF RLP RML RNFS RO RRB RSVY RTC RTI RUDSETI R&D SAO SAS SAU SBI SBLP SBPC SCARDB SCB SCC SC/ST SDC SDD SDP SF/MF SGSY SHG SHLS SHPI SIDBI SLIC SLR SLSMC SLTF SMS SOFTCOB
Revolving Fund Assistance Rural Financial Institutions Rural Financial Institutions Programme Rajiv Gandhi Charitable Trust Rajiv Gandhi Mahila Vikas Pariyojana Regional Institute of Cooperative Management Rural Infrastructure Development Fund Rural Innovation Fund Realistic Lending Programme Reuters Market Light Rural Non-Farm Sector Regional Office Regional Rural Bank Rashtriya Sam Vikas Yojana Regional Training College Right to Information Rural Development and Self Employment Training Institute Research and Development Seasonal Agricultural Operations Situation Assessment Survey State Agricultural University State Bank of India SHG-Bank Linkage Programme Standardised Banking Programme for Co-operatives State Co-operative Agriculture and Rural Development Bank State Co-operative Bank Swarojgar Credit Card Scheduled Caste/Scheduled Tribe Swiss Agency for Development and Cooperation Special Development Debentures Skill Development Programmes Small Farmers/Marginal Farmers Swarnjayanti Gram Swarozgar Yojana Self Help Group Solar Home Lighting System Self Help Promoting Institution Small Industries Development Bank of India State Level Implementation Committee Statutory Liquidity Ratio State Level Sanctioning and Monitoring Committee State Level Task Force Short Messaging Service Scheme of Financial Assistance for Training of Co-operative Banks Personnel
SPV SRI SRTO SS SSI ST STCCS STCRC Fund STD ST(SAO) ST(OSAO) SWC SWOT TA/DA TC TDF TE TF TFO TMB TPDS ToR TSSPS UNDP UPNRM USAID USQ UT VA VC VDP VOC VSAT VWC WBCIS WDC WDF WOTR WPI ZTC
Special Purpose Vehicles System of Rice Intensification Small Road Transport Operators Special Studies Sustainable Sugarcane Initiatives Short Term Short Term Co-operative Credit Structure Short Term Co-operative Rural Credit (Refinance) Fund Short Term Deposit Short Term (Seasonal Agricultural Operations) Short Term (Other than Seasonal Agricultural Operations) State Warehousing Corporation Strength, Weakness, Opportunities, Threats Travelling Allowance/Daily Allowance Technical Component Tribal Development Fund Training Establishment Task Force Total Financial Outlay Term Money Borrowings Targeted Public Distribution System Terms of Reference Tripura State Support Project on SHG United Nations Development Programme Umbrella Programme on Natural Resources Management US-Agency for International Development Unstarred Question Union Territory Voluntary Agency Video Conferencing Village Development Programme Vehicle Operating Cost Very Small Aperture Terminal Village Watershed Committee Weather Based Crop Insurance Scheme Women Development Cell Watershed Development Fund Watershed Organisation Trust Wholesale Price Index Zonal Training Centre
130
www.sansco.net
www.sansco.net
National Bank for Agriculture and Rural Development C-24, G Block, Bandra-Kurla Complex, Bandra ( East ), Mumbai - 400 051 website : http://www.nabard.org.
UCHITHA 4033 6400

National Bank For Agriculture and Rural Development-11

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

National Bank For Agriculture and Rural Development-11

Transféré par

Droits d'auteur :

Formats disponibles

www.reportjunction.

ANNUAL REPORT 2010-2011

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

Directors appointed under Section 6(1)(c) of the NABARD Act, 1981

Shashi Rekha Rajagopalan

Directors appointed under Section 6(1)(d) of the NABARD Act, 1981

Directors appointed under Section 6(1)(e) of the NABARD Act, 1981

Dr. K. G. Karmakar Managing Director

Reserves & Surplus

Borrowings against STD

Collateralised Borrowing and Lending Obligation 0 215 (-)215

193 0 25,435 0 167 182 66,078 88

0 20 35,742 1 199 131 60,255 84

193 (-)20 (-)10,307 (-)1 (-)32 51 5,823 4

(-)5 380 22,580

KEY DATA REFERENCES

26 321 12 343 11.91 18.02 30 42 79 3.72 343 282 61

28 323 11 307 9.08 13.00 33 43 79 3.50 302 260 42

395 1,603 404 220 5,764 17,928 4,948 4,742 2,515

463 1,545 97 154 4,469.16 16,015.45 5,627.56 4,867.04 3,470

AE : Advanced Estamate @@ : Statutory Inspections

Dr. Prakash Bakshi

CHIEF GENERAL MANAGERS (Rural Development Banking Service)

R. Narayan (Tamil Nadu)

Pankaj Pandit (Uttarakhand)

Dr. Venkatesh Tagat (Karnataka)

P . Mohanaiah (Andhra Pradesh)

D. P . Mishra (Uttar Pradesh)

S. Akbar (Madhya Pradesh)

M. L. Sukhdeve (Jammu & Kashmir)

K. Muralidhara Rao (Rajasthan)

V. Mohan Doss (Bihar)

Niraj Kumar Gupta

A. D. Ratnoo (Himachal Pradesh)

N. S. P . Rao (West Bengal)

R. Amalorpavanathan NBSC, Lucknow

CHIEF GENERAL MANAGERS (Legal/Technical Service)

Neeraj Kumar (Technical)

Dr. P . Renganathan (Technical)

OFFICERS-IN-CHARGE OF REGIONAL OFFICES/CELL TRAINING INSTITUTIONS

H. R. Dave (New Delhi)

B. G. Mukhopadhyay (Arunachal Pradesh)

G. R. Chintala (Andaman & Nicobar Islands)

M. M. Baheti (RTC, Mangalore)

Dr. P . M. Ghole (Mizoram)

Dr. U. S. Saha (Nagaland)

P. L. Negi (Srinagar Cell)

Out of ` 29,240 crore received under the

Development and Promotional Initiatives

Akole & Sangamner Talukas of Ahmednagar District, Maharashtra Organistion

considered under WDF. Swiss Agency for

It involves a total financial and Cooperation

The Village Development Programme is now

being implemented in 801 villages spread across 25

During the year, financial assistance of ` 373.97

NABARD received ` 132.27 crore during 2010-11

Rural Non-Farm Sector

sanctioned earlier, was ` 14.42 crore.

Under the 'Scheme for Strengthening of Rural

` 47.38 crore was released during 2010-

During the year, 1.20 lakh Swarojgar Credit

An amount of ` 24.74 crore was sanctioned as

NABARD continued to support the project implementing 'Micro-Finance Vision 2011'.