NABARD is set up as an apex Development Bank with a

mandate for facilitating credit flow for promotion and

development of agriculture, small-scale industries, cottage and
village industries, handicrafts and other rural crafts. It also has
the mandate to support all other allied economic activities in
rural areas, promote integrated and sustainable rural
development and secure prosperity of rural areas.
NABARD was established on the recommendations of
Shivaraman Committee, by an act of Parliament on 12 July
1982 to implement the National Bank for Agriculture and Rural
Development Act 1981. It replaced the Agricultural Credit
Department (ACD) and Rural Planning and Credit Cell (RPCC)
of Reserve Bank of India, and Agricultural Refinance and
Development Corporation (ARDC). It is one of the premier
agencies to provide credit in rural areas.RBI sold its stake in
NABARD to the Government of India, which now holds 99%
stake.

Mission
Promoting sustainable and equitable agriculture and rural
development through effective credit support, related services,
institution building and other innovative initiatives.
In pursuing this mission, NABARD focuses its activities
on:
Credit functions, involving preparation of potential-linked
credit plans annually for all districts of the country for
identification of credit potential, monitoring the flow of ground
level rural credit, issuing policy and operational guidelines to
rural financing institutions and providing credit facilities to
eligible institutions under various programmes
Development functions, concerning reinforcement of the
credit functions and making credit more productive
Supervisory functions, ensuring the proper functioning of
cooperative banks and regional rural banks

Role and Function of NABARD:

In discharging its role as a facilitator for rural prosperity
NABARD is entrusted with

Providing refinance to lending institutions in rural areas

Bringing about or promoting institutional development and

Evaluating, monitoring and inspecting the client banks

Besides this pivotal role, NABARD also:

Acts as a coordinator in the operations of rural credit
institutions
Extends assistance to the government, the Reserve Bank
of India and other organizations in matters relating to rural
development
Offers training and research facilities for banks,
cooperatives and organizations working in the field of rural
development
Helps the state governments in reaching their targets of
providing assistance to eligible institutions in agriculture and
rural development
Acts as regulator for cooperative banks and RRBs

Microfinance and NABARD :

For a better reach of microfinance program a continuous check
of the status, progress, trends, qualitative and quantitative
performance comprehensively is required. Thus the Reserve
Bank of INDIA and NABARD has laid out certain guidelines in
06-07 for the commercial banks, Regional Rural Banks and
Cooperative Banks to provide the data to RBI and NABARD
about the progress of the microfinance program. There are
three aspects on which the data was collected, savings of selfhelp groups with banks, loan disbursed by banks to self-help
groups default by self-help groups repayment of the loans
taken from banks. Banks also provides data regarding loans
given by banks to the microfinance institutions.

Abstract

"Growth with Social Justice" has been the basic objective of the
Development Planning in India since independence. Since the
beginning of planned development, the Government through Five
Years Plans made significant strides in developing rural India.

The National Bank for Agriculture and Rural Development

(NABARD) was set up in July 1982. It became the apex institution
to play a pivotal role in the sphere of policy planning and providin
refinance facilities to rural financial institutions and for
augmenting their resource base.
The paper analyses the role and function of NABARD in rural
development. Purpose wise disbursement of funds under
Investment Credit and RIDF during the year 2007-8 is also
analysed. It also throws a light on NABARD's past and present
performance and its major achievements for the year 2007-08.
Main Paper
INTRODUCTION
National Bank for Agriculture and Rural Development

The National Bank for Agriculture and Rural Development

(NABARD) was set up in July, 1982 following after the
recommendations of the "Committee to Review Arrangements for
Institutional Credit for Agriculture and Rural Development". All
major issues related to rural credit until then dealt with by the RB
and the Agricultural Refinance and Development Corporation
moved under the control of NABARD.
NABARD thus emerged as the apex institution to play a pivotal

role in the sphere of policy planning and providing refinance

facilities to rural financial institutions. NABARD also administers
the Rural Infrastructure Development Fund (RIDF), which was se
up in 1995-96. NABARD has also been playing a catalytic role in
micro-credit through the channel of Self-Help Groups (SHGs).
Functions of NABARD

NABARD was set up essentially as a development bank for

promoting agriculture and rural development. Its main function is
to provide refinance for rural credit disbursed by the State Cooperative Banks, the Regional Rural Banks and other financial
institutions as may be approved by the RBI.
The important functions of NABARD are as follows:
Providing finance and also refinance for production and
marketing in the rural areas.
Coordinating and advising the operations of institutions
engaged in rural credit.
Promoting research in agriculture and rural development.
Other miscellaneous functions of NABARD are as follows:
Conduct inspections of the RRBs and the co-operative
societies, without any prejudice to the authority of the RBI.
All the applications for opening a branch by RRBs or cooperative societies should be forwarded to the RBI through
the NABARD.

Copies of all returns submitted by the RRBs and co-operative

societies to the RBI should also be furnished to the NABARD.
NABARD is also empowered to obtain any information or

statement from the RRBs and the co-operative societies.

NABARD should undertake research and training programs.

These comprehensive training programs should be targeted
towards NABARD's own staff and the staff of SCBs and RRBs
as well. The R&D department of NABARD should take the lea
in promoting research concerning problems associated with
India's agriculture and rural development and also other allie
aspects. For this purpose the NABARD has been authorised t
maintain and R&D fund out of profits earned by it every year

NABARD is responsible for coordinating with the Government

of India, the Planning Commission, State Governments and
other agencies concerned with the development of rural
industrialization. It is also responsible for ensuring the
implementation of various policies and programs meant for
providing finance to the rural industries.
NABARD's Past Performance (Prior to 2005)

During 1983-84 NABARD mobilised net resources amountin

to Rs. 774 crores, which however fell to Rs.541 crores during
the year 1984-85. During this year NABARD sanctioned Rs.
1233 crores to SCBs for financial seasonal agricultural
operations. It also provided medium-term and long term
credit facilities for the benefit of the agricultural sector. Durin
1984-85, its total outstanding amounted to Rs. 1018 crores
and limits sanctioned amounted to Rs.1688 crores.

NABARD also assisted the development and promotion of

agricultural investments in the less developed and/or
underbanked states. For this purpose during the year 198485, it disbursed Rs.455 crores.

For the year 1986-87 NABARD could mobilize Rs.887 crores

towards its aggregate net resources for providing rural credit

During 1986-87, NABARD completed the inspection of 178

CCBs, 86 RRBs, 7 SLOBs and 30 other institutions. It also
approved and assisted during the year, 5 research proposals,
17 seminars and several conferences from its R&D fund, and
incurred an expenditure of Rs.3.41 lakhs on this account.

During the year 1987, NABARD also introduced a 10 point

action programme for rehabilitation of weak primary land
development banks and branches of state land development
banks. The action program was with regard to: (i)
investigation of overdues; (ii) strengthening of organization
and management; (iii) review of loan policies and procedures
and (iv) Strengthening of the resources of the LOBs.

For the year 1989-90, the short term credit limits sanctione
by NABARD for financing seasonal agricultural operations
aggregated to Rs.2807 crores. During this period NABARD
provided refinance assistance to the tune of Rs.549 crores.
During 1995-96, the total amount of refinance
disbursements by NABARD increased by less than 2% to
Rs.3064 crore from that of the previous year. During this
period a Rural Infrastructural Development Fund (RIDF) was
created within NABARD for facilitating rural infrastructure
projects.
During 1996-97 NABARD's resources increased to Rs.2963
crores against rs.1617 crore in the previous year.
NABARD current performance (After 2005)

NABARD saw its refinance to commercial banks increase by over

50% year on year, for the fiscal ended March 31, 2006. For 2005
06, the refinance was Rs.4028 crore against Rs.2569 crore in

2004-05. As on February 2006, commercial banks, regional bank

and co-operatives disbursed an aggregate of Rs.1,46,668 crores
by way of farm credit. This is against Rs.1,25,000 crore in 200405.
Purpose wise Disbursements under
investment Credit during 2007-08
Sector/Purpose/Activity

Amount
(Rs. In
Lakh)

% to Total
Disb.

Agriculture
Minor irrigation

40368

4.46%

Land development

46214

5.11%

174765

19.32%

Plantation & Horticulture

34182

3.78%

SGSY Farm Sector

13242

1.46%

1648

0.18%

45717

5.05%

Farm Mechanisation

SC/ST -AP-Farm Sector

Other Agriculture

356136

39.37%

2545

0.28%

Dairy Development

60587

6.70%

Poultry

21629

2.39%

Storage/Market Yard

13628

1.51%

639

0.07%

99028

10.95%

12616

1.39%

404

0.04%

274795

30.38%

287815

31.82%

Allied to Agriculture
Fishries

Wasteland Development

NFS
SGSY Non Farm Sector
SC/ST -AP-Non Farm
Sector
Non Farm Sector

Others
Non conventional energy
Self Help Group

TOTAL DISBURSEMENT

98

0.01%

161550

17.86%

161648

17.87%

904627

100.00%

The purpose wise disbursement for the year 2007-08 shows that
total of Rs.9,04,627 was disbursed for various purposes like
agriculture and allied activities, non farm sector etc. and
maximum 32% is allotted to agriculture sector.
Purpose wise Disbursements under RIDF
during 2007-08
Purpose

Amount (Rs.
In Lakh)

% Share

Irrigation

286955

35.71%

Rural Roads

257338

32.03%

Drinking Water Supply

64688

8.05%

Bridges

58159

7.24%

Primary/Secondary
School

49227

6.13%

Power Sector

19294

2.40%

Watershed
Development

17980

2.24%

Flood Protection

13225

1.65%

Soil Conservation

8827

1.10%

Forest Management

8030

1.00%

Drainage
Improvements

5931

0.74%

Storage/Market Yard

3467

0.43%

Others
TOTAL
DISBURSEMENT

10371

1.29%

803492

100.00%

The data shows that under Rural Infrastructural Development

Fund (RIDF) maximum disbursement is provided to irrigation i.e.
35.71% , 32.03 % to rural roads and rest approximate 32% to a
the other activities like drinking water, drainage improvements
etc.
MAJOR ACHIEVEMENTS: 2007-08
Business Operations
Financial Results
Balance sheet size increased from Rs.81220 crore to Rs.98706
crore & profit after tax from Rs.856 crore to Rs.1226 crore.
Loans and advances outstanding
o Refinance for Production & Marketing credit increased
from Rs.14651 crore to Rs.17381 crore.
o Refinance for Investment credit operations increased

from Rs.31682 crore to Rs.32401 crore.

o Loans out of RIDF increased from Rs.20005 crore to
Rs.30649 crore.
o Cofinance loans increased from Rs.42 crore to Rs.66
crore.
Loans and advances disbursed

o Refinance for ST-SAO- Rs.16443 crore (SCBs - Rs.13748

crore & RRBs - Rs.2695 crore)
o Refinance for ST-Others- Rs.183 crore (SCBs - Rs.109
crore & RRBs - Rs.74 crore)

o Refinance for MT Liquidity Support Scheme- Rs.326 cror

(SCBs - Rs.165 crore & RRBs - Rs.161 crore)
o Refinance for Investment Credit- Rs.9046 crore
[ NFS(30%), FM(19%), SHG(18%) & Dairy(7%) ]
o Loans out of RIDF- Rs.8035 crore [ Roads &
Bridges(39%), Irrigation(36%), Drinking water
supply(8%) & Schools(6%) ]
Developmental Activities
Cooperative Revival & Reforms
o MoUs signed in 20 States covering 95% of PACS and
93% of CCBs in the country
o Special Audit completed- 59294 PACS of 12 states and
the CCBs in 3 states
o Release of Capitalisation Funds to PACS- Rs.3325 crore

as GOI share in seven states

Rural Non-Farm Sector

o Assistance out of Rural Innovation Fund- Total sanctions

Rs.26.14 crore & Disbursements Rs.21.69 crore Rural
o Entrepreneurship Dev. Program- No. of progs 787;
Sanctions Rs.5.03 crore; Releases Rs.2.66 crore

o Skill Development Programs & TPCs- No. of progs 685

Sanctions Rs.2.69 crore; Releases Rs.1.96 crore
o Innovative Projects- No. of projects 29; Sanctions
Rs.7.78 crore; Releases Rs.2.56 crore

o Capacity Building of Partner Agencies- No. of progs 13

Sanctions Rs.1.30 crore; Releases Rs.1.35 crore
o Women Development Programs- No. of progs 169;
Sanctions Rs.1.45 crore; Releases Rs.0.31 crore
o Marketing & Technology support- No. of progs 349;
Sanctions Rs.1.97 crore; Releases Rs.1.40 crore
Promotion of Farmers' Clubs
o Launching of 5277 new clubs (cumulative 28226 clubs)

o Financial support - New & existing clubs 5386;

Sanctions Rs.3.14 crore; Releases Rs.3.39 crore(out
of RIF).
o Future support to be provided from Farmers Technology
Transfer Fund set up in NABARD with corpus of Rs.25
crore.
KCCs : Fresh cards issued during the year- Cooperative Banks -

21 lakh and RRBs - 18 lakh (CB data not available)

Cooperative Development Fund- Amount of grant released
during the year - Rs.6.34 crore
Research and Development Fund- Amount of grant released
during the year - Rs.7.49 crore
Micro-Finance and SHG Bank-Linkage Programme:

o SHGs provided with bank loan- New groups - 3.03 Lakh,

Repeat groups - 1.61 lakh

o Amount of Bank Loan disbursed- New groups - Rs. 1550

crore, Repeat groups - Rs.1608 crore
o Grant assistance to SHPIs for promotion & linkage of
SHGs- Amount sanctioned Rs.13.70 crore & released
Rs.25.41 crore

o Grant released for other promotional activities for

awareness building, training programs & exposure visits
Rs.13.32 crore
o Capital and equity support out of MFDEF- Rs.9.25 crore
sanctioned to 11 agencies
Disbursements under WDF

o Grant released under PM's Relief Package to distressed

districts- Karnataka Rs.4 crore, Kerala Rs.0.23 crore
Maharashtra Rs.9.7 crores & Andhra Pradesh
Rs.10.75 crore

o Financial assistance released in non-distressed districtsGrant of Rs.7.51 crore covering 128 projects in 13 State
&

o Loan of Rs.3.80 crore covering 100 projects in 2 States.

Tribal Development Fund - Amount of grant released - Rs.15.5

crore covering 47 projects in 17 States.
Conclusion
As we analyse the data it shows that NABARD is working for the
360 degree development of rural India. Every year the financial
assistance received by NABARD and the disbursement made out
it are increasing. The balance sheet size also increased from
Rs.81220 crore to Rs.98706 crore & profit after tax from Rs.856
crore to Rs.1226 crore. In short we can say that NABARD is
providing rural India all round assistance and proved to be an
institution where "Growth with Social Justice" exists.
Bibliography

NAFSCOB (Analytical and graphical presentations are made b

CSID, NABARD)
www.nabard.org
The Financial Express
Business Standard
What are the main functions of NABARD ?
NUPUR SINGH
1. Integrated Rural Development Programme
IRDP is a scheme devised by Government of India for
generating self-employment opportunities in the rural sector
and for the economic development of rural areas. Banks are
advised to extend cheap credit facilities to the people/ group
selected under this programme. NABARD then provides
refinance to banks.

NABARD has accorded high priority to projects envisaged

under IRDP. The refinance provided for IRDP accounts for
highest share for the support provided for poverty alleviation
programmes. Some specific steps taken to augment the flow of
credit under IRDP programme are given below:
(i) Including the activities under IRDP in the service area plan,
backward and forward linkage and infrastructural support.
(ii) Treating the family as a unit for providing assistance and
determining the size and number of activities in relation to the
income gap to be bridged for lifting the family above the
poverty line.
(iii) Among alternative activities, promoting the less costly ones
for securing optimum utilization of the available resources.
(iv) Diversifying the IRDP by encouraging secondary and
tertiary sectors.
(v) Facilitating provision of infrastructural support including
backing support and marketing linkages and supervision by
adopting a cluster approach in the selection of beneficiaries. A
total sum of Rs. 735 crore has been disbursed by banks under
the scheme during the year 1998-99.
The RRBs and commercial banks are the major participating
banks in the programme. Most of the funds under the scheme
go to states like Uttar Pradesh, Bihar, Assam, Orissa, and
Madhya Pradesh where poverty level is high.
The IRDP and other special schemes are now merged into a
single scheme by Government of India and announced the
details of the scheme in August 1999. The new scheme, SGSY is
explained below.
In the past years there were many self employment schemes
were in operation for the upliftment of rural poor. Effective
from April, 1999 Government of India has merged all such Self
Employment Schemes into one and launched the new SGSY
scheme.

Under this scheme rural individual poor and group of

individuals like the self-help group may obtain credit facilities
to undertake any economic activity which will generate regular
income for the borrowers.
The main objective of the scheme is to lift those who are living
below poverty line and enable them to get income of at least Rs.
2,000 per month. Presently, poverty line differs from state to
state between Rs. 13,000 and Rs. 19650 per year. The scheme
envisages lifting the poor families above the poverty line within
3 years of assistance.
The selection of families or SHG for assistance under the
scheme will be chosen by a team of officials like BDO, Bank
Branch Manager, Gram Panchayat officials on annual basis.
The credit facilities will be provided by banks. However,
funding for the programme will be done by Central Government
and State Government in the ratio 75:25.
It is proposed that the SGSY Scheme will mainly focus to help
rural poor particularly SC/ST population, Women and disabled
persons. In case of beneficiaries under the scheme being SelfHelp Group, each SHG may consist of 10 to 20 persons.
The Scheme does not prescribe any maximum loan amount. It
depends upon the project cost. Rate of interest and other
conditions may be ascertained from banks. Commercial Banks,
Co-operative Banks and RRBs will be asked to provide credit
under this scheme.
Repayment of loan needed to be made only after 5 years in
installments. It is a treated as a medium-term loan. NABARD
will provide refinance to banks sanctioning loans under the
Programme.
2. Development of Women and Children in Rural
Areas
NABARD prepared guidelines for promoting group activities
under the programme and provided 100% refinance support.

3. Training-cum-production Centre for Women

NABARD provides grant? To voluntary/development agencies
for setting up of centres which aim at providing
vocational/entrepreneurship training centres for women
exclusively. Some provide marketing-oriented skill to women
for upgrading technical and designing skill.
4. Self-Help Group
NABARD has been making efforts to establish linkages between
Self-help Group organized by some voluntary agencies for poor
people in rural areas and official credit agencies. This would
augment the flow of credit for production purposes and reduce
their dependence on informal credit sources.
Provision of credit extended under the SHG scheme during the
recent past. Under the scheme so far 4.6 lacs SHG from more
than 78 lacs poor families have been covered upto March 2002.
During the year 2 lacs new SHG have been extended bank loans
amounting to Rs. 545 crore as against Rs. 288 crore disbursed
during the year 2000-01. The total bank loan provided to all the
4.6 lacs SHGs till March 2002 aggregated to Rs. 1026 crore.
It should be remembered that NABARD provides refinance at
special interest rate of banks. Andhra Pradesh and Tamil Nadu
are the leading states which account for large portion of new
linkages under the scheme. It is noteworthy to mention here
that 90% of new SHGs were formed exclusively by women.
5. NABARD also provides refinance to full extent for
project taken under National Watershed Development
Programme and National Mission of Wasteland Development.
6. Scheme of Monitoring Evaluation and Research
Activities
NABARD conducts studies of on-going schemes and completed
studies to obtain feedback on performance of these projects.

The NABARD has system of District Oriented Monitoring

studies in which a cross section of schemes sanctioned in a
district to various banks is studied to ascertain the performance
of the schemes and to identify constraints in implementation
and for initiating appropriate action to remedy them. Annually
about 100 such studies are conducted.
NABARD also provides support to research studies by academic
and technical institutions on matters having bearing on its
developmental role. For this purpose, it has Research and
Development Fund.
7. Vikas Volunteer Vahini Programme
NABARD has been organizing farmers club in association with
voluntary agencies in rural areas particularly in tribal areas,
which have proved very helpful for credit institutions in
extending credit to poor farmers. These clubs, besides creating
awareness among weaker sections about the proper utilization
of assets and importing modern method of farm technology, are
involved in educating the tribal people.
8. External Aid Project
NABARD has been implementing various foreign aided
projects. The projects are assisted by World Bank Group,
Organisation of Petroleum Exporting Countries Fund for
International Development, etc., NABARD actively participates
in formulation and implementation of such projects. It is also
required to monitor the projects and submit final report to aid
agencies.
9. Inspection and Supervision of Co-operative Banks
and Regional Rural Banks
NABARD has been entrusted with the responsibility of
supervision of Co-operative and Regional Rural Banks. For this
purpose, it conducts inspections of Co-operative Banks and
Regional Rural Banks. These banks are also to submit
periodical information to NABARD for monitoring purposes.

NABARD gives its recommendations to RBI with the matter

relating to licensing of Co-operative Banks and Regional Rural
Banks. The nominees of NABARD on the boards of Cooperative Banks and Regional Rural Banks monitor the working
of banks.
10. Human Resource Development (HRD)
NABARD provides assistance and support for the training of
staff of other credit institutions engaged in credit dispensation
for agriculture and rural development. Training facilities are
extended at its two training institutions Bankers Institute for
Rural Development (BIRD), and Regional Training Centres
(RTCs).
Some funding of the courses conducted at the College of
Agricultural Banking of RBI and junior Level Training Centres
of SLDBs are also provided. Apart from these, NABARD
conducts seminars/programmes on Non-farm-Centre Business
Development, inspections of banks, etc.

Particulars of its organization, functions and its duties

ORGANISATION, FUNCTIONS AND DUTIES
ORGANISATION
National Bank for Agriculture and Rural Development (NABARD)
was established on 12 July 1982 by an Act of the Parliament to
promote sustainable and equitable agriculture and rural prosperity
through effective credit support, related services, institutional
development and other innovative initiatives.
FUNCTIONS AND DUTIES

Credit
NABARD Extends:
o Refinance support to Rural Financial Institutions
(RFIs), mainly to Cooperative Banks and Regional
Rural Banks, for Seasonal Agricultural Operations,
handloom weavers, marketing operations, etc

Refinance support to Rural Financial Institutions for

increasing flow of long term credit to create assets and
capital formation in agriculture and allied sector

Direct refinance assistance to Cooperative Banks for

providing short term multipurpose credit

o Credit
facility
to
Marketing
Corporations and Cooperatives

Federations,

o Loans to State Governments for creating rural

infrastructure
from
Rural
Infrastructure
Development Fund (RIDF)

o Loans for creation of warehousing infrastructure to

State Governments, State and Central Government
owned entities, Cooperatives and Federation of
Cooperatives, Corporates/ Companies, individual
entrepreneurs,
etc.,
from
Warehousing

Infrastructure Fund (WIF)

Direct lending to state owned institutions /corporations,

Cooperatives, Producers Organizations, etc., under
NABARD Infrastructure Development Assistance
(NIDA).

Developmental Initiatives:
NABARD Supports and Facilitates:
Credit Planning, Monitoring and Coordination along with
various stakeholders in increasing the ground level
credit flow and capital formation in agriculture sector

Policy formulation by GoI, RBI, State Governments on

agriculture credit, rural development, institution
development and related matters

Research and studies, techno-economic and other

surveys, training, dissemination of information in
agriculture and rural development and rural banking

Financial Inclusion for inclusive growth

Self-Help Group Bank Linkage Programme

 Promotion of Women SHGs in backward/left wing

extremism affected districts

Formation of Joint Liability Groups of marginal and

tenant farmers

Promotion of
enterprises

livelihood

opportunities

and

micro

RFIs to issue Rupay Kissan Credit Cards

Farmers Club programme

Watershed Development Programme

Integrated Tribal Development Programme

Producers Organizations

Pilots to mitigate the adverse impact of climate change

in agriculture sector and promoting initiatives in an

ecologically sustainable manner

Productivity augmentation and technology transfer

Creating livelihood avenues through skills development

in off-farm sector.
Institution Building Initiatives:
Building of Rural Financial Institutions, capacity building of
its personnel and Board Members of Credit Cooperatives
Developing innovative products for greater outreach and
business development of RFIs
Core Banking Solutions in Cooperative Banks and linking
them to payments system through RTGS/NEFT
Financial inclusion by RFIs with focus on information,
communication and technology
Development and growth of business of Primary
Agriculture Cooperative Societies (PACS) through Central
Cooperative Banks
Developing Primary Agriculture Cooperative Societies
(PACS) as Multi Service Centres.
Supervision:
NABARD undertakes statutory inspection of Regional Rural
Banks (RRBs) and State Cooperative Banks (StCBs) and
District Central Cooperative Banks (DCCBs), voluntary

inspection of State Cooperative Agriculture and Rural

Development Banks (SCARDBs) and their off-site surveillance.
Others Government of India Programmes:
NABARD Coordinates
implementation of:

with

Government

of India in

the

Select Governments programmes such as National Rural

Livelihood Mission (NRLM), Prime Ministers Jan Dhan
Yojana (PMJDY), etc.
Select Government of India Capital Investment Subsidy
Schemes as a pass through agency.
The detailed functions and duties of NABARD are available in
the respective Departments page.
Introduction:
NABARD is mean by National Bank for Agriculture and
Rural Development. It is come into existence by 1982.
NABARD is an Apex Development Bank. It mainly
focuses on development of agriculture, Small scale
industries, handy crafts and soon. This is mainly aim
full in developing farmers and agriculture field in India.
They act as a regulator for cooperative banks and
RRBs. NABARD is helping farmers by providing Kissan
credit cards and also introduced 28226 farmer clubs
where they were enlighten by exports on agriculture.
They have some classes on agriculture. It helps the
nation to develop rural areas. A professional from dairy,
financial services, forestry and mainly from banking
sector has got excellent job opportunities.

Direct Credit

Direct credit from NABARD constitutes loans to

State Governments.
Supporting Cooperatives
In order to strengthen the owned funds position of cooperative credit
institutions and therebyincreasing their capacity to leverage larger
resources, NABARD provides loans to StateGovernments
to contribute to the share capital of these institutions.
Rural Infrastructure Development
With the objective of assisting State Governments in the completion of
ongoing ruralinfrastructure projects and to take up new infrastructure
projects, the Rural InfrastructureDevelopment Fund (RIDF) was set up
with NABARD in 1995-96 with contributions fromCommercial banks by
way of deposits. The shortfall in agri/priority sector lending
wasdeposited by the commercial banks with NABARD as part of their
contribution to the RIDF. Thetotal corpus covering RIDF I (1995-96) to
X (2004-05) is Rs. 42,000 crore. Sanctions under alltrenches of RIDF
as on 31 March 2005 were Rs.42948.51 crore against which
thedisbursements were Rs. 25384.02 cr.
Anticipated Benefits
It is anticipated that the projects sanctioned upto 31 March 2005 under
RIDF would result in:Creation of additional irrigation potential in 92.47
lakh ha.Addition of 178000 km of rural road network & 331000 meter
bridge lengthContribution to the GDP to the tune of Rs. 11058
croreGeneration of recurring employment of 48.01 lakh jobs and nonrecurring employment of 13681 lakh man days due to increased
irrigationGeneration of non-recurring employment expected from nonirrigation projects: 23238 lakhperson days
Co-financing
To ensure substantial credit flow to agriculture and rural sector and to
instill confidence inbanks for financing hi-tech/export oriented
agriculture projects involving large financialoutlays/sunrise
technologies, etc., NABARD has entered into agreements for co-

financing with12 Commercial Banks thereby sharing the credit risks

with partner banks. Under this arrangement, projects have been
sanctioned in areas like floriculture, organicfarming, milk processing,
ethanol production, infrastructure development and forestry
.
Bulk-lending/ Revolving Fund Assistance
NABARD provides bulk-lending facilities to NGOs. As on 31.3.2005,
30 agencies have beensanctioned assistance of Rs 27.07 crore
against which Rs.15.18 crore has been disbursed.
Production Credit
This is a short-term refinance facility, aimed at
supporting

Agricultural production operations and marketing of crops by farmers

and farmers cooperativesMarketing and distribution of inputs like
fertilizers, seeds and pesticidesProduction and marketing activities of
village cottage industries, handicrafts, handlooms,powerlooms,
artisans, small scale and tiny industries and other rural nonfarm enterprisesEligible institutions for this facility are State
Cooperative Banks (SCBs) and Regional RuralBanks (RRBs). The
period of credit is 12 months.

Short Term Credit

1. Seasonal Agricultural Operations (SAO
)
New line of credit for financing short-term
agricultural /allied andmarketing activities
To provide liquidity to the cooperative banks and to boost credit flow to
the agriculture sector,a new line of credit was introduced in 2003-04
encompassing loans for agricultural purposesagainst security of gold
and security other than charge on crops, working capital credit forallied
agriculture activities, working capital credit for procurement and
distribution of agriculture inputs, marketing of agriculture/allied
products, collection and marketing of minorforest produce etc and
short-term credit support provided to cultivators for higher scales
of finance for commercialisation of agriculture, exports and value
addition.
2. Marketing of Crops
With a view to improve the flow of marketing credit to cultivators for
augmenting their holdingcapacity and checking incidence of distress
sale, NABARD encourages cooperative banks andRRBs to finance
marketing of crops, through its refinance facility for this purpose. Each
drawalagainst the sanctioned credit limit is repayable within a
maximum period of 12 months.
3. Distribution of agri inputs
With a view to ensuring timely supply of agri inputs like
fertilizers, pesticides etc. a line of credit is made available to
cooperative banks for financing Apex/Primary Societies for
stockingand distribution of agri inputs by way of sanction of yearly
limits. Each drawal is repayablewithin a period of 120 days.
4. Pisciculture Activities

Refinance facilities is extended to cooperative banks and RRBs for

meeting the working capitalrequirements of farmers in pisciculture
activities by way of sanction of ST credit limits. Eachdrawal is
repayable within 12 months.
5. Other than SAO (OSAO)
Refinance is available to cooperative banks for financing the working
capital requirement of PWCS/Apex Weavers' Society, working capital
requirements of industrial societies, financingindividual rural artisans,
etc. Each drawal against the sanctioned credit limit is repayable
within12 months. OSAO refinance is available to RRBs for financing
production and marketingactivities of artisans, village industries and
also for financing persons belonging to weakersections engaged in
trade/business/services. Refinance support is also available to
commercialbanks for financing the working capital requirements of
PWCS. Refinance support is available to SCBs and CBs for meeting
working capital requirements of State Handloom Development
Corporations (SHnDCs).
Special Initiatives

Special line of credit for oilseeds and pulses productionSpecial line of

credit for development of tribals in predominantly tribal areasLiquidity
support to cooperative banks and RRBs for providing relief to farmers
in distress andfarmers in arrearsRevision in methodology for fixing
scale of finance
Refinance against Investment Credit
This is a long-term refinance facility. It is
intended to create incomegenerating assets in
the following:
Agriculture and allied activitiesArtisans, small scale industries, tiny
sector, village and cottage industries, handicrafts,handlooms,
powerlooms, etc.Activities of voluntary agencies and self help
groups working among the rural poor The credit is normally provided
for a period of 3 to 15 years. Investment credit leads to capital
formation through asset creation. It induces technologicalupgradation
resulting in increased production, productivity and incremental income
to farmersand entrepreneurs.
Eligible Institutions
SCARDBs, SCBs, RRBs, CBs, Scheduled Primary Urban
Cooperative Banks, North EastDevelopment Finance Corporation Ltd.
(NEDFI) and NBFCs are eligible from NABARD for theirinvestment
credit in the rural sector.
Eligible Purposes

Some of the major purposes covered under Investment credit are

Minor Irrigation, farmmechanisation, plantation/ horticulture, animal
husbandry, storage/market yards, fisheries,post-harvest management,
food/agro processing, non-farm sector including rural
industries,microfinance, purchase of land (for small/marginal Farmers,
share croppers etc.), rural housingand disbursements under poverty
alleviation programmes like SGSY and SC/ST Action Plan etc.Hi-tech
projects and agri-export zones are identified as thrust areas and
NABARD helps intechno-financial appraisal of such projects besides
providing refinance. In recent years, refinance support has been
extended to new activities like financing of dieselgenerator sets in
Madhya Pradesh and LPG kits to rural households all over the country.
Criteria
The technical feasibility of the project, financial viability and generation
of incremental incometo ultimate borrowers thereby enabling them to
have a reasonable surplus after repayment of the loan installments
are the necessary conditions to be satisfied for sanctioning
investmentcredit. The period of loan ranges between 3 and 15 years
depending on the purpose for whichit is provided.

Introduction
NABARD is set up as an apex Development Bank with a mandate for
facilitating credit flow forpromotion and development of agriculture,
small-scale industries, cottage and villageindustries, handicrafts and
other rural crafts. It also has the mandate to support all other
alliedeconomic activities in rural areas, promote integrated and

sustainable rural development andsecure prosperity of rural areas. In

discharging its role as a facilitator for rural prosperityNABARD is
entrusted with 1.Providing refinance to lending institutions in
rural areas 2.Bringing about or promoting institutional
development and3.Evaluating, monitoring and inspecting the
client banks Besides this pivotal role, NABARD also:Acts as a
coordinator in the operations of rural credit
institutions Extends assistance to the government,
the Reserve Bank of Indiaand other organizationsin matters relating
to rural developmentOffers training and research facilities for
banks, cooperatives and organizations working inthe field of rural
development Helps the state governments in reaching their
targets of providing assistance to eligibleinstitutions in agriculture
and rural development Acts as regulator for cooperative banks and
RRBs
Some of the milestones in NABARD's activities
are:
Refinance disbursement under ST-Agri & Others and MTConversion/ Liquidity supportaggregated Rs.16952.83 crore during
2007-08. Refinance disbursement under Investment Credit to
commercial banks, state cooperativebanks, state cooperative
agriculture and rural development banks, RRBs and other
eligiblefinancial institutions during 2007-08 aggregated Rs.9046.27
crore. Through the Rural Infrastructure Development Fund
(RIDF) Rs.8034.93 crores weredisbursed during 2007-08. With
this, a cumulative amount of Rs.74073.41 crore has beensanctioned
for 280227 projects as on 31 March 2008 covering irrigation, rural
roads andbridges, health and education, soil conservation, drinking
water schemes, flood protection,forest management etc.Under
Watershed Development Fund with a corpus of Rs.613.71 crore
as on 31 March 2008,416 projects in 94 districts of 14 states have
benefited.Farmers now enjoy hassle free access to credit and
security through 714.68 lakh KisanCredit Cards that have been
issued through a vast rural banking network. Under the Farmers'
Club Programme, a total of 28226 clubs covering 61789
villages in 555districts have been formed, helping farmers get access
to credit, technology and extensionservices.

go to top

Genesis and Historical Background

The Committee to Review Arrangements for Institutional Credit for
Agriculture and RuralDevelopment (CRAFICARD) set up by the RBI
under the Chairmanship of Shri B Sivaraman in its report submitted to
Governor, Reserve Bank of India on November 28,1979
recommended the establishment of NABARD. The Parliament through
the Act 61 of 81,approved its setting up. The Committee
after reviewing the arrangements came to theconclusion that a new
arrangement would be necessary at the national level for
achieving thedesired focus and thrust towards integration of credit
activities in the context of the strategyfor Integrated Rural
Development. Against the backdrop of the massive credit needs of
ruraldevelopment and the need to uplift the weaker sections in the rural
areas within a given timehorizon the arrangement called for a separate
institutional set-up. Similarly. The Reserve Bankhad onerous
responsibilities to discharge in respect of its many basic functions of
centralbanking in monetary and credit regulations and was not
therefore in a position to devoteundivided attention to the operational
details of the emerging complex credit problems. Thispaved the way
for the establishment of NABARD. CRAFICARD also found it prudent
tointegrate short term, medium term and long-term credit structure for
the agriculture sector byestablishing a new bank. NABARD is the
result of this recommendation. It was set up with aninitial capital of Rs
100 crore, which was enhanced to Rs 2,000 crore, fully subscribed by
theGovernment of India and the RBI.
Mission
Promoting sustainable and equitable agriculture and rural development
through effectivecredit support, related
services, institution building and other
innovative initiatives. Inpursuing this mission, NABARD focuses
its activities on:Credit functions,involvingpreparation of potential-

linked credit plans annually for all districts of the country foridentification
of credit potential, monitoring the flow of ground level rural credit,
issuing policyand operational guidelines to rural financing institutions
and providing credit facilities toeligible institutions under various
programmesDevelopment functions,concerningreinforcement of the
credit functions and making credit more
productiveSupervisoryfunctions, ensuring the proper functioning of
cooperative banks and regional rural banks
Objectives
NABARD was established in terms of the Preamble to the Act, "for
providing credit for thepromotion of agriculture, small scale industries,
cottage and village industries, handicrafts andother rural crafts and
other allied economic activities in rural areas with a view to
promotingIRDP and securing prosperity of rural areas and for matters
connected therewith in incidentalthereto". The main objectives of
the NABARD as stated in the statement of objectives
whileplacing the bill before the Lok Sabha were categorized as under
: 1. The National Bank will bean apex organisation in respect of all
matters relating to policy, planning operational aspects inthe field of
credit for promotion of Agriculture, Small Scale Industries, Cottage and
VillageIndustries, Handicrafts and other rural crafts and other allied
economic activities in rural areas.2. The Bank will serve as a
refinancing institution for institutional credit such as long-term,shortterm for the promotion of activities in the rural areas. 3. The Bank
will also providedirect lending to any institution as may approved
by the Central Government. 4. The Bank willhave organic links with
the Reserve Bank and maintain a close link with in.
Major Activities
Preparing of Potential Linked Credit Plans for identification of
exploitable potentials underagriculture and other activities available for
development through bank credit. Refinancing banks for extending
loans for investment and production purpose in rural areas. Providing
loans to State Government/Non Government Organizations
(NGOs)/Panchayati RajInstitutions (PRIs) for developing rural
infrastructure. Supporting credit innovations of Non Government
Organizations (NGOs) and other non-formalagencies. Extending
formal banking services to the unreached rural poor by evolving a

supplementarycredit delivery strategy in a cost effective manner by

promoting Self Help Groups (SHGs) Promoting participatory
watershed development for enhancing productivity and profitabilityof
rainfed agriculture in a sustainable manner. On-site inspection of
cooperative banks and Regional Rural Banks (RRBs) and iffsitesurveillance over health of cooperatives andRRBs.
Organization StructureRole and Functions
NABARD is an apex institution accredited with all matters concerning
policy, planning andoperations in the field of credit for agriculture and
other economic activities in rural areas. It is an apex refinancing
agency for the institutions providing investment and productioncredit for
promoting the various developmental activities in rural areas It takes
measures towards institution building for improving absorptive capacity
of the creditdelivery system, including monitoring, formulation of
rehabilitation schemes, restructuring of credit institutions, training of
personnel, etc. It co-ordinates the rural financing activities of
all the institutions engaged in developmentalwork at the field level
and maintains liaison with Government of India, State Governments,
Reserve Bank of India
and other national level institutions concerned with policyformulation.

 It prepares, on annual basis, rural credit plans for all districts in the
country; these plans formthe base for annual credit plans of all rural
financial institutions It undertakes monitoring and evaluation of
projects refinanced by it. It promotes research in the fields of rural
banking, agriculture and rural development
NABARD and its Role in Training
National Bank Staff College, LucknowNational Bank Training Centre,
LucknowZonal Training Centre, Hyderabad Regional Training
Centre, Mangalore Regional Training Centre, Bolpur Bankers
Institute of Rural Development (BIRD), Lucknow The provisions of the
Act as stated below very clearly indicate the nature and scope of
thedevelopmental mandate of the Bank and its role in training and
capacity building with theunderlying belief that the process of
development cannot be accomplished by
credit/refinancealone.Section 38 of the NABARD Act provides that the
Bank shall: maintain expert staff to study all problems relating to
agriculture and rural development andbe available for consultation
to the Central Government, the Reserve Bank, the
StateGovernments and the other institutions engaged in the field of
rural development. provide facilities for training, for dissemination of
information and the promotion of researchincluding the undertaking of
studies, researches, techno-economic and other surveys in thefield of
rural banking, agriculture and rural development. provide technical,
legal, financial, marketing and administrative assistance to any
personengaged in agriculture and rural development activities; may
provide consultancy services in the field of agriculture and rural
development and otherrelated matters in or outside India, on such
terms and against such remuneration, as may beagreed upon;In this
context, the role of training in NABARD and the role played by it for
capacity building inclient institutions, partner agencies and other
developmental agencies is important.For maintaining 'Expert Staff',
the bank needs to provide continuous exposure to its officersand staff
for upscaling their knowledge and skills in core areas. However, in the
initial yearsthe Bank had recruited expert staff from various technical
disciplines and created a separatecadre of officers. These officers were
involved in formulating, appraising, monitoring andevaluating different
agricultural projects implemented by different credit

agencies.Theseofficers, irrespective of their academic background,

were imparted similar type of training asall other officers. Their
placements and the regular job rotations helped in grooming them
totake up assorted assignments, get involved in a variety of roles and
functions including credit,developmental, promotional, supervisory and
necessary support and information for decisionmaking. The Bank also
had access to their specialised skills which were utilised
wheneverneeded.In pursuance of the Bank's mandate as stated
in the Act, the Bank provides training facilitiesfor the RFIs and
agencies involved in rural development through BIRD and the two
RTCs. With aview to broadbase the training and capacity building
efforts, the Bank encourages the RFIs toset up their own training
systems and provides these training institutes the necessary supportto
conduct meaningful and quality training. Options and avenues for
strengthening the traininginterventions at the client level are
continuously examined so that the human resources inthese
institutions are developed to take on the challenges, reckon with the
competition,

improve customer service, expand outreach, develop suitable products

and thereby contributeto rural development.
As NABARD primarily functions through other
agencies, the needs of the clientinstitutions
largely determine the knowledge and
skill requirements of NABARDofficers.
NABARD endeavours to blend the experiences of client bank training
with the training forNABARD officers so as to make training meaningful
and relevant to their roles. Efforts are alsomade to blend the study
findings with the outcome from training to periodically measure
theoverall impact of the investments made in the training
efforts.
Credit functions
Introduction
NABARD's credit functions cover planning, dispensation and
monitoring of credit. This activity involves: Framing policy and

guidelines for rural financial institutionsProviding credit

facilities to issuing organizationsPreparation of potentiallinked credit plans annually for all districts for identification
of credit potential Monitoring the flow of ground level
rural credit
Types of Refinance Facilities
Agency
Credit Facilities
Commercial BanksLong-term credit
f o r i n v e s t m e n t p u r p o s e s Financing the working
capital requirements of Weavers' Co-operative Societies (WCS)
& State Handloom DevelopmentCorporationsShort-term CooperativeStructure (State Co-operativeBanks,District Central
Co-operative Banks, PrimaryAgricultural Credit Societies)Short-term
(crop and other loans)Medium-term (conversion) loans Term loans for
investment purposes Financing WCS for production and marketing
purposesFinancing State Handloom Development Corporations
forworking capital by StateCo-operative BanksLong-term CooperativeStructure(State Co-operativeAgriculture and
RuralDevelopment Banks, Term loans for investment purposesPilot
scheme for financing short term loans in three states

Direct Credit
Direct credit from NABARD constitutes loans to
State Governments.
Supporting Cooperatives
In order to strengthen the owned funds position of cooperative credit
institutions and therebyincreasing their capacity to leverage larger

resources, NABARD provides loans to StateGovernments

to contribute to the share capital of these institutions.
Rural Infrastructure Development
With the objective of assisting State Governments in the completion of
ongoing ruralinfrastructure projects and to take up new infrastructure
projects, the Rural InfrastructureDevelopment Fund (RIDF) was set up
with NABARD in 1995-96 with contributions fromCommercial banks by
way of deposits. The shortfall in agri/priority sector lending
wasdeposited by the commercial banks with NABARD as part of their
contribution to the RIDF. Thetotal corpus covering RIDF I (1995-96) to
X (2004-05) is Rs. 42,000 crore. Sanctions under alltrenches of RIDF
as on 31 March 2005 were Rs.42948.51 crore against which
thedisbursements were Rs. 25384.02 cr.
Anticipated Benefits
It is anticipated that the projects sanctioned upto 31 March 2005 under
RIDF would result in:Creation of additional irrigation potential in 92.47
lakh ha.Addition of 178000 km of rural road network & 331000 meter
bridge lengthContribution to the GDP to the tune of Rs. 11058
croreGeneration of recurring employment of 48.01 lakh jobs and nonrecurring employment of 13681 lakh man days due to increased
irrigationGeneration of non-recurring employment expected from nonirrigation projects: 23238 lakhperson days
Co-financing
To ensure substantial credit flow to agriculture and rural sector and to
instill confidence inbanks for financing hi-tech/export oriented
agriculture projects involving large financialoutlays/sunrise
technologies, etc., NABARD has entered into agreements for cofinancing with12 Commercial Banks thereby sharing the credit risks
with partner banks. Under this arrangement, projects have been
sanctioned in areas like floriculture, organicfarming, milk processing,
ethanol production, infrastructure development and forestry
.
Bulk-lending/ Revolving Fund Assistance

NABARD provides bulk-lending facilities to NGOs. As on 31.3.2005,

30 agencies have beensanctioned assistance of Rs 27.07 crore
against which Rs.15.18 crore has been disbursed.
Production Credit
This is a short-term refinance facility, aimed at
supporting

Agricultural production operations and marketing of crops by farmers

and farmers cooperativesMarketing and distribution of inputs like
fertilizers, seeds and pesticidesProduction and marketing activities of
village cottage industries, handicrafts, handlooms,powerlooms,
artisans, small scale and tiny industries and other rural nonfarm enterprisesEligible institutions for this facility are State
Cooperative Banks (SCBs) and Regional RuralBanks (RRBs). The
period of credit is 12 months.
Short Term Credit
1. Seasonal Agricultural Operations (SAO
)

New line of credit for financing short-term

agricultural /allied andmarketing activities
To provide liquidity to the cooperative banks and to boost credit flow to
the agriculture sector,a new line of credit was introduced in 2003-04
encompassing loans for agricultural purposesagainst security of gold
and security other than charge on crops, working capital credit forallied
agriculture activities, working capital credit for procurement and
distribution of agriculture inputs, marketing of agriculture/allied
products, collection and marketing of minorforest produce etc and
short-term credit support provided to cultivators for higher scales
of finance for commercialisation of agriculture, exports and value
addition.
2. Marketing of Crops
With a view to improve the flow of marketing credit to cultivators for
augmenting their holdingcapacity and checking incidence of distress
sale, NABARD encourages cooperative banks andRRBs to finance
marketing of crops, through its refinance facility for this purpose. Each
drawalagainst the sanctioned credit limit is repayable within a
maximum period of 12 months.
3. Distribution of agri inputs
With a view to ensuring timely supply of agri inputs like
fertilizers, pesticides etc. a line of credit is made available to
cooperative banks for financing Apex/Primary Societies for
stockingand distribution of agri inputs by way of sanction of yearly
limits. Each drawal is repayablewithin a period of 120 days.
4. Pisciculture Activities
Refinance facilities is extended to cooperative banks and RRBs for
meeting the working capitalrequirements of farmers in pisciculture
activities by way of sanction of ST credit limits. Eachdrawal is
repayable within 12 months.

5. Other than SAO (OSAO)

Refinance is available to cooperative banks for financing the working
capital requirement of PWCS/Apex Weavers' Society, working capital
requirements of industrial societies, financingindividual rural artisans,
etc. Each drawal against the sanctioned credit limit is repayable
within12 months. OSAO refinance is available to RRBs for financing
production and marketingactivities of artisans, village industries and
also for financing persons belonging to weakersections engaged in
trade/business/services. Refinance support is also available to
commercialbanks for financing the working capital requirements of
PWCS. Refinance support is available to SCBs and CBs for meeting
working capital requirements of State Handloom Development
Corporations (SHnDCs).
Special Initiatives

Special line of credit for oilseeds and pulses productionSpecial line of

credit for development of tribals in predominantly tribal areasLiquidity
support to cooperative banks and RRBs for providing relief to farmers
in distress andfarmers in arrearsRevision in methodology for fixing
scale of finance
Refinance against Investment Credit
This is a long-term refinance facility. It is
intended to create incomegenerating assets in
the following:
Agriculture and allied activitiesArtisans, small scale industries, tiny
sector, village and cottage industries, handicrafts,handlooms,
powerlooms, etc.Activities of voluntary agencies and self help
groups working among the rural poor The credit is normally provided
for a period of 3 to 15 years. Investment credit leads to capital
formation through asset creation. It induces technologicalupgradation
resulting in increased production, productivity and incremental income
to farmersand entrepreneurs.
Eligible Institutions
SCARDBs, SCBs, RRBs, CBs, Scheduled Primary Urban
Cooperative Banks, North EastDevelopment Finance Corporation Ltd.
(NEDFI) and NBFCs are eligible from NABARD for theirinvestment
credit in the rural sector.
Eligible Purposes
Some of the major purposes covered under Investment credit are
Minor Irrigation, farmmechanisation, plantation/ horticulture, animal
husbandry, storage/market yards, fisheries,post-harvest management,
food/agro processing, non-farm sector including rural
industries,microfinance, purchase of land (for small/marginal Farmers,
share croppers etc.), rural housingand disbursements under poverty
alleviation programmes like SGSY and SC/ST Action Plan etc.Hi-tech
projects and agri-export zones are identified as thrust areas and

NABARD helps intechno-financial appraisal of such projects besides

providing refinance. In recent years, refinance support has been
extended to new activities like financing of dieselgenerator sets in
Madhya Pradesh and LPG kits to rural households all over the country.
Criteria
The technical feasibility of the project, financial viability and generation
of incremental incometo ultimate borrowers thereby enabling them to
have a reasonable surplus after repayment of the loan installments
are the necessary conditions to be satisfied for sanctioning
investmentcredit. The period of loan ranges between 3 and 15 years
depending on the purpose for whichit is provided.
The beneficiaries of the programme are individuals / group of
individuals, SHGs, proprietory /partnership concerns, companies,
state-owned corporations or cooperative societies. The refinance
is usually 90% to 100% of the loan amount. The balance, wherever
applicable,will be met by the banks or the concerned state
governments or the Government of India inthe case of SCARDBs.
With a view to ensure credit flow to certain thrust areas, such as
specialcategory beneficiaries like SC/ST members, self help groups,
etc., the quantum of refinance isenhanced to 100%.
Interim Finance
SCARDBs are being extended interim finance in order to enable them
to provide investmentcredit to ultimate borrowers for eligible purposes
and avail refinance within 3 months againstthe same.
http://www.nabard.org/creditfunctions/investm
entcredit.asp