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NABARD to Refinance ₹800-cr. Loans

National Bank of Agriculture and Rural Development (NABARD) is a non-bank statutory financial organization that was established on 12th July 1982 by an Act of the Parliament. As a development bank, it is mandated for providing and regulating credit and other facilities for the promotion and development of tribal communities’ livelihood, promotion of cotton industries, agriculture, village industries, handicrafts, rural crafts and other allied economic activities in rural areas. The aim is to promote integrated rural development and secure the prosperity of rural areas. NABARD has been a proud partner of some of the government loan schemes. The subsidy for the scheme as and when received from the concerned Ministry is passed onto the financing banks where the applicant can avail the loan and benefits of the scheme.

NABARD Scheme for Farming Sector

National Bank of Agriculture and Rural Development (NABARD)  provides schemes for the development of the Farming Sector like the “Dairy Entrepreneurship Development Scheme”. Entrepreneurs associated with the dairy business can avail assistance from this scheme. The loan funds can be used to set up small dairy farms, construction, purchase new technology and other such upgrades in the dairy sector.

Objectives:

  • Planning modern day farms for farm milk production
  • The loan funds can be use to finance the purchase of new technology to handle milk production on a commercial scale
  • Generating self-employment and help improve the infrastructure for unorganized sector
  • The scheme encourages heifer calf rearing and conserving good breeding stock

Other Government Loan Schemes offered by NABARD

  • Agri-clinic and Agribusiness Centres Scheme
  • New Agricultural Marketing Infrastructure
  • National Livestock Mission
  • GSS – Ensuring End Use of Subsidy ReleasedCapital Investment Subsidy Scheme for Commercial Production Units for organic / biological Inputs
  • Interest Subvention Scheme

Refinancing

Recently, the NABARD has announced a special refinance facility of Rs. 800 crore for FY21 to support the Government of India’s Water, Sanitisation and Hygiene (WASH) programme. The NABARD scheme will provide concessional refinance to all eligible financial institutions. The bank credit will be extended to Commercial banks, regional rural banks and cooperative banks, NBFCs-MFIs and other MFIs. The repayment tenure on loans is up to 36 months.

Role of NABARD:

  • Represents as a coordinator in operation of Rural Credit Institution.
  • The organization offers assistance to the government, Reserve Bank Of India (RBI) and other organizations in matters relating to rural development.
  • NABARD offers training and research facilities for banks, cooperatives and other organizations working in rural fields.
  • Act as regulator of Cooperative Banks and RRBs.
  • The NABARD scheme has been associated with the implementation of the many project from Word Bank and International Funds for Agriculture Development (IFDA)

Functions of NABARD:

Credit Function :

  • Framing policy and guidelines for rural financial institutions.
  • Providing credit facilities to issuing organization
  • Monitoring the flow of ground level rural credit.

Financial Function:

  • Providing short term and medium term loans to RRBs (Regional Rural Bank), CCBs (central Cooperative bank) and SCBs(state Cooperative banks) and other institutions involved in Agriculture and rural development.
  • Offering long term loan to the Agriculture and allied activities, Artisans, small scale industries , Handicrafts and other non form sectors.
  • It directly provides financing for warehouses, cold storage and cold chain infrastructures, food parks as well as food processing units.

Development Function:

  • The organization helps cooperative banks and other rural banks in preparing their action plan.
  • Monitor implementation of development plan of banks and fulfillment of obligation under (Memorandum of Understanding) MoU.
  • Provide financial support to training institutes of cooperative banks.
  • Helping in development of the farm and non-farming sector by giving financial, technical, educational support.

Supervisory Action:

Inspection of Railway Recruitment Board (RRB), Cooperative Banks, State Cooperative Agriculture and Rural Development Banks (SCARDB), and apex non credit cooperative societies.

NABARD Scheme Interest Rate 2020

Scheme Interest rate
Long Term Refinance Assistance 8.50% onwards
Short Term Refinance Assistance 4.50% onwards
State Cooperative Banks (StCBs) 8.35% onwards
Regional Rural Banks (RRBs) 8.35% onwards
State Cooperative Agriculture and Rural Development Banks (SCARDBs) 8.35% onwards

List of Partner Institution/ Clients

Credit Related Partners

  • State Governments
  • State Owned Bodies and Corporations
  • Scheduled Commercial Banks
  • State Cooperative Agriculture & Rural Development Banks 
  • Scheduled Urban Cooperative Banks
  • Non-Banking Finance Companies
  • Regional Rural Banks
  • State Cooperative Banks
  • District Central Cooperative Banks
  • Farmers’ Collectives and Producers’ Organisation 
  • Corporates/ Companies, individual entrepreneurs, SPV under PPP mode, etc, for projects under Warehouse Infrastructure Fund.

 Development Oriented Partners

  • Rural Financial Institutions
  • Farmers’ Clubs
  • Self-Help Groups
  • Rural Innovators
  • Joint Liability Groups
  • NGOs and Voluntary Agencies
  • Development and Self Employment Training Institutions
  • Research Organisations

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