Expansion of Agricultural & Rural Credit in India through

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Group IX Presentatio n On

NABARD

Date : 2nd September 2011 4/12/12

Venue : SSBM

Flow Of Presentation :
Mini Saraf - Introduction Laukek D Vardhamaan - Functions Anchal Gupta - Refinance Rahul S Acharekar - Credit & Direct Credit Meena Sathappan - Agricultural Credit Govind Goyal - Rural Credit Dorab Doongaji Milestones & Achievements Aakash Sinha RIDF & Conclusion

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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.

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History and Genesis : to Review Arrangements for Institutional The Committee

Credit for Agriculture and Rural Development(CRAFICARD)set up by the RBI under the Chairmanship ofShri B Sivaraman . 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. CRAFICARD found it prudent to integrate short term, medium term and long-term credit structure for the agriculture sector by establishing a new bank. NABARD is the result of this recommendation. It was set up with an initial capital of Rs 100 crore, which was enhanced to Rs 2,000 crore, fully subscribed by the Government of India and the RBI.

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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 Development functions Supervisory functions

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Objectives :
The main objectives of the NABARD as stated in the statement of objectives while placing the bill before the Lok Sabha were categorized as under : 1.The National Bank will be an apex organisation in respect of all matters relating to policy, planning operational aspects in the field of credit for promotion of Agriculture, Small Scale Industries, Cottage and Village Industries, 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, short-term for the promotion of activities in the rural areas. 3.The Bank will also provide direct lending to any institution as may approved by the Central Government. 4.The Bank will have organic links with the Reserve Bank and maintain a close link with in.
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Major Roles and Functions :

Preparing of Potential Linked Credit Plans for identification of exploitable potentials under agriculture 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 Raj Institutions (PRIs) for developing rural infrastructure. Supporting credit innovations of Non Government Organizations (NGOs) and other non-formal agencies. Extending formal banking services to the unreached rural poor by evolving a supplementary credit delivery strategy in a cost effective manner by promoting Self Help Groups (SHGs) 4/12/12

Acts as a coordinator in the operations of rural credit institutions

Extends assistance to the government, theReserve Bank of Indiaand 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 Acts as regulator for cooperative banks and RRBs
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Refinancing :
1. NABARDs mission is accelerated capital formation to promote sustainable and Equitable Agriculture and rural prosperity with REFINANCE as a Lever. 2. Institutions eligible for refinance State Co-operative agriculture and rural development Banks (SCARBs) State Co-operative Bank (SCBs) Commercial Banks (CBs) State agriculture development finance companies (ADFCs) 3. NABARD extends refinance for farm and non-farm sector 4. NABARD extends automatic refinance facility for refinance limit upto Rs 20lakhs 5. It also extends refinance to banks for financing government sponsored prog Such as Swarnajayanti gram swarozgar yojna, action plans of SC/ST development Corporations 6. Other refinance facilities include conversion assistence in case of natural calamity, financing of state handicraft development co-op,industrial co-op societies & forest labour co-op societies
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Credit & Direct Credit

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Agricultural Credit : v Watershed Development Fund : - Concentrates on improvement of productivity of land, concentration of soil and moisture, ground water recharge. - Started in 1999-2000 - Equal contribution of Rs.200 crore from Government and NABARD - Currently present in 100 districts 14 states
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v Farmers Innovation And Promotion Fund: - Initial contribution of Rs.5 crore in 2005 - Aim was to promote innovative and feasible concepts in agriculture. Eg : Rainfed Rabi Cropping, Orcharding in Guava v Capacity Building For Adopting Of Technology(CAT) Scheme : Undertakes Sensitisation of farmers in adopting innovative methods of farming through exposure visits. v Farmers Technology Transfer Fund - Started operation from April 1st,2008 with RS.25 crore - Promotes Technology Transfer

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v Farmers Club: NABARD extends support through Commercial banks, RRBs etc. Financially support farmers when institutional agencies will withdraw their financial support

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v Commodity Futures Trading: NABARD in collaboration with Forward Market Commission(FMC) tries to ensure farmers participation in the market. v Bamboo farming:

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v Crop Insurance NABARD In collaboration with Agriculture Insurance Company of India contributed 30% of Rs.1700 crores

Agriclinics: - Launched by Government of India with the support of NABARD. - Agricultural Graduates provide consultancy, input facilities etc.
v

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Rural Credit
Rural Innovation Fund - Constituted in 2005 - Provide Support for projects in farm, non farm and micro finance sectors. Swarojgar Credit Card Scheme - Formulated in 2003 - As on March 31,2009 9.84 SCC has been issued by banks District Rural Industries Project - Introduced in 1993-94 - Objective to create employment opportunities through credit flow

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Scheme for Strengthening of Rural Haats - Introduced in 1999 in DRIP - The ceiling was increased to 5lakhs Rural Entrepreneurship Development Programme n Skill Development Programme - Formulated in early 1990s - Helps rural unemployed youth to establish their own business Cluster Programme for rural Industries - NABARD approved development of 81 rural clusters - Sectors identified for development are agriculture, cashew and food processing, handicrafts, handlooms n trading.

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Women Empowerment Programmes - Formulation of women development cells - Development of women through area programme - Assistance to rural women in rural non-farm development - Assistance for marketing of non-farm products of rural women

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Other Development Initiatives - steps has been taken to develop north-eastern region - environmental assiastance to NGOs n research organisations, cultivation of medicinal n aromatic plants, finace agricultural graduates for seeting upagribusiness centres and extend refinance for rural housing.

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Over the years has effectively brought in a number of innovations in NABARD

the rural credit domains. To quote a few:

Self Help Groups (SHGs)Farmers Clubs Rural Infrastructure Development Fund (RIDF)Watershed Development Tribal Development and WADI approach Women and Development District Rural Industries Project (DRIP) Rural Entrepreneurship Development Programme (REDP) Rural Marketing Revival of Short-Term Rural Co-operative Structure (STCCS) Rural Innovation Fund NABARD Consultancy Services (NABCONS) Co-Financing
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Mileston Total production credit disbursed at end March 2011 was es

34196 crore. Through the Rural Infrastructure Development Fund (RIDF) 12060.04 crores were disbursed during 2010-11 Under Watershed Development Fund which has a balance of 1847.69 crore as on 31 March 2011, 579 projects in districts of 14 states have benefited. Under the Farmers' Club Programme, during the year 21903 clubs were launched, taking the total to 76708 clubs as on 31 March 2011 helping farmers get access to credit, technology and extension services. Village Development Programme (VDP) is being implemented in 801 villages across 25 states. Under Tribal Development Fund, cumulative sanction amounted to 917.60 crore for 317 projects covering 2.5 lakh families. Under Farm Innovation and Promotion Fund (FIPF), cumulatively 123 projects involving financial support of 11.65 crore were sanctioned 4/12/12 There were more than 69.53 lakh savings linked SHGs and

RDF I

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Amendments to NABARD Act,1981

Amendments were made effective from Feb 1st ,2001. Enhancement of capital limit from Rs.500 crore to Rs.5000 crore. Holding of private equity up to 49% with 51% by government and RBI. Flexibility in resource mobilization and credit delivery.

- Introduction of new products and set up of new subsidiaries

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NABARD as consultant

NABARD has set up NABCON a consulting wing for loan seekers in 2003.

It provides information, technical guidance, critical ideas, consultancy services to entrepreneurs,banks,cooperatives etc.

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NABARD as supervisor
NABARD along with RBI supervises rural cooperatives. NABARD conducts voluntary inspection of State Cooperative Agriculture And Rural Development Banks(SCARDBs)

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Q & A Thank you

We Appreciate Your Attention

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