Nabard to launch a slew of initiatives under repositioning exercise

The National Bank for Agriculture and Rural Development (Nabard) is set to launch a slew of initiatives under its repositioning exercise launched last year.

The bank would launch direct, risk-based lending to two cooperative banks and provide long-term finance to Karnataka and Rajasthan for rural infrastructure. It will also finance producer organisations. It has also started work on centralised accounting and loan management.

“The repositioning envisages revisiting Nabard’s role, products, processes and tuning its functions to achieve the larger good of rural India. The proposals for direct financing from Rajkot District Cooperative Bank and South Canara District Central Cooperative Bank are under consideration. As an application service provider, Nabard will assist cooperative banks in setting up a shared core banking system. It will also launch direct, risk-based lending to select cooperative banks, including short-term cash credit products, designed to be used for maintenance of farm assets, “a Nabard official told Business Standard on condition of anonymity.

Besides, the bank proposes to provide long-term finance to the Karnataka State Warehousing Corporation and the Rajasthan Cooperative Dairy Federation for setting up warehouses and milk processing plants, respectively.

Further, it is processing proposals from state governments to design credit plus intervention products for select rural infrastructure development fund projects.

Under the repositioning exercise, to be carried out with the help of Boston Consulting Group, Nabard will explore opportunities to offer customised structured financial products to state government undertakings.

The official said the bank planned to directly finance and support producer organisations and provide funds for private initiatives in niche areas of agri rural infrastructure. “Currently, proposals from Devbhumi Producer Company, Madhya Pradesh Women Poultry Producer Company and Intivelugu Mahila Dairy Producer Company are under consideration,” said the official. He said the changing economic and financial landscape demanded customer-centric products and delivery, rather than supply-induced one-size-fits-all interventions.

Moreover, the lender plans to increase the use of information technology for improving internal efficiency, especially for human resources management. The bank has already shortlisted four vendors to carry out these changes and started preliminary work on centralised accounting and loan management.