Nabard's refinance to banks in Gujarat drops in Apr-Dec

The National Bank for Agricultural and Rural Development's refinance to banks for lending to priority sectors in Gujarat fell by Rs 1,600 crore to Rs 9,000 crore during April-December 2019 compared to same period of the last fiscal, a senior official said on Tuesday.

The fall was due to lack of growth in agriculture term lending, the official said.

The financial institution, fully owned by Government of India, provided Rs 10,600 crore to banks in Gujarat as refinance in the April-December 2018 period.

"In the first nine-month period ended on December 31, 2019, we have given Rs 9,000 crore to banks as refinancing. The figure was Rs 10,600 crore for the same period last year, and Rs 11,400 crore during the entire financial year 2018-19," Chief General Manager of Nabard (Gujarat) D K Mishra told reporters.

"The figure is low due to a fall in credit growth which has impacted refinancing. Slowdown situation is a reason behind the fall. The growth is not happening in agriculture term lending, but it has now picked up," Mishra said.

Nabard has cumulatively given Rs 30,000 crore to Gujarat under Rural Infrastructure Development Fund (RIDF), which constitutes 9.95 per cent of total RIDF deployed across the country, he said.

Nearly 70 per cent of the fund accounts for irrigation infrastructure, with Rs 13,000 crore lent to the state for Saurashtra-Narmada Avataran Irrigation (Sauni) Yojana, he said.

"This year we gave fund for river rejuvenation and set up solar panel to farmers' fields under RIDF," he said.

Nabard has also given Rs 3,600 crore under long-term irrigation fund (LTIF) for the Sardar Sarovar project, being implemented for the last three years.

Mishra noted that this is one of the 90 projects identified by the Central government which were halted due to fund crunch.

Speaking about the current financial year, Mishra said Nabard has sanctioned Rs 749 crore as dairy infrastructure development fund to two milk unions -- Banas Dairy and Sabar Dairy -- for capacity expansion.

"We are also going to operationalise a few new funds like micro-irrigation fund, fisheries infrastructure development fund and agriculture marketing infrastructure fund," he said.

Nabard has formed 190 farmer producer organisations (FPOs) covering around 35,000 cultivators and "we are going to add 50 more FPOs this (fiscal) year in Gujarat, he said.

In Gujarat, the financial institution had estimated Rs 1.15 lakh crore as credit potential for FY 2019-20.