Nabard to get funds from govt at lower rate

BANKERS' CONFERENCE 2005

The National Bank for Agriculture and Rural Development (Nabard) is in advanced stage of talks with the Centre to raise funds at a lower rate.

On the sidelines of Bankers' Conference (Bancon 2005) organised by Uco Bank, Ranjana Kumar, chairperson of Nabard said, "We are expecting to receive a significant amount of money from the government at a cheaper rate shortly. This would enable us to refinance short term credit provided to small and marginal farmers by cooperative banks and regional rural banks (RRBs)."

Couple of months back, there were reports that Nabard had sought around Rs 15,000 crore from the Centre in this regard.

Kumar further explained that it would enable cooperative banks and RRBs to lend small and marginal farmers at not more than 9 per cent. Last year, Nabard refinanced around 30 per cent of short term credit by cooperative banks and RRBs to small and marginal farmers.

"Once we receive the money, Nabard would be in a position be refinance around 50 per cent of similar credit from last year's figure of 30 per cent," she added.

This would be the first time that Nabard would make a distinction between small and marginal and other categories of farmers, she said.

Within six weeks, Nabard would also come up with guidelines regarding contribution from the Rs 200 crore micro finance fund (MFF) in equity of well performing micro finance institutes (MFIs).

Nabard, along with a committee comprising seven public banks and the RBI, would manage the fund.

After Nabard's success with its package with sugar, the bank now is exploring a similar gameplan for the tea sector.

"Nabard's team would be meeting tea industry people in Kolkata later this month to discuss in details about the tea industry," she added.