Nabard to provide more liquidity to co-op banks

This is in addition to the refinance target of Rs 32,000 crore for the fiscal.

"The demand for liquidity support from the state cooperative banks would around Rs 7,000 crore in the fiscal, following the debt waiver scheme," said UC Sarangi, Chairman, Nabard.

Accordingly Nabard will infuse around Rs 39,000 crore in rural credit institutions, against Rs 24,000 crore last fiscal.

 

Of this the short-term refinance target is around Rs 22,000 crore, 46 per cent higher compared to Rs 15,000 crore in 2007-08.

Subsequently, the market borrowing requirements for the apex bank would around Rs 26,000 crore in FY09.

Nabard has already raised Rs 3000 crore so far this fiscal.

Apart from this, Nabard has Rs 5000 crore as reserve and another Rs 5000 crore as government assistance.

"As of now we have Rs 13000 crore at our disposal and the rest of the amount would be market borrowings," Sarangi said.

However, the interest charged for the liquidity support would be 9 per cent compared to the 3.5 per cent for refinance, as Nabard will not get the subvention from the government.