This action might not be possible to undo. Are you sure you want to continue?
for agriculture and other economic activities in rural areas in India. The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the Chairmanship of Shri B. Sivaraman, conceived and recommended the establishment of the National Bank for Agriculture and Rural Development (NABARD). The Indian Parliament through the Act 61 of 1981, approved the setting up of NABARD. The Bank which came into existence on 12 July, 1982, was dedicated to the service of the Nation by the Hon’ble Prime Minister, Smt Indira Gandhi on 5 November, 1982. NABARD is established as a development Bank, in terms of the Preamble of the Act, "for providing and regulating Credit and other facilities for the promotion and development of agriculture, small scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas and for matters connected therewith or incidental thereto." NABARD took over the functions of the erstwhile Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of RBI and Agricultural Refinance and Development Corporation (ARDC). Its subscribed and paid-up Capital was Rs.100 crore which was enhanced to Rs. 500 crore, contributed by the Government Of India (GOI) and RBI in equal proportions. Currently it is Rs. 2000 crore, contibuted by GoI (Rs.550 crore) and RBI (Rs.1450 crore). NABARD: (i) serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas; (ii) takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc. ; (iii) co-ordinates the rural financing activities of all institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy formulation; and (iv) undertakes monitoring and evaluation of projects refinanced by it. NABARD’s refinance is available to State Co-operative Agriculture and Rural Development Banks (SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs), Commercial Banks (CBs) and other financial institutions approved by RBI. While the ultimate beneficiaries of investment credit can be
individuals, partnership concerns, companies, State-owned corporations or cooperative societies, production credit is generally given to individuals. NABARD operates throughout the country through its 28 Regional Offices and one Sub-office, located in the capitals of all the states/union territories. It has 336 District Offices across the country, one Sub-office at Port Blair and one special Cell at Srinagar. It also has 6 training establishments.
ORGANISATIONAL SET-UP BOARD OF DIRECTORS CHAIRMAN MANAGING DIRECTOR EXECUTIVE DIRECTORS (5) REGIONAL TRAINING OFFICES (28) ESTABLISHMENTS (5)
HEAD OFFICE DEPARTMENTS (22)
SUB-OFFICE (1) & SPECIAL CELL(Srinagar) DISTRICT DEVELOPMENT OFFICES (360)
OFFICES all over INDIA
NABARD has suitably qualified and experienced staff in the areas of: General Banking Agriculture and related Sciences such as Irrigation, Plantation and Horticulture, Land Development, Animal Husbandry and Dairy Technology, Agricultural Engineering, Bio-technology, Fisheries, Forestry, etc. Agricultural Economics Accounts and Finance Information Technology Appropriate training and skills are imparted to the staff on an ongoing basis within and outside the country. NABARD's own training establishment as also outside agencies are utilised for the purpose. Staff Structure
CHAIRMAN MANAGING DIRECTOR EXECUTIVE DIRECTORS CHIEF GENERAL MANAGERS GENERAL MANAGERS DEPUTY GENERAL MANAGERS ASSISTANT GENERAL MANAGERS / MANAGERS / ASSISTANT MANAGERS CLERKS / STENOGRAPHERS / TYPISTS
Total Staff: Officers: 2973 (including 50 officers on deputation) Others: 2257
I. Role & Functions of NABARD
Introduction NABARD is an apex institution accredited with all matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas. It is an apex refinancing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas It takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc. It co-ordinates the rural financing activities of all the institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India and other national level institutions concerned with policy formulation. It prepares, on annual basis, rural credit plans for all districts in the country; these plans form the base for annual credit plans of all rural financial institutions It undertakes monitoring and evaluation of projects refinanced by it. It promotes research in the fields of rural banking, agriculture and rural development
a. Institution Building Objectives
The rural financial system in the country calls for a strong and efficient credit delivery system, capable of taking care of the expanding and diverse credit needs of agriculture and rural development. More than 50% of the rural credit is disbursed by the Co-operative Banks and Regional Rural Banks. NABARD is responsible for regulating and supervising the functions of Co-operative banks and RRBs. In this direction NABARD has been taking various initiatives in association with Government of India and RBI to improve the health of Cooperative banks and Regional Rural Banks.
COOPERATIVE DEVELOPMENT FUND (CDF) In pursuance with the recommendations of the Parliamentary Committee on Agriculture, NABARD had created Co-operative Development Fund for providing assistance to Co-operative Credit Institutions for improving their infrastructural facilities for growth. The Fund, which started with an initial corpus of Rs.10.00 crore from the surplus contributed by NABARD, has a balance of Rs.115.68 crore as on 31 March, 2003. The assistance sanctioned to various cooperative institutions from the Fund till 31 March, 2004 aggregated to Rs.62.18 crore against which an amount of Rs.50.87 crore has been disbursed. The Objectives and Purposes of the fund are given below: (a) Objective of the Fund: Supporting the efforts of grass root level institutions (PACS) to mobilize resources etc. Human Resource Development aimed at achieving better working results and improvements in viability and also for improvement in systems in cooperative credit institutions. Building of better MIS and Conduct of special studies for improving functional efficiency and on subjects referred to above. (b) Purposes eligible for assistance: Provision of infrastructural facilities to PACS for deposit mobilization. Staff training and faculty support. Computerization support for building of MIS in cooperative banks. Conduct of special studies. Creation of a conducive recovery climate through meeting the cost of publicity, media, etc.
Providing mobility to the field staff for improving recovery. Reimbursement of training expenditure to ACSTIs and JLTCs Best Performance Awards to Cooperative Banks Establishment of Business Development Department (BDD) in Cooperative Banks Publicity of Kisan Credit Cards (KCC) Mode of Assistance: Assistance is provided by way of grant, soft loan or grant-cum-soft loan. Purpose-wise sanction and disbursement of CDF assistance as on 31 March 2004 is given below: Sr . Purpose N o. 1 2 3 4 5 Infrastructur e to PACS Computerisa tion Purchase of Vehicles Conduct of studies and seminars Reimbursem ent to ACSTIs/JLT Cs Other trainings Fax Machines FA/BDD SCB SCAR DB Othe rs Total Loa n Gran t 929.4 8 347.9 2 99.72 1920. 69 31.94 18.54 19.38 870.0 5 30.08 6.71 Total Assistance sanctioned Amount disbursed % Disb to Sancti on
1131. 67 655.9 0 98.95 904.3 6 16.52 210.1 3 -
426.94 670.62 15.08
1131. 67 18.43 1101. 27 670.6 2 9.50 123.5 3 1920. 69
231. 95 517. 29 -
929.4 8 579.8 7 517.2 9 101.7 9 1920. 69 31.94 30.89 19.38 870.0 5 30.08 6.71
82.1 52.65 77.1 82.40
1016.33 23.55 14.91 -
12.3 5 -
100.0 100.0 77.1 8.6 100.0 100.0 100.0
6 7 8 9
31.94 31.94 40.07 225.0 4
Best Performance Award 10 ODI 11 Cooperators
870.0 870.0 5 5 30.08 30.08 6.71 6.71
Meets 12 KCC 13 Others Total
36.46 3053. 99
26.13 26.13 4.00 40.46 2171.43 992.8 6218. 4 26
26.13 22.66 4323. 3
26.13 22.66 5086. 96
100.0 56.0 81.80
CDF assistance availed of by Cooperative Banks, state-wise is indicated below : CDF - STATEMENT OF ASSISTANCE SANCTIONED & DISBURSED TO SCBs/SLDBs AS ON 31 MARCH 2004 Sl. No . States SCBs SLDBs Total Sanctio Disburseme Sanctio Disburseme Sanctio Disburseme n nt n nt n nt 39.74 217.76 18.50 6.13 70.43 71.23 26.50 27.13 30.32 33.00 17.75 3.22 219.08 51.00 320.09 2.40 1.13 44.76 1.19 8.00 1.19 232.24 66.00 64.32 1.26 20.82 179.45 6.38 0.00 3.05 56.72 26.50 21.62 16.84 14.43 4.96 0.00 6.86 0.00 36.25 5.87 0.00 6.05 4.08 14.07 4.58 44.70 0.00 217.76 0.00 25.36 0.00 6.13 32.20 106.68 5.86 77.10 0.00 26.50 4.68 33.18 4.08 34.40 13.67 47.07 25.61 0.00 127.17 28.01 70.21 6.45 0.00 0.00 0.00 3.01 0.00 1.48 36.35 46.03 0.00 45.69 3.22 405.30 132.86 462.78 29.01 17.47 44.76 1.19 11.15 1.19 243.89 169.10 117.11 1.26 25.40 179.45 6.38 0.00 35.25 62.58 26.50 26.30 20.92 28.10 43.27 0.15 224.33 74.78 318.16 8.85 0.69 1.19 0.00 11.01 1.19 187.07 96.82 107.47 1.26
Andaman & 1 Nicobar 2 Andhra Pradesh Arunachal 3 Pradesh 4 Assam 5 Bihar 6 Chattisgarh 7 Goa 8 Gujarat 9 Haryana 10 Himachal Pradesh Jammu & 11 Kashmir 12 Jharkhand 13 Karnataka 14 Kerala 15 Madhya Pradesh 16 Maharashtra 17 Manipur 18 Meghalaya 19 Mizoram 20 Nagaland 21 New Delhi 22 Orissa 23 Punjab 24 Rajasthan 25 Sikkim
17.66 27.94 0.15 0.00 97.16 186.22 46.77 81.86 247.95 142.69 2.40 26.61 0.69 16.34 1.19 0.00 0.00 0.00 8.00 3.15 1.19 0.00 185.59 11.65 60.47 103.10 61.44 52.79 1.26 0.00
26 27 28 29 30 32 31 33
Tamil Nadu Tripura Uttar Pradesh Uttarnchal West Bengal NAFSCOB NCARDB NCMDARDB TOTAL
73.60 0.93 275.52 32.63 78.88 22.60
71.10 196.50 0.93 7.24 103.63 102.92 13.97 8.17 56.62 90.70 12.03 12.60 1.98 1336.01 1150.60
190.47 270.10 7.03 8.17 60.76 378.44 2.05 40.80 79.28 169.58 22.60 12.60 12.60 1.98 1.98 763.56 3209.13
261.57 7.96 164.39 16.02 135.90 12.03 12.60 1.98 2099.57
KISAN CREDIT CARD SCHEME 1. Genesis Hon'ble Union Finance Minister announced in his budget speech for 199899 that NABARD would formulate a Model scheme for issue of Kisan Credit Cards to farmers, on the basis of their land holdings, for uniform adoption by banks, so that the farmers may use them to readily purchase agricultural inputs such as seeds, fertilisers, pesticides, etc. and also draw cash for their production needs'. NABARD formulated a Model Kisan Credit Card Scheme in consultation with major banks. Model Scheme circulated by RBI to commercial banks and by NABARD to Cooperative banks and RRBs in August 1998, with instructions to introduce the same in their respective area of operation.
2. Objectives As a pioneering credit delivery innovation, Kisan Credit Card Scheme aims at provision of adequate and timely support from the banking system to the farmers for their cultivation needs including purchase of inputs in a flexible and cost effective manner. 3. Contents of Credit Card Beneficiaries covered under the Scheme are issued with a credit card and a pass book or a credit card cum pass book incorporating the name, address, particulars of land holding, borrowing limit, validity period, a passport size photograph of holder etc., which may serve both as an identity card and facilitate recording of transactions on an ongoing basis. Borrower is required to produce the card cum pass book whenever he/she operates the account. 4. Salient features of the Kisan Credit Card (KCC) Scheme Eligible farmers to be provided with a Kisan Credit Card and a pass book or card-cum-pass book. Revolving cash credit facility involving any number of drawals and repayments within the limit. Limit to be fixed on the basis of operational land holding, cropping pattern and scale of finance. Entire production credit needs for full year plus ancillary activities related to crop production to be considered while fixing limit.
Sub-limits may be fixed at the discretion of banks. Card valid for 3 years subject to annual review. As incentive for good performance, credit limits could be enhanced to take care of increase in costs, change in cropping pattern, etc. Each drawal to be repaid within a maximum period of 12 months Conversion of loans also permissible in case of damage to crops due to natural calamities Security, margin, rate of interest, etc. as per RBI norms Operations may be through issuing branch (and also PACS in the case of Cooperative Banks) through other designated branches at the discretion of bank. Withdrawals through slips/cheques accompanied by card and passbook 5. Advantages of the Kisan Credit Card Scheme 5.1 Advantages to farmers Access to adequate and timely credit to farmers Full year's credit requirement of the borrower taken care of Minimum paper work and simplification of documentation for drawal of funds from the bank. Flexibility to draw cash and buy inputs Assured availability of credit at any time enabling reduced interest burden for the farmer Sanction of the facility for 3 years subject to annual review and satisfactory operations and provision for enhancement. Flexibility of drawals from a branch other than the issuing branch at the discretion of the bank
5.2 Benefits of the Scheme to the Banks
Reduction in work load for branch staff by avoidance of repeat appraisal and processing of loan papers under Kisan Credit Card Scheme. Minimum paper work and simplification of documentation for drawal of funds from the bank. Improvement in recycling of funds and better recovery of loans Reduction in transaction cost to the banks. Better Banker - Client relationships 6. Budget 2001-02 announcement - Follow up : Hon'ble Union Finance Minister in his Budget Speech for the year 2001-02 set the future agenda for the Scheme as under : “The innovation of KCC is proved to be very successful. Since the year of its introduction in 1998-99, almost 110 lakhs KC cards have been issued. I am asking our banks to accelerate this programme and cover all eligible agricultural farmers within the next 3 years. I am also asking the banks to provide a personal insurance package to the KCC holders as is often done with other credit cards to cover them against accidental death or permanent disability, up to maximum amount of Rs.50,000/ and Rs.25,000/- respectively. The premium burden will be shared by the card issuing institutions. " 6.1 Coverage of farmers - Future strategy Banks, vide our Circular letter No.NB.PCD(KCC)/29/ 2001-02 dated 10 April 2001, requested to draw up an action plan immediately in consultation with our Regional Office concerned, based on their past performance and experience in implementing the scheme, to ensure the coverage of all the eligible agricultural farmers under the KCC Scheme within the next three years i.e. by 31 March 2004. Banks to ensure that targets fixed for 2001-02, 2002-03 and 2003-04 include new agricultural farmers likely to become eligible for their KC cards after 31 March 2001 also. Targets fixed for issue of KC Cards be disaggregated month-wise and branch/PACS-wise to facilitate close monitoring of progress vis-a-vis target and also advised to RO concerned. In order to ensure achievement of the targets so fixed, banks requested to follow strategies suggested by NABARD from time to time. Towards this end, banks to launch a campaign approach to accelerate pace of implementation of the Scheme. Following specific steps may be taken by the banks :
Conduct of Sensitisation/training programmes for the officers of controlling offices of banks, branch managers and field level functionaries as also district level functions for distribution of cards. Holding Banker-Farmers' Meets, as part of the Kharif 2001 campaign, in each block to identify the ground level constraints in the smooth implementation of the Scheme and to initiate remedial measures therefore Use of VVV Clubs fora for propagation of the scheme. Placement of hoardings/banners etc. at prominent places, such as branch premises, Panchayat buildings, Mandis, etc. Use of audio-video media, bringing out KCC literature in local language to create better awareness about KCC Scheme among farmers. Issue of plastic/laminated cards to serve as Identity Cards. Monitoring of progress in implementation of the Scheme in Board meetings as also through various state/ district and block level fora with the participation of Government functionaries, bankers, farmers etc. 6.2 Personal Accident Insurance Scheme -Salient features : Designated insurance company will nominate one office at district level to function as nodal office for coordinating implementation of personal accident insurance scheme for KCC holders in the district. Nominated office of insurance company to issue a Master Insurance Policy to each DCCB/RRB covering all its KCC holders Premium payable Rs.15/- for a one year policy while Rs.45/- for a 3-year policy. Insurance coverage available under Policy only from date of receipt of premium at insurance company Banks to ensure to incorporate name of Nominee in Kisan Credit Cardcum-Pass Book Simplified claim settlement procedure evolved under Scheme whereby an Enquiry-cum-Verification Committee comprising Branch Manager of implementing bank, Lead Bank Officer and representative of insurance company to certify nature of accident causing disability/death and recommend settlement of insurance claims. Scheme covers risk of KCC holders against death or permanent disability resulting from accidents caused by external, violent and visible means, as under: Death due to accident (within 12 months of the accident)
Caused by outward, violent and visible means -- Rs.50, 000/Permanent total disability -- Rs.50, 000/Loss of two limbs or two eyes or one limb and one eye -- Rs.50, 000/Loss of one limb or one eye -- Rs.25, 000/(cover subject to certain exclusions as per Annexure-A to Master Policy document) 7. Major Steps taken by NABARD: A Brochure on KCC Scheme highlighting the salient features, advantages and other relevant information about the Scheme was brought out by Head Office and ROs were asked to circulate the brochure to State govt. departments, Commercial Banks, Cooperative Banks, RRBs and other concerned agencies/officers so as to generate wider awareness about the Scheme. Floor limit of Rs.5000/- for issue of KC Cards stands withdrawn. Studies on KCC Scheme have been entrusted to BIRD and NABARD Staff College to facilitate feed back on the ground level issues/problems so that changes, where necessary, could be considered. Studies on the implementation of the Scheme undertaken by NABARD periodically. On the lines of instructions of RBI to Commercial Banks, Cooperative Banks and RRBs have been advised that they may, at their discretion, pay interest at a rate based on their perception and other relevant factors on the minimum credit balances in the cash credit accounts under the Kisan Credit Cards of farmers during the period from 10th to the last day of each calendar month. NABARD has prepared a Model Scheme for providing financial assistance for publicity campaign activities of Cooperative Banks under KCC Scheme under CDF with a view to speed up the pace of implementation of KCC Scheme.
8. Progress in implementation of the Scheme Since launching in August 1998, around 2.38 crore Kisan Credit Cards issued upto 31 March 2002 by Cooperative Banks, Regional Rural Banks and Commercial Banks put together.
Scheme implemented in all States and Union Territories (except Chandigarh, Daman & Diu and Dadra & Nagar Haveli) with all Cooperative Banks, RRBs and Commercial Banks participating. Agency-wise/State-wise progress in issue of cards by all banks during 2001-02 and since inception of Scheme.
Supervisory Role of NABARD NABARD has been entrusted with the statutory responsibility of conducting inspections of State Cooperative Banks (SCBs), District Central Cooperative Banks (DCCBs) and Regional Rural Banks (RRBs) under the provision of the
Banking Regulation Act, 1949. In addition, NABARD has also been conducting periodic inspections of state level cooperative institutions such as State Cooperative Agriculture and Rural Development Banks (SCARDBs), Apex Weavers Societies, Marketing Federations, etc. on a voluntary basis. Although the prime objective of the statutory inspections is to ensure general safety of public deposits, NABARD, through these statutory inspections, has been simultaneously endeavoring for further developing and strengthening the above institutions to enable them to play a far more effective and efficient role in meeting the rural credit requirements. The general banking environment emerging out of the financial sector reforms introduced by GOI/ RBI has also since been extended to cover cooperative banks and RRBs. While the capital adequacy norm has not yet been made applicable to these banks, the other prudential norms viz., income recognition, asset classification and provisioning, which were made applicable by Reserve Bank of India to the commercial banking sector have been extended to cover SCBs and DCCBs since 1996-97 and to SCARDBs in 1997-98. These norms had already been extended to RRBs since 1995-96. The exposure of these institutions to the prudential norms also called for a suitable strategy to be adopted by the NABARD to help these banks to adjust to the new financial discipline. The changes mentioned above necessitated a review and revision of the strategy adopted by the NABARD for the inspection and supervision of the cooperative banks and RRBs. Under the revised strategy, a sharper focus of the NABARD's inspection was given on the core areas of the functioning of banks pertaining to Capital Adequacy, Asset Quality, Management, Earnings, Liquidity and Systems Compliance(CAMELSC). Thus NABARD's focus in its statutory `on-site' inspections is on core assessments leaving the collateral appraisals to supplementary inspections. The micro level aspects are to be taken care of by the banks themselves by way of internal inspections or by other agencies such as auditors. In this direction, through a series of workshops and meetings held with the Chief Executives and the Chief Auditors of cooperative banks, NABARD attempted to ensure that the other areas, particularly relating to the internal checks and controls, revenue and income realisation by way of interest on loans and deposits and other routine features of carrying out general banking transactions were suitably taken care of by the respective banks and their concurrent/ statutory audit systems.
Board of Supervision (for SCBs, DCCBs and RRBs) has been constituted
by NABARD under Section 13(3) of NABARD Act, 1981 as an Internal Committee to the Board of Directors of NABARD. The broad powers and functions of the Board of Supervision are : giving directions and guidance in respect of policies and on matters relating to supervision and inspection, reviewing the inspection findings, suggesting appropriate measures, reviewing the follow-up action taken
by Department of Supervision (DoS) on matters of frauds and internal checks and control, identifying the emerging supervisory issues in the functioning of cooperative banks/RRBs such as NPAs recovery, investment portfolio, credit monitoring system, management practices, frauds, etc., and suggesting necessary follow-up measures. It can also recommend appropriate training for Inspecting Officers of NABARD for imparting necessary skills and knowledge, suggest measures for strengthening of DoS, recommend issue of directions by RBI, oversee the quality of inspections carried out and the reports issued, review the information generated through off-site surveillance and other supplementary vehicles, action taken thereon, and undertake any other functions entrusted from time to time by the Board of Directors of NABARD. The Board of Supervision, since its formation on 20 November 1999, has held 22 meetings till 30 June 2004 and reviewed the financial position of Cooperative Banks and RRBs. Based on the observations of BoS, authorities concerned have been apprised of the weaknesses.
Critical evaluation of NABARD
• • • • Income tax exemption:- NABARD was exempted for IT all these years, but has lost that status from the year 2001 onwards and paid Rs.390 Cr by way of IT for the year 2001-02 & Rs.400 Cr for the year 2002-03 Non-Performing Assets: - NABARD has the lowest non-performing assets which is around 0.96% Stagnant Labour: - The number of employees working for NABARD is almost stagnant from the last 10 years. The total numbers of employee’s are 5400 KCC: - Till 31st March 2006 just 582.50 lakh Kisan Credit Card where issued
Two very important programs undertaken by NABARD are Watershed Development & Wadi 1. Water-shed Development has been undertaken in Ahmednagar district of Maharashtra and is replicated in other districts. 2. The other project is Wadi which is in Gujarat, around 10000 families in 200 villages are working like a family to develop 1 acre of Wadi in which they would be growing Trees
After studying the role and various refinancing activities of NABARD one can say that there is a lot of scope for improvement, as the actual scenario is completely different. All the functions of NABARD are adequate, but it is the execution of these functions which is not happening correctly. Hope NABARD will improve its execution plans and improve its performance in refinancing RURAL INDIA
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.