“NABARD”

A PROJECT SUBMITTED TO

UNIVERSITY OF MUMBAI FOR PARTIAL

COMPLETION OF THE DEGREE OF

BACHELOR IN COMMERCE (BANKING AND

INSURANCE)

UNDER THE FACULTY OF COMMERCE

BY SHUBHANGI RAJKUMAR GAIKWAD

UNDER THE GUIDANCE OF

ASST.PROF. MRS. DEEPTI CHINDARKAR

VPM’S K .G.JOSHI COLLEGE OF ARTS & N.G.BEDEKAR

COLLEGE OF COMMERCE THANE

MARCH, 2022
 DECLARATION

I the undersigned miss shubhangi rajkumar gaikwad hereby, declare that the work
Embodied this project work titled “nabard”, forms my own contribution the research work
carried out under the guidance
Of asst.prof. Mrs. Deepti chindarkar is a result of my own research work and has not
Been previously submitted to any other university for any other degree to his or any other
University.
Wherever references have been made to the previous works of others, it is clearly indicated as
Such and included in the bibliography.
I, here by further declare that all information of these documents has been obtained and
Presented in accordance with academic rules and ethical conduct.
Name and signature of the learner shubhangi rajkumar gaikwad
Certifie
Name and signature of the guiding teacher
Asst.prof. Deepti chindarkar.
 ACKNOWLEDGEMENT

To list who all have helped me in difficult because they are so numerous and
the depth is so Enormous. I would like to acknowledge the following has been
idealistic channels and fresh dimensioning the completion of the project.
I take this opportunity to thank the university of mumbai for giving me chance
to do this Project.
I would like to thanks my principal, mrs. Dr. Suchitra naik for providing The
necessary facilities required for completion of this project.
I take this opportunity to thank our coordinator mrs. Dr. Mrunmayee thatte,
For her moral support and guidance. I would also like to express my sincere
gratitude towards my project guide asst. Prof. Mrs. Deepti chindarkar whose
guidance and care made the project successful
I would like to thank my college library for having provided various reference
books and magazine related to my project lastly i would like to thank each and
every person who directly or indirectly helped me incompletion of project
especially my parents and peers who supported me throughout my project.
 TABLE OF CONTENT

SR NO INDEX PAGE NO
CHAPTER :1 INTRODUCTION

1.1 ITRODUCTION TO BANKING SYSTEM IN INDIA

1.2 HISTORY OF BANKING

1.3 TYPES OF BANKS
1.4 INTRODUCTRION OF NABARD
1.5 FEATURES OF NABARD
1.6 FUNCTIONS OF NABARD
CHAPTER :2 RESEARCH METHODOLOGY

2.1 OBJECTIVE OF THE STUDY

2.2 SIGNIFICNACE OF THE STUDY
2.3 SCOPE OF THE STUDY
2.4LIMITATIONS OF THE STUDY
2.5 SOURCES OF THE DATA
2.6 TECHNIQUES OF THE STUDY
CHAPTER NO 3 REVIEW OF LITERATURE
CHAPTER NO 4 DATA ANALYSIS AND INTERPRETATION
4.1 SCHEMES OF NABARD
4.2 FINDINGS AND ANALYSIS
4.3 SECTORS BENEFITTED TO NABARD
CHAPTER NO :5 CONCLUSION
BIBLIOGRAPHY
 CHAPTER 1

INTRODUCTION TO BANKING SYSTEM IN INDIA

The banking sector is the lifeline of any modern economy. It is one of the important financial
pillars of the financial sector, which plays a vital role in the functioning of an economy. It is
very important for economic development of a country that its financing requirements of
trade, industry and agriculture are met with higher degree of commitment and responsibility.
Thus, the development of a country is integrally linked with the development of banking. In a
modern economy, banks are to be considered not as dealers in money but as the leaders of
development. They play an important role in the mobilization of deposits and disbursement of
credit to various sectors of the economy.
Banks in a financial system is the mobilization of deposits and disbursement of credit to
various sectors of the economy. The existing, elaborate banking structure of india has
evolved The banking system reflects the economic health of the country. The strength of an
economy depends on the strength and efficiency of the financial system, which in turn
depends on a sound and solvent banking system. A sound banking system efficiently
mobilized savings in productive sectors and a solvent banking system ensures that the bank is
capable of meeting its obligation to the depositors. in india, banks are playing a crucial role in
socio-economic progress of the country after independence. The banking sector is dominant
in india as it accounts for more than half the assets of the financial sector. Indian banks have
been going through a fascinating phase through rapid changes brought about by financial
sector reforms, which are being implemented in a phased manner . The current process of
transformation should be viewed as an opportunity to convert indian banking into a sound,
strong and vibrant system capable of playing its role efficiently and effectively on their own
without imposing any burden on government. After the liberalization of the indian economy,
the government has announced a number of reform measures on the basis of the
recommendation of the narasimhan committee to make the banking sector economically
viable and competitively strongthe current global crisis that hit every country raised various
issue regarding efficiency and solvency of banking system in front of policy makers. Now,
crisis has been almostover, government of india (goi) and reserve bank of india (rbi) are
trying to draw some lessons. Rbi is making necessary changes in his policy to ensure price
stability in the economy. The main objective of these changes is to increase the efficiency of
banking system as a whole as well as of indivi dual institutions. So, it is necessary to measure
the efficiency of indian banks so that corrective steps can be taken to improve the health of
banking system.
The banking system of a country is an important pillar holding up the financial system of the
country’s economy. The major role of over several decades
in india the banks and banking have been divided in different groups. each group has their
own benefits and limitations in their operations. they have their own dedicated target market.
some are concentrated their work in rural sector while others in both rural as well as urban.
most of them are only catering in cities and major towns.
the banking system plays an important role in promoting economic growth not only by
channeling savings into investments but also by improving allocative efficiency of resources.
the recent empirical evidence, in fact, suggests that banking system contributes to economic
growth more by improving the allocative efficiency of resources than by channeling of
resources from savers to investors. an efficient banking system is now regarded as a
necessary pre-condition for growth.

the banking system of india consists of the central bank (reserve bank of india -
rbi), commercial banks, cooperative banks and development banks (development finance
institutions). these institutions, which provide a meeting ground for the savers and the
investors, form the core of india’s financial sector. through mobilization of resources and
their better allocation, banks play an important role in the development process
of underdeveloped countries.
HISTORY OF BANKS

The history of banking began with the first prototype banks which were the merchants of the
world, who gave grain loans to farmers and traders who carried goods between cities. This
was around 2000 bce in assyria, india and sumeria. Later, in ancient greece and during the
roman empire, lenders based in temples gave loans, while accepting deposits and performing
the change of money. Archaeology from this period in ancient china and india also shows
evidence of money lending.

Many of histories position the crucial historical development of a banking system to medieval
and renaissance italy and particularly the affluent cities of florence, venice and genoa. The
bardi and peruzzi families dominated banking in 14th century florence, establishing branches
in many many of histories position the crucial historical development of a banking system to
medieval and renaissance italy and particularly the affluent cities of florence, venice and
genoa. The bardi and peruzzi families dominated banking in 14th century florence,
establishing branches in many other parts of europe.[1] the most famous italian bank was the
medici bank, established by giovanni medici in 1397.[2] the oldest bank still in existence is
banca monte dei paschi di siena, headquartered in siena, italy, which has been operating
continuously since 1472.[3] until the end of 2019, the oldest bank still in operation was the
banco di napoli headquartered in naples, italy which had been operating since 1463.
Development of banking spread from northern italy throughout the holy roman empire, and in
the 15th and 16th century to northern europe. This was followed by a number of important
innovations that took place in amsterdam during the dutch republic in the 17th century, and in
london since the 18th century. During the 20th century, developments in telecommunications
and computing caused major changes to banks' operations and let banks dramatically increase
in size and geographic spread. The financial crisis of 2007–2008 caused many bank failures,
including some of the world's largest banks, and provoked much debate about bank
regulation.
Modern banking practice, including fractional reserve banking and the issue of banknotes,
emerged in the 17th century. At the time, wealthy merchants began to store their gold with
the goldsmiths of london, who possessed private vaults and charged a fee for their service. In
exchange for each deposit of precious metal, the goldsmiths issued receipts certifying the
quantity and purity of the metal they held as a bailee; these receipts could not be assigned,
only the original depositor could collect the stored goods.

Gradually the goldsmiths began to lend the money out on behalf of the depositor, which led
to the development of modern banking practices; promissory notes (which evolved into
banknotes) were issued for money deposited as a loan to the goldsmith these practices created
a new kind of "money" that was actually debt, that is, goldsmiths' debt rather than silver or
gold coin, a commodity that had been regulated and controlled by the monarchy. This
development required the acceptance in trade of the goldsmiths' promissory notes, payable on
demand. Acceptance in turn required a general belief that coin would be available; and a
fractional reserve normally served this purpose. Acceptance also required that the holders of
debt be able to legally enforce an unconditional right to payment; it required that the notes (as
well as drafts) be negotiable instruments. The concept of negotiability had emerged in fits
and starts in european money markets, but it was well developed by the 17th century.
Nevertheless, an act of parliament was required in the early 18th century (1704) to overrule
court decisions holding that the goldsmiths' notes, despite the "customs of merchants", were
not negotiable.
In 1695, the bank of england became one of the first banks to issue banknotes, the first being
the short-lived banknotes issued by stockholms banco in 1661.[167][168] initially, these were
hand-written and issued on deposit or as a loan, and promised to pay the bearer the value of
the note on demand in speciel.

Pre independence period (1786-1947)

The first bank of india was the “bank of hindustan”, established in 1770 and located in the
then indian capital, calcutta. However, this bank failed to work and ceased operations in
1832.
During the pre independence period over 600 banks had been registered in the country, but
only a few managed to survive.
Post independence period (1947-1991)
At the time when india got independence, all the major banks of the country were led
privately which was a cause of concern as the people belonging to rural areas were still
dependent on money lenders for financial assistance.
With an aim to solve this problem, the then government decided to nationalise the banks.
These banks were nationalised under the banking regulation act, 1949. Whereas, the reserve
bank of india was nationalised in 1949.
Candidates can check the list of banking sector reforms and acts at the linked article.
Following it was the formation of state bank of india in 1955 and the other 14 banks were
nationalised between the time duration of 1969 to 1991. These were the banks whose national
deposits were more than 50 crores.

Types of banks

1 .the bank accepts deposits from the public at a considerably lower rate, known as
the deposit rate, and lends money at a much higher rate, known as the lending rate.
The fundamental duties of banks are nearly identical, however, the types of persons
with whom each sector or type deals may vary. In india, modern banking originated
in the late eighteenth century. The 'bank of calcutta,' founded in 1806 and currently
known as the 'state bank of india,' is the country's oldest profit-oriented bank. In
 india, there are currently 34 banks, with 12 public sector banks and 22 private
sector banks. Banks have aided the country's economic development and
developed a culture of saving among its citizens. Let's have a look at the
different types of banks in india.

the following are the functions of indian banks:

• Acceptance of deposits from the public
• Provide demand withdrawal facility
• Lending facility
• Transfer of funds
• Issue of drafts
• Provide customers with locker facilities
• Dealing with foreign exchange

Apart from the aforementioned list, the various banks must additionally fulfill a variety of
utility duties. The space below contains the list of different types of banks in india. If you are
preparing for competitive exams and are looking for expert guidance, you can check out our
daily free current affairs.

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banks are divided into several sorts. The following are the different types of banks in india:
• Central bank
• Cooperative banks
• Commercial banks
• Regional rural banks (rrb)
• Local area banks (lab)
• Specialized banks
• Small finance banks
• Payments banks

This is a crucial subject for the ias exam. Aspirants will learn about the indian banking
system, its functions, and the different types of banks in this article.
The several types of banks in india, their functions, and a list of banks under each sector are
all part of the banking awareness syllabus that is covered in most government exams.
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central bank
Our country's central bank is the reserve bank of india. Each country has a central bank that
oversees all of the country's other financial institutions.
The central bank's principal role is to serve as the government's bank and to oversee and
regulate the country's other banking institutions. The functions of a country's central bank are
listed below:
• Assisting other financial institutions
• Issuing money and enforcing monetary policies
• The financial system's supervisor

In other words, the country's central bank is also known as the banker's bank because it
assists other banks in the country and runs the country's financial system under the
supervision of the government.
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cooperative banks
• These banks are governed by a law enacted by the state government. They provide
short-term loans to agriculture and related industries.
• Cooperative banks' principal purpose is to enhance social welfare by providing low-
interest loans.
• They are arranged in a three-tiered system.
• State cooperative banks, tier 1 (state level) (regulated by rbi, state govt, nabard)
• The rbi, the government, and the national bank for agriculture and rural development
(nabard) all contribute to the project's funding. After then, the money is allocated to
the general population.
• These banks are subject to crr and slr concessions. (slr: 25%, crr: 3%)
• The state owns the company, and the senior management is chosen by the members.
• Central/district cooperative banks, tier 2 (district level)
• Tier 3 (village level) – agriculture (primary) cooperative banks

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commercial banks
• The banking companies act of 1956 established the company.
• They function on a commercial basis, with profit as their primary goal.
• They are owned by the government, state, or any private company and have a unified
structure.
• They look after all sectors, from rural to urban.
• Unless the rbi directs otherwise, these banks do not charge concessional interest rates.
• These banks' primary source of funds is public deposits.
• Commercial banks are further classified into three types:
• Public sector banks are those in which the government or the country's central bank
owns the majority of the stock.
• Banks in the private sector are those in which a private entity, an individual, or a
group of people owns the majority of the stock.
• Foreign banks – this category includes banks with headquarters in other nations and
branches in the united states.
The following is a list of our country's commercial banks:

Commercial banks in india

Public sector banks Private sector banks Foreign banks

1. Punjab national bank Catholic syrian bank

city union bank
(
dhanlaxmi bank
federal bank Australia and new zealand banking
2. Indian bank
jammu and kashmir bank group ltd.
karnataka bank National australia bank
3. State bank of india
karur vysya bank westpac banking corporation
lakshmi vilas bank bank of bahrain & kuwait bsc
4. Canara bank
nainital bank ab bank ltd.
ratnakar bank Hsbc
5. Union bank of india
south indian bank citi bank
tamilnad mercantile bank deutsche bank
6. Indian overseas bank
axis bank dbs bank ltd.
development credit bank (dcb bank ltd) United overseas bank ltd
7. Uco bank
hdfc bank j.p. Morgan chase bank
icici bank standard chartered bank
8. Bank of maharashtra
indusind bank there are over 40 foreign banks in india
kotak mahindra bank
9. Punjab and sind
yes bank
bank
idfc
bandhan bank of bandhan financial
10. Bank of india services.

11. Central bank of

india

12. Bank of baroda

gujarat

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Regional rural banks (rrb)

• These are unique types of commercial banks that lend to agriculture and the rural
economy at a reduced rate.
• Rrbs were founded in 1975 and are governed by the 1976 regional rural bank act.
• Rrbs are 50/50 joint ventures between the federal government and state governments
(15%), as well as a commercial bank (35 percent ).
• Between 1987 and 2005, 196 rrbs were established.
• From 2005 forward, the government began merging rrbs, bringing the total number of
rrbs to 82.
• A single rrb cannot open branches in more than three districts that are geographically
connected.

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Local area banks (lab)
• In india, it was first introduced in 1996.
• The private sector organizes these.
• Local area banks' primary goal is to make a profit.
• Local area banks are governed by the 1956 companies act.
• There are now just four local area banks in existence, all of which are located in south
india.
Specialized banks
• Certain banks exist just to serve a certain purpose. Specialized banks are the name for
several types of financial institutions. These are some of them:
• Sidbi (small industries development bank of india) - sidbi can provide a loan for a
small-scale enterprise or business. With the support of this bank, small businesses can
get current technology and equipment.
• Export and import bank (exim bank) - exim bank stands for export and import bank.
This type of bank can provide loans or other financial help to foreign countries that
are exporting or importing goods.
 • Nabard (national bank for agricultural and rural development) – people can resort to
nabard for any type of financial support for rural, handicraft, village, and agricultural
development.
• Other specialist banks exist, each with a unique function to play in the financial
development of the country.
Small finance banks
This sort of bank, as the name implies, provides loans and financial help to micro industries,
small farmers, and the unorganized sector of society. The country's central bank oversees
these institutions.
The following is a list of our country's small finance banks:

Equitas small finance Northeast small finance

Au small finance bank Jana small finance bank
bank bank

Capital small finance Fincare small finance Suryoday small finance Ujjivan small finance
bank bank bank bank

Utkarsh small finance

Esaf small finance bank
bank

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payments banks
The reserve bank of india conceptualized the payments bank, a newly developed form of
banking. People who have a payment bank account can only deposit up to rs.1,00,000/- and
cannot apply for loans or credit cards through this account.
Payment banks provide services such as internet banking, mobile banking, atm card issuance,
and debit card issuance. The following is a list of our country's few payment banks:
• Airtel payments bank
• India post payments bank
• Fino payments bank
• Jio payments bank
• Paytm payments bank
• Nsdl payments bank
INTRODUCTION OF NABARD

Nabard is a development bank focusing primarily on the rural sector of the country it is the
apex banking institution to provide finance for agriculture and rural development its
headquarter is located in mumbai the country's financial capital it is responsible for the
development of the small industries cottage industries and any any other such village or rural
projects it is a statutory body established in 1982 under parliamentary act- national bank for
agriculture and rural development act,1981.
National bank for agriculture and rural development (nabard) is an apex regulatory body for
overall regulation of regional rural banks and apex cooperative banks in india. It is under
the jurisdiction of ministry of finance, government of india.[5] the bank has been entrusted
with "matters concerning policy areas in india". nabard is active in developing and
implementing financial inclusion.
It is the apex banking institution to provide finance for agriculture and rural development.
National bank for agriculture and rural development (nabard) was established on july 12,
1982 with th, planning, and operations in the field of credit for agriculture and other
economic activities in rural e paid up capital of rs. 100 cr. By 50: 50 contribution of
government of india and reserve bank of india. It is an apex institution in rural credit structure
for providing credit for promotion of agriculture, small scale industries, cottage and village
industries, handicrafts etc.
Changing climate is one of the most serious threats and challenges the world is facing. Impact
of climate change likely to manifest in the form of increase in the intensity and/or frequency
of disasters and extreme events such as droughts, heat waves, tropical cyclones, intense
rainfall, ice melting, thunderstorms, severe dust storms and sea level rise. These events can
exacerbate poverty. There are different aspects of the impact of climate change, among them
one important is gender differential effect. Climate change affects men and women
differently. Women’s role and needs are different; they lack the ownership of natural
resources; low participation in decision-making at household; low capacity to cope with
natural resources; which makes them more vulnerable to the effect of climate change.
Climate change related natural events like drought, flood, cyclones etc. Affects the poor and
marginalized section of the society most and women account for a large proportion of this
section. Women have unequal access to assets and employment opportunities and when
natural resources are eroded, it hits the women hardest because activities carried out by
women to meet their family needs mainly depend on natural resources like land, water, forest
etc. Unseasonal rain or drought increase the women’s workload, increase their drudgery, and
stress level. Traditionally, women have been conservators of the natural environment. They
have been protecting biodiversity as most plant and animal species were domesticated by
women to meet household needs. With increasing commercialization and changing role
structures, traditional roles played by women have vanished resulting in the extinction of
plant and animal species used by them. Though women are more vulnerable to climate
change, it is a well-established fact that they are effective actors or agents of change in
relation to both mitigation and adaptation. Women often have wisdom, knowledge and
expertise that can be used in climate change mitigation, disaster reduction and adaptation
strategies. About 70 per cent of the world's women are poor and most of them lack ownership
of natural resources, lack access to climate information, engaged in physical activities in 7
agriculture. Change in climate affects their physical, economic and food securities. Many
times, they do not have access to or control over the capital that can help them to adapt to
changes and the plans and policies do not incorporate changes in this sense. In indian
situations, women face social, economic and political barriers that limit their coping capacity.
Women are more vulnerable when they are highly dependent on local natural resources for
their livelihood and limited mobility places women in rural areas in a position where they are
disproportionately affected by climate change. In india, 82 per cent farmers are small and
marginal where women are depending on agriculture as a source of livelihood. Nearly 84 per
cent of all economically active women in india are engaged in agriculture and allied activity
(agricultural census 2011). Women except ploughing exclusively do about 60 per cent of EN
have pooagricultural operations and they are dependent on natural resources like soil, water,
forest etc. For earning their livelihood. Climate change has an effect on these natural
resources, which ultimately affects the people dependent upon them. In india womrer access
than men to land, financial resources, health, education, information; they are seldom part of
ownership right and decision-making. Outward men migration for employment puts the
whole burden of agriculture on women what we called feminization of agriculture, which has
become a common phenomenon in indian context. All these factors make women more
vulnerable to climate change and weaken their capacity for adaptation and mitigation. Given
the significant percentage of women are small and marginal and their climate impact studies
carried out globally have shown that climate change affects women harder than men. Social
settings and structure in india is complex and women’s life is bound by religious beliefs,
traditions and patriarchal norms. Moreover, in rural settings they are more dependent on men
and natural conditions for their livelihood. Impact of climate change cannot be isolated from
all these social conditions. Climate change affects women not only in agriculture but also in
other aspects like migration, social exploitation, increase in drudgery, increase in stress etc.

National bank for agriculture and ruraldevelopment (nabard) was established on 12 july 1982
by an act of theparliament. Nabard, as a development bank, is mandated for providing
andregulating credit and other facilities for the promotion and development ofagriculture,
small scale industries, cottage and village industries,handicrafts and other rural crafts and
other allied economic activities inrural areas with a view to promoting integrated rural
development and securingprosperity of rural areas, and for matters connected therewith or
incidentaltheretothe importance of institutional credit in boosting the rural economy was
obvious to the government of india from the beginning of its planning process.as a result, at
the request of the government of india, the reserve bank of india (rbi) formed a committee to
review the arrangements for institutional credit for agriculture and rural development
(craficard) to investigate these critical issues.the committee was established on march 30,
1979, under the chairmanship of b. Sivaraman, a former member of the government of india's
planning commission.
Features of nabard

Preparing credit plans annually at the district level. Guiding the banking sector in
completing their credit targets. Regulates regional rural banks (rrbs) and cooperative banks.
Initiates new projects for rural development work.

The following are some of the features of the nabard loan scheme.

Offering support for funding or refinancing.

Growing the infrastructure of rural communities in india.

Creating credit plans available at a district level for these communities.

Offering guidance and support to the banking sector so the latter can achieve their own credit
targets for the year.

Carrying out the supervision of cooperative banks and regional rural banks (rrbs) in india.

Devising new projects that aid in rural development of the country.

Putting into place any of the government’s developmental schemes aimed at helping the
growth of rural areas.

Offering training services for handicraft artisans.

Functions of nabard
When it comes to aiding rural communities financially, nabard plays a few distinct roles.
They are as follows:the nabard scheme aims to provide funds for india’s rural infrastructure
to enable long term irrigation practices.
Generally offering financial services and aid for the development and improvement of rural
india.
Planning, implementing and managing any funding programs for farming and agricultural
activities.
Providing all kinds of funding services for developing and growing food processing units and
food parks in designated areas.
Offers both long term refinance and short term refinance servicing to its customers.
Simultaneously, it provides any direct refinance services to indian cooperative banks.
Offering lending services, cold chain, and storage infrastructure to rural warehouses.
Marketing federations can receive credit facilities from the nabard scheme.
Creating new policies for india’s rural financial institutions.
Main objectives of nabard
Increasing the number of modern-day farms for milk production.
Technological upgrades increase the production of milk and promote it on a commercial
scale.
 CHAPTER - 2ND

The nabard research study series has been started to enable wider dissemination of research
conducted/sponsored by nabard on the thrust areas of agriculture and rural development
among researchers and stakeholders. ‘scheemes of nabard.

2.1 objective of the study

1. To know about the nabard
2. To learn about the concept and principles of nabard
3. To know about scheme of agriculture sector
4. To study of role of nabard for small artisans and other small industries in rural
sectors.
2.2 significance of the study
1. To understand the role of nabard in developing agriculturesector.
2. To analyse improment in nabard sector.
3. It brings awareness among farmers other people.
2.3 scope of study

1 . To create awareness in the society and to remove misunderstanding, misinterpretation or

misperpestion among people towards nabard

2. Nabard focuses on agriculture rural and other services its has better scope for
improvement in all these sector.

2.4 limitations of the study

Reaserch work was done simultaneously with the circular of tybbi

6 th semester and other academic study so lack of time was there to do the project work
limitation.
2.5 soures of data
Secondary data
2.6 technique used for study
tabulation data
graphical interpretation of data
 CHAPTER NO 3RD

REVIEW OF LITERATURE

Bansal and agarwal (1991) say that the nabard is now the single integrated agency for
meeting the credit needs of all types of agricultural and rural development activities in the
country. ... This should also lead to increased credit absorption capacity in the rural areas.
2. Nanda (2000) observed that nabard has been directing its parties and programs to support
the rural credit institutions towards achieving the goal of providing adequate and timely
credit support for on farm, off-farm and non-farm operations in the rural sectors. Various
schemes have been formulated and implemented by nabard for policy and refinance support
to banks, in different fields like creation of aggregation facilities, farm mechanization,
plantation horticulture animal husbandry, watershed, development, and agro-processing
infrastructure in rural areas.
3.nabard (2000) is a unique development finance institution committed to rural
development15. It provides refinance to banks and the state governments, takes development
and promotional initiatives to improve the impact of credit on development and attempts to
bring about equity and justice in such development. It also supervises the operations of rural
financial institutions like co-operative banks and rrbs. The year 1999-2000, gives high degree
of satisfaction to nabard.
4. Das gupta (2001) says that nabard will definitely encourage the bankers to lend more in
rural areas. Refinance to the states by nabard should be with held if the repayment
performance of rural loans at state level falls below 75 percent. Nabard can consider giving
grants to states for better repayments.
5. Arjun sengupta28 (2001) says that nabard will have to take on huge responsibilities, take a
lot of risks, become an active operator in the field and would need large funds. The state
governments were very hesitant to draw long-term loans from nabard up to the available
limits. This could not be explained by the refinance rates of nabard , which were substantially
lower than the market rates, especially for loans below rs. 2 lakhs.
6. Hitesh and viramgami (2003) view that nabard has a dual role to play as an apex institution
and a refinance institution. Nabard services as a refinancing institution for all kinds of
production and investment credit to agriculture, small scale industries, cottage industries,
handicrafts, real artisans and other allied economic activities with a view to promoting
integrated rural development, it provides long term, medium term and short term credit to
state co-operative banks, regional rural banks, land development and other financial
institutions approved by rbi. During 1993-94, nabard has given short term agricultural credit
of rs 3940 crores, medium term credit of rs 8 crores and long term credit of rs 3232 crore.
7. Lakshmi narayanan and raman than and guvav (2010) focus that capacity building is the
key to healthy growth and sustainability of shg bank linkage programme. A variety of
capacity building programs for all the partners involved in shg banking including bank
branches, ngos, government officials, elected representatives of panchayat raj institutions,
irvs, farmers clubs and shgs should be undertaken. These may include training programs of
various durations with variations in modules according to needs o othe participants besides
exposure visits, sensitization workshops and meets and working in tandem with government
agencies and ngos in the district.
8.satish (2006) reviewed the distress in agriculture in punjab. He observed that since the
nationalisation of banks and the green revolution, institutional credit for agriculture has
grown in punjab. The incidence of suicides in punjab has not been higher than the all india
average and studies reveal that while indebtedness is indeed one of the major causes of
suicides, it is neither the only cause nor the main one.
9. Kale (2011), found that low productivity, low annual income, existence of income liability
gap, indebtedness and availing of non-institutional credit were proved as important causes of
suicide in maharashtra.
10. Kisan credit card (kcc) scheme in august1998 to provide credit to farmers in flexible
manner. Now it has emerged as a major mechanism for purveying credit to agriculture. Up to
september 2010 about 970.64 lakh kccs have been issued (government of india, 2011).
11. The national commission on farmers (ncf) under the chairmanship of prof. M.s.
Swaminathan submitted its final report in october 2007. It has stated that ‘improvement in the
outreach and efficiency of the rural banking system is the need of the hour. Towards this end,
the financial services would be galvanised for timely, adequate and easy reach to the farmers
at reasonable interest rates.
12. Chaired by dr. C.rangarajan 2011 recommended setting up of two funds, namely,
financial inclusion fund and financial inclusion technology fund, each of rs 500 crore.
Through these efforts are being made for providing credit facilities to the ‘financially
excluded’ population, majority of whom are small and marginal farmers and land less .
13. Mohan rakesh (2004) while reviewing performance of agricultural credit in india
indicated that though the overall flow of institutional credit has increased over the years,
there are several gaps in the system like inadequate provision of credit to small and marginal
farmers, paucity of medium and long-term lending, etc. These have major implications for
agricultural development as also the well being of the farming community.
14. Infosys, 2011 have indicated that indian banks have awakened to the vast potential of the
rural sector. Specialized and innovative schemes to improve rural penetration have become
the popular mantra. No-frills accounts, value chain financing for agriculture, investments in
rural infrastructure, etc., are only some of the programs directed at the rural sector.
15. Puhazhendi and jayaraman, 1999in the era of financial sector reforms, sustainability,
viability and operational efficiency of rural financial institutions (rfis) are the major issues
that need to be taken cognizance of in ensuring effective rural credit delivery system.
However, the major problems plaguing the efficiency of rural credit delivery system are the
mounting overdue and non performing assets (npas) of rfis. The overdue problem of different
entities of rural credit delivery structure is reported to be an all-pervasive phenomenon that
cuts across these different agencies.
16. Gulab and reddy, 2007 the situation was quite disturbing in maharashtra, karnataka,
andhra pradesh, kerala and even in the agriculturally most progressive state of punjab (reddy
et.al, 1998; vasavu, 1999; deshpande, 2002; sainath, 2005; mishra, 2005). In a study of
indebtedness of farmers in andhra pradesh it was reported that 70% of the farmer households
were dependent on informal sources (mainly money lenders) for their credit needs.
17. Mishra, 2006 observed that there are evidences to suggest a close link of debt to distress
and suicides in farmers as indicated in higher suicide mortality rate (smr - suicide death for
100,000 persons). Smr for male farmers in india was much higher at 17.5 than non-famers at
14.2 during 2001-05 period (mishra, 2007). The most common risk factors for farmer
suicides are – ‘indebtedness’ (87% of suicides) and ‘economic decline’ 74%.
18. Veerpaul kaur maan and amritpal singh (2013) a study titled “role of nabard and rbi in
agricultural sector growth” analyzes nabard has taken over refinancing functions from the
reserve bank of india with respect of state cooperative banks and regional rural banks. This
study reveals nabard is involved in the implementation of projects assisted by world bank and
its affiliate, the international development association (ida). Nabard has been associated with
implementation of 42 projects with external credit out of which 38 projects are assisted by
ibrd.
19. Naidu, l.k. (1998) conducted a study on rrbs taking a sample of 48 beneficiaries of rural
artisans in cuddapah district of andhra pradesh under rayale seen gramin bank. In this study,
it was concluded that the beneficiaries were able to find an increase in their income because
of the finance provided by the bank.
21. 20. kalkundrickars (1990) in his study on “performance and growth of regional rural
banks in karnataka” found that these banks kumar raj (1993) carried out a study on the topic
“growth and performance of rrbs in haryana”. on the basis of the study of rrbs of haryana, it is
found that there was an enormous increase in deposits and outstanding advances. the
researcher felt the need to increase the share capital and to ensure efficient us of distribution
channels of finance to beneficiaries.
22.a. k. jai prakash (1996) conducted a study with the objective of analyzing the role of rrbs
in economic development and revealed that rrbs have been playing a vital role in the field of
rural development. moreover, rrbs were more efficient in disbursal of loans to the rural
borrowers as compared to the commercial banks. support from the state governments, local
participation, and proper supervision of loans and opening urban branches were some steps
recommended to make rrbs further efficient.
23. according to nathan, swami (2002), policies of current phase of financial liberalization
have had an immediate, direct and dramatic effect on rural credit. there has been a contraction
in rural banking in general and in priority sector ending and preferential lending to the poor in
particular.
24. chavan and pallavi (2004) have examined the growth and regional distribution of rural
banking over the period 1975-2002. chavan’s paper documents the gains made by historical
underprivileged region of east, northeast and central part of india during the period of social
and development banking. these gains were reversed in the 1990s: cutbacks in rural branches
in rural credit deposits ratios were the steepest in the eastern and northeastern states of india.
policies of financial liberalization have unmistakably worsened regional inequalities in rural
banking in india.
25. professor dilip khankhoje and dr. milind sathye (2008) have analyzed to measure the
variation in the performance in terms of productive efficiency of rrbs in india and to assess if
the efficiency of these institutions has increased post-restructuring in 1993-94 or not.
26.malhotra 1990 at presenr rbi and nabard are involved in various aspects of coordination
and liaisioning at the district level. as it would be advantageous to have a single agency to
plan coordinate and monitor credit programms of banks and cooperative at the district level,
nabard has been identified the appropriate agency to undertake these functions for this
purpose nabard will be setting up offices in all the district within next four to five years .these
offices will be compact outfits with a manager and twenty three technical subject matters
specialist with personal computer support. nabard presence at the district level will be it in
close proximity with grass-roots realities and bring about a new dynamism in its activities for
both agricultural and non-agriculture rural development.
27.shivaji 1993 the study by shivaji 1993 revealed that nabard has been providing a variety of
training to offices of the commercial banks rrbs scbs/dccbs and sldbs as to its own staff. it has
also established a central training institute at lucknow called bankers institute for rural
development bird with a capacity to run two streams of training courses with 30 participants
each besides two regional training centers at bolpur and mangalore.
28.narasimban :- according to narasimban 1993,the limits under the general line of credit glci
provided by the reserve bank of india to teh national bank for agriculture and rural
development nabard for short term seasonal agriculture operations were enhanced in january
1993 by rs 400 crores from rs.2,700 crore to support the rabi agricultural operations it has
been decided to further enhance the limits under glcci by rs.400 crores from rs .3,300 nabard
has been provided additional resources of rs.1,000 crores to support agricultural activities.
 CHAPTER NO 04

DATA ANALYSIS AND INTERPRETATION

SCHEMES OF NABARD 05

01swarnajayanti gram swarozgaryojana

swarnajayanti gram swarozgar yojana (sgsy) was enacted in the dawn of the financial year of
1999-2000 as a replacement of six other affiliated schemes. the initiative was designed as an
integrated program that caters to the self-employment of the rural poor. it is funded by the
centre and the state in a 75:25 ratio and is implemented by commercial banks, regional banks
and cooperative banks. other financial institutions, panchayat raj institutions, district rural
development agencies (drdas), non-government organizations (ngos), and technical
institutions in the district will also undertake the process of planning, implementing and
monitoring the scheme. this article seeks to create awareness of this self-employment scheme.
schemes replaced
the scheme effectively replaces for the following other schemes:

• integrated rural development program (irdp)

• training of rural youth for self-employment (trysem)
• development of women and children in rural areas (dwcra)
• supply of improved toolkits to rural artisans (sitra)
• ganga kalyan yojana (gky)
• million wells scheme (mws)

objective
the scheme is established with the intent of bringing the assisted low-income families (also
referred to as swarozgaris) above the poverty line by providing them with an appreciable
sustained income over a period of time. this shall be fulfilled by organizing the rural poor into
self-help groups (shgs) through the process of social mobilization, training, capacity building
and provision of income generating assets.

the scheme envisages the development of activity clusters with an emphasis on key activities
identified in the block, both for the group as well as for individual assistance. these activity
clusters will be in geographic clusters of neighbouring villages within a reasonable radius.

self-help groups
the self-help groups (shgs) will be organized by ‘swarozgaris’ drawn from the bpl list
approved by the gram sabha. the scheme facilitates the formation of self-help groups (shgs),
who will be assisted on a loan-cum-subsidy basis for undertaking income-generating
activities. the scheme regulations state that half of the groups formed at the block level should
be exclusively women groups.

coverage of the scheme

The scheme caters to the rural communities such as those with land, landless labour, educated
unemployed, rural artisans and the disabled. The assisted low-income families could be either
individuals or groups and would be selected from below poverty line (bpl) families by a
three-member team comprising of a block development officer (bdo), banker and sarpanch.

The scheme specifically focuses on the vulnerable sections of the rural poor. The sc/st would
gain the bulk of assistance (50%), while a proportion of the remaining funds would be
earmarked for women and the disabled.

The scheme is aimed at the development of swarozgaris through training courses that are
designed in accordance with the activities selected and the requirements of each swarozgari.
Roadmap

The initiative focusses on establishing a large number of micro-enterprises in rural areas

based on the potential of such areas (land-based or otherwise). Due consideration is accorded
to different components such as capacity building of the poor, skill development training,
credit, training, technology transfer, marketing and infrastructure.

The scheme entails the following processes:

Group creation – this stage covers the assessment of the skill level of the members.

Capital creation – this involves the use of a rotating fund system. Here, the members are
facilitated to hone their skills through experience.

Implementation – the final stage deals with the identification and nurturing of abilities and
group skills. The implementation is processed according to the pace desired by the respective
groups.

Sealing of subsidies

The subsidy allocation for the scheme is as follows:

A uniform subsidy of 30% of the total project cost is allowed under the scheme, subject to a
ceiling of rs. 7,500.

A subsidy of 50% of the total project cost, subject to a ceiling of rs. 10,000 is extended to
sc/sts and disabled persons.

A subsidy of 50% of the total project cost, subject to a ceiling of rs. 1.25 lakh or per capita
subsidy of rs. 10,000 (whichever is less) is provided to self-help groups (shgs) and individual
swarozgaris.

No monetary limits on subsidy have been specified for irrigation projects.

Subsidy under these provisions is back-ended. The banks are prohibited from charging
interest on the subsidy portion of the loan amount.

As already stated, special emphasis will be laid on vulnerable groups among the rural poor
Notes:

The scheme will function through multiple credits in lieu of a one-time credit injection.

The shgs may comprise of 10-20 members.

Shgs are formed through a selection process.

Regular festivals and meals are organized by the government so as to assist the shgs to sell
their output/goods to a broader audience and create a market in the process.

Funding and training

The groups formed under the scheme will be maintained, educated and funded by the ngos,
philanthropists, cbos, banks, organizations promoting self-aid and district land development
agencies (drdas) owned by the government. The training program involves elements of
bookkeeping, market knowledge, identification and appraisal, acquaintance with product
costing, product keeping, familiarization with project financing by banks as well as basic
skills pertaining to the identified activity.

Disposal of revolving funds

Shgs that are in existence for a period of six months and have demonstrated the potential of a
viable group qualifies for the receipt of cash credits from drda and banks. Such funds, known
as revolving funds, is extended to augment the group corpus. This enables a large number of
members to avail loans.

Insurance cover

Insurance coverage is provided for assets/livestock bought out of the loan. Moreover, the
swarozgaris are covered under the group insurance scheme.

Repayment of loan

Loans rendered under these schemes are medium-term with a minimum repayment period of
five years. The instalments will be determined in accordance with the unit cost approved by
the nabard/district. Sgsy committee.
02

Swarnajayanti gram swarozgar yojana

Swarnajayanti gram swarozgar yojana (sgsy) was enacted in the dawn of the financial year of
1999-2000 as a replacement of six other affiliated schemes. The initiative was designed as an
integrated program that caters to the self-employment of the rural poor. It is funded by the
centre and the state in a 75:25 ratio and is implemented by commercial banks, regional banks
and cooperative banks. Other financial institutions, panchayat raj institutions, district rural
development agencies (drdas), non-government organizations (ngos), and technical
institutions in the district will also undertake the process of planning, implementing and
monitoring the scheme. This article seeks to create awareness of this self-employment
scheme.

Schemes replaced

The scheme effectively replaces for the following other schemes:

Integrated rural development program (irdp)

Training of rural youth for self-employment (trysem)

Development of women and children in rural areas (dwcra)

Supply of improved toolkits to rural artisans (sitra)

Ganga kalyan yojana (gky)

Million wells scheme (mws)

Objective

The scheme is established with the intent of bringing the assisted low-income families (also
referred to as swarozgaris) above the poverty line by providing them with an appreciable
sustained income over a period of time. This shall be fulfilled by organizing the rural poor
into self-help groups (shgs) through the process of social mobilization, training, capacity
building and provision of income generating assets.

The scheme envisages the development of activity clusters with an emphasis on key activities
identified in the block, both for the group as well as for individual assistance. These activity
clusters will be in geographic clusters of neighbouring villages within a reasonable radius.
Self-help groups

The self-help groups (shgs) will be organized by ‘swarozgaris’ drawn from the bpl list
approved by the gram sabha. The scheme facilitates the formation of self-help groups (shgs),
who will be assisted on a loan-cum-subsidy basis for undertaking income-generating
activities. The scheme regulations state that half of the groups formed at the block level
should be exclusively women groups.

Coverage of the scheme

The scheme caters to the rural communities such as those with land, landless labour, educated
unemployed, rural artisans and the disabled. The assisted low-income families could be either
individuals or groups and would be selected from below poverty line (bpl) families by a
three-member team comprising of a block development officer (bdo), banker and sarpanch.

The scheme specifically focuses on the vulnerable sections of the rural poor. The sc/st would
gain the bulk of assistance (50%), while a proportion of the remaining funds would be
earmarked for women and the disabled.

The scheme is aimed at the development of swarozgaris through training courses that are
designed in accordance with the activities selected and the requirements of each swarozgari.

Roadmap

The initiative focusses on establishing a large number of micro-enterprises in rural areas

based on the potential of such areas (land-based or otherwise). Due consideration is accorded
to different components such as capacity building of the poor, skill development training,
credit, training, technology transfer, marketing and infrastructure.

The scheme entails the following processes:

Group creation – this stage covers the assessment of the skill level of the members.

Capital creation – this involves the use of a rotating fund system. Here, the members are
facilitated to hone their skills through experience.

Implementation – the final stage deals with the identification and nurturing of abilities and
group skills. The implementation is processed according to the pace desired by the respective
groups.

Sealing of subsidies
The subsidy allocation for the scheme is as follows:

A uniform subsidy of 30% of the total project cost is allowed under the scheme, subject to a
ceiling of rs. 7,500.

A subsidy of 50% of the total project cost, subject to a ceiling of rs. 10,000 is extended to
sc/sts and disabled persons.

A subsidy of 50% of the total project cost, subject to a ceiling of rs. 1.25 lakh or per capita
subsidy of rs. 10,000 (whichever is less) is provided to self-help groups (shgs) and individual
swarozgaris.

No monetary limits on subsidy have been specified for irrigation projects.

Subsidy under these provisions is back-ended. The banks are prohibited from charging
interest on the subsidy portion of the loan amount.

As already stated, special emphasis will be laid on vulnerable groups among the rural poor

Notes:

The scheme will function through multiple credits in lieu of a one-time credit injection.

The shgs may comprise of 10-20 members.

Shgs are formed through a selection process.

Regular festivals and meals are organized by the government so as to assist the shgs to sell
their output/goods to a broader audience and create a market in the process.

Funding and training

The groups formed under the scheme will be maintained, educated and funded by the ngos,
philanthropists, cbos, banks, organizations promoting self-aid and district land development
agencies (drdas) owned by the government. The training program involves elements of
bookkeeping, market knowledge, identification and appraisal, acquaintance with product
costing, product keeping, familiarization with project financing by banks as well as basic
skills pertaining to the identified activity.

Disposal of revolving funds

Shgs that are in existence for a period of six months and have demonstrated the potential of a
viable group qualifies for the receipt of cash credits from drda and banks. Such funds, known
as revolving funds, is extended to augment the group corpus. This enables a large number of
members to avail loans.

Insurance cover

Insurance coverage is provided for assets/livestock bought out of the loan. Moreover, the
swarozgaris are covered under the group insurance scheme.

Repayment of loan

Loans rendered under these schemes are medium-term with a minimum repayment period of
five years. The instalments will be determined in accordance with the unit cost approved by
the nabard/district. Sgsy committee.

Eligible schemes for refinance under off-farm sector

Automatic refinance scheme (arf)

The various schemes formulated over the years have been categorized into five distinct and
compact schemes.

A. Composite loan scheme (cls)

Under this scheme, refinance is given to meet the block and /or working capital requirements
of small/micro enterprises. Maximum refinance available is rs. 10 lacs per unit.

B. Integrated loan scheme (ils)

Under this scheme, refinance is given to block capital and working capital for one operating
cycle. Maximum refinance available is rs. 15 lacs per borrower.

C. Self-employment scheme for ex-servicemen (semfex)

The scheme has been in operation since 15 january 1988. Semfex is specially designed to
provide a comprehensive package of credit for encouraging ex-servicemen to undertake
agricultural and allied activities or to set up off-farm units in rural areas to earn their
livelihood and lead a dignified life. Nabard provides refinance assistance under automatic
refinance facility (arf) to eligible banks for a wide spectrum of manufacturing, processing and
service sector activities under rnfs (investment credit).
D. Soft loan assistance for margin money (slamm)

The scheme is to provide financial assistance to prospective entrepreneurs who have the
requisite talent and skill of entrepreneurship but lack necessary monetary resources to meet
the margin requirements stipulated under relevant refinance schemes of nabard.

E. Small road and water transport operators (srwto)

Under this scheme, financial assistance is provided for acquisition of transport vehicles,
which are to be used for transportation of farm produce/industrial products to rural/urban
marketing centers, including passenger transport vehicle and water transport units. Margin
money assistance will be extended on a very selective basis, up to 10% of the cost of the
vehicle.

Rural housing

Housing in the rural areas, for both agriculturists and non-agriculturists, serves both business
as well as dwelling needs, thereby leading to overall rural development. Nabard is giving
refinance (investment credit) to eligible banks to support rural housing.

Renewable energy

The ministry of new and renewable energy (mnre), government of india and the jawaharlal
nehru national solar mission (jnnsm) are working earnestly to address india’s energy security
challenges. In order to achieve this objective, the mnre has launched a capital cum interest
subsidy scheme for creation of off-grid, decentralised solar powered energy harvesting
devices through application of photo voltaic technology. These devices will be used for
purposes of lighting, heating, etc. At the level of domestic and mini commercial applications.
Nabard is the nodal agency for assessing feasibility and providing refinance for eligible
projects.

03. Nabard (national bank for agriculture and rural development) is a financial institution in
india that specializes in the management and provision of credit and other forms of financial
assistance to the agricultural and rural sectors of the indian economy.

Established in 1982 during the early years of the technological revolution in the country, its
importance in the provision of assistance to meet the changing demands in agrarian
infrastructure was profoundly felt. Being a financial institution of national significance,
nabard operates national schemes and works towards the development of rural infrastructure
across the nation. Indian agriculture needs tremendous modernization and development to
alleviate farmers’ distress and improve rural incomes. This requires the provision of credit to
ensure that farmers reap the fruits of modernization and technological progress. Thus, nabard
has a three-pronged strategy which includes finance, development, and supervision of the
agricultural sector in the country.
Operationalization of nabard schemes

Nabard is involved in the propagation of its various schemes through various banks and other
credit-lending financial institutions across the country, including non-banking financial
companies (nbfcs).

The table given below charts the interest rates offered by nabard for refinancing to banks and
other credit-lending institutions.

Short term refinance assistance 4.50% onwards

Long term refinance assistance 8.50% onwards

Regional rural banks (rrbs) 8.35% onwards

State cooperative banks (stcbs) 8.35% onwards

State cooperative agriculture and rural

8.35% onwards
development banks (scardbs)

The above-mentioned rates of interest are provisional and are subject to change. Besides, the
addition of gst rates is also applicable in these cases.

04 msme scheme

1. Prime minister employment generation programme and other credit support schemes

With the education rate increasing year by year, unemployment problems are also soaring
high. This scheme is structured with the motto of eradicating the unemployment issue and
motivating emerging new businesses by providing necessary financial support.

Prime minister employment generation programme (pmegp):

Implemented by khadi and village industries commission (kvic) at the national level and
through state kvic directorates, state khadi and village industries boards (kvibs), district
industries centres (dics) and banks at the state level, the motto of this scheme is to make
every eligible thriving entrepreneur get a subsidy in their bank account for developing a new
business. Under this scheme, any new project in the manufacturing sector worth up to ₹ 25
lakhs and a new business/service sector worth up to ₹ 10 lakhs gets covered.
Eligibility *age above 18

*a maximum cost of the project should not be more than ₹ 25

manufacturing projects and up to ₹ 10 lakhs for the business/service sector.

*for projects with an estimate of rs.10 lakh in the manufacturing sector and
above rs. 5 lakh in the business/service sector, the beneficiary should have at
least viii standard pass.

*only new projects are eligible

*self help groups, institutions registered under societies registration act

(1860), production co-operative societies, and charitable trusts are also
eligible apart from individuals.

Application *the state/divisional directors of kvic give advertisements via local media,
process radio and prints to invite applications.

*you can also submit your application online

at https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp

Credit guarantee trust fund for micro & small enterprises (cgtmse):

A promising scheme for micro and small enterprises, this cgt sme scheme provides credit-
guaranteed funds to eligible beneficiaries from a trust that is jointly established by the
ministry of msme and small industries development bank of india (sidbi).

Eligibility *both new and existing enterprises are eligible

 *only individual micro and small enterprises are eligible

Application process You can visit banks and financial institutions which are eligible to
provide loan under this scheme

Interest subsidy eligibility certificate (isec):

To promote khadi and village industry products, the government has shaped this effective
scheme. With this scheme, any registered institution of kvic or kvib can avail loan from
banks at a 4% p.a interest rate to develop their business. The lending bank gets the 4%
interest from the beneficiary and the remaining part of the interest is remitted by the central
government through kvic.

Eligibility Any registered institution of kvic or kvib can avail the loan.

Application process You can apply in any recognized bank/financing institutions along with
the isec certificate issued by kvic.

2. Development of khadi, village and coir industries

To make way for the rural crafts and products to lend their part in the economic development
of the nation and to uplift the rural population, several schemes have been introduced by the
ministry of msme.

Market promotion & development scheme (mpda):

Like any other business, khadi and village crafts too need some marketing strategy to reach
the potential customers. With the motive of promoting khadi crafts and increasing the income
of artisans, this mpda scheme is developed.

Eligibility *institution should have valid khadi certificate

*the institution should be categorised as a+,a,b and c

Application process The production institution can claim the total amount from the kvic and
should be distributed to the stakeholders.

Revamped scheme of fund for regeneration of traditional industries (sfurti)

With the motto to regenerate traditional industries, emphasizing traditional skills and to
ensure long-term sustainable income for rural artisans, the ministry of msme has designed
this scheme. Under this scheme, artisans will be clustered and importance is given to
enhancing product development, productivity, competitiveness, product intervention and
even packaging and marketing. Local artisans and entrepreneurs are provided with sufficient
training and improved tools to face the upcoming challenges to optimize their income.

Depending on the number of artisans, the clusters are classified as

Heritage cluster which includes 1000-2500 artisans

Major cluster which includes 500-1000 artisans

Mini cluster which includes up to 500 artisans

Based on its functionality, this scheme can be classified as “soft interventions‟, “hard
interventions” and “thematic interventions‟.

Soft interventions include awareness training and marketing strategies like providing general
awareness, counselling, skill development, organizing exposure visits, market promotion
campaigns, product development, training programs, etc.

Hard interventions include physical structures like creation of facilities for multiple
products, packaging, common facility centres (cfcs), raw material banks (rmbs), developing
infrastructure like training center and warehouse, etc.

Thematic interventions emphasizes on both domestic and international markets and

implement new strategies for brand building, media marketing and e-commerce.

Eligibility Any non-government organizations (ngos), institutions of the central and

state governments and, semi-government institutions, field functionaries of
state and central govt., panchayati raj institutions (pris), and similar agencies
that are expertise in cluster development are eligible for this scheme.

Application You can submit the proposal to the state office, kvic. The proposal will be
process verified at state level and zonal level before being submitted to the scheme
steering committee for approval.

Coir vikas yojana (cvy):

coir industry is yet another rural business that profits around 7lakhs artisans by providing
them employment and livelihood. In our country, coir and coir-related products are exported
to 110 countries. Though benefiting towards the development of the country by making a
huge profit in export, the coir industry needs attention and support for its survival and
improvement. Hence several schemes are devised as action plans.

Coir industry technology up gradation scheme (citus)

A replacement of “development of production infrastructure” of coir vikas yojana, citus

provides financial support for entrepreneurs for procurement of machinery in establishing
new plants or for upgrading/modernizing existing plants.

Eligibility *any coir production/processing unit that is newly established

*any coir production/processing unit registered with coir board under coir
industry (registration) rules, 2008 and having udyog aadhar can apply for
modernization/upgrading.

Application You can submit the application online with all relevant documents
process prescribed.

Science and technology (s&t) for coir:

The main aim of this scheme is to ensure proper research work and training of entrepreneurs
to stay in line with the current technology. The twin research institutes: the central coir
research institute that is located in kalavoor and central institute of coir technology that is
located in bangalore receives funds under this scheme to undergo latest research works whose
outcomes serve as an aid to train entrepreneurs in coir industry for improved productivity and
quality of products and thereby increased income.

Eligibility The central coir research institute, kalavoor and central institute of coir
technology, bangalore are eligible.

Application process If you are a manufacturer or worker in a coir-industry, you can contact
the research centers for assistance.

05 skill upgradation and mahila coir yojana (mcy):

A scheme for providing self-employment opportunities to women in coconut producing

states, this mcy scheme strives to educate rural women about coir processing and coir-
products manufacturing. The national coir training and design centre (nct&dc), kalavoor,
alleppey and research-cum-extension centre, thanjavur, and field training centres of regional
officers/ sub regional offices of the board located at various parts of the country play an
active role in training women entrepreneurs.
Eligibility Workers in coir industry

Application process Trade associations, unit owners, ngos, co-operatives and industries
department can recommend candidates for training. The officer-in-charge
of the regional extension centre will finalize the candidates eligible for
the training.

Export market promotion (emp):

Apart from marketing the coir products locally, exporting those local-made products to
various countries is sure to reap the artisans with higher profits. Understanding this, the coir
board is implementing various export market promotion activities such as funding for
publicity, participating in seminars, conferences and international fairs and presenting awards
in the export sector as a token of recognition.

Eligibility Any manufacturer, entrepreneur or exporter in the coir industry is eligible

under this scheme

Application You can get the application forms from the coir board ho or can download
process from the website http://coirboard.gov.in/ to apply for this scheme

Domestic market promotion (dmp):

This scheme is a milestone of coir board in popularizing coir products within the country to
help workmen and entrepreneurs in the coir industry. As part of this scheme, high-end
showrooms are established, maintained and renovated. To showcase the products to the local
customers, various fairs and exhibitions are conducted, exclusively for coir products, and are
publicized by newspapers, television, radio and other media. Apart from that, the board takes
steps in improving the quality of the products by fixing quality standards and regularizing
inspection and certification processes.

Eligibility Apex co-operative societies, central co-op. Societies, primary co-operative

societies, public sector enterprises, franchisees appointed by coir board in
the coir industry and the showroom and sales depots / hindustan coir of the
coir board are eligible for this scheme.

Application You can get the application forms from the coir board ho or can download
process from the website http://coirboard.gov.in/ to apply for this scheme

Trade and industry related functional support services (tirfss):

Statistics is the backbone for the good planning of any business. As part of improving the coir
industry, a reliable it-related management information system is built for collecting and
processing data related to production, productivity, labour infrastructure, raw material,
marketing, etc. In the coir industry and to provide feedback for futuristic planning.

Eligibility All board’s officials, stakeholders, manufacturers, workers and major

market players in the coir industry can avail this benefit.

Application process You can approach the head office and regional offices of the board to avail
the service.

05 nabard is playing an important role in augmenting the flow of credit for the promotion of
agriculture, small scale and cottage industries, handicrafts and other rural crafts and various
other allied activities in rural areas of the country.

Nabard does not help the farmers and other rural people directly rather it flows the credit to
these people through co-operative banks, commercial banks, rrbs, etc. It is thus working as an
apex body dealing with policy, planning and other operational aspects of rural credit for the
all-round development of rural economy.

During the last ten years, nabard played an important role in developing the rural economy
and performed all its various functions smoothly and efficiently. Accordingly, the bank
sanctioned short-term credit limits to the extent of rs 3,020 crore in 1990-91 for financing
seasonal agricultural operations (at 3 per cent below the bank rate) as against rs 2,807 crore in
1989-90.

Nabard also sanctioned medium-term credit limits to the extent of rs 46 crore in 1989. During
1990-91, the bank advanced medium term and long term credit to the extent of rs 210 crore.
Nabard also pursued its policy for the promotion of investment in agricultural sector in the
less developed and under banked states.

In 1989-90 rs 737 crore was disbursed in these states. The bank also provided refinance
assistance for different purposes.
4.2 data findings and analysis.

1. The purpose-wise refinance assistance advanced by nabard can be seen from the table 7.17.

Table 7.17 shows that during -1990-91, nabard sanctioned all total 10,650 schemes which
involved its commitment of rs 2,120 crore. Moreover, up to the end of march 1991, nabard
along with erstwhile ardc sanctioned 89,510 projects for which it made a total commitment of
rs 18,300 crore.

02. Agricultural co-operative credit structure:

Plan for the year 2018-19

It is proposed to disburse rs 10500.00 crores of agricultural loans to 23.50 lakh

farmers in the state @ 0% upto 3.00 lakhs through cooperatives for the year 2015 –2016.
Medium and long term agricultural loans upto rs.3.00 lakhs are being lent at 3%.

Disbursement of loans :

Agricultural loans ursement from 01-04-2018 to 31-03-2019

OUT OF OUT OF
WHICH WHICH
LOANS FOR LOANS TO
SL.NO PARTICULARS NUMBER AMOUNT
NEW SC/ST
MEMBERS MEMBERS
NO AMT NO AMT
 SHORT TERM
1 1972694 10585.97 214030 1112.55 264145 1203.12
LOAN
MEDIUM
2 25522 530.78 19427 434.86 2481 46.67
TERM LOAN
LONG TERM
3 16735 233.77 10024 134.15 1519 20.60
LOAN
TOTAL 2014951 11350.52 243481 1681.56 268145 1270.39

Performance of short term, medium term and long term credit structure in the
karnataka

As on 31-3-2019, during the year 2018-19, the short term (st), medium term (mt) and
long term (lt) loans disbursed by the co-operative credit system in the state was rs.
10585.97crores, rs.530.78 crores and rs. 233.77crores respectively, thereby achieving
progress of 84.56% as against the annual target.

The scheme of disbursing loans to the farmers through kissan credit cards was started from
the year 1997-98. As on 31-03-2019, 2167215 kcc cards has been distributed of which
21,08,944 kcc cards holders are covered under personnel accident insurance scheme.

PERFORMANCE OF ST, MT AND LT CREDIT STRUCTURE IN THE

KARNATAKA, FROM 2016-17- TO 2018-19

(RS.IN CRORES)

SHORT TERM MEDIUM TERM LONG TERM TOTAL PERCEN

YE
TAR ACHIEVE TAR ACHIEVE TAR ACHIEVE TAR ACHIEVE TAGE
AR
GET MENT GET MENT GET MENT GET MENT (%)
201
11000 1000. 600.0 12600
6- 10769.00 692.78 440.41 11902.19 94.46
.00 00 0 .00
17
201
12000 1000. 500.0 13500
7- 10571.88 848.73 198.27 11618.88 86.06
.00 00 0 .00
18
201
12000 1000. 423.2 13423
8- 10585.97 530.78 233.77 11350.52 84.56
.00 00 6 .26
19
 RECOVERY OF LOANS

The comparative position of recovery of short, medium and long term loans under the
cooperative credit system in the state for the years from 2016-17 to 2018-19 is presented in
the following table.

RS. IN CRORES

SHORT TERM LOAN MEDIUM TERM LOAN LONG TERM LOAN

YEA DE COLL BAL % OF DE COLL BAL % OF DE COLL BAL % OF
R MA ECTIO ANC RECO MA ECTIO ANC RECO MA ECTIO ANC RECO
ND N E VERY ND N E VERY ND N E VERY
2016- 9954. 585.4 427.2 110.5 638.0 379.6
9368.72 94.12 316.71 74.13 258.41 37.00
17 19 7 3 2 7 6
2017- 1059 947.1 539.5 115.2 852.3 422.6
9647.08 91.06 424.30 78.64 429.71 50.42
18 4.25 7 4 4 3 2
2018- 1130 10281.4 1025. 583.7 105.0 843.2 516.9
90.93 478.66 82.00 326.36 38.70
19 7.30 7 83 3 7 8 2

I:
 SELF HELP GROUPS

IV. INTEREST SUBSIDY TO SELF HELPGROUPS :-

The scheme of advancing loans at interest rate of 4% through primary agricultural credit
societies to self help groups (shgs) in karnataka has been implemented from 01.04.2007. The
differential rate of interest is being reimbursed as interest subsidy by the government to the
co-operative societies. Loan lend during the year 2017-18 through dccb / pacs’s and
recovered during 2018-19, based on the recovery by including nrlm and nulm scheme of
central govt, differential rate of interest will be borne by the state govt. Which is zero percent
for women shg’s and 4% for others.

V. FORMATION, FRESH FINANCE AND REPEAT FINANCE OF SELF

HELPGROUPS :-

During the year 2015-16 rs. 6262.75lakhs and during the year 2016-17 rs. 2089.50lakhs
interest subsidy is released through dccb/credit cooperative societies in favour of shg’s. In
the year 2017-18, women shg’s have been disbursed loans at 0% . During 2018-19 loan
lend to 13820 shg’s amounting to 428.04crores and for this state govt has been released
rs.60.00crores.

RS. IN CRORES
GROUP REPEAT
FRESH FINANCE TOTAL LOANS
FORMATION FINANCE
YEA TARGE ACHIEVE TARGE ACHIEVE TARGE ACHIEVE
R TAR ACHIEVE T MENT T MENT T MENT
GET MENT AM AM AM
NO NO AMT NO NO AMT NO NO AMT
T T T
2016 120 130. 169.4 320 630. 2404 547.1 440 760. 3288 716.5
-17 12000 11419 00 00 8834 4 00 00 6 2 00 00 0 6
2017 950 184. 1368 418.6 265 606. 2508 682.7 360 790. 3877 101.9
-18 12000 23862 0 00 9 7 00 00 3 5 01 00 2 2
2018 970 200. 171.2 303 800. 256.8 400 1000 1382 428.0
-19 16400 12889 0 00 5528 2 00 00 8292 2 00 .00 0 4
ANNUAL REPORT OF NABARD

1.1

SCHEEMES 2018 2019 2020

RS IN
CRORES

PMAY – PRADHAN 10,679 18,008 28,819

MANTRI AWAS
YOJNA GRAMIN

SWACHH BHARAT 8,698 8,698 12,298

MISSION - GRAMIN

DAIRY PROCESSING 440 432 1,010

&
INFRASTRUCTURE
FUND (DIDF)

GREEN CLIMATE 344 344

FUND (GCF)

DIRECT REFINANCE 4,450 3,026

TO DCCBS
Findings And Analysis

1.Nabard Has Invested The Amount On Scheeme Of Pradhan Mantri Jan Yojana In The Year
Of 2018 Of Rs 10,679 Next Year Means In The Yaer 2019 Nabard Has Invested Of Rs
18,008 In Year Of 2020 Nabard Has Invested Of Rs 28,819

2. Nabard has invested the amount on scheeme of swachh bharat mission – gramin in the year
of 2018 of rs10,679 next year means in the yaer 2019 nabard has invested of rs 8,698 in year
of 2020 nabard has invested of rs 12,298.

3. Nabard has invested the amount on scheeme dairy processing & infrastructure fund (didf)
of in the year of 2018 of rs in the yaer 2019 nabard has invested of rs 8,698 in year of 2020
nabard has invested of rs 12,298.

4 Nabard Has Invested The Amount On Scheeme Green Climate Fund (Gcf) In The Yaer
2019 Nabard Has Invested Of Rs In Year Of 2020 Nabard Has Invested Of Rs 3,026.

5 . Nabard has invested the amount on scheeme direct refinance to dccbs in the yaer 2019
nabard has invested of rs 4,450 in year of 2020 nabard has invested of rs 3,026.
4.3 SCHEEMES BENEFIED DUO TO NABARD

1 Financing Of Joint Liability Groups (Jlgs)

Financing of jlgs was introduced as a pilot project in 2004-05 by nabard in 8 states with the
support of 13 rrbs. The scheme was later mainstreamed for the banking system in the year
2006. Jlgs are informal groups of 4-10 members who are engaged in similar economic
activities and who are willing to jointly undertake to repay the loans taken by the group from
the banks. Jlgs basically are credit groups of small/marginal/tenant farmers/ asset less poor
who do not have proper title of their farmland. Regular savings by the jlg members is purely
voluntary and their credit needs are met through loans from financial institutions and such
loans could be individual loans or group loans against mutual guarantee.

Apart from extending refinance support of 100% to the financing banks, nabard also extends
financial support for awareness creation and capacity building of all stakeholders under the
scheme. Nabard also extends grant support for formation and nurturing of jlgs to banks and
other jlg promoting institutions (jlgpis).

2 Micro Enterprise Development Programme (Medps)

Nabard since 2006 has been supporting need-based skill development programmes (medps)
for matured shgs which already have access to finance from banks. Medps are on-location
skill development training programmes which attempt to bridge the skill deficits or facilitates
optimization of production activities already pursued by the shg members. Grant is provided
to eligible training institutions and shpis to provide skill development training in farm/off-
farm/service sector activities leading to establishment of micro enterprises either on
individual basis or on group basis. Over the years around 4.68 lakh shg members have been
covered through 16,406 medps.

3. Support for training and capacity building of clients

Giving due recognition to training and capacity building of various stakeholders such as
bankers, ngos, government officials, shg members and trainers, nabard has trained around
39.40 lakh participants as on 31 march 2018, in the process giving shape to a strong back up
team for implementation of the programme.
 CHAPTER 5

CONCLUSION AND SUGGESTIONS

5.1 Conclusion

Nabard has played a very vital role in the development of indian commodity market. It has a
wide scope of services through which it has helped various sectors for its development some
of the important functions are crediting ,housing, supervision ,etc .but one of its most
important function is micro finance . Micro-finance includes functions such as giving loans
for setting up business relating to agriculture and helping self-help groups (shgs).

It also helps in savings functions. The main objective of micro finance is to promote
sustainable and equitable agriculture and rural prosperity through effective credit supply .
Related services institutional development and other innovative initiatives micro -finance has
from micro -credit then to micro insurance ,micro developed remittance and micro pension.

Suggestions

Banks Has To Grant The Loans For The Establishment Of Business At A Moderate Rate Of
Interest. Because Of This , The People Can Repay The Loan Amount To Bank Regularly
And Properly

Bank should not issue entire amount of loan to agriculture sector at a time ,it should realise
the loan in instalments .if the climate conditions are good the they have to release remaining
amount .

Sbi has to reduce the interest rate.

Sbi has to entertain indirect sectors of agriculture so that it can have more number of
borrowers of the bank .
Bibliography

Secondary data :-

Books and websites

Websites :-

Https ://www. Agriculture.gov.in/

http://www.nabard.com.

http://scribd.com/doc/47888854/nabard .

http://wiki/national bank for agriculture and rural development.

Book:the banking and finance (Arun Datta)