NABARD and its Warehousing Scheme (NWS)

National Bank for Agriculture and Rural Development (NABARD) launched the revamped website on the occasion of its Foundation Day on July 12, 2013, at the Head Office in Mumbai.

At the instance of Government of India Reserve Bank of India (RBI), constituted a committee to review the arrangements for institutional credit for agriculture and rural development (CRAFICARD) on 30 March 1979, under the Chairmanship of Shri B.Sivaraman, former member of Planning Commission, Government of India to review the arrangements for institutional credit for agriculture and rural development. The Parliament, through Act,61 of 1981, approved the setting up of NABARD. The bank came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC).

NABARD was set up with an initial capital of Rs.100 crore. Consequent to the revision in the composition of share capital between Government of India and RBI, the paid up capital as on 31 March 2013, stood at Rs 4000 crore with Government of India holding Rs.3,980 crore (99.50%) and Reserve Bank of India 20.00 crore (0.50%).

The mission of NABARD is to promote sustainable and equitable agriculture and rural prosperity through effective credit support, related services, institution development and other innovative initiatives.

It provides investment credit, production credit to both farm and non-farm based sector. Refinance is provided for production purposes at concessional rate of interest to State Cooperative Banks (SCBs) and Regional Rural Banks (RRBs) by way of sanction of credit limits. Each withdrawal against the sanctioned credit limit is repayable within 12 months. NABARD provides relief to farmers whose crops are damaged due to natural calamities, by way of conversion of current short term agricultural loans into medium term loans.

Long-term refinance facility is normally provided for a period of 3 to 15 years. It is intended to create income generating assets in the following sectors:

1. Agriculture and allied activities

1. Artisans, small scale industries, Non-Farm Sector (Small and Micro Enterprises), handicrafts, handlooms, powerlooms, etc.

1. Activities of voluntary agencies and self help groups working among the rural poor.

The Institutions Eligible for Refinance are :

1. State Co-operative Agriculture & Rural Development Banks (SCARDBs)

1. Regional Rural Banks (RRBs)

1. State Co-operative Banks (SCBs)

1. Commercial Banks (CBs)

1. State Agricultural Development Finance Companies (ADFCs)

1. Scheduled Primary Urban Co-operative Banks (PUCBs)

1. North East Development Finance Corporation (NEDFC)

1. Non-Banking Financial Companies (NBFCs)

In order to achieve India’s energy security challenges, 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 for the purpose of lighting, heating, etc. at the level of domestic and mini commercial applications. NABARD is the nodal agency for giving feasibility and Refinance for eligible projects.

The Government of India has issued instructions for continuance of interest subvention scheme for short term crop loans up to Rs 3 lakh during 2013-14. The interest subvention of 2% per annum will be available to Public Sector Banks and Private Sector Scheduled Commercial Banks (in respect of loans given within the service area of the branch) Co-operative Banks and Regional Rural Banks (RRBs) to enable these banks to give loans up to Rs 3 lakh at 7%. An additional interest subvention of 3% will be available to the prompt paying farmers for timely repayment of crop loans subject to maximum period of one year from the date of disbursement.

Through assistance of Swiss Agency for Development and Cooperation, NABARD set up the Rural Infrastructure Development Fund. Under the RIDF scheme Rs. 51,283 crore have been sanctioned for 2,44,651 projects covering irrigation, rural roads and bridges, health and education, soil conservation, water schemes etc. Rural Innovation Fund is a fund designed to support innovative, risk friendly, unconventional experiments in these sectors that would have the potential to promote livelihood opportunities and employment in rural areas.The assistance is extended to Individuals, NGOs, Cooperatives, Self Help Group, and Panchayati Raj Institutions who have the expertise and willingness to implement innovative ideas for improving the quality of life in rural areas.

This endeavour is perhaps unparalleled in the country, it has in the process partnered with about 4000 partner organisations in grounding many of the interventions be it, SHG-Bank Linkage programme, tree-based tribal communities’ livelihoods initiative, watershed approach in soil and water conservation, increasing crop productivity initiatives through lead crop initiative or dissemination of information flow to agrarian communities through Farmer clubs. Despite all this, it pays huge taxes too, to the exchequer – figuring in the top 50 tax payers consistently. NABARD virtually ploughs back all the profits for development spending, in their unending search for solutions and answers.

Under the new NABARD Warehousing Scheme (NWS) 2013-14 which has received the central government's nod, NABARD can advance direct loans to public as well as private sector for construction of warehouses, cold storage, cold chains and silos. For loan eligibility under the scheme, the infrastructure to be financed should be in keeping with the guidelines stipulated by the Warehouse Development and Regulatory Authority (WDRA).