Buoyed by expectations of a good monsoon, the National Bank for Agriculture & Rural Development plans to increase its refinancing of banks to Rs 32,000 crore during 2008-09, an increase of over 33% on the previous year?s figure.
It is also providing Rs 7,000 crore for liquidity support to the banks. UC Sarangi, Nabard?s chairman, said, ?This year we have kept a target of Rs 22,000 crore for short-term loans and Rs 9,500 crore for long-term loans.?
Last year, Nabard had disbursed Rs 24,000 crore, including Rs 15,000 crore as short-term loans, to the banks.
Commercial banks and co-operative banks, which have disbursed about 80% of farm loans, have sought speedy refinance from Nabard following the loan waiver. The banks are facing difficulty in giving fresh loans for the kharif season.
?We have advised the banks to take a small liquidity support at 9% rate of interest to start lending and convert rest of the amount into refinance later on. The rate of interest on the refinance would be much less, at 3.5%,? Sarangi said.
The finance ministry will give Nabard Rs 25,000 crore by August for disbursal among the banks which have taken part in the loan waiver scheme. For a banking conclave organised by the Federation of Indian Chambers of Commerce & Industry, Sarangi said Nabard is trying to form self-help groups (SHGs) of small and marginal farmers.
?We?ll be able to reach all small farmers then. We are now able to reach 58 million farmers through SHGs now,? he said. It will start a pilot project in five to seven states.
Nabard, which received Rs 5,000 crore from Reserve Bank of India this year, has a corpus of Rs 12,000 ready for disbursal. ?We will raise funds through bonds to meet loan growth,? he said. Sarangi said the bank is also looking into the rate of interest offered for the Bhavishya Nirman Bond and Nabard Rural Bonds after banks revised their rates.
