NABARD issues additional short-term refinance policy for financing Seasonal Agricultural Operations for F.Y. 2021

Apr 27, 2020 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The National Bank for Agricultural and Rural Development (NABARD) on April 15, 2020, has issued an Additional Short-Term (ST) refinance provision to Regional Rural Banks (RRB) for financing Seasonal Agricultural Operations (SAO) for the Financial Year 2020-2021. The Additional ST (SAO) refinance will be provided to the RRBs only in respect of crop loans disbursed during the operative period.

The followings provisions are included:-

1. The total limit sanctioned under additional short-term refinance will be upto 50% of the Realistic Lending Programme (RLP) including outstanding under normal ST (SAO). The RLP for the year 2020-21 may be arrived at on the basis of average growth rate in crop loans disbursed during previous three years.

2. RRBs can draw upto 50% (net of the amount drawn under Short Term Regional Rural Bank (STRRB) fund) of Ground Level Credit (GLC) or as the case may be under the line of credit.

3. The limit will be available only for crop loans issued upto Rupees 3 lakh at farmer level.

4. The refinance under this line of credit will be reckoned as owned funds of the bank which is eligible for Interest subvention as per extant Interest Subvention Scheme guidelines.

5. For sanction of Additional ST (SAO) credit limit, an application in the prescribed format can be submitted to NABARD Ro in respective state.

6. The interest rates on refinance will be as decided by NABARD from time to time. Interest is payable at half-yearly rests on 01 October and 01 April.

7. RRBs which fail to honour their commitments to NABARD in repayment of principal, payment of interest and / or other dues by the prescribed due dates, will not be eligible for any type of refinance facility from NABARD.

8. The amount drawn against the limit are repayable on demand. However, each drawal on the credit limit would be treated as a separate loan and would normally be repayable in a period of 12 months from the date of drawal.

9. In case of excess withdrawal, NABARD may call back the excess refinance availed by bank within 3 days along with the penal interest of 1% p.a.

10. NABARD reserves the right to inspect or get inspected the books of accounts of the RRB.

11. NABARD will have the right to cause special audit of the books of accounts and other relevant material of the RRB either by itself or through other agencies.


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