NABARD issues short-term refinance policy for State Cooperative Banks for F.Y. 2020-21

Apr 27, 2020 | by Avantis RegTech Legal Research Team


Industry Specific Compliance

The National Bank for Agricultural and Rural Development (NABARD) on April 16, 2020, has issued a provision of short term (ST) refinance policy to State Cooperative Banks (StCBs) for financing marketing of crops and other purposes under ST (Others) for the Financial Year 2020-2021. 

The followings are included:-

1. All licensed StCBs and licensed DCCBs having CRAR of 9% and above will be eligible for refinance under ST (Others).

2. The NABARD will sanction consolidated limit based on their realistic lending program for various eligible purposes. The StCBs with Net NPAs upto 12% will be eligible for refinance.

3. The consolidated limit to be sanctioned by NABARD to StCB would be segragrated into sub-limits on the basis of CCB-wise Realistic Lending program which includes:-

• ST gold loans for agriculture and allied activities, MSME, marketing crops, industrial cooperative societies

• ST crop loans exceeding Rs. 3 Lakh per farmer

• ST Loans for working capital requirements of animal husbandry and fisheries activities, professionals and self-employed

4. The refinance assistance from NABARD to StCBs will be available at an interest rate as advised by NABARD from time to time. The interest is payable at quarterly basis on the first of each quarter (July 01, Oct 01, Jan 01 and April 01 every year).

5. In case of default, the penal interest rate of 2% p.a. over and above the interest rate will be charged.

6. SCBs should submit their applications for sanction of ST (Others) credit limits in the prescribed format to concerned RO of NABARD.

7. NABARD reserves the right to inspect or get inspected the books of accounts of the bank (StCB/eligible CCBs).

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


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