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ANNUAL REPORT

2011-12

Letter of Transmittal

NATIONAL BANK FOR AGRICULTURE


AND RURAL DEVELOPMENT
Plot: C-24/G, Bandra-Kurla Complex
Post Box: 8121, Bandra (East)
Mumbai - 400 051
CHAIRMAN
Ref.No.NB.Secy./ 748 / AR-1/2012-13
12 July 2012
21 Ashadha 1934 (Saka)
The Secretary
Government of India
Ministry of Finance
Department of Financial Services
New Delhi- 110 001
The Governor
Reserve Bank of India
Central Office
Mumbai- 400 001
Dear Sir
In pursuance of Section 48(5) of the National Bank for Agriculture and Rural
Development Act, 1981, I transmit herewith the following documents :
st

i.

A copy of the audited Annual Accounts for the year ended 31 March 2012 alongwith a copy
of the Auditors Report and

ii.

Two copies of the Annual Report of the Board of Directors on the working of
st
National Bank during the year ended 31 March 2012.

Yours faithfully

Prakash Bakshi

Board of Directors
Dr. Prakash Bakshi
Chairman

Directors appointed
under Section 6(1)(b) of the
NABARD Act, 1981

Shri J. K. Batish

Prof. Trilochan Sastry

Prof. M. L. Sharma

Directors appointed
under Section 6(1)(c) of the
NABARD Act, 1981

Shri H. R. Khan

Prof. Dipankar Gupta

Directors appointed
under Section 6(1)(d) of the
NABARD Act, 1981

Shri P. K. Basu

Shri S. Vijay Kumar

Shri Umesh Kumar

Shri K. Jayakumar

Shri D. B. Gupta

Shri Shaleen Kabra

Directors appointed
under Section 6(1)(e) of the
NABARD Act, 1981

Contents

Page No.
NABARD at a Glance
Key Data References
Principal Officers
Highlights ....................................................................................................................................................................................i
I.
Rural Economic Environment .........................................................................................................................................1
Economic Scenario .............................................................................................................................................................1
Agriculture & Rural Economy .............................................................................................................................................5
II. Business Operations.......................................................................................................................................................19

 3URGXFWLRQ&UHGLW .....................................................................................................................................................19
 ,QYHVWPHQW&UHGLW .......................................................................................................................................................24

 )LQDQFLQJ5XUDO,QIUDVWUXFWXUH .....................................................................................................................................33

 5XUDOLQIUDVWUXFWXUH'HYHORSPHQW)XQG.......................................................................................................................34

 1HZ%XVLQHVV,QLWLDWLYHV .............................................................................................................................................. 42
III. Development and Promotional Initiatives ..................................................................................................................45

 &UHGLW3ODQQLQJ ..........................................................................................................................................................45

 )DUP6HFWRU ...............................................................................................................................................................45

 5XUDO1RQ)DUP6HFWRU ...............................................................................................................................................58

 )LQDQFLDO,QFOXVLRQ .....................................................................................................................................................59

 0LFUR)LQDQFH ............................................................................................................................................................62

 1$%$5'&RQVXOWDQF\6HUYLFHV ..................................................................................................................................67

 5HVHDUFKDQG'HYHORSPHQW$FWLYLWLHV .........................................................................................................................68
IV. Capacity Building of Client Institutions .....................................................................................................................75

 ,QVWLWXWLRQDO'HYHORSPHQW ...........................................................................................................................................75

 6XSHUYLVLRQRI%DQNV .................................................................................................................................................89
V. Organisation, Corporate Governance and Management .......................................................................................93

 0DQDJHPHQW .............................................................................................................................................................93

 +XPDQ5HVRXUFHV0DQDJHPHQW ................................................................................................................................94

 $GPLQLVWUDWLRQDQG2WKHU0DWWHUV ...............................................................................................................................96
VI. Financial Performance & Management of Resources ..........................................................................................101

 6RXUFHVRI)XQGV ....................................................................................................................................................101

 8VHVRI)XQGV ..........................................................................................................................................................103

 ,QFRPHDQG([SHQGLWXUH ..........................................................................................................................................105
Annual Accounts 2011-12 ..................................................................................................................................................107
Auditors Report ............................................................................................................................................. 108
Balance Sheet ................................................................................................................................................ 109
Profit and Loss Account ................................................................................................................................. 110
Schedules to Balance Sheet ............................................................................................................................ 111
Cash Flow Statement ...................................................................................................................................... 133
Consolidated Financial Statements 2011-12 ................................................................................................... 134
E-mail Addresses of NABARD Head Office Departments at Mumbai .............................................................. 140
Regional Offices/Cell/Training Establishments ................................................................................................. 141
Abbreviations ........................................................................................................................................................................143

Boxes
1.1: Measures adopted to Contain Inflation and
Food Inflation .................................................................. 4
1.2: Supply-side Constraints ................................................... 8
2.1: Rural Infrastructure Promotion Fund (RIPF) .................. 42
2.2: Application Service Provider (ASP)
Model of CBS ................................................................ 43
3.1: Impact Evaluation Findings of Watershed Projects ........ 46
3.2: New model in wadi ....................................................... 48
3.3: Pilot Project on Mobile Kisan Credit Card ..................... 49

3.4: UPNRM Projects A success story of Kamadhenu


project in Chittoor district .............................................. 56
3.5: Vocational training through micro-loan:
PanIIT-NABARD model ................................................. 58
3.6: From Red Light to a Ray of light through
JLG in Munger, Bihar .................................................... 64
3.7: Salient features of Scheme for Promotion of Women
SHGs in backward districts of India and Left Wing
Extremism Affected districts of India .............................. 66
4.1: GoI Revival Package for STCCS :
Impact Assessment Study .............................................. 85

Tables
Table 1.1

: Economic Indicators ............................................ 1

Table 3.3

: The progress under FIF & FTTF ........................ 61

Table 1.2

: Sectoral Growth Rates of GDP ............................ 2

Table 3.4

: Progress of the Micro-Finance Programme ........ 62

Table 1.3

: Drivers/Causes of Inflation in India ...................... 3

Table 3.5

Table 1.4

: Trends in Exports and Imports ............................. 5

: Grant Assistance Extended to


various Partners in SHG-Bank
Linkage Programme .......................................... 63

Table 3.6

: Comparative Position of Income


earned from Consultancy .................................. 68

Table 1.5

: Trends in Rainfall and Water Storage ................... 6

Table 1.6

: Compound Growth Rates of Area,


Production, and Yield of Principal Crops
during 1980-1990, 1990-2000 and
2000-2012 ......................................................... 7

Table 1.7

: Requirement & Availability of Seeds in India ....... 8

Table 1.8

: Production and consumption of fertiliser ............. 9

Table 1.9

: Agency-wise Ground level Credit Flow .............. 10

Table 1.10 : Sub-sector-wise Ground Level Credit


Flow for Agriculture & Allied Activities ............... 11

Table 3.7

: Training of RFI Personnel .................................. 72

Table 4.1

: Growth of Short-Term Co-operative


Credit Structure ................................................ 75

Table 4.2

: Growth of Long-Term Co-operative


Credit Structure ................................................. 76

Table 4.3

: Working Results of Co-operative Banks ............ 76

Table 4.4

: Accumulated Losses ......................................... 76

Table 1.11 : Production of Major Crops ................................ 11

Table 4.5

: Region-wise Working Results of SCB ................. 77

Table 1.12 : Production, Consumption and


Exports of Major Plantation Crops .................... 12

Table 4.6

: Region-wise Working Results of DCCB ............. 77

Table 4.7

: Region-wise Working Results of SCARDB ......... 78

Table 1.13 : Area and Production of Major


Horticulture Crops ............................................. 13

Table 4.8

: Region-wise Working Results of PCARDB ......... 78

Table 4.9

: Composition of NPA of Co-operative Banks ...... 79

Table 1.14 : Agency-wise, Year-wise Kisan


Credit Cards Issued .......................................... 15
Table 2.1

: Short term refinance (production credit)


for the last five years ......................................... 19

Table 2.2

: Sanction of ST(SAO) Credit Limits to


SCB for the year 2011-12 ................................. 20

Table 2.3

: Sanction of ST(SAO) Credit Limits to


RRB for the year 2011-12 ................................. 22

Table 4.10 : Percentage of Recovery of


loans to Demand .............................................. 79
Table 4.11 : Frequency Distribution of Co-operative
Banks According to Range of
Loan Recovery Percentage ................................ 80
Table 4.12 : Frequency Distribution of States/UTs
according to Level of Loan Recovery of
SCBs and DCCBs ............................................. 80

Table 2.4

: Rates of Interest on Refinance ........................... 24

Table 2.5

: Agency wise disbursement of Refinance .......... 26

Table 2.6

: Region-wise Disbursement of Refinance ............ 27

Table 4.13 : Frequency Distribution of States/UTs


according to Levels of Loan Recovery
of SCARDBs and PCARDBs.............................. 81

Table 2.7

: Sector-wise Disbursement of Refinance ............. 28

Table 4.14 : Elected Boards under Supersession ................... 81

Table 2.8

: Sector-wise Projects and Amounts


Sanctioned under RIDF XVII ............................. 35

Table 4.15 : Indicators of Performance ................................. 86

Table. 2.9

: Activity-wise Cumulative Sanctions ................... 37

Table 2.10 : Allocations, Sanctions and Disbursements ......... 38

Table 4.17 : Frequency Distribution of States


According to Levels of Recovery of RRB ........... 87

Table 2.11 : Utilisation Percentage of RIDF (I TO XVII) ........ 39

Table 4.18 : Status of Financial Inclusion - RRB .................... 88

Table 2.12 : Cumulative Economic and social benefits .......... 39

Table 5.1

: Promotions effected during the year .................. 95

Table 2.13 : State-wise Expected Benefits under RIDF .......... 40

Table 5.2

: Total Staff Strength ............................................ 95

Table 3.1

: Externally Aided on-going Projects .................... 53

Table 6.1

: Sources of Funds ............................................. 101

Table 3.2

: Progress under UPNRM..................................... 55

Table 6.2

: Uses of Funds .................................................. 104

Table 4.16 : Region-wise Working Results of RRB ................ 87

Charts
Chart 1.1

: Monthly Inflation Rates for Major


Subgroups of WPI (2011-12) .............................. 3

Chart 2.2

: Agency-wise Share in
Refinance Disbursement.................................... 26

Chart 1.2

: Share of Agriculture & Allied Sector in


Total Gross Capital Formation .......................... 14

Chart 2.3

: Region-wise Share in
Refinance Disbursement.................................... 27

Chart 1.3

: GCF in agriculture as a percentage


of GDP orinating in agriculture ......................... 15

Chart 2.4

: Tranche-wise Allocations - RIDF I to XVII......... 34

Chart 2.1

: Financial Support by NABARD ........................ 19

Chart 2.4

: Sector-wise Cumulative Share in


amount Sanctioned ........................................... 36

NABARD AT A GLANCE
(` crore)
Sources of Fund

2012

2011

Uses of Funds

Net

2012

2011

Capital

Reserves & Surplus

3,000

13,408

2,000

11,863

1,000

1,545

Net
Utilisation

Accretion
Cash and Bank Balances

8,313

10538

(-)2,225

Collateralised Borrowing
and Lending Obligation

231

228

2,147

2,548

(-)401

36

19

17

c) AFC Equity

d) SIDBI Equity

48

48

e) AICI Ltd.

60

60

f) NCDEX Ltd. & MCX Ltd.

Investments in
NRC(LTO) Fund

NRC (Stabilisation) Fund

Deposits

Bonds and Debentures

Borrowings from GoI

14,479

14,468

11

1,579

1,577

291

277

14

38,584

85

26,788

124

11,796

(-)39

a) GOI Securities
b) ADFC Equity

34

18

16

g) Nabcons

h) Mutual Fund/VCF

390

(-)390

i) Biotech Venture Fund

26

10

16

j) Treasury Bills

58

58

1,037

1,862

(-)825

375

225

150

12,344

13,461

(-)1,117

2,038

680

1,358

48,338

33,885

14,453

129

193

(-)64

30,762

25,432

5,327

140

167

(-)27

f) Other Loans

2,323

182

2,141

g) RIDF Loans

70,860

66,078

4,782

72

88

(-)16

225

230

(-)5

2,470

2,520

(-)50

1,82,075 1,58,872

23,203

k) Commercial Paper
l) Non Convertible Bonds

Borrowings JNN
Solar Mission

Foreign Currency Loan

33

33

503

503

m) Equity Shares of Other


Institution
n) Debentures in Nature of
Advance
o) Certificate of Deposits

Certificate of Deposits

1,281

137

1,144

Commercial Paper

2,245

6,448

(-)4,203

Term Money Borrowings

182

110

72

Loans and Advances


a) Production &
Marketing Credit
b) Conversion of Production
Credit into MT Loans
c) MT & LT Project Loans

RIDF Deposits

75,107

67,878

7,229

d) Interim finance
e) LT Non Project Loans

STCRC Fund

20,000

14,622

5,378

Other Liabilities

6,345

5,546

799

Other Funds

4,953

6,171

(-)1218

h) Co-finance
(Net of Provision)
Fixed Assets

Total

1,82,075 1,58,872

23,203

Others Assets
Total

KEY DATA REFERENCES


Particulars

Unit

Numerical Value
2010-11

Economic Indicators
Overall GDP 1
Agri GDP 1+
Share of Agri GDP in total GDP
South-west Monsoon
GLC
Foodgrains production
Oilseeds production
Sugarcane production
Cotton production
KCC Issued
Development Initiatives
Watersheds
FIPF- projects
Tribal development projects
FTTF
Farmers Club
NABARD-KfW Projects
RIF- promotional programmes
REDP
SCC Issued
FITF & FIF
SHG Loan Disbursed*
Consultancy Assignments - Contracted
R&D Fund - Sanction
Business Operations
Financial Support by NABARD
Refinance - ST Credit
ST (SAO)
- SCB
- RRB
Weavers
- SCB
ST (OSAO)
- RRB
Refinance - Investment Credit
Farm Sector
NFS
SHG
Co-financing projects
RIDF Loans - Sanction
- Disbursement
Performance of RFI
ST Co-operatives
SCB in profit @
DCCB in profit @
LT Co-operatives
SCARDB in profit @
PCARDB in profit @
ST Co-operatives - NPA Position
SCB - NPA @
DCCB - NPA @
LT Co-operatives - NPA Position
SCARDB - NPA@
PCARDB - NPA @
RRB
RRB in profit
RRB - NPA Position
Inspection of banks@@
CCB@@
RRB@@
Financial Performance &
Management of Resources
Total Working Funds

% Growth
% Growth
%
% deviation from normal
% increase
million tonnes
million tonnes
million tonnes
million bales++
million

Amount (` crore)

2011-12

2010-11

2011-12

4,68,291

43,370

5,09,040

54,269

8.4
7.0 QE
14.5 QE
2
21.79
244.80
32.50
342.40
33.00
10.16

6.5
2.8 RE
13.9 AE
1
8.70
252.60 3rd AE
31.20 3rd AE
345.70 3rd AE
35.00 3rd AE
10.07

66
45
126
512
21,903
8
122
3,327
1.20

15.86
62

41
41
98
395
2,5243
8
108
9,852
0.94
11.96
88

374
45

41
11
12
514

14,453
24.13
1.09

291
45

136
8
13
496

14,548
26.87
17.67

60,483

82,339

No.
No.
No.

21
81
3

23
80
3

8
41,779

3
18,162

23,759
9,799.69
216
600
13,486
5,055
3,446
2,545
12
18,315
12,060

No.
No.

29
324

29
317

491
1,691

521
1,457

No.
No.

10
295

5
329

401
401

367
367

% to loan O/S
% to loan O/S

8.84
12.96

9.01
11.61

4,352
16,396

5,719
15,247

% to loan O/S
% to loan O/S

45.06
5187

44.81
51.96

5,648
4,889

6,116
4,834

No.
% to loan O/S
No.
No.
No.

75
3.75
302
260
42

79
4.14
319
240
48

2,421

2,469

1,58,872

1,82,075

No.
No.
No.
No. of projects
No. of clubs
No.
No. of projects
No.
lakh
No. of projects
lakh
No. of projects
No. of projects

No.
No. of projects

33,996
13,926
190
677
15,422
6,525
3,574
3,073
14
20,701
14,927 ^

QE : Quick Estimate
RE : Revised Estimate
P : Provisional
1 : At Factor Cost at 2004-2005 prices
+ : Includes agriculture, forestry and fishing
++ : Of 170 kgs each
@@ : Statutory Inspections ^ : inclusive of warehousing refinance to Banks
@ : Data pertains to financial years 2009-10 & 2010-11
AE : Advanced Estimate. * : Data pertain to 2009-10 & 2010-11

PRINCIPAL OFFICERS
(31 March 2012)

EXECUTIVE DIRECTORS

S. K. Mitra

V. Ramakrishna Rao

B. S. Shekhawat

CHIEF GENERAL MANAGERS


(Rural Development Banking Service)

C.K. Gopalakrishna

P. Satish

K.C. Shashidhar
(Kerala)

Dr. Venkatesh Tagat

P. Mohanaiah
(Andhra Pradesh)

M.V. Ashok
(Maharashtra)

K.K. Gupta
(Odisha)

S. Akbar
(Madhya Pradesh)

A. K. Srivastava

K. Muralidhara Rao

Dr. S. L. Kumbhare

J. G. Menon

V. Mohan Doss
(Bihar)

Niraj Kumar Gupta

A. D. Ratnoo
(Rajasthan)

K. S. Padmanabhan

R. Amalorpavanathan
(BIRD, Lucknow)

Mahinder Kumar

N. Krishnan
(Uttar Pradesh)

Dr. Rajender Singh

A. K. Mukhopadhyay
(NRMC)

S. N. A. Jinnah
(Karnataka)

K. Jindal
(Punjab)

K. Sayeed Ali
(Haryana)

H. R. Dave
(Gujarat)

M. K. Mudgal

Smt.. L. Venkatesan
(Tamil Nadu)

Dr. S. Saravanavel
(Jharkhand)

A Lahiri

K. R. Nair

S. C. Rabra
(Jammu & Kashmir)

Naresh Gupta
(Himachal Pradesh)

S. K. Bansal
(Chhattisgharh)

A. P. Sandilya

D. V. Deshpande
(Bihar)

S. Selvaraj
(Uttarakhand)

K. Venkateswara Rao

M. I. Ganagi

R. M. Kummur

G. R. Chintala
(New Delhi)

Subrata Gupta

Jiji Mammen
(Rajasthan)

S. Padmanabhan
(West Bengal)

CHIEF GENERAL MANAGERS


(Legal/Technical Service)

U. N. Srivastava
(Legal)

Neeraj Kumar
(Technical)

Dr. R. N. Kulkarni
(Economic)

J. S. Pynadath
(Technical)

OFFICERS-IN-CHARGE OF REGIONAL OFFICES/


CELL TRAINING INSTITUTIONS

R. K. Das
(Mizoram)

M. M. Baheti
(BIRD, Mangalore)

Dr. U. S. Saha
(Nagaland)

Dr. S. D. Kulkarni
(Goa)

R. K. Mishra
(BIRD, Bolpur)

S. Athirstavel
(Andaman & Nicobar Islands)

P. C. Chaudhri
(Sikkim)

S. V. Nemlekar
(Manipur)

N. Remesh
(Tripura)

M. T. Wankhede
(Meghalaya)

S. N. Chalia
(Arunachal Pradesh)

Des Raj
(Srinagar Cell)

Highlights
Economic Environment
1.
Indian economy, one of the key drivers of
global growth, had a relatively slower GDP growth at
6.5 per cent in 2011-12 which can be attributed to the
slowdown in the world economy, as well as to
domestic factors such as inflation, tight monetary
policy and cutting back on the fiscal stimulus. Lower
growth of 6.5 per cent in the economy was mainly on
account of slippage in the manufacturing sector growth
(3.9 per cent as against 7.2 per cent in 2010-11) as also
agriculture sector (2.8 per cent against 7.0 per cent in
the preceding year). With near double-digit growth, it
was the services sector which held Indias growth
performance together.

exports of basmati rice, raw tobacco, meat and meat

2.
Growth of consumption expenditure and gross
fixed capital formation in real terms was 6.0 per cent
and 5.6 per cent, respectively, during 2011-12,
compared to 8.1 per cent and 7.5 per cent, in 201011. Consumption expenditure grew, though at a lesser
rate, mainly due to largely consistent private
consumption.

numbers, now operate about 41 per cent of the total

3.
Headline inflation, after remaining persistently
high over the past two years showed signs of
moderation towards the end of 2011-12. Financial
year 2011-12 started off with a headline inflation of
9.7 per cent, which briefly touched double digits in
September 2011, before coming down to 6.6 per cent
in January 2012. The shift in the nature and causes of
inflation in India was a natural fallout of the structural
changes that the economy had undergone. Both
domestic and global factors determined the
inflationary trend. However, the inflationary pressures
during 2011-12 in India was due to the interplay of a
number of immediate and some underlying long-term
factors such as high price of primary articles driven by
vegetables, eggs and meat brought about by changing
dietary pattern, increasing global commodity prices,
etc.

benefits of the growth process.

4.
Agricultural exports increased from `1,13,117
crore during 2010-11 to `1, 41,095 crore during 201112, registering a growth of 24.73 per cent. Increase in
agricultural exports has been mainly due to higher

and Haryana; and in pulses in Maharashtra, Uttar

preparations, castor oil and tea.


5.

Moderate growth rate of agriculture (2.8 per

cent) was in the backdrop of several constraints which


are long term in nature. Evidence shows that besides
tackling low growth in the agriculture sector, dealing
with high and increasing volatility in the wake of
climate change, is going to be a major policy challenge.
Moreover, Indian agriculture growth has been varying
considerably at the state level, implying that uniform
prescriptions across the states may not work.
6.

Small farmers, who form 83 per cent of the

area, indicating that the base of Indian agriculture is


getting smaller. Estimates suggest that with 51 per cent
share in the value of agriculture output, small holders
contribute significantly to food security. Therefore, the
biggest challenge today is ensuring that the small
holders do not get marginalised and excluded from the

7.

Since a large part of agriculture depends on

rainfall, receiving 899.9 mm of rainfall which was 1.0


per cent more than the Long Period Average (LPA)
during the South-West monsoon (June-September)
2011, was a positive feature. Reservoirs also showed
normal levels of water availability.
8.

Production of food grains during 2011-12 was

at an all time record level of 252.56 (3rd Advanced


Estimate) million tonnes mainly due to increase in
production of rice and wheat. This happened despite a
decline in overall area under food grains during
2011-12

(1,254.92

lakh

ha.)

as

compared

to

2010-11(1,267.65 lakh ha.). The decline was due to a


shortfall in the area under jowar in Maharashtra,
Rajasthan and Gujarat; bajra in Maharashtra, Gujarat
Pradesh, Andhra Pradesh and Rajasthan. The area
under coarse cereals and oilseeds has also come down
as compared to the previous year.
i

With urbanisation and economy growing in

`5,09,040 crore as on 31 March 2012, achieving

the range of 7 to 8 per cent, there has been a shift in

107.2 per cent of the target. Commercial banks, Co-

the demand from cereals to non-cereal food items like

operative banks and Regional Rural Banks disbursed

pulses, edible oils, fruits, vegetables, dairy products,

`3,68,616 crore, `86,185 crore and `54,239 crore,

meat and fish. These accounted for 70 per cent of the

respectively, constituting 72 per cent, 17 per cent and

wholesale price index (WPI) basket for primary food

11 per cent of the total credit flow during 2011-12.

9.

items. The food inflation during the year were largely

15.

due to the constraints experienced in increasing the

The share of Gross Capital Formation (GCF)

in agriculture & allied sector in total GCF over the

supply of these commodities in the short run, as

past few years has been hovering between 6 and 8 per

compared to their demand.

cent as compared to about 18 per cent observed in

On the agricultural inputs side, seed sector

early 1980s, implying that the non-agriculture sectors

exhibited an improved performance. During 2010-11,

have been receiving higher investment resulting in

277.3 lakh quintals of certified/ quality seeds were

growth disparities. This is in line with the falling share

distributed. Production of breeder and foundation seed

of agriculture in the overall GDP, which is in

reached 1.19 and 17.53 lakh quintals, respectively

conformity with the development patterns observed

during 2010-11, registering 13.53 and 7.8 per cent

elsewhere. Yet keeping in view the high population

growth over the previous year.

pressure on agriculture, the need for substantial

10.

11.

increase

During 2010-11, an irrigation potential of

increasingly

566.24 thousand hectares has been created by States

Capital

agriculture

formation

in

is

being

agriculture

has an enabling effect on private investment, the

(AIBP).

stagnant share of the former is a matter of concern.


Despite making efforts to develop irrigation,

16.

ensuring adequate water availability for agriculture is

Kisan Credit Card (KCC) scheme introduced

in 1998-99 has facilitated smooth flow of credit to

becoming an increasingly important concern. The

farmers. During 2011-12, 10.07 million KCCs were

efficiency of surface water irrigation has been on the

issued by banks with sanctioned credit limit of `54,269

decline, while groundwater, the major source of

crore. Of the 113.91 million credit cards issued

irrigation, suffers from over-exploitation in most of the

cumulatively, commercial banks issued 53.06 million

States resulting in steep decline in the groundwater

cards (46.58%) followed by Co-operative Banks with

table.

43.66 million cards (38.33%) and Regional Rural


Banks with 17.19 million cards (15.09%).

Nearly, 65 per cent of agriculture is rain-fed

and located in resource poor regions. These regions

17.

are home to a majority of small and resource poor

Minimum Support Price (MSP) for common

paddy, wheat, arhar, moong and urad increased by

farmers whose contribution to food and nutrition

8.0,

security has been acknowledged. Therefore, there is a

14.73,

6.67,

10.41

and

13.79

per

cent,

respectively, during 2011-12 over 2010-11. There was

need for greater understanding of rain-fed agriculture

no change in the MSP of cotton. The procurement of

and framework for its development.


14.

felt.

in

private investment. Considering that public investment

under the Accelerated Irrigation Benefit Programme

13.

investment

(`1,42,254 crore in 2010-11) now primarily relies on

from major, medium and minor irrigation projects

12.

in

rice and wheat as on March 1, 2012 at 26.8 million

Agriculture credit growth as a facilitator, has

tonnes

and

28.3

million

tonnes,

respectively,

been consistent during the past few years. As against

represented a decline of (-) 21.63 per cent and

the target of `4,75,000 crore of credit flow to

increase of 25.78 per cent as compared to the

agriculture for 2011-12, the banking system disbursed

corresponding date last year.


ii

The significance of agriculture sector in

growth is well-recognised The structural concer ns

India is not merely restricted to its contribution to

and other issues brought out above, have a

GDP.

critical bearing on the policies and per formance

18.

Its

wide-ranging

impact

on

reducing

of NABARD.

pover ty, tackling inflation and achieving inclusive

Business Operations
19.

The

total

financial

support

extended

by

per cent in Eastern Region and 55 per cent in the rest

NABARD during 2011-12 stood at `82,339.48 crore,

of the country.

registering a growth of 36.13 per cent over 2010-11.

23.

Production Credit
20.

to farmers through the co-operative credit structure, a


separate direct credit window facility was launched for

The total production credit disbursed, as on

well-functioning

31 March 2012, was `48,981 crore. During 2011-12,


`33,995.67

crore

as

compared

declaration in writing setting out the purposes for


which they have made loans and advances or any

National Pulse Development Programme (NPDP) and


Population

(DTP).

the
SCBs

Development
reached

of

such reasons as may be required by NABARD. A credit

Tribal

limit of `79.47 crore was sanctioned to Public Sector

maximum

Banks for financing PACS.

outstanding of `33,995.61 crore during 2011-12 with


100 per cent achievement level.
21.

24.

`9,799.69 crore sanctioned to 80 RRBs in 2010-11.


The limit included `1,236.29 crore for Oilseeds

SCBs (Andhra Pradesh- `60.32 crore, Tamil Naducrore

production,

&

Puducherry-

procurement,

`7.69

marketing

crore)

for

activities

as

Production Programme (OPP), `251.90 crore for


Development of Tribal Population (DTP) and `27.91
crore for National Pulses Development Programme

against `215.75 crore during 2010-11. So far, 4,624


Handloom

Weavers

Groups

(HWG)

have

During 2011-12, NABARD sanctioned limits of

`13,925.66 crore to 81 RRBs under ST-SAO as against

During 2011-12, ST (Weavers) credit limits

aggregating `190.01 crore were sanctioned to three


`122

In

promissory notes, subject to the Banks furnishing a

Production Programme (OPP), `285.57 crore for


for

Banks.

Primary Agriculture Credit Societies (PACS) against

credit limits included `3,171.70 crore for the Oilseeds

crore

Co-operative

Rural Banks and Public Sector Banks for financing

to

`23,759.34 crore to 21 SCBs during 2010-11. The

`1,106.47

Central

addition, NABARD sanctioned refinance to Regional

ST-SAO credit limits were sanctioned to 23 SCBs


aggregating

With a view to augmenting ST-SAO Refinance

(NPDP). The maximum outstanding was `13,925.66

been

crore with 100 per cent achievement level under the

formed in various States viz. Odisha (1,366), Andhra

limit sanctioned during 2011-12. Six RRBs in the

Pradesh (1,258), Assam (272), Bihar (82) Jharkhand

North-Eastern Region were sanctioned credit limit of

(500), Madhya Pradesh (266), Uttar Pradesh (272),

`104.94 crore, which was fully utilised by them.

West Bengal (88) and in other States (520). Of these,


2,062 HWGs have been credit linked.

25.

RRBs were also provided additional refinance

In order to enhance ground level credit for

of 10 per cent for 2011-12, only to enhance crop

crop loans by Co-operative Banks, it was decided to

loans disbursed by them. Thus, RRBs were eligible for

provide additional refinance of 10 per cent for the

refinance upto 55 per cent of their crop loan

year 2011-12 only. Thus, SCBs were eligible for

disbursements in North-Eastern and Hilly Regions;

refinance upto 70 per cent of their crop loan

upto 35 per cent in Eastern region and 30 per cent in

disbursements in North-Eastern and Hilly Regions; 60

the rest of the country.

22.

iii

26.

29.

In the Budget speech for 2011-12, the

NABARD continued to act as the nodal

Centrally

agency for GoI package for restructuring of term loans

Sponsored Plan Scheme on Revival, Reform and

of co-operative sugar mills. Out of `200.13 crore

Restructuring Package for Handloom Sector with a

received

total outlay of `3,884 crore, be implemented by

`200.02 crore was disbursed to 76 co-operative sugar

NABARD. The revival package includes waiver of

mills in Maharashtra and Odisha. NABARD also acted

Finance

overdue

Minister

loans,

announced

capacity

that

building,

GoI

towards

interest

subvention,

as the nodal agency for routing interest subvention to

technology

co-operative banks and RRB under Scheme for

upgradation and introduction of Common Accounting

extending Financial Assistance to Sugar Undertakings -

System and Management Information System. So far,

2007. Out of `383.59 crore received from GoI during

19 States have given their consent to implement the

the year 2011-12 towards interest subvention, `383.38

package in their States out of which, tripartite

crore was released to 212 sugar mills operating in 11

agreement has been signed between GoI, NABARD

States

and the Governments of Andhra Pradesh, Kerala,

viz.,

Maharashtra,

UP,

AP,

Tamil

Nadu,

Uttarakhand, Odisha, Madhya Pradesh, Gujarat, Goa,

Uttarakhand, West Bengal and Karnataka.


27.

from

Punjab and Karnataka.

The Ministry of Textiles (MoT), GoI vide its

Investment Credit

notification dated 9 January 2012 issued operational


guidelines for Institutional Credit component under

30.

the

Scheme

disbursement for investment credit for farm and

(IHDS) for the handloom sector in the country.

non-farm sector activities was `15,421.70 crore as

NABARD has been designated as the implementing

against the budget of `14,995.00 crore. During

agency

Money

2011-12,

Integrated

for

Handloom

Development

channelising

the

Margin

During

the

year

Commercial

2011-12,

Banks

have

the

refinance

availed

of

Interest

refinance amounting to `8,433.75 crore, SCARDBs

Subsidy (@ 3 per cent per annum for 3 years)

and SCBs have availed of refinance amounting to

components under the Package. The first instalment

`2,444.93 crore and `1,192.29 crore, respectively

of `7.57 crore has been released by the MoT, GoI to

and RRBs have availed of refinance amounting to

(@

`4,200/-

per

individual

weaver)

&

`3,086.19 crore. The spatial distribution of refinance

be passed on to the banks.


28.
scheme

disbursement across regions indicated that a major

The continuance of the interest subvention


was

announced

in

the

Union

share had been accounted for, by the States in the

Budget

southern region (48.20%), followed by northern

2011-12, making interest subvention available at

(15.7%), central (12.10%), eastern (11.60%), western

2 per cent per annum to public sector banks,

(10.80%), and north-eastern region (1.60%). During

co-operative banks and RRBs for deploying their own

2011-12, the major share of refinance has been

funds for crop loan upto `3 lakh per farmer, provided

accounted for, by NFS (23.18%) followed by SHG

the ultimate borrowers were given loans at 7 per cent

(19.92%),

interest rate per annum. Additional subvention of

Husbandry (10.18%) and Plantation & Horticulture

3 per cent was announced for 2012-13 to those

(10.03%).

farmers who repaid crop loans promptly within one

31.

year of disbursement. Interest subvention was given

Farm

Mechanisation

(13.84%),

Animal

With effect from 2 September 2011, refinance

to SCARDBs was extended as term loans as against

to NABARD for providing concessional refinance to

the earlier practice of contribution to floatation of

SCBs and RRBs at 4.5 per cent interest rates. The

debentures. Under the new system, all SCARDBs are

Interest subvention for 2011-12 was estimated at

eligible for refinance of 90 per cent of the eligible

`3,000 crore.

bank loan disbursed.

iv

Rural infrastructure Development Fund


32.

Kerala (95%), Haryana and Uttarakhand (93%), Tamil


Nadu (92%) and Chhattisgarh (91%).

The Corpus of the Fund has grown to `18,000

crore under Rural infrastructure Development Fund

35.

(RIDF) XVII (2011-12) from an allocated amount of

stood at `1,11,025.94 crore as on 31 March 2012.

`2,000 crore under RIDF I (1995-96), taking the

The

cumulative allocation to `1,52,500 crore (which is

31 March 2012, was `70,860.31 crore.

inclusive of `18,500 crore under a separate window

which

`2,000

crore

has

on

31

March

2012,

18,162

prevailing bank rate.


37.

Administrative

(24.20%), social sector projects (17.90%), rural bridges


sanctioned

Approvals

(AA)

from

the

State

Governments was made mandatory before submission

(12.90%) and agri related projects (9.70%). An


was

Among the new steps initiated in 2011-12 for

quick grounding of RIDF projects, the receipt of

27.50 per cent followed by rural road projects

crore

Consequent upon the change in bank rate

2012 has been fixed at 1.5 per cent below the

projects sanctioned, irrigation projects accounted for

`1,493.82

on

RIDF to the State Governments on or after April 01,


projects

involving a loan amount of `20701.12 crore were

of

as

cent) till 31 March 2012. Loan disbursements from

sanctioned under RIDF XVII. Of the total number of

amount

RIDF

rate viz., 6 per cent plus 0.5 per cent (i.e. 6.5 per

facilities in different States on a priority basis.


As

under

State Governments has been fixed at the earlier bank

been

exclusively dedicated towards creation of warehousing

33.

outstanding

2012, the rate of interest payable to NABARD by the

an amount of `18,000 crore under RIDF XVII during


of

loan

from 6 per cent to 9.5 per cent w.e.f. 13 February

Programme). The Union Budget for 2011-12, allocated


out

total

36.

for funding rural roads under the Bharat Nirman

2011-12,

The cumulative deposits received under RIDF

of projects to NABARD for sanction; 20 per cent of

for

RIDF was specifically allocated for social sector

warehousing projects as at end of March 2012.

projects and steps initiated for on-line/web-based

Cumulatively, 4,62,229 projects were sanctioned since

monitoring of RIDF projects.

the inception of RIDF involving an amount of


`1,42,470.65 crore as on 31 March 2012. Of the

38.

cumulative RIDF loans sanctioned as on 31 March

Promotion Fund (RIPF) with a corpus of `25 crore on

2012, 42 per cent went to agriculture and related

1 September 2011 for augmenting the skill sets and

sectors, including irrigation and power; 15 per cent to

technical know-how of personnel engaged in the

social sector projects like, health, education and rural

creation of rural infrastructure. The Fund also aims at

drinking water supply; while the share of rural roads

creation

and bridges was 31 per cent and 12 per cent,

infrastructure that would benefit the village community

respectively.

at large and form the basis for larger infrastructure

34.

RIPF

under various tranches (RIDF I to XVII), State


had

total

pool

of

projects

of

critical,

low

cost,

last-mile

rural

projects under RIDF. The small investments under

Taking into account phasing of the projects,

Governments

NABARD set up the Rural Infrastructure

is

expected

to

attract

and

make

larger

investments feasible under RIDF. As on 31 March

of

2012, 8 proposals amounting to `0.56 crore have

`1,30,009 crore as on 31 March 2012. During the

been sanctioned under RIPF.

year, disbursements were made to the tune of `14,927


crore (inclusive of `759 crore sanctioned and released

39.

as refinance under Warehousing facilities to Banks). A

India (GoI) had made a dedicated allocation of

state-wise analysis of ratio of disbursements to the

`2,000 crore for financing warehousing under RIDF. As

approved phasing of sanctions reveals that Mizoram

on 31 March 2012, total sanctions under the scheme,

topped with 132 per cent, followed by Goa (106%),

stood at `1,493.82 crore, to four State Governments

Meghalaya (100%), Manipur (96%), Maharashtra and

viz., Bihar, Karnataka, Tamil Nadu and Puducherry.


v

In the Union Budget 2011-12, Government of

40.

NABARD

also

introduced

scheme

for

opportunities. To take advantage of these, building up

providing refinance to banks, against loans extended

institutions and arrangements based on principles of

by them to private entities and the agencies owned/

aggregation

assisted by government, for creation of warehousing

co-operatives as well as producers organisations and

infrastructure. Refinance from NABARD was made

its variants. The new business initiatives need to be

available at an interest of 8 per cent for a period of

viewed in the above context.

07 years (including a moratorium of 02 years).

42.

NABARD will also provide financial incentive to those

would

include

Financing Producers Organizations; creation of

Banking Solutions (CBS) to create a level playing field

financing bank. An aggregate amount of `759.07

to compete with the other banks for business and

crore was sanctioned and disbursed to banks. With

growth;

this, the total sanctions against the allocation of

engaging

with

the

Primary

Agricultural

Co-operative Societies (PACS) to convert them in to

`2,000 crore stood at `2,252.89 crore as on 31

multi-service centers are all such initiatives which

March 2012.

eventually have huge development potential and are


inclusive in nature. The new business initiatives thus,

New Business Initiatives


NABARD

These

co-operatives on a higher technology platform of Core

as per the repayment schedule prescribed by the

As

essential.

new line of financial support for DCCBs; bringing

borrowers, who repay their loans, along with interest,

41.

are

part

of

the

has

set

new

business

up NABARD

are in tune with organisational strategy of business for

initiatives,

development.

Infrastructure

Development Assistance (NIDA) to provide credit

43.

support

infrastructure

Assistance (NIDA), a new line of credit support for

projects. Ensuring investments in agriculture in the

funding of rural infrastructure projects, funds State

eastern states was another important initiative. The

owned institutions/ corporations both on-budget as

focus of the new initiatives was on excluded areas and

well as off-budget for creation of rural infrastructure

the small operators who will have to compete in the

outside

markets, which are quite demanding in terms of

cumulative sanctions under NIDA during the year

for

funding

of

rural

NABARD

the

Infrastructure

ambit

of

RIDF

Development

borrowing.

The

quality and food safety. Participating in these markets

2011-12 was `890.85 crore and disbursement of

poses

`422.90 crore.

challenges,

but

they

also

bring

more

Development and Promotional Initiatives


Farm Sector
44.

Programme (IGWDP), (ii) Participatory Watershed


Development

During the year, 41 watershed projects were

Development

sanctioned under the Watershed Development Fund,

Programme
Fund

(WDF),

under
(iii)

Watershed

Prime

Ministers

package for distressed districts in four States and

taking the cumulative number of such projects to 620,

(iv) Integrated Watershed Development Programme

covering an area of 5.29 lakh ha. in 15 States, with a

(IWDP)

total commitment (loan and grant component) of

in

Bihar,

supported

by

the

Planning

Commission.

`239.99 crore. Sixty one projects graduated to Full


Implementation Phase (FIP), taking the number of

45.

such projects to 316. NABARD anchors four types of

7th year of implementation, has enhanced livelihood

watershed development programmes in the country

opportunities

namely, (i) Indo-German Watershed Development

traditional tribal livelihoods such as bee keeping,


vi

Tribal Development Fund programme, in its


of

tribal

communities,

covering

sericulture, organic wadis and mixed wadis (perennial

(16.52%) and Northern (12.43%) regions, while NER

fruit crops + creeper vegetables + spices). During the

accounted for 2.75 per cent. 279 Farmers Clubs

year,

functioned

financial

assistance

of

`290.63

crore

was

as

Business

Facilitators/Business

sanctioned for 98 projects benefiting 72,419 tribal

Correspondents and 761 Farmers Clubs as Self Help

families in 16 States. The cumulative sanction as on

Promoting Institutions.

31

March

2012

was

`1,208.23

crore,

covering

49.

3,22,912 families in 415 projects across 26 States/


in

Alirajpur,

Madhya

Pradesh

supported

of perennial fruit crops.

50.

During 2011-12, 41 projects were sanctioned

Augmenting

Farm

that

have

direct

bearing

on

Uttar Pradesh. The key activities for concessional


refinance support under the scheme, include (a) Water
Resources Development (b) Land Development (c) Farm

project enabled farmers to transact on their loan

Equipment and (d) Seed Production units. The total

accounts with Pallavan Grama Bank using their mobile

lending target of the banks for the financial year 2011-

phones and enter into mobile supported cashless

12 was `3,912 crore.

transactions with agriculture input dealers.

51.

Fund

During the year, two new initiatives for

augmenting farm productivity were launched. These

(FTTF), with a corpus of `100 crore, supports

include

adoption of appropriate technologies by farmers.

the

Pilot

project

for

Augmenting

Farm

Productivity in Select Districts and the Pilot Project for

During the year, 395 proposals were sanctioned under

Augmenting Farm Productivity in Balasore District,

FTTF in 29 States with financial assistance of `20.59

Odisha. The Pilot Project for Augmenting Farm

crore as grant. The cumulative disbursement was

Productivity in Select Districts is a comprehensive

`44.59 crore.
48.

Region

Chhattisgarh, Jharkhand, Odisha, West Bengal and

KCC) project in Villupuram district of Tamil Nadu. The

Transfer

with

annum to seven Eastern states, viz., Assam, Bihar,

of the unique mobile-enabled Kisan Credit Project (m-

Technology

States

refinance at a concessional rate of 7.5 per cent per

three years. The Fund also supported the pilot testing

Farmers

16

enhancing crop productivity. The scheme provides

grant support of `48.08 crore phased over a period of

The

in

A concessional refinance support scheme was

Eastern

Productivity in Balasore District in Odisha with a

47.

projects

institutional credit flow for key investments in the

14 States with financial assistance of `56.53 crore


on

104

launched by NABARD during the year to facilitate

under Farm Innovation and Promotion Fund (FIPF) in


project

Natural

disbursements to the tune of `131.89 crore.

system of vegetable cultivation along with cultivation

the

on

sustainable natural resource management projects, has

year of implementation by combining the mandap

including

Programme

rural livelihoods by supporting community-managed

that

generated income for the farmers from the first

46.

Umbrella

Resource Management (UPNRM), which aims to boost

UTs. During the year, a new Wadi model was


introduced

The

package

for

augmenting

farm

production

and

With the launching of 25,243 new Farmers

productivity by addressing all interlinked components

Clubs during the year, the number of clubs reached

of farming viz., agricultural inputs, technology, credit,

1,01,951 as on 31 March 2012. NGOs promoted

post-harvest

maximum number of clubs (15,870) followed by

marketing in a holistic manner. One district each has

co-operative banks (4,359), commercial banks (2,104),

been selected in 11 States for implementation, viz.,

RRBs (2,103) and SAUs/KVKs/other agencies (807)

Bihar

during the year 2011-12. Eastern region had the

(Sirsa), Jharkhand (Deoghar), Karnataka (Belgaum),

highest share (24.99%) of clubs followed by the

Maharashtra (Yavatmal), Madhya Pradesh (Shahdol),

Central

Odisha (Balasore), Rajasthan (Bikaner), Uttar Pradesh

(24.83%),

Southern

(18.48%,)

Western
vii

management,

(Bhojpur),

Chattisgarh

value

addition

(Bilaspur),

and

Haryana

(Azamgarh) and West Bengal (Nadia). The Pilot

to support development, promotional and Information

Project at Balasore District in Odisha has been

and Communication Technology (ICT) interventions

sanctioned with a total financial outlay of `3,211.86

leading to financial inclusion are in operation in

crore, including a grant component of `48.08 crore to

NABARD. As on 31 March 2012, the cumulative

be supported under the Farm Innovation Promotion

sanctions under FIF and FITF were `114.62 crore and

Fund (FIPF), for a period of three years i.e., from

`343.48 crore, respectively and disbursements `36.46

2012-13 to 2014-15.

crore and `184.16 crore, respectively. This year, RRBs

Rural Non farm Sector

were supported for implementation of CBS and card

52.

Provider (ASP) model and for holding financial literacy

based ICT solutions using the Application Service

The Rural Innovation Fund, which facilitates

innovative, risk-mitigating experiments with potential

awareness camps in villages.

to promote livelihood opportunities in rural Farm,

56.

Non-Farm and micro-Finance sectors, supported 108

A Centre of Excellence for Rural Financial

The

Institutions (CERFI) was set up during the year with

cumulative projects supported under the Fund are 483

the objective of embedding Aadhar numbers into the

in number, as on 31 March 2011 of which, 150 have

CBS platform of RRBs, for bringing about higher

been completed and 67 are in advanced stages of

accountability and transparency in last- mile banking.

new

innovative

projects

during

the

year.

implementation.
53.

Micro Finance

With the sanctioning of 9,852 REDPs/ SDPs

with grant support of `13.09 crore during 2011-12,

57.

NABARD has so far supported 27,711 REDPs/SDPs

a renewed thrust with the launch of SHG-2. The focus

with grant of `96.45 crore, covering around 6.93 lakh

of SHG-2 would be on voluntary savings, cash credit

unemployed rural youth. During the year, NABARD

as a preferred mode of lending, scope for multiple

initiated a vocational training programme for blue

borrowings by SHG members in keeping with repaying

collar entry level workers like masons, welders, cooks,

capacity, avenues to meet higher credit requirements

technicians

in

for livelihood creation, SHG Federations as non-

collaboration with the PanIIT Alumni Reach for India

financial intermediary, rating and audit of SHGs as

(PARFI), an organization created by IIT alumni. It is a

part of risk mitigation system and strengthening

loan-based

and

drivers

approach

to

on

pilot

vocational

basis

The SHG-Bank Linkage Programme was given

training.

800

monitoring mechanisms.

students have been trained through this model with a

58.

100 per cent placement rate.


54.

The GoI communicated its decision of only

sanctioning Cash Credit Limits to SHGs from 17

During the year, 94,479 Swarojgar Credit

November 2011, so as to address the issue of delayed/

Cards (SCC) with credit limit of `495.81 crore were

limited /non-approval of repeat loans to SHGs, to

issued for facilitating hassle-free credit for investment

ensure cost effectiveness to clients and to provide

and working capital requirements of small/micro

greater operational flexibility to SHG clients.

entrepreneurs. The cumulative total of SCC as on 31


March 2012 was 13.06 lakh, involving a credit limit of

59.

`5,445.32 crore.

crore were disbursed to 11,96,134 SHGs. As on 31


March 2011, there were more than 74.62 lakh savings-

Financial Inclusion
55.

During 2011, loans amounting to `14,547.73

linked Self Help Groups (SHG) and more than 47.87


lakh credit-linked SHGs covering 9.7 crore poor

The Financial Inclusion Fund (FIF) and the

households under the micro-finance programme.

Financial Inclusion Technology Fund (FITF), dedicated


viii

60.

During 2011-12, `33.31 crore was released

by involving an anchor NGO in each of the selected

under Micro-Finance Development and Equity Fund

backward districts of the country. The NGO will serve

(MFDEF); of which, `28.68 crore was grant support

not only as an SHPI, but also as a banking/business

for

facilitator. The scheme will be implemented in 109

promotional

activities

and

`4.63

crore

for

CS/RFA to MFIs, as against `29.95 crore and `17.43

selected backward/LWE districts of the country.

crore, respectively, in the previous year.


61.

66.

As stated in the Budget Speech of 2011-12, a

An amount of `36.68 crore was sanctioned as

Women SHGs Development Fund with a corpus of

grant for promotion of 1.94 lakh JLGs across the

`500 crore was created to empower women by

country till 31 March 2012. During the year, banks

promoting their Self Help Groups. This Fund will also

disbursed a loan of `946.81 crore to 1,29,646 JLGs

support the objectives of Aajeevika i.e. the National

upto 31 March 2012 taking the cumulative loan

Rural Livelihood Mission. It will empower women

disbursed to `2,092.10 crore for 2,70,691 JLGs. A

SHGs to access bank credit.

unique project was sanctioned by NABARD during the

NABARD Consultancy Services

year, to the Bihar Kshetriya Gramin Bank, Munger for


promotion of two JLGs comprising sex workers, one

67.

for taking up tailoring activity and the other for

During the year, NABCONS contracted 88

assignments for a contract value of `26.87 crore. The

opening a shop selling bangles.

company

executed

125

assignments,

including

were

international visitors programmes. NABCONS earned

conducted for 56,292 members on various location-

`17.30 crore as professional fees on assignments

specific farm, non-farm and service sector activities.

executed, `0.43 crore as commission from mutual fund

Cumulatively, 6,363 MEDPs had been conducted for

distribution and `2.62 crore as interest on investments,

1,64,948 participants.

aggregating a total income of `20.35 crore.

63.

Research and Development Activities

62.

During

the

year,

1,914

MEDPs

During 2011-12, NABARD Financial Services

Ltd., (NABFINS), disbursed loans to the extent of


`213.58 crore to 6,915 SHGs through 67 Business

68.

Correspondents

from the R&D Fund for supporting activities like

(BCs),

taking

the

cumulative

During the year, `17.67 crore was utilised

disbursement to `265.54 crore to 8,968 groups. Loans

research

other than to SHGs were disbursed to the extent of

(`0.85 crore), training/summer placement (`15.57

`2.30 crore during the year, taking the cumulative of

crore), NABARD Chair Professor Scheme (`0.48 crore)

other loans disbursed to `5.25 crore.

and other activities (`0.07 crore). As on 31 March

64.

2012,

The Centre for Micro-finance Research (CMR)

the

cumulative

(`0.70

crore),

disbursement

seminars

stood

at

`153.86 crore.

brought out two issues of its half-yearly journal, The


Micro-finance Reviewand its sub-centres

projects/studies

69.

undertook

During

2011-12,

five

research

projects

research on 41 prioritised themes during the year.

involving a grant assistance of `0.49 crore were

Grant assistance of `199.33 lakh was released by

sanctioned. Further, seven projects/studies sanctioned

NABARD

earlier were completed during the year.

during

2011-12

to

CMR,

taking

the

cumulative assistance to `560.01 lakh.


65.

A new scheme for Promotion of Women SHGs

70.

During the year, grant assistance of `1.14

crore

was

sanctioned

to

various

universities,

in backward and Left Wing Extremism (LWE) affected

research institutes and other agencies for organising

districts of India was formulated in association with the

139 seminars, conferences, symposia and workshops

GoI, as a viable and self-sustainable model for

covering subjects/areas related to agriculture and

promotion and financing of Women Self Help Groups

rural development including Green Revolution-II,


ix

Agri-Marketing, Micro Finance, Financial Inclusion,

and initiate suitable policy interventions by agencies

Sustainable Livestock and Poultry Development,

concerned.

Plant

Biotechnology,

Genetic

Resources

Conservation

Water

Security

of

Animal

and

Climate

Change, Food Security, Organic Farming, Economic

extended

to

the

out

under

the

overarching

objective

of

addressing the concerns of small operators and

Women Entrepreneurship and Coffee Research, etc.


support

carved

policy. To make a perceptible difference on ground,

Regional Imbalance Inclusive Growth, SHG and


grant

NABARDs development initiatives have been

sustainable inclusive growth of Indias development

Reforms and Agriculture, Advances in Aquaculture,

The

71.

excluded areas and deploying technology upon finding

organisers

space for location/product specific viable delivery

enabled them to document the proceedings and

models, which can be up-scaled have been the

publish background papers, thus facilitating wider

principles which have guided various development

dissemination of the recommendations/action points

initiatives.

Capacity Building of Client Institutions


Institutional Development
72.

75.

During 2010-11, SCB as a group earned

on 31 March 2012, RRBs had opened 913 new

overall return of 6.9 per cent, while cost of funds

branches, taking the cumulative number of branches

worked out to 5.01 per cent, resulting in financial

of all RRBs to 16,914 spread over 635 districts in 26

margin of 1.92 per cent (excluding miscellaneous

States and one UT. It is now compulsory for all new

income of 0.49 per cent). The average transaction cost

branches to be equipped with CBS. CBS has been

and risk cost of SCB during the year worked out to

fully implemented in 80 RRBs. J & K GB has

1.37 per cent and 0.39 per cent, respectively. SCB as

implemented CBS in 90 branches out of 184

a group earned a positive net margin of 0.71 per cent

branches. Kisan Kshetriya Gramin Bank (UP) has not

in 2010-11, compared to net margin of 1.06 per cent

been

in 2009-10.
73.

RRBs were given a target of opening 2000

new branches by March 2012. In the current year, as

able

to

make

any

progress

on

CBS

implementation in the bank, as it is linked to its

In the case of DCCB, the overall return on

merger with Aryavrat GB.

working funds was 7.62 per cent, while the cost of

Supervision of Banks

funds was 5.11 per cent, yielding a financial margin of


2.51 per cent (excluding miscellaneous income of 2.30

76.

per cent). The average transaction cost and risk cost as

During 2011-12, statutory inspections of 319

banks (31 SCBs, 240 CCBs and 48 RRBs) and

percentage to working funds were 2.09 per cent and

voluntary inspections of 15 SCARDBs have been

1.37 per cent, respectively, during 2010-11. The

conducted as on 31 March 2012 as scheduled. The

DCCB as a group, earned a net margin of 1.41 per


cent during 2010-11.

inspections brought out supervisory concerns relating

74.

banks concerned, Registrar of Co-operative Societies

to these institutions, which were communicated to the

During 2011-12, financial assistance of `7.09

crore under Co-operative Development Fund (CDF)

(RCS), State Governments (in respect of co-operative

was sanctioned and `5.34 crore disbursed (including

banks) and Sponsor Banks (in respect of RRBs) for

disbursements against sanctions of previous years). As


on

31

March

2012,

cumulative

sanctions

corrective action.

and

disbursements were `105.26 crore and `92.91 crore,

77.

respectively. The balance in the Fund as on 31 March

Committee on Financial Sector Assessment (CFSA)

2012 stood at `125 crore.

(Chairman: Dr. Rakesh Mohan, the then Deputy


x

Pursuant to the recommendations of the

Governor of RBI), the RBI had revised the licensing

to 332 (28 SCBs and 304 CCBs) as on 31 March

norms for co-operative banks during October 2009.

2012. The number of scheduled SCBs remained

The number of licensed SCBs and CCBs stood at 24

unchanged

and 222, respectively, as on 31 March 2011. During

licensing eligibility by co-operative banks in some

the year, RBI issued licenses to 4 SCBs and 82

States

CCBs, thus increasing the number of licensed banks

Government of India.

at

were

16.

The

reviewed

problems

in

periodically

attaining
by

the

Organisation, Corporate Governance and Management


78.

The Board of Directors met seven times

cadre. One programme each conducted by NBTC, ZTC

during the year, while the Executive Committee and

and HO, Mumbai covering 31 ST/SC Group B staff.

the Sanctioning Committee for loans under RIDF, met

One pre-recruitment Training was conducted at IES,

once and nine times, respectively.

Bandra covering 84 SC/ST participants.

79.

82.

The repositioning initiative of NABARD was

During the year, 20 staff members availed of

undertaken with a view to analyse existing financial

the facility of the Incentive Scheme for staff members

products and services, types of existing development

to pursue professional studies. Various Courses being

interventions both internally and through market

pursued by employees were CFA, CS and MBA from

survey and to design new products, services and

reputed institutions viz., C F Institute of USA and

networks. Further, the purpose was also to evaluate


organisational

structure,

against

repositioning

Institute of Company Secretaries of India, Sikkim

of

Manipal University, etc. During the year, 177 officers

products and services and set up appropriate structure;

completed

system and processes re-engineering.


80.

83.

information provided. 20 hearings on appeals made to

Total staff strength of the Bank as on 31

Scheduled Castes (18.36 %) and 397 to Scheduled

Workshops were conducted on Right to Information

Tribes (8.72%). The staff strength of ex-servicemen

Act, 2005 through Video Conferencing for selected

and physically handicapped employees stood at 80

Regional Offices at HO.


year,

Harvard

March 2012 stood at 4552 of which 836 belong to

Central Information Commission were attended to.

the

programme,

School, USA.

During the period ended 31 March 2012, 744

During

e-learning

Mentor 10 in collaboration with Harvard Business

applications and 101 appeals were received and

81.

the

and 88, respectively, constituting 1.7 per cent and 1.9


103

programmes

were

per cent of the total staff strength.

conducted by NBSC Lucknow covering 2,232 officers

84.

(2,049 from NABARD and 103 officials from RFIs)

Industrial relations in the Bank continued to

be harmonious during the year. Periodic discussions

covering Programmes on Watershed Development,

were held between the Management and the All India

TDF, Microcredit, HRMS, Financial Inclusion, Appraisal


and monitoring of Infrastructural projects etc. Further,

National Bank Officers Association and the All India

1,704 officers and 528 officers were trained in

NABARD Employees Association. Five meetings of

in-house and on-location programmes, respectively.

the

During

Grievances

Redressal

Committee

and

three

Centre

meetings of the Appellate Committee were held during

(NBTC), Lucknow and Zonal Training Centre (ZTC),

the year. Twenty one grievances and six appeals were

Hyderabad conducted 74 training programmes for 976

received, of which 19 grievances and 6 appeals were

Group B and C staff. The College also conducted

processed. The Joint Consultative Committee (JCC)

pre-promotional training programmes for Group B

comprising representatives from Bank Management

staff for promotion to higher grade in the officers

and National Bank Officers Association, met once

2011-12,

National

Bank

Training

xi

during the year to discuss HR issues.


85.

by

Human

the

Top

HO departments, continued to be outsourced to

Resources

external auditors, while the Concurrent Audit of all

Management System (HRMS) and Centralised Loan

ROs/Training Establishments were undertaken by the

Accounting & Management System (CLMAS) was

Concurrent Audit Cells (CAC) set up in the respective

initiated after due system studies done in previous

RO/TE. ID also inspected NABARD Subsidiaries, viz.,

financial year.
86.

apprise

Head Office Departments. The concurrent audit of

Banks efforts in this direction, in the financial year


of

and

conducted Inspection of 9 Regional Offices and 18

systems as per the IT roadmap. In continuation of the


implementation

institutions

Management of the status. During the year, ID

Bank has taken steps in implementing IT

2011-12,

client

Agri

Business

Development

During the year, as on 31 March 2012, the

Finance
Finance

Ltd,

Hyderabad,
Chennai,

while the Risk Management Committee of the Board

Mumbai. The Inspection Reports and Flash Reports

(RMCB) met thrice. The ACB reviewed the internal

containing major areas of concern were placed before

inspection/audit function in the institution - the

the MC and ACB for deliberation and guidance.

system, its quality and effectiveness with focus on the

Visits of Parliamentary Committees


87.

Management,

Management,

Committees on Subordinate Legislation, Government

Operational Risk Management and other risks facing

Assurances, Agriculture and Official Language for the

the bank and guided in devising the policy and

Central Government have visited NABARD offices at

strategy

Chandigarh,

for

containing

and

integrated

various

risk

Liability

risk

management

exposures

of

the

for

Shimla,

year,

Jaipur,

nine

NABCONS,

The RMCB oversaw the functioning of Credit Risk


Asset

the

and

NABARD

Audit Committee of the Board (ACB) met four times,

During

Bangalore

Agri

Financial

follow-up of major areas of concern in housekeeping.

Services,

Ltd,

Parliamentary

Delhi,

Guwahati,

Dimapur, Imphal, Kolkata, Port Blair, Chennai, Ranchi,

Bank.

Patna, Bhopal and Mumbai.

Inspection Department continued to monitor defaults

Financial Performance & Management of Resources


88.

The financial resources of NABARD increased

March 2012. The amount of reserves and surplus

to `1,82,075 crore, as on 31 March 2012, registering

increased to `16,408 crore on 31 March 2012 from

an increase of 14.60 per cent, over the previous

`13,863 crore on 31 March 2011.

financial

year.

During

the

year,

total

market

90.

borrowing of NABARD stood at `43,203 crore,

amounted to `10,979 crore as against `9,202 crore for

constituting 23.73 per cent of the total resources of

the year 2010-11. The profit before tax and profit after

the Bank.
89.

The total income of NABARD during the year

tax stood at `2,252 crore and `1,635 crore, respectively,

The paid up capital, as on 31 March 2012,

as on 31 March 2012, as compared to `1,824 crore and

stood at `3,000 crore against `2,000 crore on 31

`1,279 crore, respectively, in the previous year. The

March 2011, with the share of GoI being 99.33 per

average cost of borrowings (interest expenditure as a

cent and that of RBI at 0.67 per cent. As per Union

per cent of average borrowings) increased from 6.64

Budget 2011-12, Government of India infused `1,000

per cent per annum during 2010-11 to 6.96 per cent per

crore capital in NABARD, which was received on 31

annum during 2011-12.

xii

I
Rural Economic Environment
A. Economic Scenario

financial year 2011-12 compared to 7.2 per cent in

a. Gross Domestic Product

the corresponding period of the previous year. The


growth in agriculture was 2.8 per cent, which is much

The Indian economy continued to be one of

lower compared to the high level of growth achieved

the key drivers of global growth, even with its slower

during the previous year. With growth rate just short of

Gross Domestic Product (GDP) growth at 6.5 per cent

double digits, service sector continues to be the

in 2011-12, compared to a growth of 8.4 per cent

mainstay of the economy holding Indias overall

achieved in two previous years (Table 1.1). The

growth together.

slowdown can be partly attributed to global factors


viz., the slowdown in the world economy, exacerbation

1.2

of the euro zone crisis, hardening of crude oil prices in

the

the international market, as well as to domestic

agricultural sector with the overall economy has

factors, such as the imperatives of dealing with

thrown up opportunities as well as challenges for

inflation by tightening monetary policy and cutting

agriculture, where concerns regarding food security

back on the fiscal stimulus. The slowdown is mainly

and the subsidy regime continue to prevail. The sharp

on account of the sluggishness in industrial sector,

distinction between rural and urban is diminishing and

which registered a growth rate of 3.9 per cent in the

Increasing integration of Indian economy with


world

kind

economy

of

and

ruralurban

greater

integration

continuum

is

of

emerging,

particularly with service sector occupying the lead in


rural

Table 1.1: Economic Indicators

Particulars

2009-10

Overall GDP

8.4

GDP from Agriculture &


Allied Activities

2010-11

of

this

is

captured

in

the

The

crux

of

the

matter

is

that,

while

impact is felt at the micro level and channels of its


1.0

7.0 (QE)

2.8(RE)

(-)7.1

6.8

Industrial Production

10.5

7.8

3.6

9.4

Domestic Savings
(as % of GDP)

33.8

32.3

Capital Formation
(as % of GDP)

36.6

35.1

6.5

4.8

4.6

Imports (% change)

(-)5.0

28.2

29.4

Exports (% change)

(-)3.5

40.5

23.5

Trade Balance
(as % of GDP*)

(-)2.8

(-)2.7

(-) 3.6

External Debt
(as % of GDP*)

18.1

17.8

Fiscal Deficit (as % of GDP)

Some

globalisation works through macro parameters, its

6.5

Foodgrain Production

Inflation as measured by WPI

areas.

2011-12

8.4

areas.

compositional shift in the consumption pattern in rural

Annual per cent change

transmission need to be understood and accordingly


responded to.
1.3

Sectoral analysis of growth rates has shown

the least inter-temporal variations. With the declining


share of agriculture sector and consistent growth in
the services sector, the variations in growth rate of
GDP are lately being associated with the variations in
the

industry.

The

contributions

of

agriculture,

industry and services to the GDP were 13.9, 27.0


and 59.1 per cent, respectively, during 2011-12
(Table 1.2).
1.4

An important feature of agricultural growth,

unlike the overall economic growth pattern, is its

QE: Quick Estimates; RE: Revised Estimates;


*: At current market prices
Source: Economic Survey 2011-12; CMIE, April 2012; Central
Statistical Organisation, GoI

volatility. The State of Indian Agriculture, Ministry of


Agriculture 2011-12 reveals that the coefficient of
variation (CV) of agricultural growth during 2000-01
1

Table 1.2: Sectoral Growth Rates of GDP


(2004-05 prices)
Sector

2007-08

2008-09

2009-10

2010-11(QE)

2011-12 (RE)

Agriculture & Allied

5.8

(16.4)

(-)0.1

(15.7)

1.0

(14.7)

7.0

(14.5)

2.8

(13.9)

Industry#

8.7

(28.8)

4.4

(28.1)

8.4

(28.1)

7.2

(27.8)

3.9

(27.0)

10.3

(54.8)

9.4

(56.2)

10.5

(57.2)

9.3

(57.7)

9.4

(59.1)

Services
GDP at factor cost

9.3 (100.0)

6.7 (100.0)

8.4 (100.0)

8.4 (100.0)

6.9 (100.0)

Figures in parentheses indicate percentage shares in GDP QE: Quick Estimates; RE: Revised Estimates
#: Includes mining & quarrying, manufacturing, electricity, gas and water supply and construction
Source: 1. Monthly Economic Report (March 2012), Ministry of Finance, GoI; 2. Economic Survey 2011-12

to 2010-11 was 1.6 compared to 1.1 during 1992-93

an overall growth of private final consumption

to 1999-2000. This is almost six times more than the

expenditure that was in the range of 7.1 to 9.2 per

CV observed in the overall GDP growth of the

cent during the period 2005-06 to 2010-11, the rates

country, indicating that high and perhaps increasing

of

volatility is a real concern. The volatility is likely to

beverages, and tobacco and gross rent, fuel, and

increase in the years to come in the wake of climate

power have generally been lower. On the other hand,

change,

the

there

by

making

it

more

challenging.

growth

of

growth

the

rates

consumption

of

furniture

and

communications,

and

furnishing,

been highly varying across states, suggesting that

miscellaneous goods and services have generally

uniform prescription may not work in propping

been higher. As a result, the composition of private

agricultural growth as state level occurances measures

final consumption expenditure in terms of shares

up to the overall performance.

underwent changes.
1.6

1.5

and

like

food,

Moreover, the Indian agriculture growth pattern has

b. Consumption, Savings and Investments

transport

items

groups

The Gross Domestic Savings (GDS), as a

proportion to GDP at current market prices (savings

The growth in real terms of consumption

rate) is estimated to have declined from 33.8 per cent

expenditure and gross fixed capital formation works

during 2009-10 to 32.3 per cent during 2010-11.

out to 6.0 per cent and 5.6 per cent respectively for

While the private sector savings has declined from

the year 2011-12. The growth in these indicators in

33.6 per cent to 30.6 per cent, public sector savings

2010-11

cent

increased from 0.2 per cent to 1.7 per cent during

respectively. The rate of growth of private final

2009-10 and 2010-11, respectively. This decline is

consumption expenditure in real terms has been fairly

accounted for by a reduction in private savings,

consistent and did not decline significantly even

primarily household savings in financial assets, and

when the growth rate was relatively lower, partly due

somewhat by a reduction in corporate savings. Public

to the inherent nature of private consumption that

savings, on the other hand, registered an increase,

does not fluctuate as much as other demand-side

thanks to fiscal consolidation. The reduction in the

components and partly on account of inflationary

financial savings rate of households could be partly

tendencies, which tend to reduce savings (on account

attributable to inflationary tendencies in the economy

of reduction in real interest rates) rather than

during the period that resulted in higher growth of

affecting the consumption level in the economy.

private

However, this consistency masks large variations

personal disposable income and partly to a reduction

between the various commodity groups. As against

in real interest rate. The Gross Capital Formation

was

8.1

per

cent

and

7.5

per

final

consumption

expenditure

than

of

(GCF), as a proportion to GDP, is estimated at 35.1


per cent with the contribution of public and private
sectors at 8.8 and 24.9 per cent, respectively during
2010-11. Within the private sector, the investment
rate for the corporate sector declined from 12.7 per
cent in 2009-10 to 12.1 per cent in 2010-11 while
that of the household sector increased from 12.4 per
cent to 12.8 per cent. Reduction in corporate
investment could be attributed to global factors, with
the global economy exhibiting signs of slowing down
in the second half of 2010 as well as to domestic
factors, namely increased cost of borrowing following
the upward revision of interest rates in order to
control inflation. Fixed investment as a ratio of GDP

in September 2011 before coming down to 6.6 per

peaked in 2007-08 and registered a decline since

cent in January 2012 (Chart 1.1).

then, falling from 31.6 per cent in 2009-10 to 30.4


per cent in 2010-11.

i. Drivers of Inflation in Recent Years

c. Inflation

1.8

1.7

commented upon in recent times. The analysis showed

The drivers and the measures to contain

inflation

Headline year-on-year wholesale price index

have

been

extensively

analysed

and

(WPI) inflation, after remaining persistently high over

that the shift in the nature and causes of inflation in

the past two years, has started to show signs of

India is a natural fallout of the structural changes that

moderation towards the end of the year 2011-12.

the economy has undergone. Both domestic and

Financial

global

year

2011-12

started

with

headline

inflation of 9.7 per cent, briefly touched double digits

factors

determined

the

inflationary

trend.

However, the inflationary pressure in India during the

Table 1.3: Drivers/Causes of Inflation in India


Category Products
covered

Immediate/
Short term

Medium Term

Long Term/
Structural

Implications

Food

Foodgrains,

9 Spike in global

9 Demand side drivers-

9 Pricing (MSP)

9 Nutritional security

Inflation

fruits & vegetables,

9 Changing

9 Productivity issues

food prices

proteins (milk,

9 Weak monsoon

eggs, meat, fish)

9 Crop losses

increased wages due to


MGNREGA
9 Wastages

9 Supply shock
Core

Manufacturing, coal

Inflation

consumption pattern

9 Supply chain

9 Lack of storage and

Management

other infrastructure

9 Excess demand

9 Capital stock deficiency

9 Production

9 Resource constraint

9 Infrastructural
bottlenecks

short fall
9 Supply shock

9 Stabilising exchange
rates to smoothen
volatility

Energy

Petroleum products,

Prices

crude oil, aviation

9 Global trends

alternative sources of

fuel etc.

energy

The list is illustrative.

9 Growing demand

9 Need for finding

year was caused due to the interplay of a number of

commodities need to change in favour of the ones

immediate and some underlying long term factors

facing the supply shock.

(Table 1.3).

contain inflation and food inflation are summarised in

1.9

the Box 1.1.

The analysis also showed that the nature of

inflation was different from the earlier instances of

d. Trade

prolonged inflation, basically because of the kind of


shifts

it

was

pointing

towards.

Moreover,

The measures adopted to

1.10

the

Cumulative value of exports for the period

April-March 2011-12 was `14,54,065 crore as against

persistent nature of food inflation posed challenges


for policy makers as monetary policy cannot have a

`11,42,921 crore over the same period last year,

direct and immediate bearing on food prices. But in

registering a growth of 27.22 per cent. Cumulative

view of the prolonged inflationary spells in recent

value of imports for the period April-March, 2011-

years, using the monetary policy weapon was thought

12 was `23,42,216 crore as against `16,83,466 crore

to be the appropriate policy response in order to

over the same period last year, registering a growth of

prevent and control the spillover of the supply shock

39.13 per cent. Agricultural exports increased from

in food prices into a generalised inflationary pressure

`1,13,117 crore during 2010-11 to `1,41,095 crore

in the economy. In order to keep inflation under

during 2011-12, registering a growth of 24.73 per

check,

cent. Increase in agricultural exports has been mainly

relative

prices

across

categories

of

Box 1.1: Measures adopted to Contain Inflation and Food Inflation


per kg for Antyodaya Anna Yopjana (AAY)) and wheat
( a t `4.15 per kg for BPL and `2 per kg for AAY)
since 2002.

A. Fiscal and Administrative Measures

Reduction of import duties (for rice, wheat, onion,


pulses, edible oils).

Permitting import of certain products (viz., skimmed


milk powder and other dairy products, duty free white/

Suspension of futures trading in rice, urad, and tur.

Extension of the Scheme for distribution of subsidised


imported edible oils through state governments/UTs

refined sugar).

Removal of levy obligation in respect of all imported


raw sugar and white/refined sugar.

Ban on export of edible oils and pulses (with certain


exceptions), non-basmati rice, wheat, onion (for short
period

of

time),milk

powders,

casein

and

B. Monetary Measures

casein

As part of the monetary policy review stance, the RBI has


taken suitable steps with 13 consecutive increases in policy
rates and related measures to moderate demand to levels
consistent with the capacity of the economy to maintain its
growth without provoking price rise. As per the most recent
announcement of the RBI on 24 January 2011, the cash
reserve ratio (CRR) has been cut by 50 basis points (bps)
from 6.0 per cent to 5.5 per cent and repo rate and reverse
repo rate have remained unchanged at 8.5 per cent and
7.5 per cent respectively.

products.

Permitting export of edible oils in branded consumer


packs of up to 5 kg subject to a limit of 10,000 tonnes.

No change in tariff rate values of edible oils. Exports of


onion calibrated through the mechanism of minimum
export prices (MEP).

Allocation of wheat and rice under the Open Market


Sale Scheme (OMSS),bulk sale, for distribution to BPL
families at BPL issue price and for above poverty line
(APL) families.

Maintaining the central issue price (CIP) for rice


( a t `5.65 per kg for below poverty line (BPL) and `3

(Source: Economic Survey 2011-12)

(<2ha). Small farmers who form 83 per cent of the

Table 1.4: Trends in Exports and Imports

numbers, now operate about 41 per cent of the total

(`000 crore)
Year

area indicating that the base of Indian agriculture is

Total
Exports

Share of
agri allied
products (%)

Total
Share of food
Imports
& allied
products(%)

2005-06

456.4

10.2

2006-07

571.8

10.3

840.5

3.5

2007-08

655.9

9.9

1012.3

3.0

security. Therefore, ensuring that the small holders do

660.4

small.

Available estimates suggest that small holders

contribute

3.3

about

51

per

cent

of

the

value

of

agriculture output and contribute significantly to food

2008-09

840.8

9.0

1374.4

2.1

not get marginalised and excluded from the benefits of

2009-10

845.5

10.0

1363.7

3.7

2010-11

1142.6

9.9

1683.5

2.9

the growth process is the biggest challenge today.

2011-12

1425.2

9.9

1677.4

3.1

Making them participate in the growth process not


merely in the production stage but in the post

Source: Economic Survey, Various Issues, Ministry of Commerce


& Industry, GoI, CMIE, April 2012.

production stage also will be necessary to include


them, meaningfully.
b. Making Small Farmer participate

due to higher exports of basmati rice, unmanufactured


tobacco, meat and meat preparations, castor oil and

1.13

tea. The percentage share of agriculture and allied

which is an integral element of market liberalisation

products in the total exports was 9.9 during 2011-12

and globalisation means that the small farmer is

as compared to 10.0 in 2009-10. The share of food &

increasingly being asked to compete in markets that

allied product imports in the total imports of the

demand much more in terms of quality and food

country also increased from 2.19 per cent in 2010-11

safety. As small farms tend to diversify into higher-

to 3.1 per cent in 2011-12 (Table 1.4).

value products, they must increasingly meet the


requirements of these demanding markets, both at

B. Agriculture & Rural Economy

home

changes

that

threats

new

to

small

with the working of the market.

further accentuated the predominance of

c. Rainfall situation

small farming as reflected by an increase of 10

1.14

million operational holdings within just five years with

The country as a whole received 899.9 mm of

rainfall, which was 1.0 per cent more than the Long

no rise in the net cropped area. In fact, going by the

Period Average (LPA) during the South-West monsoon

trend, another 10 million operational holdings might

(June-September) 2011 as compared to 2.0 per cent

have been added, putting pressure on the average

less than the LPA in the corresponding period last

area operated per farmer (holding) which was 1.23

year. Central India and North-West India experienced

hectares in 2005-06.
1.12

serious

offer

which can aid/ensure the transition of small farmers

occurred

during the two agricultural censuses (2001-02 &


2005-06)

pose

changes

Producers Organisations and other such arrangements,

the longer term structural changes taking place in


structural

and

these

urgent need to create and facilitate institutions like the

during the year under report, can also be related to


The

overseas-

farmers. In the changed policy environment there is an

The developments in the agriculture sector,

agriculture.

and

opportunities

a. Structural changes in agriculture


1.11

The shift towards consumer-driven markets

excess rainfall over the LPA by 10.0 per cent and 7.0

Another feature of this structural shift has

per cent respectively. The southern peninsula received

been the rise in the area operated by small farmers

normal rainfall. North-East India received 14 per cent


5

d. Crop production

Table 1.5: Trends in Rainfall and Water Storage


Particulars

South-West Monsoon*

1.16

2009

2010

2011

2008-09, foodgrains production recorded an increasing

(-)23

Number of Sub- Divisions


with Normal/ Excess Rainfall

13

31

33

Deficient/Scanty/No Rainfall

23

58.6

75.4

86.4

trend. However, it declined to 218.11 million tonnes in

A. Cumulative rainfall
(% variation from normal)
B.

C.

For five consecutive years, from 2004-05 to

Reservoir status
(% of FRL$@)

2009-10 due to severe drought conditions in various


parts

of

the

country.

Normal

monsoon

in

the

subsequent year, 2010-11, helped the country reach a


significantly higher level of 244.78 million tonnes of
foodgrains production. As per the third Advance
Estimates, production of foodgrains during 2011-12 is

Normal: +/-19%; Excess: +20% or more; Deficient: -20 to


-59%; Scanty: -60% or less; No Rain: -100%

estimated at an all time record level of 252.56 million

* : Cumulative position between 1 June and 30 September;

tonnes which is a significant achievement mainly due

$ : Full Reservoir Level in 81 major reservoirs (accounting for


67% of total reservoir capacity in the country) as at the
end of the season

to increase in the production of rice and wheat.

@: As on 30 September in the case of SW Monsoon and 31


December in the case of NE Monsoon

1.17

There has been a decline in overall area under

foodgrains during 2011-12 as compared to 2010-11.

Source: Indian Meteorological Department, Economic Survey,


Various Issues, CMIE April 2012

The area coverage under foodgrains during 2011-12


stood at 1,254.92 lakh ha compared to 1267.65 lakh
ha last year. The lower area under foodgrains has

less rainfall than the LPA. At disaggregated level, 24

been due to a shortfall in the area under jowar in

per cent of the districts received excess rainfall, 52 per

Maharashtra,

cent normal rainfall, 23 per cent deficient rainfall, and

Rajasthan

and

Gujarat;

bajra

in

1 per cent received scanty rainfall. Out of the 36 sub-

Maharashtra, Gujarat and Haryana; and in pulses in

divisions, 3 recorded deficient rainfall during the

Maharashtra, Uttar Pradesh, Andhra Pradesh and

South-West

33

Rajasthan. Moreover, the area under coarse cereals

remaining subdivisions, 7 recorded excess rainfall and

and oilseeds has also come down as compared to the

the

previous year. The area coverage under rice during

monsoon

remaining

26

in

2011.

recorded

Out

of

normal

the

rainfall

(Table 1.5).
1.15

2011-12 was around 444.06 lakh ha which was 15.44


lakh ha more than the previous year. The area

The total designed storage capacity at full

coverage under sugarcane during the current year has

reservoir level (FRL) of 81 major reservoirs in the

slightly improved to 50.81 lakh ha, higher by about

country monitored by the Central Water Commission

1.96 lakh hectares as compared to the previous year

(CWC) is 151.77 billion cubic meters (BCM). At the

and the area under cotton has increased significantly

end of monsoon 2011, the total live storage in these

to 121.78 lakh ha as compared to 112.35 lakh ha

reservoirs was 131.076 BCM, which was more than


the live storage of 115.23 BCM at the end of

during 2010-11. An analysis of trends in indices of

monsoon 2010 and 102.759 BCM, which is the

area, production, and yield of different crops during

average of the last 10 years. Thus, by and large the

the period from 1980-81 to 2011-12 (base triennium

rainfall situation and availability of water in the major

ending (T.E.) 1981-82=100) indicates a mixed picture

reservoirs was normal. However, given the vagaries of

(Table 1.6). There is a need for renewed research

the monsoon, augmenting irrigation potential is key to

efforts to boost production and productivity of food

sustained growth in agriculture.

grain crops against the backdrop of plateauing growth


6

Table 1.6: Compound Growth Rates of Area, Production, and Yield of Principal Crops
during 1980-1990, 1990-2000 and 2000-2012
(Base: TE 1981-82=100)
1980-81 to 1989-90
Area

Production

1990-91 to 1999-2000

Yield

Area

Production

2000-01 to 2011-12*

Yield

Area

Production

Yield

Rice

0.41

3.62

3.19

0.68

2.02

1.34

0.04

1.72

1.68

Wheat

0.46

3.57

3.10

1.72

3.57

1.83

1.22

2.37

1.14
4.39

Coarse Cereals

(-)1.34

0.40

1.62

(-)2.12

(-)0.02

1.82

(-)0.75

3.01

Total Pulses

(-)0.09

1.52

1.61

(-)0.60

0.59

0.93

1.70

3.47

1.91

Sugarcane

1.44

2.70

1.24

(-)0.07

2.73

1.05

1.37

1.96

0.58

Total Oilseeds

1.51

5.20

2.43

(-)0.86

1.63

1.15

2.08

4.45

3.39

Total Foodgrains (-)0.23

2.85

2.74

(-)0.07

2.02

1.52

0.43

2.32

2.91

Source : Department of Agriculture and Cooperation.


*: Growth rates are based on the second advance estimates (AE) 2011-12 released on 03 February 2012; Total oilseeds include nine oilseeds, cotton seed
and coconut.

rate in yield levels of rice and wheat and growing

patterns,

popularity of coarse cereals and pulses as nutri-food.

considering its bearing on inflation.

it

is

raises

lot

concern

especially

Both public and private-sector investment in research


and development (R&D) in these crops needs to be

1.19

Some of the short-term, medium-term and

encouraged.

long-term measures that could be undertaken to


achieve higher production and productivity in the

e. Aligning agricultural production with


the consumption basket

agriculture sector, to ensure that the higher demand

1.18

supply response, storage, and marketing (Box 1.2).

for food items is met, include measures related to

With the spread of urbanisation and the

economy growing in the range of 7-8 per cent, there


has been a shift in the demand from cereals to non-

f. Inputs use in Agriculture

cereal food like pulses, edible oils, fruits, vegetables,

i. Seeds

dairy,

meat

and

fish,

which

now

account

for

1.20

approximately 70 per cent of the WPI basket for


primary

food

items.

An

examination

of

Farmers generally need a genetically diverse

portfolio of improved crop varieties that are suited to

food

a range of agro-ecosystems and farming practices and

consumption expenditure in the country during the

resilient

period from 1987-88 to 2009-10 clearly reveals that

to

climate

change.

Seed

Programme

milk products, egg, fish, meat and vegetables both in

Indian

rural

of

Agricultural Universities, Co-operatives and private

consumption of cereals in the total food basket has

sector has been addressing the issue of low seed

gone down. The recent food inflation episodes have

replacement

rate.

been attributed to the constraints in increasing the

Development

and

supply of these commodities as compared to their

Facilities for Production and Distribution of Quality

demand. This has led to an increasing pressure on

Seeds is being implemented since 2005-06 to ensure

their prices. As the agricultural production basket is

timely availability of quality seeds at affordable prices

still not fully aligned with the emerging demand

to farmers. During 2010-11, 277.3 lakh quintals of

urban

areas;

whereas,

the

share

Council

of

Central/State

Indian

there has been a shift in expenditure towards milk and


and

involving

The

Agricultural

Besides,

Research,

the

Strengthening

Governments,

of

scheme

State

for

Infrastructure

Box 1.2: Supply-side Constraints

Given the compositional shift in food basket of a


common household and its impact on consumption
demand, improved supply response is critical for
ensuring price stability in food items.

Extension programmes and guidance to farmers


regarding fertilizer and insecticide usage and alternate
cropping pattern based on soil analysis could be
undertaken and intensified.

As a strategy, regular imports of agricultural


commodities in relatively smaller quantities with an
upper ceiling on total quantity could be considered.
The upper ceiling can be decided annually, relatively
well in advance, after assessing the likely domestic
situation in terms of production and consumption
requirements.

Setting up special markets for specific crops in states/


regions/areas producing those crops would facilitate
supply of superior commodities to the consumers.

Mandi governance is an area of concern. A greater


number of traders must be allowed as agents in the
mandis. Anyone who gets better prices and terms

outside the Agricultural Produce Marketing Committee


(APMC) or at its farm gate should be allowed to do so.
For promoting inter-state trade, a commodity for which
market fee has been paid once must not be subjected
to subsequent market fee in other markets including
that for transaction in other states. Only user charges
linked to services provided may be levied for
subsequent transactions.

Perishables could be taken out of the ambit of the


APMC Act. The recent episodes of inflation in
vegetables and fruits have exposed flaws in our supply
chains. The government-regulated mandis sometimes
prevent retailers from integrating their enterprises with
those of farmers. In view of this, perishables may have
to be exempted from this regulation.

Considering significant investment gaps in post-harvest


infrastructure of agricultural produce, organised trade in
agriculture should be encouraged and the FDI in multibrand retail once implemented, could be effectively
leveraged towards this end.

Government should step up creation of modern storage


facilities for food grains.

Source: Economic Survey 2011-12

certified/ quality seeds were distributed. Breeder seed

to strengthen the seed sector include, improving

production and foundation seed production reached

policies and legislation for variety development and

1.19 lakh quintals and 17.53 lakh quintals, respectively

release as well as seed supply; enactment of flexible

during 2010-11, registering 13.53 and 7.8 per cent

variety release legislation, strengthening capacity by

growth over the previous year. The requirement and

creating a new generation of skilled practitioners to

availability of certified seeds during the last five years

support enhanced breeding; working with farmers to

are given in the Table 1.7. Some important measures

explore

the

ways

in

which

crops

and

varieties

contribute to successful intensification; revitalising the


public sector and expanding its role in developing new

Table 1.7: Requirement & Availability of Seeds in India

crop varieties; supporting the emergence of local,

(lakh quintal)
Year

private sector seed enterprises through an integrated

Requirement

Availability

Surplus (+)/
Deficient (-)

2007-2008

180.74

194.31

+13.57

2008-2009

207.28

250.35

+43.07

2009-2010

249.12

279.72

+30.60

2010-2011

290.76

321.36

+30.60

1.21

2011-2012

330.41

353.62

+23.21

role in the development of the agricultural sector. Both

approach involving producer organisations; linkages to


markets and value addition, etc.

ii. Chemical fertilizers


Chemical fertilizers have played a significant

production and consumption of chemical fertilizers has

Source: Department of Agriculture and Cooperation (DAC), Seeds


Division, GoI.

steadily increased over the years (Table 1.8). Under


8

Table 1.8: Production and consumption of fertiliser

area as a per cent of Gross cropped area has

Production of Urea, DAP and


Complex Fertilizers

increased from 34 per cent in 1990-91 to 45.3 per


cent in 2008-09. However, there are wide variations

(lakh tonnes)

in irrigation coverage across states and across crops.

Year

2009-10

2010-11

2011-12

Flagging efficiency levels of public surface irrigation

Urea

211.12

218.80

222.88

schemes is causing a lot of concern and perhaps

Di-ammo-iumphosphate

42.46

35.37

39.41

urgent institutional reforms, better management and

Complex fertilizers

80.38

87.27

90.69

maintenance

Per Hectare Consumption of


Fertilizers in Nutrient Terms
(kg)
Nitrogenous (N)
Phosphatic (P)
Potassic (K)
Total (N+P+K)
Per hectare consumption

only

can

hold

the

deteriorating

performance. It may involve engaging water user


associations and even by

150.90

155.80

165.58

65.06

72.74

80.50

unbundling the large

surface schemes into storage (dams), transmission


(main

canals)

(distribution

at

and
the

retail
farmer

distribution
level).

of

water

Groundwater

33.13

36.32

35.14

249.09

264.86

281.22

irrigation, which is a biggest source of irrigation

127.2

135.76

144.14

today, suffers from over-exploitation in most of the


states. Excessive dependence on groundwater for

Source: Department of Fertilizers. Ministry of Chemicals & Fertilizers,


Directorate of Economics and Statistics, Department of Agriculture and

irrigation purposes has several implications like steep

Cooperation (DAC), GoI.

decline in the groundwater table, drying up of a huge


number of wells, low well productivity, rapid rise in

the Nutrient Based Subsidy (NBS) Policy, a fixed

well and pumping depths, deteriorating groundwater

subsidy is announced on per kg basis of nutrient

quality and salinity ingress in many areas. Free or low

annually. An additional subsidy is also given for micro-

pricing

nutrients. With the objective of providing a variety of

contributed to this problem. Major reforms in the

subsidized fertilizers to farmers depending upon soil

power sector, improvement in the quality of power

and crop requirements, the government has included

and availability of power are a precondition for

seven new grades of complex fertilizers under the

improving

NBS. Under this scheme, manufactures/marketers are

the country.

allowed to fix the maximum retail price (MRP).

1.23

Farmers pay only 50 per cent of the delivered cost of


P

and

fertilizers,

the

rest

is

borne

by

of

primarily

situation

in

The Government of India has taken up

been created through major and medium irrigation


schemes.

increasing

groundwater

has

their own farms. Substantial irrigation potential has

Water, a natural resource, is critical in the


of

overall

irrigation

funding and is assisting farmers to create potential on

iii. Irrigation

context

the

for

augmentation of irrigation potential through public

the

Government of India in the form of subsidy.

1.22

power

productivity

and

The

central

government

initiated

the

Accelerated Irrigation Benefit Programme (AIBP) from

income

1996-97 for extending assistance for the completion of

stabilization at the micro level and ensuring food

incomplete irrigation schemes. Under this programme,

security at the macro level. India, currently, has an

projects approved by the Planning Commission are

overall irrigation potential of 140 million ha, out of

eligible for assistance. Under the AIBP, `50,380.64

which only about 109 million ha have been created,

crore of central loan assistance (CLA)/grant has been

and around 80 million ha utilised. Gross irrigated

released up to 30 November 2011. As on 31 March


9

2011, 290 projects were covered under the AIBP and

and `54,239 crore, respectively, sharing 72 per cent,

134

17 per cent and 11 per cent of the total credit flow

completed.

During

2010-11,

an

irrigation

potential of 566.24 thousand ha is reported to have

during 2011-12 (Table 1.9).

been created by states, from major/medium/minor


irrigation projects under the AIBP. While the higher

1.26

irrigation potential would help to augment production

agriculture and allied activities registered a Compound

and productivity, assured remuneration from such

Annual Growth Rate (CAGR) of 20.01 per cent. The

production is vital for development of agriculture.

growth rate in short term credit flow and term loans


were 24.52 per cent and 12.11 per cent, respectively

iv Rain-fed agriculture
1.24

During the period 2007-11, the GLC flow for

for the five-year period (2006-07 to 2010-11). Sub

Sixty-five per cent of agriculture in India is

sector-wise, during 2010-11; High-tech agriculture

undertaken in dry land and resource poor regions,

witnessed the highest annual growth of 62.95 per cent,

which

different

followed by Farm Mechanisation (25.36%), Animal

orientation and approach. This is especially critical in

Husbandry (24.49%) in GLC flow over 2009-10

the context of food security. As the emphasis has been

(Table 1.10).

largely

require

on

perhaps

research

and

completely

solutions

for

irrigated

g. Agricultural Production

agriculture, priority needs to be given for building up


greater understanding and creating a framework for
development

of

rainfed

agriculture

and

i. Foodgrains & Non-foodgrains

farmers

depending on such land. These regions are home to

1.27

According to the 3rd Advance Estimates, the

majority of small and resource poor farmers.

countrys foodgrain production during 2011-12 was


estimated at 252.56 million tonnes as compared to

v. Credit

244.78 million tonnes (final estimate) during 2010-11,

1.25

As against the target of `4,75,000 crore credit

registering an increase of 3.2 per cent over the

flow to agriculture for 2011-12, the banking system

previous year. Overall, agriculture sector is expected to

disbursed `5,09,040 crore as on 31 March 2012,

achieve a modest growth of 2.4 per cent in 2012-13.

achieving 107.2 per cent of the target. Commercial

Livestock, forestry and fishing are expected to do well,

Bank (CB), Co-operative banks and Regional Rural

while minor crops production is estimated to rise by

Bank (RRB) disbursed `3,68,616 crore, `86,185 crore

4.0 per cent. However, output of major crops is

Table 1.9: Agency-wise Ground level Credit Flow


(` crore)
Agency

2007-08

2008-09

2009-10

2010-11

2011-12 @

Growth Rate (%) @


2007-11 #

2010-11 ^

2011-12 ^

Co-op

48258

45966

63497

78007

86185

18.40

22.85

10.48

RRBs

25312

26765

35217

44293

54239

22.48

25.77

22.46

181088

228951

285800

345877

368616

20.13

21.02

6.57

254658

301908 *

384514

509040

20.01

21.79

8.70

CBs
Total

468291 **

#: Compound Annual Growth Rate; ^: Percentage change over the previous year. * Includes ` 226 crore by other agencies
**: includes ` 114 crore by other agencies @: provisional
Source: NABARD

10

Table 1.10: Sub-sector-wise Ground Level Credit Flow for Agriculture & Allied Activities
(` crore)
Sl Sector/Sub-Sector
No.
I.

Crop Loan
(ST-Production Credit)

II.

Term Loans
(MT & LT Investment Credit)

2006-07

2007-08

2008-09

2009-10

2010-11

Growth rate (%)


2006-11 ^

2010-11*

138455

181393

210461

276656

335550

24.52

21.29

90945

73265

91447

107858

132741

12.11

23.07

i.

Minor Irrigation

8566

2840

3180

5197

4363

(-)7.18

(-)16.05

ii.

Land Development

2285

2553

2887

3669

3615

13.66

(-) 1.47
25.36

iii. Farm Mech

10113

8303

8334

10211

12800

7.02

iv. P & H

5266

5910

6045

6407

6610

5.50

3.17

v.

8045

9034

10398

10260

12773

11.09

24.49

Animal Husbandry

vi. Fisheries
vii. Hi-tech agriculture
viii. Others$
Total (I + II)

1424

1248

1281

1854

1931

10.57

4.15

21498

33325

41694

50797

82774

36.59

62.95

33748

10052

17628

19463

7875

(-)20.15

(-)59.54

229400

254658

301908

384514

468291

20.19

21.79

Source: NABARD
$ : Others include storage/market yards,forestry/waste land development, RIDF, bullock and bullock cartsand bio-gas
^: Compound Annual Growth Rate;
*: Percentage change over the previous year.

projected to decline marginally by 0.6 percent in

estimated coffee production for the year 2011-12 is

2012-13, mainly because of a fall in output of non-

3.02 lakh tonnes, i.e., 0.97 lakh tonnes of Arabica and

food crops. Production of non-food crops is projected

2.05 lakh tonnes of Robusta.

to fall by 1.6 per cent in 2012-13, owing to lower


output of cotton and sugarcane. During the year

Table 1.11: Production of Major Crops

2011-12, production of all the crops is estimated to be

(Million tonnes)

higher, the maximum increase being for cotton at

Year/Crops

40.04 per cent followed by oilseeds (21.58%), coarse


cereals (19.85%), pulses (18%), sugarcane (16.5%)
and wheat (4.29%) (Table 1.11).

ii. Plantation crops


1.28

Tea production in the country during 2010-11

lakh tonnes achieved in 2009-10. Further, the export


of tea from India during 2010-11 was 1.78 lakh tonnes
as against 2.13 lakh tonnes in 2009-10. The estimated
import of tea into India during 2010-11 was valued at
`186.82 crore, which was lower by `27.62 crore
compared to the previous year.

2012-13F

2011-12
(% change)

Foodgrain
of which
Rice
Wheat
Coarse Cereals
Pulses

218.1

244.8

252.6

251.8

3.2

89.1
80.8
33.5
14.7

96.0
86.9
43.7
18.2

99.8
91.1
42.0
17.5

100.4
87.3
42.3
17.7

4.0
4.8
(-)3.6
(-)3.7

Non-food crops

24.9

32.5

31.2

32.1

(-)4.3

8.3
12.7

6.9
13.1

8.0
12.8

(-)17.1
2.8

8.2
33.0
342.4
10.6

7.6
35.0
345.7
11.6

7.6
32.2
342.5
11.7

(-)6.6
5.9
1.0
10.2

Major oilseeds
of which
Groundnuts
5.4
Soyabeans
10.0
Rapeseed &
Mustard
6.6
Cotton#
24.0
Sugarcane
292.3
Jute & Mesta*
11.8

has been estimated at 9.66 lakh tonnes as against 9.91

1.29

2009-10 2010-11 2011-12

E: 3rd Advance Estimates;


F: Forecast;
#: Million bales of 170 kgs each;
*: Million bales of 180 kgs each;
Source: CMIE, April 2012, Agricultural Statistical Division, Ministry of
Agriculture, Government of India; Economic Survey 2011-12

Coffee is cultivated in an area of around 4.0

lakh ha mainly confined to Southern India. The


11

1.30

Schemes of the National Horticulture Board and

India is the fourth largest producer of natural

Integrated Development of Coconut.

rubber (NR) with a share of 8.2 per cent in world


production

in

2010.

The

production

of

NR

in

1.32

2011-12 is projected at 9.02 lakh tonnes, an increase

The National Horticulture Mission (NHM),

under implementation in 372 districts of the country,

of 4.6 per cent over 2010-11. India continues to be


the second largest consumer of NR with 8.8 per cent

aims

share of world consumption in 2010. Consumption of

horticulture sector through area based and regionally

NR in 2011-12 is projected at 9.77 lakh tonnes, an

differentiated strategies. Under the scheme, a total

increase of 3.1 per cent over the previous year.

area of 16.57 lakh ha has been brought under

Despite not having regions geographically best suited

horticulture crops and an expenditure of `4,125.43

to growing natural rubber, India continued to record

crore had been incurred upto 2009-10. Area and

the highest productivity in the world with an average

production under horticulture crops increased from

yield of 1,867 kg/ha. The production of Rubber

20.7 million ha and 214.7 million tonnes, respectively

(natural & synthetic) was 9.08 lakh tonnes during

during 2008-09 to 20.9 million ha and 223.1 million

2010-11 (April-February) as against 9.38 lakh tonnes

tonnes, respectively during 2009-10 (Table 1.13).

during 2009-10. During 2010-11 (April-February), the

to

promote

holistic

development

of

the

h. Agriculture and Allied Sector

estimated export of natural rubber was 29,851 tonnes

1.33

against an import of 1,71,282 tonnes (Table 1.12).

Agriculture and allied activities contributed for

14.6 per cent of GDP in 2010-11 with Agriculture

iii. Horticulture Crops


1.31

Development

recognised

as

accounting for 12.3 per cent, followed by forestry and

of

the

horticulture

avenue

for

has

logging at 1.5 per cent and fishing at 0.8 per cent.

been

diversification

in

i. Livestock and Poultry

agriculture, addressing nutritional security, enhance


employment

opportunities

and

providing

1.34

export

Livestock sector plays a critical role in the

earnings. Among the various horticulture crops, fruits

welfare of Indias rural population. It contributes 9.0

and vegetables form the single largest sub-sector

per cent to GDP and employs 8.0 per cent of the

constituting

labour force. This sector is emerging as an important

about

92.3

per

cent

of

the

total

horticultural production in the country. Schemes for

growth

horticultural

National

component of agricultural sector, its share in GDP has

Mission,

been rising gradually, while that of the crop sector has

Horticulture

development
Mission,

National

include
Bamboo

leverage

of

the

Indian

economy.

As

Table 1.12: Production, Consumption and Exports of Major Plantation Crops


(lakh tonnes)
Year

Tea

Coffee

Production Consumption Exports

Rubber

Production Consumption Exports

Production

Consumption

Exports

2006-07

9.73

7.71

2.18

2.88

0.85

2.49

9.52

10.91

0.57

2007-08

9.87

7.86

1.85

2.62

0.90

2.19

9.31

11.58

0.60

2008-09

9.73

8.02

1.90

2.62

0.94

1.97

9.61

11.64

0.47

2009-10

9.91

7.70

2.13

2.90

0.94

1.95

9.38

12.43

0.25

2010-11*

9.66

NA

1.78

2.99

0.94

3.22

9.08 $

12.78 $

0.29

NA: Not Available *: Estimated


$: April 2010-February 2011
Source: Ministry of Commerce and Industry, GoI. Coffee Board, Tea Board and Rubber Board

12

Table 1.13: Area and Production of Major Horticulture Crops


(Area in million ha and production in million tonnes)
Year

Area Total
Fruits

Vegetables

Production Total

Flowers

Horticulture

Fruits

Vegetables

Flower

Horticulture

2005-06

5.3

7.2

0.1

18.7

55.4

110.1

0.7

181.8

2006-07

5.6

7.5

0.1

19.4

59.6

115.0

38.0

191.8

2007-08
2008-09

5.8
6.1

7.8
7.9

0.2
0.2

20.2
20.7

65.6
68.4

129.3
129.1

44.5
47.9

211.2
214.7

2009-10*

6.3

7.9

0.2

20.9

71.5

133.7

66.7

223.1

*: 3rd Advance Estimates


Source: Agricultural Statistics at a glance; various issues, NHB

been on the decline. In recent years, livestock output

over 14 million people in 2010-11, apart from being a

has grown at a rate of about 5.0 per cent a year,

major foreign exchange earner.

higher than the growth in agricultural sector. This


enterprise provides a flow of essential food products,

i. Agro and Food Processing Sector

draught power, manure, employment, income, and

1.37

export earnings. Distribution of livestock wealth is

as the promising sector of the Indian economy in view

more egalitarian, compared to land. Hence, from the

of its large potential for growth and its socio economic

equity and livelihood perspective, it is considered as

impact

an

generation. Agro processing helps in better utilization

important

component

of

poverty

alleviation

Agro and Food Processing sector is regarded

specifically

on

employment

and

income

and value addition of agricultural produce. The Vision

programmes.

Document 2015 by Ministry of Food Processing


1.35

During

2010-11,

the

livestock

sector

Industries has set a challenging target of trebling the

contributed to 5.1 per cent of GDP and 28.0 per cent

size of processed food sector by 2015 through

value of output from agriculture and allied activities.

appropriate enabling policies. The export of processed

As per the 18th Livestock Census 2007, the livestock

foods including processed fruits and juices increased

and poultry population in the country were 529.7

from `3,176 crore during 2008-09 to `3,255 crore

million and 648.8 million, respectively. The per capita

during 2009-10.

availability of milk increased from 258 grams per day


production in the country by 3.68 per cent during

j. Agricultural Marketing and Commodity


Futures

2010-11 over 2009-10. The per capita availability of

1.38

eggs has been around 51 per annum during 2010-11.

amended

to 263 grams per day due to increase in milk

Committee

ii. Fisheries
1.36

Seventeen
their

States/Union
Agricultural

(APMC)

Acts

for

Territories

Produce

have

Marketing

agricultural

market

reforms. Initiatives have been undertaken by GoI for

The fisheries sector contributed 0.7 per cent of

setting up terminal market complexes for fruits,

total GDP at factor cost and 5.0 per cent of GDP at

vegetables and other perishables in States that have

factor cost from agriculture, forestry, and fishing

in

amended their APMC Acts. Agricultural Marketing

the year 2010-11 (QE). Fish production increased

Information Network (AGMARKNET) provides internet

from 3.8 million tonnes in 1990-91 to 8.29 million

connectivity to agricultural markets for establishing

tonnes in 2010-11. Fishing, aquaculture, and allied

information network of prices and other market related

activities are reported to have provided livelihood to

information.
13

Agricultural

commodities

valued

at

`8,614.58 crore and `306.65 crore were certified

pressure on agriculture for their sustenance, there is a

under Agmark for domestic trade and exports,

need

respectively during 2009-10 as compared to `7,865.25

agriculture. Capital formation in agriculture (`1,42,254

crore and `241.08 crore for the same during 2008-09.

crore in 2010-11) now primarily rests on the private

1.39

for

investment.

Agriculture commodity futures market includes

substantial

increase

in

investment

in

But considering that public investment

has an enabling effect on private investment, the

21 commodity exchanges in the country. The value of

stagnant share of public investment is a concern.

total trade in commodity futures market increased from


`77,64,754 crore in 2009-10 to `119,48,942 crore in

1.41

2010-11 recording a growth of 53.86 per cent during

in the ratio of GCF in agriculture as a percentage to

the period. The value of agricultural commodities as a

agri-GDP, however has substantially improved in the

proportion to total trade in commodity futures market

last decade which is a positive sign. In percentage

decreased from 15.68 per cent in 2009-10 to 12.18

terms in 1997-98 (beginning of ninth plan) it was 8.6

per cent in 2010-11.

per cent which increased to 20.3 per cent in 2010-11


(Chart 1.3).

k. Capital Formation
1.40

The investment rate in agriculture, as reflected

l. Composition of investment

The share of Gross Capital Formation (GCF)

of agriculture & allied sector in total GCF has hovered

1.42

between 6 to 8 per cent; whereas, it was around 18

critical and has a vital, enabling impact on the

per cent during the early 1980s, implying that the non-

private sector investment, it forms not more than

agriculture sectors are receiving higher investment as

about

compared to agriculture & allied sector over the plan

agriculture. This means that it is the private sector

periods resulting in growth disparities (Chart 1.2).

investment which is mainly holding the agriculture

Though this is in line with the overall falling share of

growth together. Implications for sustaining this position

agriculture in the overall GDP and also conforms to

are critical, especially when we keep in mind that the

the development process observed elsewhere in the

private sector response would be better to a more

developing world, keeping in view the high population

reformed incentive structure.

14

While public investment in agriculture is

20

per

cent

of

the

total

investment

in

m. Kisan Credit Card Scheme


1.43

n. Agricultural Debt Waiver and Debt


Relief Scheme

Kisan Credit Card (KCC) scheme introduced

in 1998-99 has facilitated the flow of credit to farmers.

1.44

During 2011-12, 10.07 million KCC were issued by

Debt Relief (ADWDR) for farmers was announced in

banks with sanctioned credit limit of `54,269 crore. Of

the

the cumulative 113.91 million Kisan credit cards issued

Budget

2008-09

to

address

the

community, especially small and marginal farmers.

million cards (46.58%), followed by Co-operative

NABARD implemented the Scheme as the nodal

Bank, 43.66 million cards (38.33%) and by RRBs

agency for co-operative banks and RRBs. About

17.19 million cards (15.09%) (Table 1.14).

192.59 lakh farmer borrowers of co-operative banks


and RRBs are estimated to have benefited under the

Table 1.14: Agency-wise, Year-wise Kisan


Credit Cards Issued
(As on 31 March 2012)

Co-operative
Regional
Commercial
Banks
Rural Banks
Banks

Union

indebtedness of farmers and difficulties of the farming

as at the end December 2011, CBs issued 53.06

Year

The Scheme of Agricultural Debt Waiver and

Scheme,

of

constituting

which
83.5

small
per

and
cent,

marginal
were

the

farmers,
major

(million)

beneficiaries. Out of `29,240.12 crore received under

Total

the Agriculture Debt Waiver and Debt Relief Scheme


2008, the cumulative disbursements by NABARD was

2006-07

2.29

1.41

4.81

8.51

`29,099.33 covering 1.88 crore accounts of the

2007-08

2.09

1.77

4.61

8.47

farmer. The share of State Co-operative Bank (SCB),

2008-09

1.34

1.42

5.83

8.59

State Co-opetative Agriculture and Rural Development

2009-10

1.75

1.95

5.31

9.01

Bank (SCARDB) and RRBs stood at `18,282.30 crore,

2010-11

2.81

1.77

5.58

10.16

2011-12*

2.96

1.99

5.12

10.07

Cumulative# 43.66

17.19

53.06

113.91

`3,843.37 crore and `6,973.66 crore, respectively.

o. Interest Subvention Scheme


1.45

*: Data for commercial banks available up to 31 December 2011


#: Since inception of the Scheme, i.e., August 1998

For encouraging timely and prompt repayment

of crop loans, additional subvention of 3 per cent was


15

announed to those farmers who would repay crop loans

The WBCIS is based on actuarial rates of premium but

promptly within one year of disbursement. Aggregate

to make the scheme attractive, premium actually

interest subvention of `1,688.62 crore and `2,097.94

charged from farmers has been restricted to be on par

crore in 2009-10 and 2010-11, respectively, was

with the NAIS. From kharif 2007-08 to kharif 2010-11,

provided by GoI. The Interest subvention for 2011-12

195.33 lakh farmers over an area of about 278 lakh

has been estimated at `3,000 crore.

ha with sum insured of about `31,953 crore have


been covered under the scheme. Claims to the tune of

p. Agricultural Insurance

about `991 crore have been paid against the premium

1.46

With the aim of further improving crop

of about `2,868 crore. Detailed fund requirements as

insurance schemes, the Modified National Agricultural

estimated by the implementing agency for these

Insurance Scheme (MNAIS) is under implementation

schemes for the year 2012-13 are to the tune of

on pilot basis in 50 districts in the country from rabi

`2,200 crore.

2010-11 season. Some of the major improvements

q. Support Prices, Procurement and


Stock of Foodgrains

made in the MNAIS are actuarial premium with


subsidy in premium at different rates, all claims liability
to be on the insurer, unit area of insurance reduced to

1.48

village panchayat level for major crops, indemnity for

gradual integration with the world economy, relaxation

Though

with

economic

liberalization

and

prevented/sowing/planting risk and for post-harvest

of export controls on several agricultural products

losses due to cyclone, on account payment up to 25

since 1991 have helped agricultural exports, there are

per cent advance of likely claims as immediate relief,

still occasional interventions by the government (for

more proficient basis for calculation of threshold yield,

example, export bans on wheat and rice, or limits on

and allowing private sector insurers with adequate

the stocking of grains by private trade that dissuade

infrastructure.

is

the private sector players from investing in the agri-

shared by the central and state governments on

system). However, one of the main government

50:50 basis and claims are the liability of the

interventions in the agricultural markets currently is its

insurance companies. The scheme has been notified

policy

by 17 states in a total of 50 districts for rabi 2011-12

agricultural

season. During rabi 2010-11, about 3.58 lakh farmers

horticultural commodities which are perishable in

over an area of about 3.23 lakh ha have been

nature and not covered under the Price Support

covered, insuring a sum amounting to `694.06 crore.

Scheme, with a view to protect the growers of these

The claims amounting to `15.96 crore have been

commodities from making distress sale in the event of

provided to 46,224 farmers. 4.89 lakh farmers have

bumper crop during the peak harvesting periods when

been covered over an area of 7.18 lakh ha insuring a

the prices tend to fall below the economic cost of

sum amounting to `14.70 crore.

production, a Market Intervention Scheme (MIS) is

1.47

Only

upfront

premium

subsidy

of

Minimum

implemented

The Weather Based Crop Insurance Scheme

Support

commodities.

on

the

For

request

Prices

(MSP)

for

procurement

of

of

State

/UT

Government which is ready to bear 50 per cent loss

(WBCIS) is also being implemented as a central-sector

(25% in case of North-Eastern States), if any, incurred

scheme from kharif 2007 season. The scheme is

on its implementation.

intended to provide insurance protection to farmers


against adverse weather incidence, such as deficit and

1.49

excess rainfall, high or low temperature, and humidity

moong, urad and cotton increased by 8.0, 14.73,

that are deemed to adversely impact crop production.

6.67, 10.41 and 13.79 per cent, respectively during


16

MSP

for

common

paddy,

wheat,

arhar,

2011-12 over the year 2010-11. There has been no

markets, logistics and warehouse receipt systems,

change in the MSP of cotton. The procurement of

futures markets, and in infrastructure (such as cold

rice

(kharif

storage facilities, quality certification, etc.) for imports

marketing season for rice and rabi marketing season

and exports. This is particularly relevant for the high

for wheat) at 26.8 million tonnes and 28.3 million

value segment that is currently hostage to high post-

tonnes, respectively, represents a decline of (-) 21.63

harvest losses and weak farm-firm linkages. The

per cent and increase of 25.78 per cent as compared

introduction of the Model Act in 2003 was directed

to the corresponding date last year. The stock of

towards allowing private market yards, direct buying

foodgrains (rice and wheat) held by the Food

and selling and also to promote and regulate contract

Corporation of India (FCI) as on 01 February, 2012

farming in high value agriculture. Although many

at 55.25 million tonnes was higher by 17.2 per cent

states

over the level of 47.17 million tonnes as on 01

modifications, its impact on farmers in terms of better

and

wheat

as

on

March

1,

2012

February, 2012. The off-take of foodgrains (rice and

lower than that at 53.0 million tonnes during

1.52

Act,

with

Around 30 per cent of fruits and vegetables

grown in India (40 million tonnes) get wasted

r. Policy focus on post production stage towards a broad based food grains
policy

annually due to gaps in cold chain, infrastructure,


insufficient cold storage capacity, unavailability of
cold storages in close proximity to farms, poor

The agricultural growth strategy for a long

transportation infrastructure etc. India wastes more

time focused mainly on production phase. In the

fruits and vegetables than it consumes. Operating

context of food grains policy, concern has been raised

costs for Indian Cold Storage Units are over $60 per

about simultaneous occurrence of high food inflation

cubic metre per year compared to less than $30 in

and large food grains stocks in our granaries. It has

the West. Energy Expenses make up about 28 per

been argued that, in creating a better food grains

cent of the total expenses for Indian cold storages

policy, it is imperative that the entire system of food


release

Model

s. Storage Infrastructure

2010-11.

procurement,

new

prices is not yet visible.

during April-January 2011-12 was 9.96 per cent

production,

the

differences between farm harvest prices and consumer

(TPDS) and other schemes at 47.72 million tonnes

grains

adopted

prices for their produce and a reduction in the high

wheat) under Targeted Public Distribution System

1.50

have

compared to 10 per cent in the West (Source: Post-

and

Harvest Losses due to Gaps in Cold Chain in India

distribution is looked at.

A Solution, Maheswar.C). This brings out the need

In this endeavour, besides improving storage

to give focused attention to post harvest issues.

facilities, there is a need to redesign the mechanics of

Efforts at creating storage infrastructure should also

procurement and release of food grains to the market

keep in its radar that the benefits of this infrastructure

to ensure that the impact on prices is substantial in the

accrues to the small and marginal farmers- a few

desired

NABARD in-house studies have pointed out that

1.51

direction.

conditions

and

An

improvement

encouragement

to

in

marketing

private

sector

unless facilitating arrangements like pledge financing

participation can be achieved by reforming the APMC

facilities, warehouse receipts, etc. are put in place,

Acts. Appropriate changes in the APMC Acts can boost

the benefits of the storage infrastructure may not

private sector investment in developing regularised

accrue to small and marginal farmers.

17

t. Union Budget 2012-13 and Agriculture


1.53

repayment and making Kisan Credit Card a smart


card which could be used at ATMs are some of the

Given the crucial role of agriculture in the

positive announcements.

economy, Union Budget 2012-13 provided a boost to


agriculture by enhancing the allocations to agricultural

1.54

sector and to some key national projects for expansion

is not merely restricted to its contribution to GDP, but

of agricultural facilities. Recognising that farmers need

also by way of its close link to the objective of

timely access to affordable credit, the farm credit target

inclusive growth, its ability to impact poverty and its

has been raised from `4,75,000 crore in 2011-12

role in addressing the macro concern of inflation. The

t o `5,75,000

crore

of

structural concerns and other issues brought out

interest subvention scheme for providing crop loans to

above, have a critical bearing on the policies and

farmers at 7.0 per cent interest and additional

performance

subvention

chapters.

of

in

3.0

2012-13.

per

Continuation

The significance of agriculture sector in India

cent

for

prompt

18

of

NABARD,

outlined

in

the

later

II
Business Operations
The business operations of NABARD comprise

Institutions,

Co-operative

Institutions,

Corporates,

(i) providing refinance support to State Co-operative

NGOs, International organisations and other clients

Banks (SCB), Commercial Banks (CB), Regional Rural

provided by NABCONS. This chapter presents detail

Banks (RRB), Scheduled Primary Urban Co-operative

of the business operations and achievements of the

Banks (PUCB) and Agriculture Development Finance

Bank during the year.

Companies (ADFC) to supplement their financial

2.2

resources for enhancing credit flow to agriculture and


banks,

RRBs,

SCB

&

Co-operative

Bank

(CCB)

and

financial

support

extended

by

registering a growth of 36.13 per cent over 2010-11

Non-Banking

(Chart 2.1).

Finance Companies (NBFC), (iii) direct lending to


Central

total

NABARD during 2011-12 stood at `82,339.48 crore,

rural sectors, (ii) co-financing viable projects with


commercial

The

Primary

Agricultural Credit Societies (PACS) by way of a shortterm multi-purpose credit product, (iv) financing for
rural infrastructure projects by way of the Rural
Infrastructure Development Fund (RIDF) and a new
line

of

credit

called

the

NABARD

Infrastructure

Development Assistance (NIDA), (v) refinancing banks


against loans extended by them to private entities and
agencies owned /assisted by the Government for
creation

of

warehousing

infrastructure

and

(vi) professional consultancy service in agriculture,


allied activities and rural development to Government
of

India,

State

Governments,

Banks/

Financial

Production Credit
A. Short-Term Refinance
2.3

marketing and procurement activities. Increase in


NABARDs

NABARD refinances short-term loans given by

Co-operative

Banks

and

RRBs

for

Seasonal

production,

assistance

under

Operations

Short-Term

((ST-SAO)

to

Co-operative Banks and RRBs indicating credit limits


sanctioned and maximum outstanding for the last five

Table 2.1: Short term refinance (production credit)


for the last five years

years can be seen from Table 2.1.

(` crore)
Year

refinance
Agricultural

a. State Co-operative Banks

Credit Limits
sanctioned

Maximum
outstanding

2007-08

18291

16352 (89.40)

2008-09

19627

17212 (87.70)

2009-10

25661

24715 (96.31)

2.4

2010-11

34375

34196 (99.48)

preparation of land for sowing, usage of farm inputs

2011-12

49013

48981 (99.94)

and labour by way of a consolidated limit to SCBs on

(i) Support for Seasonal Agricultural


Operations

Figures in the parentheses refer to percentage share

NABARD refinances SAO activities including

behalf of the DCCBs in its jurisdiction. The quantum

19

of refinance assistance to Co-operative Banks was

in the NE Region, Jammu and Kashmir, Sikkim,

linked to their net Non Performing Assets (NPAs) and

Andaman and Nicobar Islands, Himachal Pradesh and

their compliance with Sec. 11(1) of B R Act, 1949

Uttarakhand, the quantum of refinance provided to

(AACS). The region-wise refinance eligibility of SCBs

SCBs was enhanced to maximum 70 per cent of their

during 2011-12 is provided in Table 2.2. With GoIs

crop loan disbursements with relaxation in eligibility

new initiative named Bringing Green Revolution to

criterion. This was higher by 15 per cent from the

Eastern India (BGREI) comprising the States in the

maximum level of 55 per cent during 2010-11.

Eastern Region and 28 districts of Eastern Uttar

2.6

Pradesh, it was decided to extend the facility of

to farmers through the co-operative credit structure, it

additional refinance of 5 per cent to SCBs in this

has been decided to launch a direct separate credit

region during 2011-12.


2.5

window facility for good working Central Co-operative


Banks under Section 21 (1) (i) read with Section 21

In order to enhance the ground level credit for

(2) and Section 33 of NABARD Act 1981. In addition,

crop loans by Co-operative Banks, it was decided to

NABARD will also sanction refinance to Regional Rural

provide additional refinance of 10 per cent to all the

Banks and Public Sector Banks for financing PACS

regions thus providing refinance of 55 per cent and 60

under Section 21 (1) and Section 21 (4) of NABARD

per cent of the crop loan disbursements to general

Act 1981 against promissory notes, subject to the

areas and the Eastern region (Bihar, West Bengal,

Banks furnishing a declaration in writing setting out

Odisha, Jharkhand, Chhattisgarh and 28 districts of

the purposes for which they have made loans and

(Eastern Uttar Pradesh) respectively, for the year


2011-12.

advances and such other reasons as may be required

This refinance was available to SCBs

by NABARD. A credit limit of `79.47 crore was

working in other than NER & Hilly States on behalf of


DCCBs

which

were

complying

with

sanctioned to Public Sector Banks for financing PACS

criterion:

to provide crop loan to farmers under the scheme.

(i) Section 11(1) compliant (ii) Rated as A or B as per


the

latest

inspection

With a view to augmenting ST-SAO Refinance

report

of

NABARD

2.7

During 2011-12, ST-SAO credit limits were

(iii) Continuously in profit for the last 3 years &

sanctioned to 23 SCBs aggregating `33,995.67 crore

(iv) CD Ratio of 70 per cent and above (as on 31

as compared to `23,759.34 crore to 21 SCBs during

March 2011). With a view to increasing the credit flow

2010-11. The credit limits included `3,171.70 crore for


the Oilseeds Production Programme (OPP), `285.57

Table 2.2: Sanction of ST(SAO) Credit Limits to SCB for


the year 2011-12

crore for National Pulse Development Programme

Region/States

Net NPAs
(%)

Eligible quantum
of refinance (%)

Tribal Population (DTP). SCBs reached a maximum

NE/Hilly Region/
A & NIslands

Upto 15
Above 15

70
65

Eastern Region

Upto 10
Above 10

50
45

Rest of India

Upto 10
Above 10

45
40

(NPDP) and `1,106.47 crore for the Development of


outstanding of `33,995.67 crore during 2011-12 with
100 per cent achievement level.
2.8

While SCBs in northern region (Haryana,

Himachal Pradesh, Punjab and Rajasthan) accounted


for 32 per cent share, SCBs in southern region

NE : Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland


and Tripura

(Andhra Pradesh, Karnataka, Kerala, Puducherry and


Tamil

Hilly Region : Jammu and Kashmir, Himachal Pradesh, Uttarakhand,


Sikkim

Nadu),

western

region

(Gujarat

and

Maharashtra) and central regions (Madhya Pradesh,

Eastern Region : Bihar, West Bengal, Chhattisgarh, Jharkhand, Odisha and


28 Districts of Eastern Uttar Pradesh.

Uttarakhand and Uttar Pradesh) accounted for 24, 17


20

and 16 per cent shares, respectively, of the aggregate

also. Refinance assistance for weavers is also routed

credit

(Bihar,

through commercial banks to co-operative societies

Chhattisgarh, Odisha and West Bengal) accounted for

for production and marketing of handloom products

11 per cent. The share of refinance availed of by the

made by individual weavers, handloom weaver

co-operative banks in the NER continued to be low

groups and master weavers. Scheduled Commercial

despite relaxations. However, the aggregate limits

Banks having Net NPA not exceeding 3 per cent of

sanctioned

limits

to

sanctioned.

Assam,

Eastern

region

and

net loans and advances outstanding as on 31 March

Sikkim SCBs more than doubled from `7.00 crore in

Meghalaya,

Nagaland

2011 and in profit in 2009-10/2010-11 and without

the year 2010-11 to `18.58 crore in the year 2011-12.

accumulated losses, were considered eligible for

The limits were fully utilised.

refinance. In addition, refinance is provided to RRBs


and Commercial banks to meet the working capital

(ii) Support for Short Term (Others)


2.9

This

(MACS) and Producer Groups. Short term credit was

agriculture purposes, allied activities, marketing of

also available to SCBs and scheduled commercial

crops, pisciculture, working capital requirements of

banks for financing working capital requirements of

industrial co-operative societies (other than weavers)/

State

labour contract and forest labour co-operative societies

production/procurement and marketing of handloom

(including collection of minor forest produce) and rural

products. The Interest Rate on refinance to client

artisans (including weaver members of PACS/LAMPS/

institutions for the year 2011-12 for Weaver Sector

FSS)/ procurement and distribution of agricultural

was revised from 8.5 per cent to 9.75 per cent w.e.f.

inputs

Co-operatives

29.7.2011 and further revised to 10.0 per cent w.e.f.

engaged in civil work in rural areas. The SCBs with net

14.11.2011 (for CBs w.e.f. 28.11.2011), keeping in

NPA not exceeding 10 per cent, as on 31 March 2010,

view the hardening of the interest rates.

ST-

short-term

Labour

Contract

refinance

requirement of Mutually Aided Co-operative Societies


for

and

includes

Handloom

Development

Corporations

for

were considered eligible for refinance. Relaxations in


NPA norms extended to North Eastern regions in the

2.11

During 2011-12, ST (Weavers) credit limits

case of ST-SAO was made applicable for ST-Others

aggregating `190.01 crore were sanctioned to three

also. The assessment norms hitherto followed, for

SCBs (Andhra Pradesh- `60.32 crore, Tamil Nadu- `122

different

ST

crore and Puducherry - `7.69 crore) for production,

(Others) limit of `145.00 crore was sanctioned to

procurement, marketing activities as against `215.75

Haryana and Tamil Nadu SCBs and the extent of

crore during 2010-11. The maximum outstanding

utilisation was 85 per cent.

during 2011-12 was `204.54 crore which includes

purposes

continued.

consolidated

previous year outstanding as against `198.14 crore in

(iii) Support to weavers

2010-11. Due to weakness in both credit and non-

2.10

Refinance assistance is made available to SCBs

credit co-operative credit system, many states having

on behalf of eligible DCCBs to meet the working capital

major concentration of handloom activities (NE

requirements of primary, apex and regional weavers

states,

societies. The refinance assistance is linked to their net

Karnataka) have not been able to avail of refinance

NPA, with relaxations for eastern and north eastern

facilities from NABARD. However, the situation is

regions. Consolidated limits were sanctioned to SCBs

likely to improve upon the implementation of the

on behalf of eligible DCCBs. Relaxations in NPA norms

Revival, Reform and Restructuring Package for the

as extended to Eastern and NER in the case of ST-SAO

handloom sector and inclusion of the support for the

continued to be made applicable for weavers sector

institutional credit under the Integrated Handloom


21

Odisha,

Kerala,

West

Bengal,

UP

and

Development Scheme (IHDS) of the Ministry of

RRBs working in other than NER & Hilly states subject

Textiles (MoT) of the GoI. So far, 4,624 HWGs have

to conditions that the Net NPA would be less than 5

been formed in various states viz., Odisha (1,366),

per cent and CD Ratio of 70 per cent and above as on

Andhra Pradesh (1,258), Assam (272), Bihar (82)

31 March 2011.

Jharkhand

(500),

Madhya

Pradesh

(266),

Uttar

Pradesh (272), West Bengal (88), and in other states

2.14

(520). Of these, 2,062 HWGs have been credit linked.

NE Region, Jammu and Kashmir, Sikkim, Andaman


and

b. Regional Rural Banks

With a view to increasing the credit flow in the


Nicobar

Islands,

Himachal

Pradesh

and

Uttarakhand, the quantum of refinance provided to


refinance

RRBs was enhanced to maximum 55 per cent of their

support to Regional Rural Banks (RRBs) for financing

crop loan disbursements with relaxation in eligibility

Seasonal Agricultural Operations (SAO) and Other

criterion. This was higher by 15 per cent from the

than SAO (OSAO) activities. The quantum of refinance

maximum level of 40 per cent during 2010-11.

2.12

NABARD

provides

Short

Term

to RRB is linked to their net NPAs. The details of

2.15

region-wise refinance available to the banks are

During 2011-12, NABARD sanctioned limits of

provided in Table 2.3. Additional refinance assistance

`13,925.66 crore to 81 RRBs under ST-SAO as against

of 5 per cent is provided to RRBs functioning in the

`9,799.69 crore sanctioned to 80 RRBs in 2010-11.

Eastern States and the 28 districts of Eastern Uttar

The limit included `1,236.29 crore for Oilseeds

Pradesh, covered under the BGREI scheme of the

Production Programme (OPP), `251.90 crore for

Government of India.

Development
`27.91

2.13

crore

of
for

Tribal

Population

National

Pulses

(DTP)

and

Development

In order to further enhance the crop loan

Programme (NPDP). Uttar Pradesh received the largest

disbursements by the RRBs, it was decided to provide

share of credit limit sanctioned of `2,442.14 crore

additional refinance of 10 per cent to all the regions

under ST (SAO) for RRBs, followed by Andhra

thus providing refinance of 40 per cent and 45 per

Pradesh (`2,017 crore), Rajasthan (`1,575 crore),

cent of the crop loan disbursements to general areas

Karnataka

and the eastern region of the country, respectively, for

crore). The maximum outstanding was `13,925.66

the year 2011-12. This refinance was available to

(`1,175

crore)

and

Kerala

(`1,084.40

crore with 100 per cent achievement level under the


limit sanctioned during 2011-12. Six RRBs in the

Table 2.3: Sanction of ST(SAO) Credit Limits to


RRB for the year 2011-12
Net NPAs (%)
of RRB
NE/Hilly Region/
A & N Islands

North Eastern Region were sanctioned credit limit of


`104.94 crore, which was fully utilised by them.

Eligible quantum of
refinance (%)

Upto 10
Above 10

55
50

Eastern Region

Upto 5
Above 5

35
30

Rest of India

Upto 5
Above 5

30
25

NE: Arunachal Pradesh,


Nagaland and Tripura

Assam,

Manipur,

Meghalaya,

2.16

NABARD sanctioned consolidated limits to

RRBs for ST-OSAO to the extent of 60 per cent of


their Realistic Lending Programme (RLP) for eligible
purposes like marketing of crops, fisheries, approved
purposes like production and marketing activities of
artisans (including handloom weavers), village/cottage/

Mizoram,

tiny sector industries, financing persons belonging to

Hilly Region : Jammu and Kashmir, Himachal Pradesh, Uttarakhand,


Sikkim

the weaker sections engaged in trade/business/service


activities including distribution of inputs for agriculture

Eastern Region: Bihar, West Bengal, Chhattisgarh, Jharkhand, Odisha


and 28 Districts of Eastern Uttar Pradesh

and allied activities. RRBs having Net NPA upto


22

5 per cent were eligible for refinance. The aggregate

agency for channelising the Margin Money & Interest

limit for ST-OSAO sanctioned during 2011-12 was

Subsidy

`677.00 crore, against `600.00 crore in the previous

Money assistance will be provided @ `4,200/- per

year. The maximum utilisation was `653.00 crore.

individual weaver, their SHGs & JLGs so as to raise


borrowings

B. Other Initiatives

disbursal

In the Budget speech for 2011-12, the

Finance

Minister

announced

that

provided

to

weaver/eligible

However, Interest Subsidy

crore has been released by the MoT, GoI to be passed


on to the banks.

technological up gradation, introduction of Common

c. Interest Subvention to Farmers

Management

2.19

Information System (MIS). The focus of the assistance

The continuance of the interest subvention

scheme was announced in the Union Budget 2011-12.

under the Package is to ease the existing chocked

Interest subvention was made available at 2 per cent

credit lines to the handloom sector, with fresh flow of

per annum to public sector banks, co-operative banks

credit, to be supported by 3 per cent interest


through

be

Monitoring Committees. The first instalment of `7.57

of overdue loans along with its capacity building,

guarantee

will

Package will be monitored at All India and State Level

scheme aims at revival of handloom sector by waiver

credit

Institutions

Interest Subsidy @3

turns NPA even within the period of 3 years. The

NABARD, starting with the current financial year. This

and

Margin

will not be available from the date of the loan account

total outlay of `3,884 crore will be implemented by

subvention

Banks/Financial

facility at subsidised rate.

Centrally

Restructuring Package for Handloom Sector with a

and

Package.

institutions by the GoI so that they may avail credit

Sponsored Plan Scheme on Revival, Reform and

(CAS)

the

the

per cent per annum for 3 years from the date of first

2.17

System

from

under

including RRBs, SCBs/DCCBs.

a. Revival, Reform and Restructuring


Package for Handloom Sector

Accounting

components

and RRBs for deploying their own funds for lending

Credit

crop loan upto `3 lakh per farmer, at an interest rate

Guarantee Fund Trust for Micro and Small Enterprises

of 7 per cent p.a. or less. Additional subvention of 3

(CGTMSE) floated by Small Industries Development

per cent was announced to those farmers who would

Bank of India (SIDBI). So far, 19 states have given

repay

their consent to implement the Package in their states

crop

loans

promptly

within

one

year

of

disbursement. Thus the effective interest rate paid on

out of which tripartite agreement has been signed

crop loan by such farmers would be 4 per cent.

between GoI, NABARD and the Governments of

Interest subvention was given to NABARD by GoI for

Andhra Pradesh, Kerala, Uttarakhand, West Bengal

providing concessional refinance to SCBs and RRBs at

and Karnataka so far.

4.5

per

cent

interest

rate.

Aggregate

interest

subvention of `1,688.62 crore and `2,097.94 crore

b. Comprehensive Package for the


Handloom Sector

under the interest subvention scheme 2009-10 and

2.18 The Ministry of Textiles (MoT), GoI vide its

NABARD, Co-operative Banks and RRBs. The Interest

Notification dated 9 January 2012 issued operational

subvention for 2011-12 has been estimated at `3,000

guidelines for Institutional Credit component under

crore and so far an amount of `424.96 crore has been

the

received from GoI.

Integrated

Handloom

Development

2010-11,

Scheme

respectively,

was

provided

by

GoI

to

The total amount disbursed by

(IHDS) for the handloom sector in the country.

GoI during the year under various interest subvention

NABARD has been designated as the implementing

schemes is `2,111.52 crore.


23

Table 2.4: Rates of Interest on Refinance


(per cent)
Sl. No.

Purpose

SAO

ST (Others other than weavers)

ST (Weavers Primary and Apex/


Regional Weavers Cooperative Societies.)

ST Weavers - Financing of Primary


Weavers Cooperative Societies

ST-Other than SAO loans (ST- OSAO)

ST - Working capital requirements of SHDC

MT (Conversion) loan

Interest Rate

i) SCB/RRB

4.5

ii) CCB & PACS through RRB / CB (PSB)

4.5

SCB

10.0

SCB

10.0

Scheduled Commercial Banks

10.0

RRB

10.0

SCB & Scheduled Commercial Banks

10.0

SCB/RRB

d. GoI Package for Sugar Industry


2.20

Agency

from GoI during the year 2011-12 towards interest


subvention, `383.38 crore was released to 212 sugar

NABARD continued to act as the nodal

mills operating in 11 States viz., Maharashtra, UP, AP,

agency for GoI package for restructuring of term

Tamil Nadu, Uttarakhand, Odisha, Madhya Pradesh,

loans of co-operative sugar mills. Out of `200.13

Gujarat, Goa, Punjab and Karnataka.

crore received from GoI towards interest subvention,

e. Interest Rates on Refinance


Assistance

`200.02 crore was disbursed to 76 co-operative sugar


mills in Maharashtra and Odisha.

7.25 (minimum)

NABARD also

acted as the nodal agency for routing the interest

2.21

subvention to co-operative banks and RRB under

Term (ST/MT) refinance to Co-operative Banks, RRB

Scheme for extending Financial Assistance to Sugar

and

Undertakings -2007. Out of `383.59 crore received

2011-12 are indicated in Table 2.4.

The rates of interest on Short Term/Medium


Scheduled

Commercial

Banks

during

Investment Credit
2.22

NABARD refinances term loans given by

Commercial

Banks,

Regional

Rural

Banks

refinance. The eligibility criteria for refinance for the

and

year 2011-12 continued to be linked to Net NPA in

Cooperative Banks for farm and non-farm sector

case of Commercial Banks, SCBs, PUCBs and RRBs

activities. These loans have a currency of 3-15 years

and recovery for the SCARDBs. However, for the

and include advances for farm investments, allied

current

activities, small and micro enterprises, agro-processing,

classified under four categories based on their Net

organic farming, non-conventional energy and rural

NPA/ Recovery position as against five categories

housing.

during 2010-11 for the purpose of deciding their

year

SCBs,

SCARDBs

and

RRBs

were

eligibility for availing of refinance. SCBs with Net NPA

A. Refinance Policy and Eligibility


Criteria

above 20 per cent or Audit Classification of C/D;


SCARDBs with recovery of less than 30 per cent or

The refinance policy for 2011-12 laid down

Audit Classification of C/D; and RRBs with net NPA

the eligibility criteria for banks to avail of NABARD

above 15 per cent and those with accumulated losses

2.23

24

and not complying with 42(6) (a) (1) of RBI Act,

other than A) alternative security like pledge of

1934,

Government Securities or Fixed Deposit Receipts

were

not

considered

eligible

for

availing

issued by Scheduled banks/ good working SCB (in the

refinance during the year.


2.24

event of Government Guarantee not forthcoming),

Commercial Banks/ PUCBs/ NEDFi with Net

was considered subject to fulfillment of certain terms

NPA exceeding 3 per cent were not eligible for

and conditions as prescribed by NABARD. Refinance

availing refinance during the year. NBFCs registered

to all SCARDBs was against Government guarantee.

with RBI, having AAA rating from a SEBI approved

D. Interest Rates on Refinance

agency and with Net NPA not exceeding 3 per cent,


were eligible for refinance. Refinance was provided to

2.27

Commercial Banks, SCBs and RRBs at 100 per cent of

revised five times in the range of 8.25 to 11.25 per

the eligible bank loan for all activities under thrust

cent depending upon the type of agency and quantum

areas. With effect from 2 September 2011, refinance

of refinance. The revised interest rate on refinance to

to SCARDBs was extended as term loans as against

CBs and RRBs against loans to MFIs for on-lending to

the earlier practice of contribution to floatation of

clients was 3 per cent less than that being charged by

debentures. Under the new system, all SCARDBs are

banks subject to the minimum interest rates prevailing

eligible for refinance of 90 per cent of the eligible

for various agencies in various regions of the country.

bank loan disbursed.

a. Concessional rate of interest for


Eastern Region

B. Special Package for North


Eastern and Other Regions
2.25

2.28

For increasing the credit flow to the States in

Eastern Region, comprising of the States of Assam,

Jharkhand and Andaman & Nicobar Islands), North

Bihar, Jharkhand, Chhattisgarh, Odisha, West Bengal

Eastern Region (Assam, Arunachal Pradesh, Manipur,

and Eastern UP (covering 28 districts of UP), banks

Meghalaya, Mizoram, Nagaland, Tripura including

were

Sikkim), Hilly States (Jammu & Kashmir, Himachal


and

Uttarakhand),

Lakshadweep

For ensuring investments in agriculture for

enhancing production and productivity of crops in the

the Eastern Region (West Bengal, Odisha, Bihar,

Pradesh

During the year, the rate of interest was

eligible

for

100

per

cent

refinance

at

concessional interest rate of 7.50 per cent for specified

and

eligible activities during 2011-12 and 2012-13 after

Chhattisgarh, NABARD continued to (i) apply uniform

achieving minimum target in key activities viz. Water

interest rate on refinance to all client institutions in the

Resources Development, Land Development, Farm

north eastern region, (ii) extend 5 per cent relaxation

Equipments, Seed Production and under group mode

in recovery norms for SCARDBs and relaxation in Net

to SHGs/ JLGs for Tractor financing. During the year,

NPA norms by 5 and 3 per cent, respectively, for SCBs

an amount of `128.71 crore was disbursed under the

and RRBs and (iii) provide refinance at 100 per cent

above scheme by various banks.

of the eligible bank loan for all client institutions


except SCARDBs for all purposes.

E. Refinance Support

C. Security Norms

2.29

2.26

disbursement was `15,421.70 crore as against the

For release of refinance to SCARDBs and

During

the

year

budget of `14,995.00 crore.

SCBs (not scheduled and having audit classification

25

2011-12

the

refinance

Table 2.5: Agency wise disbursement of Refinance


(` crore)
Agency

2009-10

2010-11

2011-12

Target

Disb

% Share

Target

Disb

% Share

Target

Disb

% Share

SCARDBs

2290.00

2221.30

18.50

2160.00

2351.85

17.44

2445.00

2444.93

15.85

SCBs

1040.50

1251.95

10.43

1340.00

1356.62

10.06

1205.00

1192.29

7.73

CBs

6085.50

6057.19

50.44

7052.00

7348.49

54.49

8030.00

8433.75

54.69

RRBs

1879.00

2457.46

20.46

2288.00

2287.84

16.96

3035.00

3086.19

20.01

16.14

0.13

85.00

84.87

0.63

60.00

54.08

0.35

5.00

5.05

0.04

55.00

56.20

0.42

220.00

210.46

1.37

11300.00

12009.08

100.00

12980.00

13485.87

100.00

14995.00

15421.70

100.00

PUCBs
ADFCs/NABFINS
Total

a. Agency-wise Disbursements of
Refinance
2.30

central

SCBs

have

availed

of

refinance

2.32

`3,086.19

crore

(Table

2.5

During 2011-12, the major share of refinance

SHG (19.92 %), Farm Mechanisation (13.84 %),

and

Animal

Chart 2.2).

Husbandry

(10.18%)

and

Plantation

&

Horticulture (10.03%) (Table 2.7).

b. Spatial Distribution of Refinance

F. Co-financing

2.31

2.33

The

western

has been accounted by NFS (23.18 %) followed by

respectively and RRBs have availed of refinance


to

%),

c. Sector-wise disbursements

amounting to `2,444.93 crore and `1,192.29 crore,


amounting

(11.60

and Chart 2.3).

availed of refinance amounting to `8,433.75 crore,


and

eastern

(10.80%), and north eastern region (1.50%) (Table 2.6

During 2011-12, Commercial Banks have

SCARDBs

(12.10%),

spatial

distribution

of

refinance

During the year, an amount of `1.91 crore

disbursement across regions indicated that major share

was disbursed taking the cumulative disbursement to

had been accounted by the states in the southern

`155.55

region

co-financing.

(48.30%),

followed

by

northern

(15.7%),

26

crore

for

35

ongoing

projects

under

Table 2.6: Region-wise Disbursement of Refinance


(` crore)
Region

2009-10
Target

Disb.

2790.00

2419.87

210.00

139.85

Eastern

1185.00

Central
Western
Southern

Northern
North Eastern

Total

2010-11
% Share *

Target

Disb.

20.20

2835.00

2810.70

1.20

266.00

265.82

891.07

7.40

1392.00

1680.00
935.00
4500.00

1478.60
1111.79
5967.89

12.30
9.30
49.70

11300.00

12009.08

100.00

2011-12
% Share *

Target

Disb.

% Share *

20.80

2928.00

2426.37

2.00

258.00

232.86

1.50

1405.35

10.40

1415.00

1783.53

11.60

1718.00
965.00
5804.00

1928.63
1253.64
5821.73

14.30
9.30
43.20

1927.00
1598.00
6869.00

1867.05
1671.16
7440.73

12.10
10.80
48.30

12980.00

13485.87

100.00

14995.00

15421.70

100.00

15.70

*: % share of the total disbursement during the year


Northern: Haryana, Himachal Pradesh, Punjab, Rajasthan, J&K, Delhi and Chandigarh
North Eastern: Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim
Eastern: Bihar, Jharkhand, Odisha, West Bengal and Andaman &Nicobar Islands
Central: Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Uttarakhand
Western: Gujarat, Goa, Maharashtra, Dadra & Nagar Haveli and Daman & Diu
Southern: Andhra Pradesh, Karnataka,Kerala, Tamil Nadu, Puducherry and Lakshadweep Islands

G. Capital Investment Subsidy


Schemes
2.34

(ii)

Marketing

Strengthening

Infrastructure,

of

Agriculture

Grading

and

Standardisation

NABARD continued to serve as nodal agency

for implementation of various Capital Investment

(iii)

Subsidy Schemes (CISS) of the GoI, for routing of

Establishment of Agri-Clinic and Agri-Business


Centres

subsidy admissible under the schemes, monitoring the


progress of the scheme and coordinating with banks,
State Governments & the GoI. The schemes were as

(iv)

Bihar Ground Water Irrigation Scheme

(v)

Scheme for installation of Solar Off-Grid and

follows:
(i)

Development/

Decentralised Applications
Construction of Rural Godowns

(vi)

27

National Project on Organic Farming

Table 2.7: Sector-wise Disbursement of Refinance


(`crore)
Purpose

2009-10

Minor Irrigation

2010-11

Target

Disb

Share %

Target

660.00

496.73

4.1

909.00

2011-12

Disb Share %
920.61

Target

6.8

Disb % Share

1071.00

660.51

4.28

Land Development

976.00

303.67

2.5

1168.00

295.69

2.1

1243.00

504.07

3.27

Farm Mechanisation

2194.00

1714.66

14.3

1817.00

1762.98

13.0

1714.00

2134.51

13.84

Plantation & Horticulture

362.00

377.40

3.1

579.00

698.39

5.2

750.00

1547.50

10.03

PF/SGP/AH-Oth

230.00

349.79

2.9

266.00

402.37

3.0

536.00

680.20

4.41

Fisheries

132.00

54.62

0.5

149.00

47.45

0.4

160.00

91.88

0.60

Dairy Development

570.00

725.35

6.0

649.00

918.11

6.8

975.00

889.88

5.77

38.00

6.46

0.1

52.00

9.57

0.1

21.00

15.97

0.1
1.02

Forestry
Storage Godown &
Market Yard

143.00

187.22

1.6

172.00

170.79

1.3

429.00

157.47

SGSY

274.00

151.50

1.3

322.00

228.84

1.7

211.98

1.37

2852.00

3465.99

28.9

3115.00

3446.40

25.6

4298.00

3574.21

23.18

Non Farm Sector


SC/ ST-AP

91.00

2.30

130.00

12.63

0.1

4.26

0.03

803.00

3173.56

26.4

795.00

2545.36

18.9

3642.00

3072.59

19.92

1975.00

999.82

8.3

2857.00

2026.68

15.0

156.00

1876.67

12.17

11300.00 12009.08

100.0

12980.00 13485.87

100.0

14995.00 15421.70

100.00

SHG
Others
Total

*: % share of the total disbursement during the year

(vii)

a.

Eight schemes relating to Animal Husbandry

Government of India. It aims at creation of scientific

Sector, viz:

storage facilities for rural farmers; thereby helping

Establishment/

Modernisation

of

them to avoid wastage, product deterioration and

Rural

distress sales. With effect from 20 October 2011, the

Slaughter Houses
b.

maximum capacity admissible for subsidy under the

Integrated Development of Small Ruminants

scheme was revised by the MoA, GoI from 10,000 MT

and Rabbits

to 30,000 MT. During the year subsidy of `148.68

Establishing Poultry Estates and Mother Units

crore

for Rural Backyard Poultry

(cumulatively `798.51 crore for 22,665 units).

d.

Salvaging and Rearing Male buffalo calves

(ii) Agricultural Marketing Infrastructure,

e.

Utilisation of Fallen Animals

f.

Pig Development

g.

Dairy Entrepreneurship Development Scheme

h.

Poultry Venture Capital Fund (Subsidy)

c.

2.36

of

Marketing

in

respect

of

2,950

units

This

scheme

aims

at

establishing

and

strengthening infrastructure for marketing, grading,


standardisation and quality certification of produce in
the agriculture and allied sectors. The scheme is
reform-linked and is being implemented by the DMI,
GoI in States/UTs that have amended their Agricultural

The scheme is being implemented by the

Directorate

released

Grading and Standardisation

(i) Rural Godowns


2.35

was

and

Inspection

Produce Market Committee (APMC) Act to facilitate

(DMI),

direct marketing, contract farming and setting up of

28

agricultural

produce

markets

in

the

private

state,

and

with

NABARD

channelising

the

admissible

cooperative sectors. The scheme provides for a credit-

subsidy amounting to 45 per cent of the project cost.

linked, back-ended subsidy @ 25 per cent of the

The Minor Water Resources Department, Government

approved capital cost, with a ceiling of `50 lakh, for

of

projects taken up by individuals, farmers, farmers

implementation of the project. During the year, 16,589

Bihar

serves

as

the

groups, companies, cooperatives, NGOs and State

units were sanctioned under the scheme for which a

Agencies. In case of North Eastern states, hilly and

subsidy of `35.02 crore was released to the banks by

tribal areas and entrepreneurs belonging to SC and ST

NABARD.

categories, the rate of subsidy is 33.33 per cent subject

released as subsidy so far for 50,655 units. In order to

to an upper ceiling of `60 lakh. The Scheme became

facilitate easy monitoring of this scheme, NABCONS,

operational with effect from 20 October 2004. During

a subsidiary of NABARD has commissioned a web-

the year, the APMC Act was amended in the states of

based MIS.

Cumulatively

nodal

`83.32

department

crore

has

for

been

Mizoram and Uttarakhand. With this, 24 states and 4

(v) Scheme for installation of Solar Off-Grid

Union Territories have amended their APMC Act as on

and Decentralised Applications

date and were eligible to receive subsidy assistance for


projects under the scheme. In 2011-12, subsidy

2.39

amounting to `166.80 crore was released in respect of

The subsidy cum refinance scheme under the

877 units (cumulatively `440.83 crore for 5,369 units).

Jawaharlal

(iii) Agri-Clinics and Agri-Business Centre

(MNRE), GoI in November 2010, to encourage

2.37

Solar

Mission

(JNNSM)

was

launched by the Ministry of New & Renewable Energy


replacement of non-renewable energy sources like

The scheme was launched in April 2002 with

fossil fuels, kerosene and diesel with solar energy to

the objective of supplementing public extension by

meet energy requirements. The scheme was revised as

facilitating agricultural graduates to provide fee based

the Capital Subsidy for Solar Lighting & Small

extension services to farmers. The TFO ceiling has

Capacity Photo Voltaic (PV) Systems with effect from

been enhanced from `10 lakh to `20 lakh for

15 March 2012 and the earlier Capital Subsidy cum

individual projects (`25 lakh for extremely successful

Refinance scheme closed on 12 March 2012. The

projects) and from `50 lakh to `100 lakh for group

scheme for Solar Lighting & Small Capacity PV

projects. During the year, an amount of `5.54 crore

Systems provides for capital subsidy of 40 per cent of

was released in respect of 147 units (cumulatively

the project cost.

`10.92 crore for 537 units).

2.40

(iv) Bihar Ground Water Irrigation Scheme


2.38

Nehru

There is no change in the Capital Subsidy

cum Refinance scheme for installation of Solar Water

The Bihar Ground Water Irrigation Scheme

Heating Systems. The entrepreneur has the option to

(BIGWIS), promoted by the Planning Commission,

avail of either subsidy or bank loan at concessional

was introduced in Bihar in 2009-10 to provide

rate of interest at 5 per cent p.a for Commercial Banks

irrigation to 9.28 lakh hectare of agricultural land of

and RRBs. The scheme covers projects specifically

the State by installing 4.64 lakh units of shallow

approved by the Project Approval Committee of the

tubewells/ dugwells with pumpsets, over a period of

MNRE. During the year an amount of `51.83 crore

three years. The scheme envisages coverage of all the

was released including subsidy and refinance in

districts in the state. It is implemented through all

respect of 45,030 units (Cumulatively `55.44 crore

Commercial Banks and Regional Rural Banks in the

was released in respect of 54,017 units).

29

(vi) National Project on Organic Farming


2.41

end subsidy to the extent of 25 per cent of the outlay


(33.33 % in NE States

The National project on Organic Farming is a

beneficiaries) is being provided by GoI, through

central Sector Scheme introduced in the 10th Five

NABARD to the banks for financing rearing/breeding

Year Plan for promotion of organic farming in the

of sheep and goat and rearing of rabbit under the

country. The scheme was modified in 2011-12 to

scheme. During the year, subsidy amounting to `7.00

exclude vermin-hatchery. The quantum of eligible

crore was released for 1,066 Sheep/Goat rearing units

subsidy is to the extent of 25 per cent to 33.33 per

(cumulatively `8.59 crore for 1,370 units).

cent of project cost subject to a ceiling of `60 lakh.


During the year, subsidy of `1.56 crore was released in
respect of 12 units.

c. Establishment of Poultry Estates


and Mother Units for Rural
Backyard Poultry

As on 31 March 2012,

cumulatively `14.01 crore was released in respect of


688 units.

2.45

(vii) Schemes under Animal Husbandry Sector


2.42

lines of industrial estates, where common infrastructure


facilities, inputs supply and marketing arrangements

to Animal Husbandry Sector launched by GoI during

would be provided. As on 31 March 2012, two

2009-10 and 2010-11 continued in the current year

projects have been sanctioned for establishment of

also. A State Level Sanctioning and Monitoring

Poultry Estates in Odisha and Sikkim. The Rural

Committee (SLSMC) has been constituted by the State

Backyard Poultry component of the scheme intends to

Animal Husbandry Department in association with

promote rearing of low input breeds that can survive

NABARD in each State for sanctioning of subsidy/


subsidy/

interest

free

loans

under

in rural areas and is intended for BPL beneficiaries. As

these

on 31 March 2012, GoI has sanctioned 899 Mother

schemes and also monitoring their progress.

Units in Kerala, Bihar, Madhya Pradesh, Andhra

a. Establishment/ Modernisation of
Rural Slaughter Houses
2.43

Pradesh, West Bengal, Nagaland, Karnataka, Punjab,


Maharashtra and Uttar Pradesh under the scheme.

As per GoI guidelines, the scheme is to be

d. Scheme for Salvaging and Rearing


Male buffalo calves

implemented on a pilot basis in three states, viz., Uttar


Pradesh,

Andhra

Pradesh

and

Meghalaya,

The Scheme aims at establishment of poultry

estates having up to 100 broiler/ layer units on the

The implementation of eight schemes relating

interest

hilly areas and SC/ST

for

establishing and modernising slaughter houses in rural

2.46

The scheme was launched in 2010-11 by GoI

areas. Credit linked back end subsidy up to a

to

maximum of `2.00 crore has been made available for

corporate bodies for rearing male buffalo calves for

establishment/ modernisation of rural slaughter houses,

meat production and recovery of hides. Under the

projects for by-products utilisation, cold storage and

scheme, 100 per cent interest subsidy on short term

cold chain and certification of quality. As on 31 March

loan is provided for rearing up to nine male buffalo

2012, cumulatively `0.10 crore was released for

calves. Back ended capital subsidy at 25 per cent of

establishment of one unit under the scheme.

the outlay (33.33% in NE and hilly areas) is provided

assist

farmers,

NGOs,

partnership

firms

and

for establishment of commercial and industrial units.

b. Integrated Development of Small


Ruminants and Rabbits

e. Utilisation of Fallen Animals

2.44

2.47

The scheme aims at encouraging commercial

rearing of sheep, goat and rabbits by farmers. Back

The scheme, launched during 2010-11, aims

at improving the quality of hides and skins from fallen


30

animals and to convert other by-products into value

purchase of milking machines/ milk testers/ bulk milk

added

cooling units/ processing equipment, establishment of

items.

environmental

It

also

pollution

aims
and

to

reduce/

bird-hit

check

hazards

dairy product transportation facilities, cold chain and

to

aircrafts. Under the Scheme for establishment of

dairy marketing outlets/ dairy parlours.

Carcass Utilisation Centre (CUC) and Bone crushing

year, subsidy worth `114.36 crore for 27,319 units

unit, 90 per cent and 50 per cent of the TFO

(cumulatively `124.05 crore for 29,297 units) was

respectively are provided as back ended capital

released.

subsidy. The scheme will also facilitate compliance to

During the

the Infectious & Contagious Diseases in Animal Act

h. Poultry Venture Capital Fund (Subsidy)

2009, wherein, proper disposal of carcasses of animals

2.50

is mandatory. During the year, the State Level

(Interest Free Loan) Scheme was modified as Poultry

Sanctioning and Monitoring Committee (SLSMC),

Venture Capital Fund (Subsidy) with effect from 1

West Bengal has sanctioned subsidy amounting to

April 2011 by replacing the interest free loan and

`2.61 crore for establishment of two CUCs.

interest subsidy with capital subsidy. The modified

The earlier Poultry Venture Capital Fund

scheme

f. Pig Development

was

launched

for

encouraging

poultry

farming activity, especially in non-traditional States,

The scheme was launched in 2010-11 for

improving production of poultry products which have

encouraging commercial pig rearing by farmers so as

ready market all over the country, providing quality

to improve the performance of native breeds through

meat

cross-breeding. Under the scheme, 25 per cent back

improving hygienic sale of poultry meat and products

ended capital subsidy is available (33.33% in NE

in

States, including Sikkim and hilly areas) for pig

marketing outlets. Under the scheme, back-ended

breeding/ rearing/ fattening units. Similarly, 50 per

capital subsidy is available at the rate of 25 per cent

cent of the outlay as back ended capital subsidy is

(33.33% for SC/ST farmers and NE States including

provided for retail outlets/ facilities for live stock

Sikkim) of the outlay for establishment of Breeding

markets. During the year, subsidy amounting to `6.26

farms for low input technology birds like turkey, emu,

crore was released for establishment of 1,634 pig

etc., central grower units, hybrid layer (chicken) and

rearing units. Cumulatively subsidy amounting to

broiler units, feed mixing plants, transport vehicles,

`7.75 crore has been released for 1,873 units.

retail outlets, poultry dressing plants, cold storage for

2.48

consumers

urban

poultry

g. Dairy Entrepreneurship Development


2.49

to

areas

products,

processing

units,

in

hygienic

through

large

conditions

poultry

dressing

processing

feather

processing

units,

and
and

Emu

units,

etc.

Subsidy amounting to `4.36 crore was released for

The scheme was launched in 2010-11 for

establishment of 189 units.

encouraging modern dairy farms to produce clean milk


and heifer rearing farms to conserve good breeding

H. Evaluation Studies

stock. The scheme also aims at upgrading traditional


technology to handle milk on a commercial scale and

2.51

bringing about structural changes in the unorganised

Specific/Special Studies were conducted. A study on

dairy sector so as to facilitate initial processing of milk

Coping Mechanism conducted in Bidar and Kolar

at the village level itself. Under the scheme, back-

districts

ended subsidy amounting to 25 per cent (33.33% for

fluctuations resulting in drought / flood and price

SC/ST farmers) of the outlay is being

provided for

instability were the two major concerns of the

establishment of small dairy units, heifer rearing units,

agricultural households in the dryland areas. To recoup


31

During the year, 6 Evaluation/Commodity

of

Karnataka

pointed

out

that

rainfall

the loss in income due to agricultural shocks, the

ICT based BC model as on 31 December 2011.

farmers kept milch animals, reared sheep and goat,

Seventy

reduced family expenditure and borrowed from SHGs,

appointed

relatives,

one
by

Business
various

Correspondents

banks

in

(BCs)

sample

district

friends and moneylenders. Asset poor

(Panipat) had opened 21,810 No Frills accounts and

households and vulnerable/older farmers were found

issued 12,989 smart cards. Study on Financial

to cope less with risks because of lack of resources,

Inclusion

education and health. Since rainfall variability was

indicated that, out of 48 unbanked villages (having

found to be one of the major problems faced by the

population

farmers, water availability can be improved upon by

designated banks had

tapping

and

43 villages (90%) by end of January 2012. Four of

encouraging farmers towards precision farming/move

the villages were covered by opening new branches

towards

Tripartite

whereas 39 were covered under BC model. A total of

arrangement for marketing between farmer, industry/

13,944 No Frills Accounts were opened and pension

wholesaler and bank/cooperative society will reduce

distributions in 11,299 accounts were done through

farmers distress to a certain extent.

the BCs in the sample district (Una). The study

2.52

the

potential

changing

irrigation

cropping

facilities

pattern.

in

Banaskanthta

and

of

cumin.

Cumin

cultivation

demonstration
facilities,

poor

than

the

(1,250
seed

productivity

kg/ha.)

Lack

replacement

of

frontline

of

irrigation

rate

and

in

the

state,

extended banking services in

them viable and sustainable in the long run.


2.54

A Study on Agricultural Credit : An Analysis

into Trends in Disbursement and Outstanding

non

for

period from 2007-08 to 2010-11 was taken up in five


districts

were the main reasons for the same. Marketable

i.e.,

Aurangabad

(Maharashtra),

Ujjain

(Madhya Pradesh), Patiala (Punjab), West Godavari

surplus of the commodity was 98 per cent, being a

(Andhra Pradesh) and Burdwan (West Bengal). The

seed spice crop. Majority of the marketable surplus

study looked into various aspects of agricultural credit

was sold in regulated markets and only 5 per cent was

such as coverage of small and marginal farmers,

sold to village traders. The producers share in the

disbursement, outstanding, short term, long term, etc.

consumers rupee was 71 per cent in regulated

pertaining

High export

to

50

branches

and

around

4,500

borrowers. While the coverage of small and marginal

potential of the crop demands international quality

farmers appeared to be adequate, consistent with their

standards in pre harvest (farm practices) and post

respective shares in the numbers and area operated,

harvest stage (processing and storage) operations.


2.53

identified

Pradesh

model, etc. are need to be assessed so as to make

adoption of weed, disease and pest management, etc.

markets and 68 per cent with traders.

Himachal

inadequate infrastructure, lack of sound revenue

was

`2.08. The average productivity at 717 kg/ha. was,


lower

2000)

of

business volume, credibility gap, inactive accounts,

profitable with return per rupee on cultivation being


much

over

district

access to financial services, the issues like low

Surendranagar

districts of Gujarat to analyse the supply chain


management

Una

revealed that though the BC model has improved

Commodity Specific Study on cumin was

conducted

in

the study confirmed certain macro concerns like credit


growth leading to more of deepening and less

Study on Financial Inclusion in Hayana

revealed that out of 1,838 villages (with more than

widening

2,000 population) identified in the state,

1,670

investment credit. The study clearly brought out that

villages (91%) were covered under banking fold

agriculture credit variations can be captured only at

either through brick and mortar branch or through

disaggregated level as it becomes increasingly difficult

32

and

also

low

and

declining

share

of

to make generalisations as variations / area specific

farming needs.

issues exist at each level, may it be state, district,

members took up additional activity, after joining

branch as well as credit agency. Available technology

SHGs. Graduation level of an SHG or its members

should make it possible to generate granular data for

was measured as a two dimensional index, individual

capturing monthly disbursements and outstanding so

savings account and micro-enterprises being the two

that the seasonality of agriculture (which varies and is

dimensions. At disaggregated level, two-fifth the SHG

changing) is not lost, while monitoring agriculture

members did not graduate in terms of savings

credit. The insight into various aspects of agricultural

dimension.

credit can be made only when authentic granular

in determining the level of graduation of an SHG.

information

and

Further, building strong SHGs based on savings and

repayment of credit for agriculture at branch level is

financial discipline can help more and more members

maintained as well as made available for further policy

to graduate.

about

disbursement,

outstanding

formulation.
2.55

About 38 per cent of the SHG

Training emerged as an important factor

I. Investment Specific Studies

Study

on

Graduation

of

SHGs

was

2.56

conducted in Karnataka and Odisha to measure

the

Studies and 2 Special Studies covering farm and rural

the process

non-farm sectors were conducted by the Regional

the factors that can promote

Offices. The studies were conducted with the objective

graduation process. The Study based on 240 sample

of assessing the potential of selected investments in

SHG members and 40 control households indicated

the district/ state, examining adherence to the techno

that modal value of members saving was `80 per

economic specifications, assessing the adequacy of the

month while the range of saving was between `30 to

loan amount provided by the banks, estimating the

`200. About three-forth of SHG members were

benefits accruing from the investment, identifying the

tapping loans for productive purposes. Considerable

constraints at the field level in the implementation of

proportion of SHG members was dependent on non-

schemes, etc. Major findings and recommendations of

SHG

the studies are being forwarded to the banks for

extent of graduation of SHGs, study


involved and identify

loans

for

consumption

needs

and

equally

sizeable proportion availed non-SHG loans for meeting

During

2011-12,

19

Investment

Specific

suitable action.

Financing Rural Infrastructure


Rural

new line of credit for rural infrastructure projects.

Infrastructure Development Fund (RIDF) to improve

Considering the intensity of the storage problem in

rural infrastructure through NABARD. In addition, so

rural area, the Government of India (GoI) made a

as to provide more credit and grant, NABARD

dedicated allocation of `2,000 crore for financing

created

Fund

warehousing under the RIDF during 2011-12. This

NABARD

chapter deals sanctions/disbursements under RIDF,

2.57

(RIPF)

The

government

Rural
and

has

Infrastructure

also

designed

set-up

Promotion
the

RIPF and NIDA.

Infrastructure Development Assistance (NIDA), a

33

Rural infrastructure Development Fund


The RIDF was instituted in NABARD after an

of water logged areas animal husbandry, plantation

announcement was made to this effect in the Union

and horticulture, seed, agriculture and horticulture

Budget of 1995-96 with the sole objective of giving

farms,

low cost fund support to State Governments and

riverine fisheries; market yards, godowns, marketing

State-Owned Corporations for quick completion of on-

infrastructure;

going projects in medium and minor irrigation, soil

mechanisms; testing laboratories; hydel projects (up to

conservation, watershed management and other forms

10 MW); village knowledge centres; infrastructure for

of rural infrastructure.

IT in rural areas; desalination plants in coastal areas;

2.58

development,
cold

fishing

storages;

harbour/jetties,

grading/certifying

and setting up of KVIC industrial estates/centres. The

A. Allocations
2.59

forest

loans are provided at 95 per cent of project cost to all


States.

The Corpus of the Fund has grown to

`18,000 crore under RIDF XVII (2011-12) from an


allocated amount of `2,000 crore under RIDF I (1995-

(ii) Social Sectors

96), taking the cumulative allocation to `1,52,500

2.62

crore

which is inclusive of `18,500 crore under a

projects; public health institutions; construction of

separate window for funding rural roads under the

toilet blocks in existing schools, especially for girls and

Bharat Nirman Programme. The Union Budget for

Pay & Use toilets in rural areas, and construction of

2011-12, allocated an amount of `18,000 crore under

anganwadi centres. The loans for the above sectors are

RIDF XVII during 2011-12, out of which `2,000 crore

provided at 90 per cent of project cost for NER & Hill

has

States and at 85 per cent to all other States.

been

exclusively

dedicated

for

creation

of

warehousing facilities in different States on a priority

The Social sector include drinking water

(iii) Rural Connectivity

basis. The successive allocations to the RIDF in the


Union Budgets have been presented in Chart 2.4.

2.63

Rural Connectivity projects include rural roads

B. Sectors/Activities

& rural bridges and a loan for this sector is being

2.60

Hilly States and at 80 per cent to all other States.

provided at 90 per cent of the project cost to NER &

In accordance with the GoIs instructions, only

ongoing irrigation, flood protection, and watershed


management projects were financed under RIDF I,
adopting a last mile approach to facilitate completion
of the projects delayed on account of budgetary
constraints. The financing of rural road & bridge
projects was started during RIDF II. The coverage of
RIDF was broad-based in the subsequent tranches and
at present, a wide range of 31 activities, as approved
by the GoI, is being funded under the RIDF. These 31
activities are classified broadly under three categories,
(i) Agriculture and related sectors, (ii) Social Sectors
and (iii) Rural connectivity as detailed below:

(i) Agriculture and related Sectors


2.61

These

include

irrigation

projects,

soil

conservation, flood protection, watershed, reclamation


34

C. RIDF XVII Terms and Conditions


2.64

the Bank Rate (6%). Bank rate has changed from 6 to


9.50 per cent w.e.f 13 February 2012. However, RBI

Out of the allocated amount of `18,000 crore

has allowed the State Governments to pay at the

(including `2,000 crore for warehousing) under RIDF

previous Bank Rate plus 0.5 percent, i.e. 6.5 per cent

XVII during 2011-12, `16,000 crore was assigned to

to NABARD till 31 March 2012. Loan disbursements

the States on the basis of allocative norms with

from RIDF on or after April 01, 2012 will be at 1.5 per

weights, viz., rural population (20%), geographical

cent below the prevailing Bank rate.

area (20%), rural infrastructure development index


(20%), availing of sanction (5%), disbursements (20%)

D. Review of Performance

in the past tranches and rural Credit Deposit (CD)

(i) Sanctions and Disbursements

ratio (15%) as prescribed by the Project Sanctioning

2.67

Committee (PSC). As all funding through RIDF is

As

on

31

March

2012,

18,162

projects

project- specific and project-based, the projects pertaining

involving a loan amount of `20,701.12 crore were

to eligible sectors are submitted to NABARD by the

sanctioned under RIDF XVII. Of the total number of

State Governments. These are later on prioritised

projects sanctioned, irrigation projects accounted for

based on the State Governments priorities and placed

27.50 per cent followed by rural road projects (24.20

before the PSC for sanction.

%), social sector projects (17.90%), rural bridges

2.65

(12.90 %) and agri related projects (9.70%). An

As was the practice in the earlier tranches, the

amount

implementation phase for projects sanctioned under

of

`1,493.82

crore

was

sanctioned

for

warehousing projects as at end of March 2012

RIDF XVII is spread over 3-5 years. The maximum

(Table 2.8).

phasing in the case of major and medium irrigation


projects and other stand-alone projects involving RIDF

2.68

loan of `50 crore and above is five years. The

Tranches of RIDF have so far been implemented. The

quantum of actual drawal of funds by a State

tranche XVII was being implemented during the year,

Government, however, depends upon the pace at

2011-12. While tranche I to X were closed earlier,

which it implements the projects. NABARD provides

tranche XI was closed as at end-March 2012. For

funds on reimbursement basis, except for the initial

projects sanctioned under RIDF XII and XIII, the

20 per cent of the project cost (30% in North-East)

implementation period has been extended until 31

which is given as mobilisation advance. Each drawal

March 2013 to enable State Governments to complete

by the State Government is treated as a separate loan

on-going projects and avail of reimbursement of

and is repayable over a seven years period including


a two years moratorium. Excepting the mobilisation
advance,

subsequent

drawls

are

made

Since the inception of RIDF in 1995-96, 17

Table 2.8: Sector-wise Projects and Amounts


Sanctioned under RIDF XVII
(As on 31 March 2012)

on

reimbursement basis. Depending on the drawls by


State Government, NABARD places demands for

Sector

deposits on the banks based on the bank-wise


allocation made by RBI.
2.66

Irrigation
Rural Bridge
Rural Roads
Social Sector
Power
Ag. related
Warehousing

State Governments borrowings under RIDF

are governed by Article 293 (3) of the Constitution


under which GoI determines its borrowing powers
from the market and financial institutions during a
year. The rate of interest payable by NABARD on

Total

deposits from commercial banks under RIDF-XVII is


35

No. of
Projects

Share in
Amt
Total No. Sanctioned
` crore)
(%)
(`

Share in
Total
Amount (%)

2717
860
6294
3311
5
3857
1118

14.7
4.7
34.1
17.9
0.0
22.5
6.1

5686.32
2663.97
5011.57
3707.11
127.15
2011.18
1493.82

27.5
12.9
24.2
17.9
0.6
9.7
7.2

18162

100.0

20701.12

100.0

expenditure

incurred

there

against.

Cumulatively,

2.71

Taking into account phasing of the projects,

4,62,229 projects were sanctioned since the inception

under various tranches (RIDF I to XVII), State

of RIDF involving an amount of `1,42,470.65 crore as

Governments had a total pool of projects of `1,30,009

on 31 March 2012. Of the cumulative RIDF loans

crore as on 31 March 2012. A state-wise analysis of

sanctioned as on 31 March 2012, 42 per cent went to

ratio of disbursements to the approved phasing of

agriculture and related sectors, including irrigation and

sanctions (Table 2.11) reveals that Mizoram topped

power; 15 per cent to social sector projects like,

with

health, education and rural drinking water supply;

Meghalaya (100%), Manipur (96%), Maharashtra and

while the share of rural roads and bridges was 31 per

Kerala (95%), Haryana and Uttarakhand (93%), Tamil

cent and 12 per cent, respectively (Chart 2.5).

Nadu (92%) and Chhattisgarh (91%).

2.69

(ii) Deposits/Repayments

A significant number of rural infrastructure

projects covered so far related to irrigation, rural


roads,

bridges,

protection,

watershed

command

area

management,
development,

flood
primary

per

2.72

The

under

RIDF

cent,

followed

cumulative
stood

by

deposits

at

Goa

and

(106%),

repayments
crore

`1,11,025.94

and

`35,919.23 crore respectively, as on 31 March 2012.

schools, public health, rural drinking water, citizen

During the year, an amount of `15,241.32 crore was

information centres, agro-forestry, etc. Cumulatively,

received as deposits from commercial banks. An

the number of projects and amount sanctioned,

amount of `8,012.24 crore was received from state

activity-wise, is presented in Table 2.9.


2.70

132

governments towards repayment of RIDF loans during


2011-12. The outstanding loans under RIDF have also

As per the phasing of projects under various

been rapidly increasing over the years indicating better

tranches (RIDF I to XVII), the total amount sanctioned

implementation of the projects and availability of more

was `1,30,009 crore. Against this the disbursements

infrastructural facilities in rural areas. The total RIDF

aggregated `1,13,924 crore, about 88 per cent of the

loan

amount sanctioned (Table 2.10). During the year,

outstanding,

as

on

31

March

2012,

was

`70,860.31 crore.

disbursements were made to the tune of `14,927

crore (inclusive of
`759 crore sanctioned and
released as refinance under Warehousing facilities to
Banks).

E. Monitoring of RIDF Projects


2.73

Monitoring

of

RIDF

projects

under

implementation are imperative for ensuring timely


completion and quality of assets being created.
Though the primary responsibility of monitoring of
RIDF projects vests with State Governments, NABARD
also undertakes monitoring of RIDF projects by
exception. This two-pronged monitoring approach
results in better implementation of projects, as various
constraints are identified, reviewed and sorted out at
regular intervals. The High Power Committee (HPC) at
State level has proven to be an effective mechanism
for monitoring and in ensuring speedy and timely
completion of projects. The HPC chaired by the Chief/
Finance Secretary of the State, meets quarterly to
review the pace of project implementation.

36

Table. 2.9: Activity-wise Cumulative Sanctions


(As on 31 March 2012)
No. Sanctions

RIDF XVII
No.

Cumulative (I-XVII)
Amount

No.

Amount

Ach.(%)

2717

5686.32

237137

42586.38

29.89

2691

2625.73

234463

21517.80

15.10

Irrigation sector

Minor

Medium

15

725.93

322

5808.54

4.08

Major

10

2105.03

313

13227.73

9.28

Micro Irrigation

II

Roads & Bridges

229.63

2039

2032.31

1.43

7154

7675.54

101932

61522.56

43.18

1
2

Roads

6294

5011.57

86372

44766.42

31.42

Bridges

860

2663.97

15560

16756.14

11.76

3311

3707.11

88698

20923.25

14.69

303

2781.15

10887

12625.19

8.86

0.00

19986

1393.10

0.98

III Social Sector


1

Drinking Water

Primary/Middle Schools

Public Health

126

247.70

12904

1680.01

1.18

S.Sch/Colleges/Ru.Service Centre

338

273.00

17474

3578.83

2.51

Pay & Use Toilets

20

204.00

3258

324.44

0.23

Anganwadi Centres

2524

201.26

24189

1321.68

0.93

IV

Power Sector

127.15

766

2273.68

1.60

System Improvement

0.00

687

1195.44

0.84

Mini Hydel

127.15

79

1078.24

0.76

Other Agriculture

4975

3505.00

33694

15164.80

10.66

Soil conservation

0.00

5633

1520.89

1.07

Flood protection

304

585.04

2382

3968.78

2.79

Watershed Development

31

24.89

2420

1924.91

1.35

Drainage

178

460.94

683

1405.59

0.99

Forest Development

77

58.09

2633

604.44

0.42

Rural Market/Yard/Godown

23

13.64

1623

720.00

0.51

Fishing harbour/jetties

14

68.78

165

412.25

0.29

Rain W.Hvstg.

105

120.86

4034

468.70

0.33

CADA

0.00

29

438.94

0.31

10

Inland Waterways

0.00

10.00

0.01

11

Food Park

0.00

41.37

0.03

12

Seed / Agri / Hoti. farms

4.79

1544

197.68

0.14

13

Cold Storage

0.00

17.19

0.01

14

Animal Husbandry

664

302.62

7071

1033.51

0.73

15

Rubber Plantation

6.94

22

27.07

0.02

16

Meat Process

0.00

12

49.72

0.03

17

Riverine Fisheries

0.00

297

73.13

0.05

18

Rural Library

19

Citizen Information Centres

0.00

41

2.55

0.00

70

65.43

98

126.05

0.09

20

Vill.Know.Centre/E-Vikas Kendras

21

Rural Industrial Estates/Centres

2382

299.16

3621

428.04

0.30

0.00

116.40

22

0.08

Comprehensive Infrastructure

0.00

249

83.77

0.06

23

Warehousing/Rural Godowns

1118

1493.82

1118

1493.82

1.05

18162

20701.12

462229

142470.65

100.00

Grand Total

37

Table 2.10: Allocations, Sanctions and Disbursements


(As on 31 March 2012)
Tranche

Cumulative Amount (`
` in crore)

Allocation

Sanctioned

Phased

Disbursed

% Utilised

50000

50233

50233

44203

88

XII

10000

10377

10377

8368

81

XIII

12000

12596

12594

9982

79

XIV

14000

14723

14674

10738

73

XV

14000

15638

9390

9459

101

XVI

16000

18202

11000

7747

70

XVII

1600

19207

2271

3809

168

1118 *

115 *

Closed Tranches (I to XI )
Ongoing Tranches

Warehousing

02000

Sub-total

84000

92996

61276

51221

84

Bharat Nirman

18500

18500

18500

18500

100

152500

161729

130009

113924

88

G. Total

2253 *

970 *

*inclusive of `759 crore sanctioned and released as Refinance under Warehousing Facilities to Banks

the

RIDF because of their weak implementing apparatus.

objectives of (i) facilitating timely physical completion

Training and capacity building is thus central to the

of the projects, (ii) avoiding cost overruns, (iii)

implementation

ensuring compliance to the approved design and

implementation of RIDF could be overcome through

quality parameters and (iv) identifying new investment

training and capacity building of officials/staff involved

opportunities. Monitoring of RIDF projects is carried

directly/indirectly in the implementation of RIDF. With

out through desk review based on periodic returns and

a view to overcoming this limitation, four Regional

field

smooth

Business Meets were organised by NABARD in four

implementation of projects, designated officers from

major regions during 2011-12. Similarly, 48 regional

the Head Office and Regional Offices at the state level

awareness workshops have been carried out by

and the DDMs at the district level undertake regular

Regional Offices for State Government officials of

field visits to monitor the progress of projects. During

Finance and other implementing Deparments, other

the year, 5,499 projects were monitored through field

project

visits. Major observations/ issues were being taken up

agencies.

2.74

with

NABARD

visits.

the

Finance

With

undertakes

implementing
Department

improving

view

the

pace

monitoring

to

ensuring

departments

of
and

State

with

also

the

Governments

for

quality

of

as

the

implementing

RIDF.

Various

agencies

and

constraints

user

in

groups/

G. Economic/Social Benefits of
RIDF Projects

project

execution.

2.76

The rural infrastructure projects have their

own special features like (i) large capital requirement,

F. Capacity Building Support


2.75

of

(ii) high sunk cost, (iii) a large proportion of the cost


to be irrevocably committed upfront before the project

RIDF projects involve several processes such

as project identification, area survey, project design,

becomes

preparing detailed project reports (DPRs), mid-term

(v) returns slow to pass on, (vi) sector is sensitive to

appraisal both technical and economic, monitoring

local social, political and cultural environment and

and evaluation, quality testing, etc. Infrastructure

policy changes and (vii) the services produced/

deficient States have comparatively lower off-take of

generated non tradable. The excess services generated


38

operative,

(iv)

long

gestation

periods,

efficiency of agriculture in the form of improving the

Table 2.11: Utilisation Percentage of RIDF (I TO XVII)


(As on 31 March 2012)
Sl. States
No.

Sanctions

Phasing

credit absorbing capacity, enhancing the productivity

(` Crore)

of crops and livestock, generating employment and

Drawn Utilisation
(%)

increasing farmers income, etc. This would make a


direct attack on minimising the incidence of rural

1
2
3
4
5

Andhra Pradesh
Karnataka
Kerala
Tamil Nadu
Puducherry
South Zone

14358
7173
4572
9829
380
36312

12424
5885
2894
7992
180
29375

10014
4980
2751
7353
133
25231

81
85
95
92
74
86

6
7
8

Goa
Gujarat
Maharashtra
West Zone

449
10902
9495
20846

356
8852
6673
15881

376
7947
6336
14659

106
90
95
92

investment already made by the State Governments,

9
10
11
12
13
14
15

Haryana
3528
Himachal.Pradesh
3537
Jammu & Kashmir 4108
Punjab
5129
Rajasthan
9729
Uttar Pradesh
11999
Uttarakhand
2929
North Zone
40958

2462
2671
3381
4278
7481
10253
1867
32392

2284
2312
2982
3810
6227
8930
1740
28285

93
87
88
89
83
87
93
87

people, (iv) contribution to the economic wealth of the

16
17

Chhatisgarh
Madhya.Pradesh
Central Zone

1939
10248
12187

1562
8284
9846

1418
6354
7771

91
77
79

18
19
20
21

Bihar
Jharkhand
Odisha
West Bengal
East Zone

6011
3905
7059
8526
25501

4375
2725
5130
6179
18409

3064
2374
4143
5247
14828

70
87
81
85
81

758
2335
329
601
387
709
1070
476

711
1743
109
399
196
532
823
332

616
1477
105
400
258
338
471
225

87
85
96
100
132
64
57
68

6666

4847

3890

80

22
23
24
25
26
27
28
29

Arunachal Pradesh
Assam
Manipur
Meghalaya
Mizoram
Nagaland
Tripura
Sikkim
North-East &
Sikkim
RIDF Total

142471

110750

94665

85

18500

18500

18500

100

759

759

759

100

161730

130009

113924

88

Bharat Nirman
Warehousing Ref.
Grand Total

poverty.
2.77

be

bridged

by

imports

barring

financing

incomplete

agriculture

development projects, the RIDF gives rise to significant


potential benefits such as (i) unlocking of sunk
(ii) creation of additional irrigation potential, (iii)
generation of additional employment for the rural
State economy, (v) improved connectivity to villages
and marketing centres, (vi) improvements in quality of
life through facilities in education, health and drinking
water supply. Cumulative Economic and social benefits
generated as on 31 March 2012 is presented in Table
2.12 & 2.13.

Table 2.12: Cumulative Economic and social benefits


(As on 31 March 2012)
SI. Particulars
No.

Additional
Benefits

Irrigation potential (lakh ha.)

204.07

Rural Roads (kms.)

354344

Rural Bridges (mts.)

796899

Rural Market Yards/Godowns (MTs)

325270

Gross Domestic Product (`Crore)

Recurring Employment (No.of jobs)

24580
8543283

Non Recurring Employment:


A.

Irrigation (lakh mandays)

30097.76

B.

Rural Roads and Rural Bridges


(lakh mandays)

41098.51

C. Others (lakh mandays)


7

cannot be stored or exported and deficiency in service


cannot

By

certain

exceptions. There is a felt need for development of

Power Sector
A.

Hydel Power Generation (MW)

212.83

B.

System Improvements to minimize


T & D Losses (lakh units/ year)

22315

Social Sector (People /Students benefited)


A.

Health Centres (lakh)

B.

Primary & Secondary Schools (lakh)

C. Rural Drinking Water Supply (lakh)

rural infrastructure for increasing the productivity and


39

24228.44

615.83
100.06
1250.60

Table 2.13: State-wise Expected Benefits under RIDF


(As on 31 March 2012)
No. State

Potential

Value Prodn.
` crore)
(`

Irri (ha)

Bridges (m)

Roads (km)

2383278

48321

31871

2670

2600

1010

317317

55127

836

Recurring
Employment
(Nos.)

Non-recurring Emp.
(Lakh Mandays)
Irri.

RR& RB

Others

1953055

5383

5545

3378

233

64

348

102400

84

882

220

Andhra Pradesh

Arunachal Pradesh

Assam

Bihar

617591

28227

4453

702

231766

341

1306

615

Chhattisgarh

352200

31603

4567

475

69622

849

496

42

Goa

68601

1410

258

45

5288

97

158

Gujarat

1257981

4346

20124

1210

1321098

1574

990

1091

Haryana

957912

2969

2512

1835

167267

735

413

196

Himachal Pradesh

109716

19164

8376

398

415157

660

640

321

10 Jammu & Kashmir

133787

15000

11082

190

97849

237

1359

197

11 Jharkhand

73571

68043

8334

210

90742

303

1167

544

12 Karnataka

472951

41886

36948

1121

123784

1708

2868

946

13 Kerala

244362

30659

4244

501

79863

367

779

463

1332453

43274

14905

3610

1063279

3392

1703

493

655034

54143

24506

1435

270236

3127

2354

193

14 Madhya Pradesh
15 Maharashtra
16 Manipur

19550

29

8808

20

147

147782

7427

1986

15

3706

234

403

73

2990

283

693

1976

12

65

23

19 Nagaland

179826

10683

2153

16

4107

305

498

279

20 Odisha

838038

74009

5744

1777

441162

1897

2580

277

17 Meghalaya
18 Mizoram

21 Puducherry

375349

327

275

1110

352

55

121

22 Punjab

511556

9593

10017

756

179092

714

965

1268

23 Rajasthan

421644

2905

51071

738

98671

1268

2760

2560

24 Sikkim

134947

5353

3798

343

609

36

312

371

25 Tamil Nadu

360034

58809

35425

319

281594

594

3930

1642

26 Tripura

88725

30331

1436

23

380

97

516

929

27 Uttar Pradesh

4939634

49458

26610

4175

730755

2564

2198

1608

28 Uttarakhand
29 West Bengal

243075
3166925

16188
84762

9904
31206

175
1461

27500
772409

305
2844

1196
4727

229
5930

20406829

796899

354344

24580

8543283

30098

41099

24228

Total

H. RIDF Implementation:
Deficiencies

deficiencies have been observed in implementation of

2.78

2.79

RIDF.

As compared with the closed tranches (I-XI),

RIDF is a substantial and cost effective source

the RIDF fund under ongoing tranches are more

of fund for the State Governments for investment in

judiously distributed across states, with a larger share

rural infrastructure, the demand for which always

going to the less developed and NE States. There is

surpasses its supply. Lakhs of projects in irrigation,

also more balanced investment across the sectors. The

rural connectivity, and other vital sectors are being

State-wise

and

financed from RIDF. However, there is no long-term

disbursements were set more rationally, in transparent

and assured fund flow for RIDF. The ability of the

and participatory manner.

State Governments to raise resources is restricted by

targets

for

RIDF

sanctions

However, quite a few


40

the borrowing limit imposed upon it under article

infrastructure

293(3) of Constitution. Once an RIDF project is

Governments due to their limited resources and

sanctioned, the State Governments have to match

organisational

their funds with the phasing of the project so as to

leveraging private resources by implementing specific

implement the project within the prescribed timeframe.

projects under the public-private participation (PPP)

The availability of funds is largely contingent upon the

model.

borrowing

the

partnerships with private entities for bringing private

Constitution. The State Governments therefore need

sector competence and funds into the realm of rural

to earmark adequate funds in their Budgets and their

infrastructure through a separate window called NIDA.

limit

under

article

293(3)

of

cannot

be

structure.

NABARD

is

bridged

by

NABARD

in

the

the

is

State

looking

process

of

at

forming

borrowing plans for completing the RIDF projects.


2.83
2.80

The RIDF, with its diversified projects, entails

Administrative

various State Government Departments need to be


in

handling

Governments

techno-financial

each

(AA)

project

from

has

been

State
made

of RIDF allocation has been specifically allocated for

found to hamper the grounding of projects.


to

Approvals
for

agriculture and rural connectivity projects, 20 per cent

root level and mid-term change of priorities has been

contributes

were

accorded less priority as compared to irrigation,

the order of priority. Inadequate planning at the grass

directly

steps

for sanction. As projects in the social sector are

Governments need to maintain a shelf of projects, in

RIDF

new

mandatory before submission of projects to NABARD

appraisals of projects under RIDF. Further, State

2.81

many

based on the recommendations of the PSC. Receipt of

For timely completion of RIDF project, the staff of


trained

2011-12,

initiated for the quick grounding of RIDF projects,

the participation of many State Govt. Departments.

adequately

During

social sector projects. Action has also been initiated for

creation

on-line/web based monitoring of RIDF projects. The

of

small investments made under RIPF (Box 2.1) would

physical infrastructure and capital formation in rural

attract and make feasible larger investments under

areas. The outstanding loans under RIDF have rapidly

RIDF. Consultations/discussions have been in progress

increased in the past five years, indicating better

with

implementation of the projects. However, each drawal

the

Centre

for

Development

of

Telematics

(C-DACs), Pune for development of on-line software

from the RIDF has a shorter repayment period of 7

funded by RIPF.

years, with two years moratorium. This, many State


Governments, view as an impediment in the smooth
implementation and financing of RIDF projects. The

I. Warehousing

time lags in announcement of RIDF tranche in the

2.84

Union Budget in February and

the

India (GoI) had made a dedicated allocation of

bank-wise funds by RBI, to actual submission of RIDF

`2000 crore for financing warehousing under the RIDF.

projects by

As on 31 March 2012, total sanctions under the

allocation

of

State Governments and their appraisal

In the Union Budget 2011-12, Government of

and sanction adds up to inordinate delay in the

scheme, stood at `1493.82 crore, to four State

process

Governments viz., Bihar, Karnataka, Tamil Nadu and

each

year.

The

State

Governments

are

normally able to ground the projects only in the post-

Puducherry.

monsoon period, thereby virtually losing the first year


of the project.

2.85

addition,

NABARD

also

introduced

scheme for providing refinance to banks, against loans

I. Looking Ahead
2.82

In

extended by them to private entities and the agencies


owned/assisted

Despite lakhs of projects in irrigation, rural

by

government,

for

creation

of

connectivity, and other vital sectors being financed

warehousing infrastructure. Refinance from NABARD

under RIDF, it is felt that the gigantic gap in rural

was made available at an interest of 8 per cent for a


41

Box 2.1: Rural Infrastructure Promotion Fund (RIPF)


NABARD set up a Fund titled the Rural Infrastructure

creation of experimental infrastructure projects by Gram

Promotion Fund (RIPF) in 2011 with a corpus of `25 crore

Panchayats (GPs), SHGs/SHG Federations, Farmers Clubs/

for augmenting the skill sets and technical know-how of

FC Federations and NGOs and villages under VDPs. The

personnel engaged in creation of rural infrastructure. The

guiding principle for the operation of RIPF will be to solely

Fund was established to address many of the constraints

support the programmes/ activities that are carried out for

faced by the State Governments in the implementation of

promotion of rural infrastructure.

RIDF projects such as inadequate planning and poor techno-

The Fund, effective from 01 September 2011, has received

financial appraisal of projects, improper monitoring and

15 proposals pertaining to exposure visits, evaluation studies

evaluation, inexperienced Departmental staff engaged in the

and creation of experimental projects, out of which 8

implementation of the project etc. The RIPF also aims at

proposals amounting `0.56 crore have been sanctioned as on

creation of critical, low cost, last-mile rural infrastructure that

31 March 2012. Two evaluation studies, i.e., one on Flood

would benefit the village community at large and would form

Protection Projects in Uttar Pradesh to Indian Institute of

the basis for larger infrastructure projects under RIDF. The

Management (IIM), Lucknow and another on Irrigation

small investments made under RIPF would thus attract and

Projects supported under RIDF in Karnataka to Centre for

make feasible larger investments under RIDF.


The RIPF
knowledge

Multi-Disciplinary Research (CMDR), Dharward have been

will provide grant support for conducting


sharing

workshops,

national/

sanctioned. Similarly, four exposure visit projects by senior

international

and middle level State Government officials from Himachal

exposure visits for senior level bank/State functionaries,

Pradesh, Odisha, Andhra Pradesh and Assam have been

exchange of technical experts, conduct of evaluation and

sanctioned. One check dam project has also been sanctioned

other potential mapping studies and surveys as also

as an experimental infrastructure project in Andhra Pradesh.

period of 7 years (including a moratorium of 2 years).

financing bank. An aggregate amount of `759.07 crore

NABARD will also provide financial incentive to those

was sanctioned and disbursed to banks. With this the

borrowers, who repay their loans, along with interest,

total sanctions against the allocation of `2,000 crore

as per the repayment schedule prescribed by the

stood at `2,252.89 crore as on 31 March 2012.

New Business Initiatives


2.86

As part of the new initiatives and expansion of

Organisations Development Fund with an initial

its development and promotional roles, NABARD is

corpus of `50 crore. During the year, 13 projects were

supporting; i) Producers Organisation by releasing

sanctioned to Producers Organisations and 70 projects

finance to them, ii) Direct lending to CCBs for short

to PACS, respectively with an assistance of `32.29

term multi- purpose credit and (iii) Support to PACS

crore and `7.75 crore, respectively. The cumulative

for developing into multi-service centre (iv) Core

sanction under the fund was `40.04 crore.

Banking Solutions for co-operative banks and (v)

ii. Direct Lending to CCBs

Setting up of NABARD Infrastructure Development


Assistance

(NIDA)

to

provide

credit

support

for

2.88

funding of rural infrastructure projects.

refinance support to Co-operative Banks through


SCBs. The implementation of the revival package for

i. Producers Organisation Development Fund


2.87

Co-operative Banks as per Vaidyanathan Committee

In order to support and finance Producers

Organisations,

NABARD

set

up

NABARD has been traditionally providing

the

recommendations has enabled CCBs to raise financial

Producers

resources
42

from

sources

other

than

the

SCB.

Accordingly, NABARD has designed a Short Term

Box 2.2: Application Service Provider (ASP)

Multipurpose Credit Product for financing the CCBs

Model of CBS

directly. The product is being offered to financially

In ASP model, the cooperative banks would be responsible

strong i.e. A & B category CCBs. As on 31 March,

for setting up the infrastructure facilities within the branch,

2012, `1,547 crore of loans was sanctioned to 26

HO and other service outlets (PCs, printers, branch servers,

DCCBs of which `937.74 crore was disbursed.

UPS, LAN, switch, etc.), and its regular maintenance. The


CBS vendor will be responsible for developing and
customising the CBS and other application software, setting

iii. Developing PACS into Multi-service

up and maintaining the Data Centre/ Disaster Recovery

Centres
2.89

centres and the network connection from banks to the Data

PACS being registered cooperative societies

Centre/Disaster Recovery centres including user training,

have been providing credit and other services to its

regular maintenance and support of related hardware and


software and data migration support. The final payment

members. It has been observed that PACS are

structure is a monthly fee, to be paid by the bank directly to

generally meeting only the credit requirements of its

the vendor on per month per service outlet (branch, training

members. In order to enable PACS to provide more

establishment, administrative unit, etc) basis. In this model,

services to their members and generate income for

the bank doesnt have to go in for heavy initial investment

themselves, an initiative has been taken to develop

as in the case with ownership model thus making it a more


viable option for small banks like the DCCBs. The banks are

PACS as Multi service Centres. This will enable PACS

thus using the computing facility as a service on a monthly

to provide ancillary services to their members and

payment basis.

diversify its activities. Assistance under PODF is


available to SCBs/CCBs/PACS for this purpose. 2,335
PACS have been developed as Multi-service Centres

2.91

so far through various interventions from NABARD.

the 162 banks will be over by 31 December 2012. As


on 31 March 2012, 162 DCCBs across 10 states viz,

iv. Core Banking Solutions for Co-operative

Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh &

Banks
2.90

Tamil Nadu (being implemented by TCS), Bihar,

With changes in banking scenario and to

Haryana, Maharashtra, Punjab and Uttar Pradesh

remain competitive in the market, it is imperative for

(being implemented by WIPRO) are covered under

Co-operative banks to implement the Core Banking


Solutions (CBS).
largest

banking

Information

CBS project.

CBS is the meeting point of the


services

Technology

segments,
and

the

cutting

ever

v. NABARD Infrastructure Development


Assistance

edge

advancing

Communication Technology. It provides the banking

2.92

customers with the right products at the right time

State owned institutions/ corporations both on-budget

week through a multi location, multi branch network.


has

engaged

TCS

and

WIPRO

NIDA is a new line of credit support for

funding of rural infrastructure projects. NIDA will fund

through the right channels 24 hours a day, 7 days a


NABARD

It is expected that the complete roll-out in all

as well as off-budget for creation of rural infrastructure

for

outside the ambit of RIDF borrowing. The assistance

implementation of the project on ASP Model (Box

under NIDA is available on flexible interest terms with

2.2). In addition, NABARD also extends project

longer repayment period not exceeding 15 years (2-3

management and advisory support to the DCCB

years repayment holiday). At the end of March 31,

during roll-out of the product.

2012 the major projects sanctioned under NIDA were:

43

I.
lakh

Project for construction of Warehouses of 1.06


MT

storage

capacity

to

Karnataka

VI.

Two Lift irrigation project to Krishna Bhagya

State

Jala Nigam Ltd, Karnataka involving a term loan of

Warehousing Corporation. An amount of `29 crore

`244.08 crore. The project is expected to irrigate

has been disbursed. The project aims at improving

about 40,000 ha of dry land in Bagalkot district of

storage infrastructure for foodgrains.

Karnataka.

II.

VII.

Project for establishment of substation and its

Three projects involving term loan of `354.39

associated transmission systems at Hura in Purulia Dist

crore to Tamil Nadu Generation and Distribution

in West Bengal to West Bengal State Electricity

Company (TANGEDCO) for rehabilitation of power

Transmission Company involving a term loan of

distribution network damaged by Cyclone THANE.

`92.64 crore of which `3.56 crore was disbursed. The


The cumulative sanctions under NIDA during the year

project aims at supplying quality power to the

2011-12 was `890.85 crore and disbursement of

agriculture sector specially and rural areas in general.

`422.90 crore.
III.

Two

generation

solar
capacity

power
of

plants
MW

to

project

with

Gujarat

State

2.93

With

the

base

of

agriculture

becoming

Electricity Corporation Ltd. involving term loan of

increasingly smaller (nearly 83 % of holdings are small

`16.97 crore. The sites identified for the projects are

who operate 41% of the area), it is inevitable that

unique. One of the sites is the area used for filling fly

small operators will have to compete in the markets

ash from the Thermal Power Plants and the other

that demand much more in terms of quality and food

Canal area of Narmada Project. The Solar Panels

safety. Participating in these markets poses challenges,

cover on the canal may reduce the evaporative loss of

but they also bring more opportunities. To take

water. This provides a potential for utilising the canal

advantage of these, building up institutions and

area for setting up solar power plants.

arrangements based on principles of aggregation are


essential. These would include cooperatives as well as

IV.

Project for establishment of five substations in

producers organisations and its variants. The new

Medak, Ananthapur and Karimnagar districs of Andhra

business initiatives need to be viewed in the above

Pradesh

context.

and

augmentation/modification

of

other

associated transmission systems on three line, viz. the


Nizamsagar-Banswada,

Manubollu-Sullurpet

2.94

and

Creation of new line of financial support for

Minpur-Jogipet lines to Transmission Corporation of

DCCBs; bringing cooperatives on a higher technology

Andhra Pradesh Ltd. involving a term loan of `140

platform of CBS to create a level playing field to

crore. The project aims at supplying quality power to

compete with the other banks for business and growth;

the agriculture sector and rural areas.

engaging with the PACS to convert them in to multi


service centers are all such initiatives which eventually

Solar Power project with five MW power

have huge development potential and which are

generation capacity was sanctioned to Gujarat Power

inclusive in nature. The new business initiatives thus,

Corporation Ltd. involving a term loan assistance of

are in tune with organisational strategy of business for

`42.75 crore.

development.

V.

44

III
Development and Promotional Initiatives
NABARDs development initiatives on-going and new;

of India and the State Governments, implemented in

diverse in coverage and inclusive in nature are

association with the Banks for the development of

presented in this chapter. Programmes of the Government

agriculture and rural sectors are also discussed.

Credit Planning
A. Potential Linked Credit Plans
3.2

The SFP presents a comprehensive picture of the


potential available in various sectors of the rural

NABARD prepares Potential Linked Credit

economy, critical infrastructure gaps to be filled and

Plans (PLPs) for all districts in the country every year.

linkage support to be provided by various State

The PLP outline the credit potential in agriculture,

Government Departments. Credit Seminars were also

allied sectors and rural development projects in the

organised

district. The PLPs serve as an important tool for banks

by

NABARD

in

all

States/UTs,

where

discussions on bridging of infrastructural gaps for

in their credit planning excercise. During the year,

facilitating greater flow of credit to the rural economy

PLPs were prepared for the 625 districts in India. The

were held with the officials of the State Government

sector-wise credit projections captured in the PLPs

departments,

were utilised for arriving at the credit target for

financial

institutions

and

other

stakeholders.

agriculture and allied sector in particular and priority

C. District Level Offices

sector as a whole for the year, 2012-13.

3.4

B. State Focus Paper


3.3

NABARD

has

405

District

Development

Manager (DDM) offices across the country which focuses

State Focus Papers (SFP) were prepared by the

on credit planning, monitoring and developmental and

Regional Offices of NABARD for all the States and

promotional activities in these districts. In addition, 98

Union Territories (UTs) based on the district-level PLPs.

districts are tagged to specific DDM districts.

Farm Sector
A. Watershed Development

Programme

3.5

Planning Commission.

NABARD promotes participatory watershed

development projects with the aim of enhancing the

3.6

productivity and profitability of rainfed agriculture in a


sustainable

manner.

It

anchors

four

Programme

(IGWDP)

Participatory

Bihar,

supported

Watershed

by

the

Development

watershed programmes under a national programme.


The

1.78 million ha. These programmes are: Indo-German


Development

in

programme aims at consolidating isolated, successful

watershed

development programmes in the country covering over


Watershed

The

(IWDP)

programme

is

financed

by

the

Watershed

Development Fund established in NABARD in 1999-

in

2000 with an initial corpus of `200 crore. The Fund

Maharashtra, Andhra Pradesh, Gujarat and Rajasthan,


Programme

was augmented over the years by way of interest

under Watershed Development Fund (WDF) in 15

differential earned under RIDF and interest accrued on

States, Prime Ministers package for distressed districts

the unutilised portion of the Fund. As on 31 March

in four States, and Integrated Watershed Development

2012 it has a total corpus of `1,806.03 crore.

Participatory

Watershed

Development

45

3.7

`41.76 crore, respectively. Under the participatory

During the year, 41 watershed projects were

sanctioned, taking the cumulative number of such

watershed

projects to 620, covering an area of 5.29 lakh ha. in

component of Rashtriya Sam Vikas Yojana (RSVY), a

15 States, with a total commitment (loan and grant

sum of

component) of `239.99 crore. Sixty one projects

The cumulative disbursement, as on 31 March 2012,

graduated to Full Implementation Phase (FIP), taking

stood at `51.83 crore. The Impact Evaluation findings

the number of such projects to 316.

of watershed projects is given in Box 3.1.

3.8

The

Prime

Ministers

Relief

package

3.10

is

development

programme

for

Bihar

`17.74 crore was disbursed during the year.

NABARD will be routing its support for

implemented in 31 distressed districts of Andhra

enhancement of livelihood and agriculture productivity

Pradesh, Karnataka, Kerala and Maharashtra for

under its watershed development programme through

developing 15,000 ha. of watershed annually over two

its subsidiaries ABFL, NABFINS and ADFT. This

years in each of these districts. The cumulative area

arrangement is being pilot tested by way of a project

under this programme is 9.44 lakh ha., with financial

implemented in three districts of Andhra Pradesh

commitment of `1,023 crore. As on 31 March 2012, a

(Chitoor, Rangareddy and Adilabad) through ABFL.

cumulative amount of `429.19 crore was released.

The project sanctioned under WDF, has a financial


requirement of `6 crore, i.e., `2 crore for each district.

3.9

The watershed projects are entirely grant

The project will be implemented through good working

based in distressed districts while the assistance is

MACS. Another Pilot Project for financing watershed

grant-cum-loan

districts.

plus activities in three watersheds of Chitoor district

During the year, grant assistance of `201.13 crore and

based

in

non-distressed

was sanctioned to ABFL with a loan component of

loans worth

`5.29 crore were disbursed under these

`99 lakh which will be utilised for on-lending to

watershed projects. The cumulative disbursements

Rahstriya Seva Samiti (RASS) for implementation of

under these components were `556.14 crore and

watershed plus activities.

Box 3.1: Impact Evaluation Findings of Watershed Projects


(A) Kannamangala Watershed, Chickballapur District

watershed; cotton (38%), maize (38%) and red gram

in Karnataka

(35%) in Shivarvenkatpur; cotton+redgram (153%),

Between 2002 and 2009, cropped area (Rabi) increased

maize (11%) and kharif paddy (31%) in Kakatiya

from 157 ha. to 443 ha

watershed and cotton (34%), wheat (34%) and kharif

(182 % increase), orchards

paddy (32%) in Shettihadapnur.

from 88 ha. to 149 ha., wastelands reduced from 85 ha.


to 35 ha. and

fallow land reduced by 485 ha. There

was no decline in the water table.

Among the watersheds, the real income change was


highest (48%) in Shettihadapnur watershed followed by

(B) Mid Course Impact Evaluation Study of Four

Kakatiya

IGWDP watersheds in Andhra Pradesh

(40%),

Lakshmipur

(15%)

and

Shivarvenkatpur (13%).

There was employment generation of 73,217 person days.

Water storage capacity stood at 35,114 CuM.

watersheds. The level of reduction was the highest in

Crops which registered higher productivity levels were

Kakatiya (52%) followed by Shettihadapnur (35%),

Cotton (32%) and vegetables (29%) in Lakshmipur

Lakshmipur (35%) and Shivarvenkatpur (22%).

46

The extent of migration has reduced in all the four

B. Village Development Programme

Conduct of awareness and skill development

The Village Development Programme (VDP)

programmes on crop specific package of practices,

envisages identification of development needs in

Integrated Nutrient Management (INM)/Integrated

3.11

consultation with the village community and delivering

Pest Management (IPM), organic farming, use of

an

and

certified seeds, nursery development, promotion of

developmental initiatives for holistic development of

SRI, etc., led to considerable knowledge-building

the village. Under Phase-I of the Programme, 877

in the village community.

integrated

villages

spread

package

across

of

25

promotional

States

were

identified

through 493 Project Implementing Agencies (PIA)

Promotion of allied sector livelihood activities

including Non Governmental Organisations (NGO),

such as Dairy, Poultry, Fisheries and Non-Farm

Farmers Club and Krishi Vigyan Kendras (KVK). The

sector activities such as cloth painting, embroidery,

programme was completed in 631 villages and is

carpentry,

under different stages of implementation in 178

achieved by

villages.

promoting

Implementation

of

68

VDPs

were

discontinued/ withdrawn due to withdrawal by PIAs,

SHGs,

non involvement of village community, etc. The

shops

was

conducting workshops, MEDPs and


activity-based

JLGs,

and

These

nurturing

Farmers

Clubs

led

to

VDCs.

generation

of

part-time

sectors, formation/revival of Dairy Co-operatives

1,540 villages. Under this phase, the programme is

and

being implemented through 457 PIAs in 1,026 villages

Milk

Collection

establishment

spread across 26 States.


of

Kirana

livelihood activities in the agriculture and allied

Phase II from April 2010 which envisages coverage of

Outcome

business,

and

interventions

programme has been upscaled with the launch of

3.12

petty

of

rural

Centres,

Setting

up

marketing

outlets

and

establishment of market linkages in most villages.


the

Village

Development

Programme (VDP) Phase I : VDP interventions in

Hundred per cent financial inclusion was brought

several villages have visibly impacted the lives and

about by the opening of No-Frills accounts, issuing

living standards of the village community across the

to all farmers, purveying of investment credit and

country. Success stories include, Kapurtunga Village in

issuing of GCC. In all VDP villages, crop loans,

Raigarh district, Chhattisgarh; Irlapadu Village in

investment credit for allied and non-farm sector

Nellore district, Andhra Pradesh and Kalliganur Village

activities and attendant financial services improved

in Gadag district, Karnataka. The salient interventions

considerably.

and their impact in the villages are as follows :

Comprehensive

soil

testing

and

crop-specific

package of practices, covering 100 to 150 farm


fields in each village led to judicious and needbased
changes

use
in

of

fertilizers,

cropping

crop

pattern,

VDP led to greater convergence of

Agriculture

Line

specialists,

Departments,

scientists

diversification,
improved

Training Programmes and workshops held under

of

KVKs

subject
and

matter

Community-based

organisations such as NGOs, SHGs, FCs, JLGs as

seed

also RFAs.

replacement, use of low cost compost/ vermicompost. This in turn resulted in reduction in cost

of cultivation, varying from 10 per cent to

80 to 90 per cent of women folk of the villages


were empowered through various programmes.

20 per cent. Productivity in majority of the villages

Migration of villagers became almost non-existent

for lead crops improved between 20 per cent to 40


per cent and income enhancement ranged from 30

from the pre-development stage of 20 to 30 per

per cent to 50 per cent.

cent.

47

C. Tribal Development Fund

Convergence of Gram Panchayats with district


administration under VDP led to infrastructure

3.13

development by way of development of internal


roads,

solar

lighting,

drainage

channels,

by

tribal

NABARD

development
through
has

project

the

Tribal

wadi (a small

orchard) as the core component. The TDF programme,

structures, construction of drinking water tanks,

in its 7th year of implementation, has enhanced

village school, community buildings and sanitation

livelihood opportunities for tribal communities, covering

units.

traditional tribal livelihoods (such as bee keeping,


sericulture), organic wadis and mixed wadis (perennial

Health camps, literacy campaigns and educational

fruit crops + creeper vegetables + spices) (Box: 3.2).

activities, sanitation and drinking water led to

During the year, financial assistance of `290.63 crore

improvement in living standards and awareness

(`274.11 crore as grant and `16.52 crore as loan) was

levels of the village community.

integrated

Development Fund (TDF)

maintenance of farm ponds, rain water harvesting

The

implemented

sanctioned for 98 projects benefiting 72,419 tribal

VDP also led to integration of various NABARD

families in 16 states. The cumulative sanction as on 31

programmes, like WDF, TDF, NFS- SDPs, MCID-

March 2012 was `1,208.23 crore, covering 3,22,912

SHGs, JLGs, MEDPs, FIPF, FTTF and FCP in the

families in 415 projects across 26 States/UTs. During

villages which ensured optimum utilisation of

the year, the Fund disbursement

resources, making NABARD a household name in

(`156.98 crore as grant and `5.04 crore as loan). The

these villages.

cumulative disbursement under the fund as on 31

was `162.02 crore

Box 3.2: New model in wadi

A new Wadi model was introduced by NABARD in

shade-crops such as turmeric grown under the manadap,

Alirajpur district of Madhya Pradesh to enable farmers to

generate an income of `25,000-30,000 in October-

earn from the very first year of project implementation.

November. Thus, an income of `35,000-45,000 is

The conventional wadi model, based on cultivation of

obtained from 0.25 acre of land within a few months of

perennial fruit crops start generating income for the

the commencement of the wadi project.

farmers from the fourth year onwards.

The wadi (perennial fruit crop) planting commences in


June-August period. The wadi families also benefit from

The new Wadi model combines the mandap system of

vegetable/ pulses inter-cropping, from which they are able

vegetable cultivation along with cultivation of perennial

to realise an income of `25,000- 30,000. Therefore, in the

fruit crops. The mandap system supports two types of

new wadi model, farmers generate an income of `50,000

vegetables-creeper vegetables grown along the bamboo

60,000 in the very first year of project implementation.

supports and GI canopy of the mandap and crops such as

Some farmers have even realised an income of `1.5 lakhs

turmeric and ginger that are grown in the shade of the


mandap. The mandap occupies 0.25 acre in a one acre

in the

plot, while 0.75 acre is used for the wadi plantation. The

approaches and improved varieties. The new wadi

mandaps are erected by March and creeper vegetables

approach has helped farmers to achieve financial stability

grown in summer. The creeper vegetables generate an

in a short period and has successfully checked migration

income of `10,000-15,000 in the summer months. The

to a great extent.

48

first and second

years by adopting innovative

March 2012 was

sanctioned under FIPF in 14 States with financial

`368.85 crore (`360.07 and grant

assistance of `56.53 crore as grant. Major projects

and `8.78 crore as loan).

sanctioned during the year cover various activities

D. Farm Innovation and Promotion


Fund

including the following:

3.14

The Farm Innovation and Promotion Fund

(FIPF)

provides

resource

support

to

Pilot project for mobile enabled Pallavan m-Kisan


Credit Card, Villupuram district, Tamil Nadu by

innovative

Pallavan Grama Bank (Box 3.3)

ventures in the Farm Sector. The Fund, created from

the operating profits of NABARD in 2004-05, with an

Pilot project for promotion of seed business

initial corpus of `5 crore, has grown to `50.00 crore as

ventures by Small farmers through seed village

on 31 March 2012. During 2011-12, 41 projects were

plus approach in Assam, Bihar, Chhattisgarh,

Box 3.3: Pilot Project on Mobile Kisan Credit Card


The mobile enabled Kisan Credit Card (m-KCC), was

KCC. The share of benefit accrued due to reduction in

launched as a pilot project

in Villupuram district in Tamil

transaction cost indicated that 69 per cent benefit accrued

Nadu on 2nd October 2011. It covers farmers having KCC

to the farmer followed by bank at 25 per cent and input

accounts with the

a RRB

dealer at 6 per cent. Reduction in transaction cost to the

sponsored by the Indian Bank. The project enables farmers

system as a whole, in percentage terms, was maximum for

to transact on their loan accounts with PGB by using their

farmers (1.44 %), followed by Banks (0.41%) and input

mobile phones as an interface. To make this possible, the

dealer (0.10%).

Pallavan Grama Bank (PGB),

mobile phones of farmers and vendors/ BCs

are registered

with the PGB

and with Paymate, the technical service

provider.

transactions

The

are

performed

combination of secured SIM card

through

2. Technology

enabled

card

would

ensure

greater

penetration of KCC and better financial inclusion.

3. Returns per m-KCC (`679) are more than the costs per

and PIN, using an

m-KCC (`157) indicating viability and sustainability of the

Interactive Voice Recording (IVR)/ SMS system. Thus, the

project.

farmers can avoid visiting the branch to transact on their loan


accounts.

The Study reported the following benefits to stakeholders:

The farmers are also given the benefit of using the mobile

Farmer:

interface

Savings due to reduced number of trips to the bank

for

entering

into

cash-less

transactions

with

agriculture input dealers. For this purpose, the agriculture


input dealers have to open an account with the bank and

Reduced interest burden as the farmer was drawing funds

have their mobiles registered with Paymate. The farmer can

as and when required, instead of withdrawing the entire

place orders over their mobiles with the input dealers and

loan in a lump sum during his visit to the bank

have their loan accounts debited for the amount.

Reduction in price or cash discount on input purchase


Bank :

The project will cover 5,000 KCC account holders in 3 years.

Better end use of the kind component of credit


Savings due to fewer transactions in cash
New merchant business

A total of 5,946 farmers have been registered with m-KCC.


A quick study of the m-KCC project

undertaken by the

Indian Institute of Banking & Finance (IIBF), Mumbai reveals

Input dealers :

that :

Instant payment
Increase in business
Less credit risk

1. The number of transactions ranged between 2-5 under


mobile enabled KCC vis-a-vis single withdrawal under

49

Odisha,

Jharkhand,

Madhya

Pradesh

and

Rajasthan.

for

betelvine

plantations,

Augmenting sea weed production in Chilka, Puri

Bio-efficacy

studies

on

Nemato

Gro

in

Tiruchirapalli district, Tamil Nadu.

Introduction of Adoptable, Low cost innovative


Theni

district, Tamil Nadu.

through

district, Odisha.

Project on Permaculture, Karur district, Tamil

technology

Management

systems in Pune district of Maharashtra.

Lac Rearing on Palash Trees in Korba district,

Nadu.

Water

integrated performance management of pumping

Chhattisgarh.

Sustainable

Dissemination

of

Veterinary

herbal

healing

techniques for livestock in Sivaganga district of


Tamil Nadu.

Participatory Research and implementation of


technology on protected cultivation of Capsicum

and Paprika, Thiruvarur district, Tamil Nadu.

Production,

procurement,

distribution

and

processing of organic milk in Solan district of

Standardisation
Farming

of

Fisheries

Technology

based

in

Integrated

Pittoragarh

Himachal Pradesh.

and

Champawat, Uttarakhand.

Popularising T & D

Cross Breed of Pigs in

Ramgarh district of Jharkhand.

Pilot project for Augmenting Farm Productivity in

Balasore district in Odisha.

High Density Ber Plantations in Ranchi district of

Innovations in Summer Groundnut production,

Jharkhand.

Kannauj district, Uttar Pradesh.

Farmers

Training/Awareness

Programmes

E. Farmers Technology Transfer Fund

on

Commodity Exchange at Gramin Suvidha Kendra

3.16

in

(FTTF) was set up in 2008 with a corpus of `25 crore

Maharashtra,

Madhya

Pradesh,

Gujarat,

Karnataka, Rajasthan and Uttar Pradesh.


3.15

Cumulatively,

sanctioned as on

164

financial

assistance

projects

have

of

facilitating

been

crore

have

Technology

Transfer

Fund

farmers

for

adoption

of

appropriate

crore from 1 April 2010. During the year, 395


proposals were sanctioned under FTTF in 29 States

been

with financial assistance of `20.59 crore as grant. The

completed. Some of the major completed projects are:


Sustainable upscaling of weather based

Farmers

technologies. The Fund has been augmented to `100

Of this, 72 projects with


`3.69

The

sourced from the operating profits of NABARD for

31 March 2012, with financial

support of `68.45 crore.

Development of Lac Production System using

disbursement during the year was `44.59 crore. Some

crop

of the major proposals sanctioned are as follows:

insurance in Ahmedabad, Anand and Patan

districts, Gujarat.

Special

Relief

package

for

arecanut/

vanilla

farmers in Uttara Kannada district of Karnataka.

Seed

purification,

multiplication

and

area

expansion of Navara rice in Palakkad district of


Kerala.

Sustainable

Sugarcane

districts of Tamil Nadu.

50

Initiative

(SSI)

in

10

Development
producer

of

institutions

companies

of

for

farmer

(24.83%), Southern (18.48%,) Western (16.52%) and

promoting

produces

Northern (12.43%) regions, while NER accounted for

in

(2.75%). As FCs coordinate with banks for ensuring

Andhra Pradesh.

credit

and

forging

better

bank-borrower

relationship, the RBI has permitted banks to engage

Goalpara district of Assam.

FCs as Business Facilitators (BF). As on date, 279 FCs


are

Seed village programme in various States.

Support to Farmers Club for online marketing of

flow

Agriculture Knowledge Management System in

functioning

as

Business

Facilitators/Business

Correspondents. Farmers Clubs have also been acting


as Self Help Promoting Institutions (SHPI) and 761

their produce in Goa.

FCs have promoted 17,321 Self Help Group (SHG) of

IKSL-NABARD Mobile Phone Centric Initiative for

also promoted and credit linked 268 Joint Liability

Empowerment of Farmers in 9 districts of Gujarat.

Group (JLG). Farmers Clubs are provided with

which 9,642 SHGs have been credit linked. FCs have

information on weather, market prices, crop advisory

Integrated Fish Farming in Ranchi district, Zero

services through SMS on mobile phones and 36,654

tillage in Wheat cultivation in Godda district of

connections have been provided to farmers / Farmers

Jharkhand.

Clubs as on 31 March 2012, as part of an ICT


initiative.

Zero Budget Natural Farming in Alappuzha district

and

Rural

FTTF as on 31 March 2012.

Commercial Floriculture in Champawat district of

Developing

Training

grant assistance aggregating to `57.97 lakh under

Uttarakhand.

Farmers

Development Centre (FTRDC) have been provided

of Kerala.

Five

3.18
Agricultural

Entrepreneurs

NABARD

initiated

pilot

project

for

development of specialised cadres of farmers from

in

amongst the members of Farmers Clubs, in the areas

Vegetable Seed production in New Delhi.

of

F. Farmers Club Programme

Technology Transfer, Credit Counselling and

Market Advocacy is underway. As on 31 March 2012,


31 projects have been sanctioned with a grant

3.17

Farmers Clubs are grassroots level informal

assistance of `62.65 lakh in 15 States viz., Arunachal

forums of farmers. These Clubs facilitate farmers in

Pradesh,

accessing credit, extension services, technology and

Kerala,

markets. NABARD sees Farmers Clubs as change

Sikkim, Tamil Nadu, Uttar Pradesh, Uttarakhand and

agents at the grassroots level. The target of forming

West Bengal. So far 443 farmers have been trained as

one lakh Farmers Club (FC) by the end of XI plan

Master Farmers. They have imparted training to 5,109

period was achived with the formation of 25,243 new

farmers

Farmers Clubs, taking the total number of clubs to

date, 50 Federations of Farmers Clubs are operating in

1,01,951 as on 31 March 2012. Agency-wise, NGOs

14 States while 8,232 FCs in 3 States were registered

promoted

maximum

number

of

clubs

Bihar,

Haryana,

Maharashtra,

Jharkhand,

Meghalaya,

Karnataka,

Odisha,

Punjab,

through 593 training programmes. As on

(15,870),

as legal entities. NABARD has entered into an MoU

followed by co-operative banks (4,359), CBs (2,104),

with the Mahatma Phule Krishi Vidyapeeth, (MPKV),

RRBs (2,103) and SAUs/KVKs/other agencies (807)

Rahuri in Maharashtra, for preparation of CDs/VCDs/

during the year 2011-12. The region-wise distribution

Brochures/Pamphlets on agriculture and allied activities

of clubs indicated that the Eastern region had the

for use by farmers, formation of Farmers Scientists

highest share (24.99%), followed by the Central

Forum arranging training and exposure visits for

51

adoption of technology, implementing the Seed Village

Gram Swarozgar Yojana (SGSY) by GoI in 2006-07

concept

of

for implementation in Sultanpur and Raebareli districts

thereby

of Uttar Pradesh. The project aims at covering 8,000

ensuring quality of seeds and effecting cost saving of

Below Poverty Line (BPL) families under Multi-activity

seeds, promoting NABARDs Farmers Clubs through

Approach for Poverty Alleviation (MAAPA) and 15,000

KVKs and other activities leading to agriculture and

financially very needy youth under Demand Driven

rural development.

Skill

together

Agriculture

for

with

the

State

self-sufficiency

Department

in

seeds,

G. Capacity Building for Adoption of


Technology
3.19

The

Scheme

for

Capacity

Building

Development

(DDSD)

through

Livelihood

Advancement Business School (LABS) in the two


districts. The cost of the project is `14.97 crore for
Sultanpur and `14.90 crore for Raebareli. NABARD is
the

for

project

holder

while

BAIF

and

Dr.

Reddy

Adoption of Technology (CAT) uses training and

Foundation are the implementing agencies for the two

exposure visits as a means of sensitising farmers on

components. The project period of both the projects

adoption of new/ innovative methods of farming.

is over. However, in order to take the activities already

During the year, 339 exposure visits of 9,197 farmers

initiated to a logical conclusion, the agencys request

were arranged in collaboration with select research

for extension of the project implementation period

institutes, KVKs and SAUs. The areas covered were

upto March 2013 has been recommended to the

precision farming, hi-tech agriculture, tissue culture

Government. During 2011-12, `0.51 crore and `1.72

banana, fodder development, organic farming, drum

crore were released to Sultanpur and Raebareli

seeding,

districts,

sustainable

management,

agriculture

pisciculture,

practices,
vegetable

cattle

respectively,

taking

the

cumulative

disbursement to `9.49 crore and `9.44 crore.

seed

multiplication, etc.

I. Externally Aided Projects

H. Government Projects

3.23

3.20

NABARD continued to implement/coordinate

an amount of `130.82 crore as grant/loan assistance

the following area specific projects of the Government

during the year under the KfW supported externally

of India (GoI).

aided projects. Further, an amount of `3.59 crore was

i. Cattle Development Projects (CDP)

received from GIZ under UPNRM and RFI Programme

3.22

(Table 3.1).

NABARD received `96.93 crore and disbursed

disbursed as grant assistance as against `1.77 crore


NABARD is the co-coordinating agency and

facilitator for channelising and utilisation of funds


under

CDP,

project

supervision

and

a. Adivasi Development Programme in


Gujarat and Maharashtra

monitoring.

Against a total financial outlay of `27.22 crore, GoI


released `25.39 crore; with utilisation at `25.37 crore.

3.24

While 100 Cattle Development Centres have been

Programme in Gujarat is implemented in Valsad and

established in each State, 16 District Dairy Farmers

Dangs districts through BAIF since 1994-95, with an

Associations have been formed in Uttar Pradesh and

outlay of `67.25 crore. The focus of the programme is

13 in Bihar.

wadi, (a small orchard of mango and cashew nut),

The

Special

Project

on

Livelihood

KfW-NABARD-V-Adivasi

Development

with components of soil conservation, water resources

ii. Special Project on Livelihood Based


Development
3.22

The

development, women/landless family development and


health. The programme has covered 13,663 families
from 162 villages, as against

Based

a target of 10,000

families. A total area of 12,732.5 acre was brought

Development was sanctioned under Swarnajayanti

52

Table 3.1: Externally Aided on-going Projects


(As on 31 March 2012)
(` Lakh)
Sl. Name of the Project
No.

1. KfW-NABARD
i. V-Adivasi Development
Programme in Gujarat*
ii.

IX-Adivasi Development
Programme in Maharashtra

Effective
from

Closing
date

23 Dec 1994

31 Dec 2011

External
assistance
(million)

13.29 Grant)
(+ 1.5 Suppl.

Disbursements
made by NABARD

Amount received
by NABARD

During
2011-12

Cumm.
Upto
31.03.12

During
2011-12

Cumm.
upto
31.03.12

584.92

8980.15

523.63

8994.57

2 June 2000

31 Dec 2011

14.32

352.00

7928.87

441.18

8037.03

iii. Indo-German Watershed


Development Programme in
Andhra Pradesh

15 July 2002

31 Dec 2013

8.69

1373.25

3964.27

929.48

3363.77

iv. Indo-German Watershed


Development Programme in
Maharashtra (Phase III)

27 Aug 2005

31 Dec 2012

19.94

2611.64

11295.50

2024.05

10519.61

Indo-German Watershed
Development Programme in
Gujarat

17 Feb 2006

31 Dec 2015

9.20

645.00

1461.87

573.79

1363.70

vi. Indo-German Watershed


Development Programme in
Rajasthan

7 Dec 2006

31 Dec 2016

11.00

620.53

1493.23

546.84

1188.96

28 March 2006

31 Dec 2014

7.00

28 June 2002

31 Dec 2013

4.09

v.

vii. Adivasi Development


Programme in Gujarat
(Phase II)*
viii. KfW-Sewa Bank Project

combined figures given at item (i) above


291.88

1243.01

294.83

1255.57

2. KfW-Umbrella Programme for Natural Resources Management (UPNRM)


i.

FC Loan

16 Sept 2009

30 Dec 2014

FC Loan :
15.00

6275.51

12473.45

4099.26

9510.50

ii.

FC Grant

16 Sept 2009

30 Dec 2014

FC Grant :
1.4

16.09
@@

32.21

(-)64.01
@

33.11

16 Sept 2009

31 Dec 2014

FC Grant
for Accompanying
Measures :
3.00

311.57

669.42

323.90

697.31

62.51

116.57

51.40

143.93

296.89

463.34

125.20

303.78

iii. Grant for Accompanying


Measures

3. Technical Component (TC)xx.Assistance from GIZ


i

GIZ UPNRM TC

26 Jul 2010

31 Dec 2014

ii

GIZ-RFIP

1 Jan 2009

31 Dec 2013

8.5
12.5
(of which 0.1 is
FC component)

FC - Financial Cooperation
SEWA - Self Employed Womens Association
@: An amount of `66.91 lakh was received from KfW during 2011-12, an amount of `130.92 lakh pertaining to service charge of FC
loan claimed inadvertently from KfW during 2009-10, 2010-11 and 2011-12 and booked under FC grant, was adjusted to
Accompanying Measures (as advised by KfW). Hence the balance is shown as negative. The cumulative receipt of FC grant also
reflects this transaction.
@@: Includes only the disbursement made under FC grant and the service charges thereon. The service charges for FC loans included
during the previous years have been removed from the cumulative FC disbursement figures.

53

under wadi, against the target of 10,000 acre. Phase I

Gujarat and Rajasthan. KfW, Germany has committed

of the programme stands closed on 31 March 2011.

a grant assistance of euro 8.69 million (about `48.66

Phase II (2006-2014) is under implementation, for

crore)

which, KfW has sanctioned a grant assistance of

rehabilitation of watersheds in four districts (Adilabad,

under

Karimnagar,

7 million (approx. `38.15 crore), covering 4,700

IGWDP
Medak

in

and

Andhra

Pradesh

Warangal).

Thirty

for
eight

families in these districts. Under this Phase, as on 31

projects covering an area of 4,16,436 ha. are being

March 2012, 5,922 families have been identified,

implemented under this programme. Of these, 36

5789.5 acre of wadi established and 253 wadi tukadis

projects

(group of 8-10 wadi holders) formed. The Adivasi

terminated. KfW has approved an additional amount

Development

of

Programme

in

Maharashtra

was

have

euro

been

completed

million

(about

and

two

crore)

`11

were

towards

implemented in Nashik and Thane Districts since

Complementary Measures Programme for capacity

2000 with KfW assistance of

14.32 million (`82.22

building of stakeholders. RODECO, an international

crore). 13,848 families have been covered by the

consulting agency, was associated with the programme

project as against a target of 13,000 families and

till December 2011 to support the capacity building

wadi area coverage reached 12,293.5 acres as against

issues of projects of

a target of 10,000 acres. The programme was closed

grant assistance of `13.73 crore was disbursed taking

on 31st December, 2011.

the cumulative release to `39.64 crore.

b. IGWDP-Maharashtra, Andhra
Pradesh, Gujarat and Rajasthan

3.27

3.25

(IGWDP),

introduced

in

German

programme

Governments,

implemented

by

is

an

Village

37,884

integrated

implemented

under

this

Programme Management Unit (PMU) has been set up


at Dahod to oversee the implementation from close
quarters with the help of three consultants. SHG
federations have been constituted in two watersheds

2012) of the programme is under implementation,

and provided support for on-lending to women SHGs

which was started in January 2005. Under Phase III


have

being

projects are in Capacity Building Phase (CBP) stage. A

At present, the Phase III (2005-

projects

are

project in Feasibilty Study Report (FSR) stage and 6

were successfully completed, covering 95 watersheds

watershed

ha.

programme. Of these, 26 projects are in FIP, one

Watershed

2000) and Phase II (2001-2007) of the programme

114

envisages

crore). Thirty three projects covering an area of

regeneration of natural resources and Phase I (1990-

(2005-12),

Gujarat

commitment of Euro 9.2 million (approx. `51.52

Maharashtra

Committee (VWC) in association with NGOs for

on 1.02 lakh ha.

in

the year,

Panchmahal, Sabarkantha and Vadodara) with a

under the bi-lateral aid agreement between the Indian


and

IGWDP

During

rehabilitation of watersheds in four districts (Dahod,

The Indo-German Watershed Development

Programme

The

IGWDP-AP.

formed in the project villages. During the year, grant

been

assistance of `6.21 crore was disbursed taking the

sanctioned since 2005, covering an area of 11,07,916

cumulative release to `14.93 crore.

ha. in 18 districts of Maharashtra. Of these, 10


projects have been completed, 4 terminated and 100

3.28

projects are in Full Implementation Phase (FIP) stage.

KfW, Germany had committed grant assistance

of euro 11 million (about `61.60 crore) under the

During the year, grant assistance of `26.12 crore was

IGWDP for watershed development in five districts of

disbursed, taking the cumulative disbursement to

Rajasthan

`112.96 crore.

(Banswara,

Chittorgarh,

Dungarpur,

Pratapgarh and Udaipur). Thirty Five projects covering

In addition to Maharashtra, the IGWDP has

an area of 35,745 ha. are being implemented under

been extended to three States; viz., Andhra Pradesh,

this programme, of which 20 projects are in FIP,

3.26

54

9 projects in FSR stage, 3 projects in CBP stage and 3

December 2009 and is expected to be completed by

projects were terminated. A Programme Management

December 2013. The cumulative amount disbursed

Unit (PMU) has been set up at Udaipur to oversee the

under this project to SEWA Bank upto 31 March 2012

implementation from close quarters with the help of

stood at `1,255.57 lakh.

four consultants. During the year, grant assistance of

d. Umbrella Programme on Natural


Resource Management

`6.20 crore was disbursed taking the cumulative


release to `14.93 crore.

3.30

c. KfW-NABARD - SEWA Bank Capitalization of Rural Financial


Intermediaries
3.29

credit

in

supporting community-managed sustainable natural


resource management projects. It is a shift from

Ahmedabad

(i) project- based to programme-based funding and

and

(ii) grant-based to loan-based funding. The total fund


envisaged under the programme is

a rural department in SEWA Bank, opening Extension

Counters (ECs) and enabling outreach of credit to

The

Board

30.90 million

8.50 million from GIZ

3.00 million from NABARD). The progress

under UPNRM is given in the Table 3.2.

Project Executing Agency, NABARD serves as the


Agency.

19.40 million from KfW,

and

rural and urban clientele. While SEWA Bank is the


Channelising

Natural

and GIZ. It aims to boost rural livelihoods by

Gandhinagar Districts of Gujarat State by establishing

Financial

on

since 2007-08 by NABARD in collaboration with KfW

improve the access of the rural and urban poor


micro

Programme

based Indo-German programme being implemented

Capitalization of Rural Financial Intermediaries is to


to

Umbrella

Resource Management (UPNRM) is a loan-cum-grant

The objective of KfW-NABARD-SEWA Bank -

women

The

of

3.31

An amount of

6.181 million as Financial

Management of the project consist of representative of

Co-operation (FC) loan,

NABARD-Head Office, implementing RO of NABARD

and

and Managing Director-SEWA Bank. The project

were received from KfW and `0.514 crore from GIZ

intends to transfer the lending operations of Rural

under Technical Component (TC) during the year. The

District Associations (RDA), which presently function

cumulative FC Loan, FC grant and AM received from

like federated entities in two districts. The project

KfW were

commenced its operations in July 2007.


implementation

phase

of

the

project

The full
began

0.101 million as FC grant

0.496 million as Accompanying Measures (AM)

15.00 million,

0.258 million and

1.103 million, respectively. A success story of


UPNRM proposal is detailed in the Box 3.4.

in

Table 3.2: Progress under UPNRM


(As on 31 March 2012)
` crore
No. of Projects

Amount

Sanctioned
During the year

During the year


Cumulative

Amount Disbursed

Cumulative

During the year

Cumulative

40

Loan

53.88

Loan

199.92

Loan

62.86

Loan

124.83

104

Grant

3.32

Grant

13.03

Grant

3.17

Grant

7.06

Total

57.28

Total

212.95

Total

66.03

Total

131.89

Implementing agency: NGO, MFI, Producers Companies, Private Limited Companies and Co-operatives16 States covered under UPNRM (Andhra Pradesh,
Bihar, Gujarat, Karnataka, Maharashtra, Odisha, Tamil Nadu, Kerala, West Bengal, Himachal Pradesh, Madhya Pradesh, Uttarakhand, Jharkhand, Uttar Pradesh,
Arunachal Pradesh and Rajasthan) and one UT (A & N Islands)

55

Box 3.4: UPNRM Projects A success story of Kamadhenu project in Chittoor district
To give a fillip to the milk procurement and marketing

The impact was substantial and milk procurement increased

activities at Chittoor, the District Rural Development Agency

from 233 to 500 per cent in the 4 BMCUs. Three of the 4

(DRDA) in association with two private dairies

BMCUs which were to be closed or merged had completely

established

Bulk Milk Chilling Units (BMCUs) in 82 places. Four of the

turned around and are presently running in profits.

BMCUs were manned by

two Mandal Mahila Samakhya

In September 2011, coinciding with the centenary celebrations

(MMS), Mandal level SHG Federations (2 each) that collected

of the district, the Honble Chief Minister of Andhra Pradesh

milk from women dairy farmers at the grass roots level. The

directed

Dairies paid the MMS chilling charges of `0.65 per litre of

procurement by the MMS to around 5 lakh litres per day from

milk. On account of low milk availability from the members

the existing 2.2 lakh litres. Accordingly, the DRDA (Chittoor) in

of MMS, only around 1/3rd of the installed capacity of the

consultation with NABARD, prepared a detailed project report

BMCUs were utilised. DDM, NABARD in consultation with

(based on the successful UPNRM project model) covering 65

the DRDA (Chittoor) prepared UPNRM projects for these two

BMCUs and presented the same to the bankers forum. The

MMS in the district. The interventions covered in the UPNRM

bankers welcomed these proposals and process is on in 111

project included purchase of quality animals by the women

branches of 11 banks in the district. The project was officially

members along with requisite investments for raising green

launched on 21 September 2011.

fodder; grant support to the MMS for providing veterinary

around 13,500 SB accounts were opened, loan documentation

services, azolla cultivation, motorised chaff cutters in villages,

completed for more than 12,800 cases and loan sanctioned for

capacity building for farmers and organising animal health

11,723 units with credit flow estimated at `73.8 crore. Thus, a

camps in their area of operation. The financial assistance

small initiative under UPNRM was accepted by the banking

sanctioned was `104.14 lakh (`92.46 lakh as loan and

community as a profitable portfolio, and mainstreamed,

`11.68 lakh as AM) to both the projects.

benefitting a larger rural population.

J. Policy and Promotional


Interventions-Financing
Agricultural Investments in the
Eastern Region Concessional
Refinance Support
3.32

the

District

administration

to

increase

milk

As on 31 March 2012,

Development (c) Farm Equipment and (d) Seed


Production units.
3.33

The total lending target of the banks for the

financial year 2011-12 was `3,912 crore. With a view


to ensuring adequate credit flow for the selected

With a view to facilitating institutional credit

activities, the minimum lending level against the

flow for key investments that have a direct bearing on

targets was prescribed for banks to become eligible for

enhancing crop productivity in the Eastern Region,

the concessional refinance.

NABARD introduced a concessional refinance support

Minimum level for the

envisages

year 2011-12, was fixed at 50 per cent of the target

extending refinance support at a concessional rate of

allocated for Commercial Banks and 25 per cent for

7.5 per cent per annum (p.a) and covers seven states

RRBs and Co-operative Banks. Under this scheme,

in

Bihar,

NABARD also extended support to the banks for

Chhattisgarh, Jharkhand, Odisha, West Bengal & Uttar

related interventions like forming and linking JLGs,

Pradesh (28 districts). The key activities qualifying for

organising sensitisation meets for the branch officials

concessional refinance support under the scheme,

of implementing banks, training and capacity building

include (a) Water Resources Development (b) Land

needs of entrepreneurs identified under the scheme.

scheme

the

for

this

Eastern

region.

Region,

The

scheme

viz.,

Assam,

56

K. New Initiatives

marketing linkages & storage

a. Pilot Project for Augmenting Farm


Productivity in Select Districts
3.34

at the behest of the Ministry of Finance, as a


production

package

and

for

productivity

augmenting
by

3.35

farm

addressing

post-harvest
marketing
components

management,
in

holistic

comprise

value

addition

manner.

The

interventions

in

`3,211.86 crore, including a grant component of


`48.08 crore to be supported under the FIPF, for a

credit,

period of three years i.e., from 2012-13 to 2014-15.

and

The project was formally launched on 24 April 2012.

project

agriculture

b. Pilot Project on Augmenting


Productivity of Lead Crops

extension, crop management, marketing of produce,


livelihood

development

including

interventions

The Pilot Project at Balasore District in Odisha

has been sanctioned with a total financial outlay of

all

interlinked components of farming as an economic


activity, viz., agricultural inputs, technology,

Areas of convergence along with the financial


implications for a period of three years.

This project has been designed by NABARD,

comprehensive

ICT medium, post production facilities including

in

animal husbandry and financial inclusion. The project

3.36

aims at strengthening the support systems available to

with the objective of increasing the yield of lead crops

farmers in respect of major crops and activities in the

by adopting sustainable agricultural practices, effecting

identified districts by involving public and private

reduction in cost of production and facilitating value

sector organisations on a Public Private Participation

addition, so as to improve the

(PPP) mode and dovetailing resources of various

the rural farming community. The project is being

Government agencies. Accordingly, one district has

implemented using the cluster approach. Each cluster

been selected in each of the identified 11 states for the

comprises five villages and 4-6 such clusters per state

implementation of the captioned project, viz., Bihar

have been selected for implementation of the project.

(Bhojpur), Chhattisgarh (Bilaspur), Haryana (Sirsa),

As on 31 March 2012, 50 projects covering 250

Jharkhand

(Belgaum),

villages were launched with a financial commitment of

Maharashtra (Yavatmal), Madhya Pradesh (Shahdol),

`21.58 crore and disbursement of `6.09 crore has

Odisha (Balasore), Rajasthan (Bikaner), Uttar Pradesh

been achieved.

(Deoghar),

Karnataka

(Azamgarh) and West Bengal (Nadia). NABARD has

This was launched by NABARD in 2009-10

standard of living of

prepared project reports keeping in view the following

c. System of Rice Intensification

important factors:

3.37

System of Rice Intensification (SRI) is a

combination of simple agronomic and management

Lead crops covering 80 per cent or more cropped

practices that improves productivity. A project of 150

area and one or two major allied activities

Model Units covering 28,800 ha. and 84,000 farmers,


was launched in June 2010 in 13 identified States for

The existing backward and forward linkages

Problem constraints in increasing the production

financial outlay of `25.68 crore. Cumulatively, 175

and productivity

units have been sanctioned with a Total Financial

implementation over a period of three years, with total

Outlay of `25.19 crore and an amount of `15.60 crore

Availability of partners and their roles

Models of extension that would work for the

an area of 22,503 ha. covering 97,000 farmer in 2,380

district

villages across 12 States.

have been disbursed.

57

The project is implemented in

Rural Non-Farm Sector


A. NABARD-SDC Rural Innovation
Fund
3.38

Cumulative grant assistance of `16.90 crore has been


sanctioned for 383 rural haats across 23 States till
now.

NABARD constituted the Rural Innovation

Fund

(RIF)

with

corpus

of

`140

crore

in

C. Rural Entrepreneurship
Development Programmes and
Skill Development Programmes

collaboration with the Swiss Agency for Development


and Cooperation (SDC)

in 2005-06. The Fund

supports innovative, risk mitigating


Farm,

Non-Farm

and

micro-Finance

experiments in
sectors

3.40

with

For generating self-employment and wage

potential to promote livelihood opportunities in rural

employment opportunities in rural areas, NABARD has

areas. During the year, 108 new innovative projects

been supporting Rural Entrepreneurship Development

were sanctioned support of `7.94 crore, taking the

Programmes

cumulative number to 483. With these projects, the

Programmes (SDP) since the early 1990s. As on 31

cumulative commitment made until 31 March 2012

March 2012, 9,852 REDPs/ SDPs with an amount of

has reached `57.22 crore (up from `49.28 crore as on

`13.09 crore were sanctioned.

31.3.2011). An amount of `10.24 crore has been

REDPs/SDPs with grant support of `96.45 crore have

disbursed during the year for 483 projects taking the

been supported which are estimated to have covered

cumulative disbursements to `43.23 crore. Of this 150

around 6.93 lakh unemployed rural youth.

projects have been completed and 67 projects are in

includes

the advance stages of implementation.

Development & Self Employment Training Institute)/

3.39

support

RUDSETI

B. Strengthening of Rural Haats

(REDP)

type

and

extended

Skill

Development

Cumulatively, 27,711

to

RUDSETI

institutions/R-SETIs

This
(Rural

(Rural

Self

Employment Training Institutes) for incurring capital


and/or

As rural haats (local markets) play an

recurring

expenditure.

During

the

year,

important role in rural economy, NABARD launched

NABARD had started a vocational training on a pilot

the Scheme for Strengthening of Rural Haats in

basis with collaboration of PanIIT Alumni Reach for

1999. Under the scheme, grant support of `3.71 crore

India (PARFI), an organisation created by IIT alumni

was sanctioned to 76 rural haats during 2011-12.

(Box 3.5).

Box 3.5: Vocational training through micro-loan: PanIIT-NABARD model

In a first-of-its-kind-intervention, NABARD and PanIIT

guaranteed by the mother of the trainee. The mother

Alumni Reach For India (PARFI), an organisation created

needs to be a member of SHG/JLG so that social and

by IIT alumni, have come together to pilot a loan-based

peer pressure would ensure timely repayment of loan.

approach to vocational training of blue-collar entry level

NABARD has sanctioned `4.76 crore towards training of

workers like masons, welders, cooks, technicians and

8,000 youth over 3 years. As of January 2012, over 800

drivers. NABARD provides Revolving fund-assistance to

students have been trained through this model with a 100

PARFI, which, further on-lends to NGOs who select poor

per cent placement rate.

rural youth and finance them with a vocational education

The initial experience shows that this model can be upscaled.

loan at 8.5 per cent p.a. The loan for the training is

58

D. Cluster Development

E. Marketing/Other initiatives

3.41

3.43

NABARD has been implementing the Cluster

NABARD

recognises

the

importance

of

National

developing marketing opportunities for the highly

Programme on Rural Industrialisation (NPRI) from

unorganised rural producers, especially artisans. In

1999-2000. As on 31 March 2012, 120 clusters across

order to directly linking rural producers with markets,

Development

Programme

under

the

NABARD

110 districts in 22 States have been approved. These


include 57 handloom clusters, 43 handicraft clusters, 7

with

Blacksmiths and 2 NPRI clusters, and one


of

implementation.

During

2011-12,

States

like

programmes/

workshops

3.44

were

other

SHGs,

etc.,

from

the

94,479 SCCs

having credit limit of `495.81 crore were issued for


facilitating

the year amounting to `120.35 lakh. A sum of

working

`331.95 lakh was disbursed during the year towards


Cluster

micro-entrepreneurs,

effective manner. During the year,

including venture like assistance was sanctioned during

the

Swarojgar Credit Card (SCC) Scheme was

banking system in a flexible, hassle free and cost

As a part of the programme, grant-cum-loan

of

NABARD

and timely credit to small artisans, handloom weavers,

departments, NGOs, etc., during 2011-12.

implementation

crore.

`2.84

introduced in September 2003 for providing adequate

organised for the participants from banks, government

3.42

of

F. Swarojgar Credit Card Scheme

Chhattisgarh,

implementation and monitoring of the initiative, 5


building

assistance

card was permitted to enhance the quantum of sales.

Jharkhand, Odisha and Madhya Pradesh. For smooth


capacity

grant

This year, for the first time, payment through credit

region alone and large numbers of clusters are being


backward

Melas/

28 States participated in a 15-day long exhibition.

clusters are being supported in the North Eastern


in

in

Mumbai, wherein 130 artisans and 61 agencies from

07

participatory clusters were approved. As many as 23

developed

participation

continued to co-sponsor the Saras Mahalaxmi Fair at

each of Bee Keeping. All the clusters are in different


stages

their

exhibitions/melas across the country were supported

Rural Tourism, 7 food processing clusters, 2 each of


Leather,

supports

Exhibitions. During 2011-12, 537 marketing events/

hassle-free
capital

entrepreneurs.

Development

credit

for

requirements

investment
of

small/

and
micro

The cumulative number of SCCs

issued was 13.06 lakh involving credit limit of

programme.

`5,445.32 crore.

Financial Inclusion
3.45

investments

Two dedicated funds, the Financial Inclusion

in

meeting

the

cost

of

technology

Fund (FIF) and the Financial Inclusion Technology

adoption aimed at promoting financial inclusion. The

Fund (FITF) were set up in NABARD during 2007-08,

corpus of each fund is `500 crore, to be contributed

in

the

by the GoI, RBI and NABARD in the ratio of 40:40:20

Rangarajan Committee on Financial Inclusion for

in a phased manner over five years. As on 31 March

providing timely and adequate credit to vulnerable

2012, the contribution to these Funds stood at `79.32

keeping

with

the

recommendations

of

groups at an affordable cost. The Financial Inclusion

crore (FIF) and `130.49 crore (FITF). The Funds are

Fund (FIF) supports developmental and promotional

managed by NABARD as per the directions given by

interventions

the Advisory Board for FIF and FITF. The Advisory

leading

to

financial

inclusion

and

Board met thrice during the year.

Financial Inclusion Technology Fund (FITF) supports

59

A. Policy initiatives
3.46

iii. Establishment of Financial Literacy


and Credit Counseling Centre (FLCC)

The following policy initiatives were taken

by Lead Banks

during the year:


I.

3.49

Financial Inclusion by RRBs through BC

Under the scheme, support is being provided

model using card based ICT Solution ASP

from FIF for establishment of FLCCs by Lead Banks in

Model

256 excluded districts and 10 disturbed districts. As on

Support from FITF - It has been decided to

31 March 2012, `10.71 crore has been sanctioned to

support the RRBs implementing ICT through

Lead Banks in 128 districts of 12 States viz., Assam,

Application Service Provider (ASP) Model.

Bihar, Manipur, Meghalaya, Rajasthan, West Bengal,

for

Financial

Inclusion

(ICT)

Uttar
II. Support for CBS to weak RRBs from FITF -

Pradesh,

Jharkhand,

Madhya

Pradesh,

Maharashtra, Odisha and Gujarat for setting up

It has been decided to support the identified weak

FLCCs.

RRBs for CBS implementation through ASP

iv. Financial Literacy through Audio Visual

Model
III. Holding

of Financial

Literacy

medium Doordarshan

Awareness

3.50

Camps by RRBs - NABARD will reimburse


expenditure

incurred

by

RRBs

for

holding

a half an hour financial literacy programme in Hindi,

financial literacy awareness camps in each of the

to be telecast in six centres (DD Kendras of Lucknow,

2000+ villages allotted to them from the Financial

Bhopal, Patna, Jaipur, Raipur and Ranchi). The

Inclusion Fund (FIF) at the applicable rate (100%


or 80% of actual cost depending upon the State)

programme

subject to a maximum of `10,000 per programme.

Bhopal, Ranchi, Jaipur and Patna Kendras, whereas

v.

Under the scheme of support to 28 identified


3.51

received from 27 RRBs as on 31 March 2012, against


with

disbursements

amounting

the

NABARD extended support to the extent of


to Invest India Micro

among SHG members in 8 districts of 4 States, viz.,


Odisha, Uttar Pradesh, Bihar and Tamil Nadu. The
project aims at covering 40,000 rural poor under the

Application of ICT Solution in BC/BF


models by RRBs

3.48

by

Pension Services to pilot test a micro pension model

to

`139.54 crore.

ii.

telecasted

Micro Pension Model Support to Invest

`2.25 crore from the FIF

which assistance was sanctioned to 26 RRBs for


crore

been

India Micro Pension Services

weak RRBs for CBS installation, proposals were

`216.52

already

Kendras.

Support for CBS for weak RRBs

3.47

has

the work is under progress in Lucknow and Raipur

B. Major Projects
i.

Grant assistance of `3.28 crore was provided

from FIF to Doordarshan for producing and directing

old-age pension scheme. So far, `1.74 crore have


been released covering 16,395 persons.

The projects involve application of ICT based

solutions by RRBs in their BC model so as to enable

vi. Engaging Farmers Club as BF by RRBs

them to cover all the villages in their jurisdiction. As


on 31 March 2012, grant assistance of `107.07 crore

3.52

has been sanctioned to 53 RRBs under FITF as against

NABARD for Farmers Clubs acting as Business

which

Facilitators

disbursements

were

of

the

order

of

Financial
of

support
RRBs

in

is

being

villages

extended
having

by

2000+

population in their command areas. As on 31 March

`40.52 crore.

60

2012, `2.08 crore sanctioned to 22 RRBs in 12 States

especially SC and ST, minorities and the displaced.

from FIF.

`46.97 lakh had been utilised during 2011-12 for


activities conducted by NABARD in the seven States

vii. Engaging SHGs as BC/BF by RRBs


3.53

of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh,

Support is available from the FIF to RRBs for

Odisha, Rajasthan and Uttar Pradesh.

engaging Authorised functionaries of well run SHGs

E. GIZ-NABARD Rural Financial


Institutions Programme (RFIP)
Component IV

linked to Banks to act as BC / BF, with the purpose


of extending financial services in semi-urban and rural
areas in their command area. As on 31 March 2012,
8 RRBs were sanctioned `43.81 lakh for training of

3.57

authorised functionaries of well-run SHGs in 6 States.

Internationale
conducted

viii. Geographical Information System for


financial Inclusion
3.54

improving

study

on

(GIZ)

Remittance

together

Needs

and

delivery

channels,

especially

through

financial institutions for providing adequate remittance

web- based MIS for capturing the banking facility.

facilities as well as other financial services through

C. Fund Utilisation
March

Zusammenarbeit

fr

for small value money transfer and strengthening

extent of banking in India and also development of a

31

Gesellschaft

Business Correspondents upgrading payment systems

web-based GIS Application for assessing the reach and

on

Deutsche

improving financial services for domestic migrants by

NABARD has sanctioned and released `21.71

As

and

Opportunities in India. The study address the issues of

lakh to National Informatics Centre for development of

3.55

NABARD

enhanced financial education. The study covered four


2012,

the

specific

cumulative

remittance

corridors:

Gujarat-Southern

sanctions under FIF and FITF were `114.62 crore and

Rajasthan, Eastern UP-Mumbai, Odisha-Hyderabad/AP

`343.48 crore respectively and disbursements `36.46

and

crore and `184.16 crore, respectively. The year-wise

Maharashtra.

achievements are given in Table 3.3.

remittances could be faster, easier and more secure,

intra-state

migration

The

study

and

remittance

concluded

that

in

sending

when the significant problems of sending money

D. NABARD-UNDP Collaboration for


Financial Inclusion

through

the

formal

banking

system

over

long

distances - which migrants and the recipients in India

UNDP-NABARD Financial Inclusion Fund was

are currently facing is removed. The component IV of

established in NABARD to provide better access to

the RFIP aims at involving more number of service

financial products and services for reducing risks and

providers for remittances. The identification of area/

enhancing

institution for launching the pilot project is in progress.

3.56

livelihood

opportunities

for

the

poor,

Table 3.3: The progress under FIF & FTTF


(As on 31 March 2012)
(` in crore)
Name of the Fund

2008-09

2009-10

2010-11
D

2011-12
D

Cumulative up to
March 2012
D

FIF

1.30

0.36

18.36

7.99

19.00

9.21

75.96

18.90

114.62

36.46

FITF

4.22

0.09

17.08

1.67

101.11

54.01

221.07

128.39

343.48

184.16

Total

5.52

0.45

35.44

9.66

120.11

63.22

297.03

147.29

458.10

220.62

S : Sanctions, D: Disbursements

61

F. Centre of Excellence for Rural


Financial Institutions

promise to bring the much required transparency,


speed and ease of operations into last mile banking.

3.58

A meeting was held on 16th February, 2012 in

Head

Office

between

Shri

Nandan

Accordingly, NABARD, has set up CERFI (Centre of


Excellence for Rural Financial Institutions) with its

Nilenkani,

basic responsibilities being propagation of APB and

Chairman, UIDAI (Unique Identification Authority of

AEPS among rural financial institutions for all kinds of

India) and Dr. Prakash Bakshi, Chairman, NABARD to

cashless transactions and new KCC operations. It will

discuss the ways in which these institutions can

also

collaborate to increase the outreach of financial

procedure, financial implications and time frame for

inclusion. It was desired therein that NABARD, as a

adoption of AEPS by rural financial institutions. RRBs

key player in the field of financial inclusion, earmark a

will be targeted in the first phase while CCBs with

core team of its officers for furthering the outreach and

CBS platform will be covered in the second. An MOU

acceptance of Aadhar Payments Bridge (APB) and

is being signed among NABARD, UIDAI and NPCI to

AEPS (Aadhaar Enabled Payments System) which

provide a formal outline to this collaborative effort.

document

and

disseminate

the

benefits,

Micro Finance
3.59

The NABARD SHG-Bank linkage programme,

has proved to be a decentralised

various micro-finance activities such as formation and

cost-effective and

linkage of SHGs through SHPIs, training and capacity

the fastest growing microfinance initiative in the world.

building of stake holders, capital and soft loan

As on 31 March 2011, there were more than 74.62

assistance to MFIs, livelihood propagation, studies,

lakh savings-linked Self Help Groups (SHG) and more

documentation, etc. During 2011-12, `33.31 crore was

than 47.87 lakh credit-linked SHGs covering 9.7 crore

released of which `28.68 crore was grant support for

poor households under the micro-finance programme.

promotional activities and `4.63 crore for CS/RFA to

The progress of the micro-finance programme is given

MFIs, as against `29.95 crore and `17.43 crore,

in Table 3.4.

respectively, in the previous year.

A. Micro-Finance Development and


Equity Fund

B. Support to Partner Agencies

3.60

3.61

The Micro-finance Development and Equity

to

Fund (MFDEF) is being utilised for promotion of

NABARD continued to extend grant support

NGOs,

RRBs,

DCCBs

and

Individual

Rural

Table 3.4: Progress of the Micro-Finance Programme


(As on 31 March 2011)
(` crore)
Sl.
No.

Particulars

Self Help Groups


2010

Micro Finance Institutions (MFI)*


2011

2010

2,011 #

Number

Amt

Number

Amt

Number

Amt

Number

Amt

1586822
(267403)

14453.30
(2198.00)

1196134
(240888)

14547.73
(2480.37)

779
(88)

10728.49
(2665.75)

469
(2)

8448.96
(843.77)

Loans disbursed
during the year

Loans
Outstanding

4851356
(1245394)

28038.28
(6251.08)

4786763
(1285714)

31221.16
(7829.38)

1659
(146)

13955.74
(3808.20)

2315
(139)

13730.62
(3041.76)

Savings Accounts
with Banks

6953250
(1693910)

6198.71
(1292.62)

7461946
(2022649)

7016.30
(1817.12)

Figures in parentheses indicate the share of SHG covered under SGSY*: Actual Number of MFI provided with bank loans would be lower, as several MFI
availed loans from more than one bank#: Figures in parentheses indicate the assistance of SIDBI to MFI

62

Volunteers (IRV) for promoting and nurturing quality

for promoting, credit linking and federating of SHG in

SHG. New SHPI were identified even while continuing

select districts of UP, in association with participating

support to the existing ones. During the year, grant

banks and implementing NGO. As on 31 March 2012,

assistance of

36,128 SHG were promoted, of which 22,614 were

`37.94 crore was sanctioned to various

agencies for promoting and credit linking 94,482

credit

groups, taking the cumulative assistance sanctioned to

Federations and 45 Block Level Federations were

`184.17 crore to 6.76 lakh groups (Table 3.5). As on

formed.

31 March 2012, an amount of `55.28 crore was

linked.

In

addition,

1,238

Cluster

Level

released resulting in formation of 4.17 lakh SHGs. The

(ii) Priyadarshini Project

number of SHGs credit linked till March 2012 was

3.64

2.66 lakh.

Programme in Mid Gangetic Plains also called


Priyadarshini

C. Training and Capacity Building of


Stakeholders
3.62

partners

and

stakeholders

of

Programme

empowerment

of

envisages

1,08,000

poor

holistic

women

and

adolescent girls through formation of 7,200 SHGs. The


programme

NABARD is continuously imparting training to

various

The Women Empowerment and Livelihood

districts

SHG-Bank

originally

including

being

implemented

in

six

four districts in UP (Bahraich,

NGOs,

Raebareili, Shravasti and Sultanpur) and two districts

government officials, SHG members and trainers.

in Bihar (Madhubani and Sitamarhi), now covers

During 2011-12, NABARD has trained 1.77 lakh

seven

officials of various agencies and cumulatively 28.38

Sultanpur district (UP) into Sultanpur and CSM Nagar.

lakh

The

Linkage

Programme

officials

have

such

been

as

bankers,

trained.

NABARD

in

districts
eight

consequent

year

long

to

the

bifurcation

Programme

assisted

of
by

association with GIZ has initiated the process of

International Fund for Agriculture Development (IFAD)

revising the content, coverage of training modules.

and GoI to the extent of US $ 30 million and US $

Training needs of all the stakeholders are being

2.73 million, respectively, has a total outlay of US $

assessed for the purpose.

32.73 million. NABARD is the Lead Programme


Agency for implementing the programme.

D. Special Initiatives in Backward


Region

3.65

the purpose of capacity building of the Programme

(i) Rajiv Gandhi Mahila Vikas Pariyojana


3.63

NABARD has engaged the Resource NGO for

Staff and Field NGOs for the implementation of the

NABARD continued to support the Rajiv

programme at the grass root level. During the year, the

Gandhi Mahila Vikas Pariyojana (RGMVP), a special

Field NGOs have set up 39 Community Service

initiative of the Rajiv Gandhi Charitable Trust (RGCT),

Centres (12 in Bihar and 27 in Uttar Pradesh for the

Table 3.5: Grant Assistance Extended to various Partners in SHG-Bank Linkage Programme
(As on 31 March 2012)
(` lakh)
Agency

Sanctions during 2011-12

Cumulative Sanctions

Cumulative Progress

No.

Amt.

No.of
SHGs

No.

Amt.

No.of
SHGs

Amt.
released

SHG s
formed

SHG s
linked

DCCB
RRB
NGO
FC
IRV

7
3
166
4
1

118.50
96.75
3573.75
0.73
5.20

4740
3810
85571
61
300

115
123
3013
811
72

857.81
542.19
16200.59
83.16
733.58

71695
53145
499909
7689
43223

289.19
197.10
4882.31
73.81
86.03

47515
56070
283007
17356
13105

31744
36852
181196
9694
6860

Total

181

3794.93

94482

4134

18417.33

675661

5528.44

417053

266346

63

purpose of social mobilisation and formation of

Munger district of Bihar with support from NABARD is

SHGs). The Field NGOs have formed total 3,410

given in Box 3.6.

SHGs during 2011-12, including 1,659 SHGs in Uttar

(ii) Micro-Enterprise Development Programme

Pradesh and 1,751 SHGs in Bihar. For the purpose of


capacity building of Programme Staff, the Resource

3.67

NGO, SERP has conducted six Orientation Training


Programmes.

skill upgradation and development of sustainable


livelihoods/venturing

E. Scaling -up of Micro-Finance


Programme: Special Initiatives

into

micro-enterprises

by

members of matured SHG. During the year, 1,914


MEDPs were conducted for 56,292 members on
various location-specific farm, non-farm and service

(i) Financing of Joint Liability Groups


3.66

NABARD had launched the Micro-Enterprise

Development Programme (MEDP) during 2005-06 for

sector activities. Cumulatively, 6,363 MEDPs had been


conducted for 1,64,948 participants.

An amount of `36.68 crore was sanctioned as

grant for promotion of 1.94 lakh JLGs across the

F. Pilot Projects SHG - Post Office


Linkage Programme

country till 31 March 2012. During the year, banks


disbursed a loan of `946.81 crore to 1,29,646 JLGs
upto 31 March 2012 taking the cumulative loan

3.68

disbursed to `2,092.10 crore for 2,70,691 JLGs. The

districts of Tamil Nadu (i) to examine the feasibility of

success story of JLGs formed by sex worker in

utilising vast network of Post offices in rural areas in

The project was launched in 2006 in five

Box 3.6: From Red Light to a Ray of light through JLG in Munger, Bihar
The dark realities of flesh trade and the unfortunate lives of

Gulabi, one of the JLG members, says that she did not

the sex workers who live an economically and socially

believe

excluded and deprived life was no different in case of

Government sector would ever come to their world and

Munger district of Bihar.

earlier

that

any

formal

institution

from

the

Due to lack of awareness on

help them. But she was amazed when bank offered them

alternative options and resources available, most of these

loans for economic activities. Julee another JLG member-

sex workers find it difficult to come out of this profession.

says that earlier they had to borrow from money lenders in

But there was a ray of hope for some of them in Munger

case of emergencies but the rate of interest was very high -

district of Bihar when NABARD sanctioned a project to

from 76 per cent to 120 per cent per annum.

Bihar

for

the bank loan available to them @11 per cent p.a. they do

promotion of JLG in eight districts including Munger.

not have to go to such money lenders who happened to

Consequently, an NGO Panaah Ashram, which was

exploit them otherwise too. Geeta another member of

working in the field of education for the children of sex

JLG, who also teaches in the school being run for the

workers of Munger, got in touch with Munger branch of

children of Red Light area, says that the social and

BKGB and two JLGs were formed among the sex workers.

psychological emancipation is even greater than the

These

economic benefits of the alternate professions.

Kshetriya

groups

Gramin

were

Bank

sanctioned

(BKGB),

Munger

`80,000/-

each

for

undertaking livelihood activities. Now, one group named as

Now with

Ekta JLG 1 is engaged in tailoring activity and the other,

These JLG members have now started living a life of dignity

named, Ekta JLG 2 has opened a shop for selling

and self respect. Moreover, it augurs well for their next

bangles. Now each member of the JLG is earning on an

generation too who are happily taking their baby steps

average of

also their

towards the mainstreamed developmental process. Efforts

incomes increase substantially during marriage and festive

are being made to cover more such women under the JLG

seasons.

in the district.

`2,500 `3,500 per month and

64

(ii) Centre for Micro-finance Research

disbursement of credit to rural poor and (ii) to test the


efficacy of Department of Posts (DoP) in providing

3.70

micro finance services to the rural clients. NABARD

established by NABARD in BIRD in 2008 and four

sanctioned RFA to the tune of `300.00 lakh for on-

sub-centres in Guwahati, Patna, Chennai & Jaipur

lending to SHGs on an interest sharing basis. As

continued to conduct research on various themes of

against the RFA released, `37.12 lakh was outstanding

micro-finance across the country, for bringing out

at DoP level as on 31 March 2012. A total of 2,189

policy initiatives that would improve the design and

SHGs have opened saving accounts, of which 1,259

delivery of various micro-finance products. The CMR

SHGs have been credit linked by various Post Offices,

brought out two issues of its half-yearly journal The

with cumulative loan disbursed amounting to `3.65

Micro-finance

crore as on 31 March 2012. The project was closed on

assistance to

Post for on-lending to SHGs in East Khasi Hills district.

viz.,

NABARD

Agriculture

of all stakeholders.

Development

Financial

Services

H. New Developments / Initiatives

Ltd.,

a. Re-launching SHG Bank Linkage


Programme: SHG-2 Background

NABARD is the major stakeholder,

other share holders being, Government of Karnataka,

3.71

Canara Bank, Union Bank of India, Federal Bank and


31 March 2012 was `42.08 crore.

financial

During 2011-12,

6,915

Correspondents

SHGs
(BC)

through
taking

67

the

the

SHG-Bank

Linkage

inclusion

of

hitherto

unreached

poor

features like increase in loan volume to SHGs, definite

cumulative

shift in the loan utilisation pattern of SHG members,


gradual increase in income level of SHG members,

Loans to agencies other than SHGs to the extent of

sound recovery performance of SHG loans, significant

`2.30 crore were disbursed during the year taking the

reduction in the transaction costs for the banks and

cumulative other loans disbursed to `5.25 crore.

the borrowers, etc. However, skewed growth of SHGs

During the year, rate of interest on loans to SHGs was

in certain regions of the country had narrowed the

revised upwards from 12.0 per cent to 13.5 per cent

growth process of the programme. In this background,

per annum on reducing balance. NABFINS follows a

it was decided to revisit the SHG-BLP for identifying

client friendly model, with credit disbursements made

the shortcomings and incorporate suitable changes to

and repayment collected at the door step of the

give the programme a renewed thrust and direction.

During the year, it opened 17 district offices

The

and appointed 36 BCs taking the number of total


offices to 31 and BCs to 67, respectively.

years,

has brought in a lot of encouraging and positive

Business

disbursement to `265.54 crore, to 8,968 groups.

clients.

the

households particularly in rural areas. The Programme

NABFINS disbursed loans to the extent of `213.58


to

Over

Programme (BLP) has emerged as a viable model for

Dhanalakshmi Bank. The paid up Share Capital as on

crore

`560.01 lakh. The sub-centres of CMR

published/uploaded on BIRDs website for the benefit

(NABFINS), during 2007, to promote the microfinance Sector.

Grant

research studies were completed and 14 reports

Finance Company Ltd. (KADFC) was restructured into


MFI,

year.

research on 41 prioritised themes, of which 20

(i) NABARD Financial Services Ltd.

an

the

in Guwahati, Patna, Chennai and Jaipur undertook

G. Other Developments
Karnataka

during

during the year to CMR, taking the cumulative

in Meghalaya with `5.00 lakh sanctioned to Indian

The

Review

assistance of `199.33 lakh was released by NABARD

31 March 2012. The project is also being implemented

3.69

The Centre for Micro-finance Research (CMR)

purpose

and

intent

of

re-launching

the

programme named, SHG-2, was to focus on a few

NABFINS

issues like creating space for voluntary savings,

availed refinance of `200 crore from NABARD during

positioning cash credit as preferred mode of lending,

the year.
65

scope for providing multiple borrowings by SHG

a banking / business facilitator, tracking, monitoring

members

capacity,

these groups and also being responsible for loan

creating avenues to meet higher credit requirements

repayments. To begin with, the scheme is being

for livelihood creation, supporting SHG Federations as

implemented in 109 selected backward/LWE districts

non-financial intermediaries, rating and introducing

of the country. Some of the salient features of the

audit of SHGs as part of risk mitigation system,

scheme are given in Box 3.7.

matching

with

their

repaying

strengthening monitoring mechanisms, etc. A National

c. Cash credit limit to SHGs

Colloquium of bankers, senior Government officials,


NGOs and thought leaders of micro finance was held

3.73

at Mumbai on 21 February 2012 to discuss the scope

The GoI communicated its decision of only

sanctioning

and content of SHG-2. The guidelines of SHG-2 have

Cash Credit Limits to SHGs from 17

November 2011 so as to address the issue of delayed /

since been issued by NABARD to the concerned

limited or non-approval of repeat loans to SHG, to

stakeholders.

ensure cost effectiveness to clients and provide greater

b. Scheme for Promotion of Women


SHGs in backward districts of India
And Left Wing Extremism (LWE)
Affected districts of India

operational flexibility to SHG clients. The groups

3.72

A scheme in association with GoI has been

the cash credit availed by them. Earlier, the SHGs

formulated to bring out a viable and self sustainable

were being sanctioned term loans by banks depending

model for promotion and financing of Women Self

on the quantum of savings made by the group. The

Help Groups by involving an anchor NGO in each of

tenure of such loans was upto a period of three years.

the selected backward districts of the country. This

However, often, the groups tended to prepay such

project is an attempt at having NGO-SHPI to work not

loans leading to a situation where the groups were not

merely as an SHPI for promoting and enabling credit

sanctioned fresh loans/repeat loans. Therefore, even

linkage of these groups with banks, but also serving as

for their emergent needs these SHGs were depending

in

turn, are to extend loans to their members as per the


extant guidelines of RBI and NABARD. The SHGs are
to ensure payments of interest on monthly basis on

Box 3.7: Salient features of Scheme for Promotion of Women SHGs in backward districts of India and
Left Wing Extremism Affected districts of India
i.

The LDM in consultation with the DDM, NABARD and

iv. The identified NGOs will be eligible for grant assistance of


`10,000 per SHG from WSHG Fund.

due approval of DLCC in each of the district can identify


more

than

one

NGO/support

agency,

with

clear

v. All loans to new SHGs promoted will preferably be under

geographical demarcation of areas for implementation of

the cash credit mode.

the scheme.

vi. DDM, NABARD will arrange need based awareness and


capacity development programmes for key stakeholders

ii. The scheme would be implemented primarily through two

under the project.

nodal bank branches, having CBS facility, in each block


of the identified districts.

vii. A Service Charge of 5% per annum on monthly average


loan outstanding shall be paid by the bank to the

iii. The concerned bank branch will enter into a MoU with

respective NGOs to meet the administrative, transaction

the identified NGO.

and risk cost of the NGOs.

66

on various alternate options like MFIs, etc. The


introduction

of

cash

credit

is

thus

aimed

their drawable limit will be enhanced every year

at

based on their actual saving.

smoothening the consumption & working capital needs


of the SHGs during the initial years as well as to a

certain extent, in subsequent years. This will offer the

The cash credit system will lead to frequent


circulation of loan amount among the members

following benefits :

The SHGs will be encouraged to save regularly as

thereby satiating their frequent credit needs.

The system will provide considerable flexibility to


the SHGs for meeting their emergency needs

d. Women Self Help Group (WSHG)


Fund

The SHGs will be able to reduce their cost of

3.74

borrowing.

Budget

The

banker

will

be

freed

from

The Union Finance Minister announced in his


Speech

2011-12,

Women

SHGs

Development Fund with a corpus of `500 crore has

frequent

been created to empower women by promoting their

documentation and dealing with high number of

Self Help Groups. This Fund will also support the

transactions as the loan limit will be sanctioned

objectives

over a period of three to five years based on the

Livelihood Mission. It will empower women SHGs to

projected savings of the group.

access bank credit.

of

Aajeevika

i.e.

the

National

Rural

NABARD Consultancy Services


3.75

B. Business Process Re-engineering

NABARD Consultancy Services (NABCONS)

is a wholly owned company promoted by NABARD.

3.77

NABCONS operates from its offices located in all


Regional Offices of NABARD towards a vision of being

crore during the financial year 2012-13. With a view

a trusted business advisor in the field of agriculture


and

rural

development.

NABCONS

to achieve this target, NABCONS has embarked upon

provides

an exercise of re-engineering its business processes by

professional consultancy services in agriculture, allied

establishing verticals for its key business activities such

sectors and rural development to Government of


India,

State

Institutions,

Governments,

Co-operative

Banks/

Institutions,

as Infrastructure and Engineering, Food and Agro-

Financial

processing, Monitoring & Evaluation, Agriculture and

Corporates,

Rural

NGOs, International organisations and other clients.

125

assignments

The

Business

re-engineering

and

process

diversify the business portfolio. NABCONS has also


made a beginning in IT related assignments with the

assignments for a contract value of `26.87 crore. The


executed

etc.

International

coupled with engagement of specialists is expected to

During the year, NABCONS contracted 88

company

Development,

Administration,

A. Financial Achievements
3.76

NABCONS has set for itself an ambitious

business target of contracting assignments of `100

including

prestigious Bihar Ground Water Irrigation Scheme

(BIGWIS) assignment for Government of Bihar.

international visitors programmes. NABCONS earned


`17.30 crore as professional fees on assignments

C. India Africa Institute of Agriculture


and Rural Development

executed, `0.43 crore as commission from mutual fund


distribution and `2.62 crore as interest on investments
aggregating a total income of `20.35 crore. Further,

3.78

NABCONS is also in advanced stages of submitting

of India has selected NABCONS for establishing the

bids for several prestigious assignments.

India

67

The Ministry of External Affairs, Government


Africa

Institute

of

Agriculture

and

Rural

Development

in

country

to

be

selected

E. Business Highlights

in

consultation with the African Union. This initiative is a

3.80

follow up of the announcement made by the Honble

During

the

year,

NABCONS

established

business relationship with several new clients such as

Prime Minister during the Africa India Forum Summit

Small Farmers Agri-Business Consortium (SFAC) in

held in Addis Ababa in May 2011. The Institute will

diverse areas. A major private sector bank has

cater to the training needs of Bankers, Government

approached NABCONS to equip them for enhancing

Officials, Rural Financial Institutions, MFIs, NGOs and

credit flow to agriculture. Under the Border Area

other

rural

Development Programme (BADP), new States such as

development. NABCONS is expected to establish the

Sikkim, Uttar Pradesh and Rajasthan have been added

Institute and manage it for 3 years before handing it

for monitoring of various infrastructure projects.

stakeholders

in

agriculture

and

over to the host country.

F. Comparative Position of Income


earned from Consultancy

D. North East Region, Jammu &


Kashmir
3.79

NABCONS

monitoring

of

is

comparison

of

income

earned

from

third

party

consultancy by Institutions such as IIMs, AFC is given

development

under

in table 3.6.

engaged

infrastructure

3.81

in

Special Programme Assistance (SPA) in the states of

Table 3.6: Comparative Position of Income earned


from Consultancy

Arunachal Pradesh, Nagaland, Sikkim and Jammu and


Kashmir. During the year 2011-12, NABCONS earned

(` lakh)
Sr. No. Institute

an income of `464.61 lakh in NER and `118.81 lakh

1
2
3
4

in J & K from such assignments by ensuring effective


utilisation of investment worth `23,230 lakh in NER
and `5,940 lakh in J & K.

IIM Indore
IIM Ahmedabad
AFC
NABCONS

2009-10

2010-11

278.85
2024.92
3042.84
997.35

679.84
NA
4977.95
1481.03

Research and Development Activities


The Research and Development (R&D) Fund

Chair Professor Scheme (`0.48 crore) and other

was set up in NABARD in 1982-83 as mandated by

activities (`0.07 crore). Cumulative disbursement stood

NABARD Act 1981. The Fund provides financial

at `153.86 crore as on 31 March 2012.

3.82

support to select agencies for promoting applied

B. Sanctions under the Fund

research projects/studies, training and upgrading skills


of personnel of client institutions and disseminating

i.

research findings. The corpus of the Fund has been


pegged

at

expenditure

`50

crore

incurred

since
being

2004-05,
replenished

with

the

3.84

through

Research Projects/Studies
During

2011-12,

five

research

projects

involving a grant assistance of `0.49 crore were

appropriation of profits during the year.

sanctioned. Further, seven projects/studies sanctioned

A. Utilisation of the Fund

earlier were completed during the year.

3.83

given below.

A brief

summary of findings of these completed studies is

During the year, `17.67 crore was utilised

from the fund for supporting activities like research


projects/studies (`0.70 crore), seminars (`0.85 crore),

3.85

training/summer placement (`15.57 crore), NABARD

Principal Crops in Various Regions of India conducted


68

An Economic Analysis of Yield Gaps in

by Centre for Development Research, New Delhi

as internal funds. Performance of SHGs receiving

reported that among Cereals, the yield gaps were

repeat doses of credit were better as compared to

highest for Jowar (212.04%) and lowest for Wheat

others. Around 56 percent of SHG members had taken

(28.22%). Amongst Pulses, it was highest for Green

up micro entrepreneurial activity, in farm and non-

Gram

Gram

farm sectors, as a result of their association with

(115.39%). For Sugarcane, the yield gap was 31.66%.

SHGs. Hence, the household income as well as

Amongst Fibre crops, it was very high for Cotton

expenditure of the members increased significantly.

(495.46%) and very low for Jute (20.88%). Amongst

The

Oilseeds, it was highest for Sunflower (180.84%) and

support

lowest for Rapeseed & Mustard (24.41%). Amongst

experience sharing meetings for SHGs; standardisation

Vegetables the yield gap was highest for Onion

of dispensing credit with promotional activities by

(172.92%)

different

(225.41%)

and

and

lowest

lowest

for

for

Bengal

Potato

(57.56%).

study
for

recommended
refresher

agencies;

extended

training,

formation

promotional

exposure

of

District

visits,

Level

Underdeveloped blocks showed higher yield gaps for

Monitoring Committee on SHGs to monitor, supervise

all crops compared to developed blocks and, the crop

and provide guidance to the self help movement in

yield gaps of marginal and small farmers were found

the

to be higher than medium and large farmers. Credit

conditions; and, greater role for SHPIs.

had a positive and significant relationship, via fertiliser

3.87

route, with yield of most crops. Paddy and Wheat

sample producers are neither trained nor have the


resources to undertake smart formal packaging. The
study did not find any definite pattern in prices over

Study on Impact Assessment of Micro-credit in

time though they reflected the importance of relative

Alleviating the Poverty of Rural Poor in Keonjhar

elasticities of demand and supply. Farmers have

District of Odisha, studied 236 credit linked SHGs and

diverted land from paddy to flowers due to higher

The motivating

returns. Major constraints to flower production in the

factor of people in forming into SHGs is possibility of

state have been institutional factors, natural factors

additional employment and income. Most of the SHG

and infrastructure related factors. The study stresses

members, averaging to 12 per group, belonged to

the need to train farmers, provide finance, develop

on

and modernise the marketing channels.

moneylenders declined considerably after the spread


of SHGs in the district. The rate of savings per month

3.88

per member was `60 per month, collected in 4


instalments.

Loan

to

savings

ratio

was

Extent,

preparation. Packaging methods are very primitive and

of power supply, etc., were identified by the study.

Dependency

and

major item in general, though for gladiolus, it is land

such as water shortage, shortage of skilled labour, lack

groups.

Nature

local

across districts for the same flowers. Labour cost is a

farms. Several constraints for bridging the yield gaps

socio-economic

the

suiting

structure not only varied across flowers but also varied

major constraint to crop yield improvement on their

lower

into

modules

Bengal by Kolkata Girls College revealed that the cost

Farmers

reported non-availability of institutional credit as a

their members numbering 2,753.

inquiry

with

Study of Flower Production in the State of West

credit taken and crop productivity was observed at

3.86

An

training

Problems and Prospects of Floriculture An integrated

responded well to credit. Positive correlation between


farm level in all four states surveyed.

district;

An

action

research

for

organising

small

producers into community owned, paced association

4.41:1

taken up in Rayagada, a tribal Odisha district, funded

Majority of the SHGs were charging `24 to `36 per

by NABARD brought out a manual that can guide

annum as interest for a loan of `100 while the

replication of such experiments elsewhere. The action

transaction cost worked out to 10 to 15 per cent.

research brought out clearly that sustainability of the

Uniform interest rate is charged on bank loans as well

community wrests on: (a) the sustainability of the


69

weakest in the system, (b) developing the trust and co-

(ISI),

operation among the members within the community,

precariously far below the poverty line and seldom get

(c) developing competence of local facilitators to

academic attention. The study conducted in 2009

systematically and responsibly operate the community

covered five districts from three eastern States of

enterprise system (CES) known as Nava Jyothi CES.

Odisha, Jharkhand and West Bengal covering 1000

The core design variables, thus, include size, scope,

tribal households across 100 villages. The study

technology,

These

revealed that the tribal per capita income increased

variables needs to be simultaneously optimised based

three times over last 20 years against 6 fold increase

on the community context such as social, cultural,

in the country as a whole. The growth got neutralised

geography,

micro-climatic

conditions,

basic

by doubling of the Consumer Price Index (CPI) during

infrastructure,

etc.,

community.

Hence,

the same period. On an average, three fifth of the

sustainability of the producer-family is the prime

sample households are living below poverty level in

concern and not the enterprise per se. Sustaining and

the region. Degree of poverty is not uniform among

improving the quality of life of family of the small and

the tribes. Eleven tribal communities have been found

marginal farmer/producer is the main purpose of the

to have more than 80 per cent BPL households in

proposed system.

The key functions of the CES

each. Forty to fifty per cent households have been

included (a) marketing of surplus produce for better

found in Jalpaiguri and Purulia to be the victims of

net price realisation for the producers/farmers, (b)

starvation some time during the year. Tribes like

provide emergency and production credit to the

Birhor, Oraon, Paharia, Mal and Sutar are the worst

producer/farmer members and subsequently facilitate

victims of starvation. Firewood is the only source of

consumption demand by partially supporting the retail

fuel in more than 90 per cent households of the entire

outlets in the villages of the Nava Jyothi CES, (c)

region often requiring family members, mostly women,

encourage adoption of integrated natural farming

to travel more than 10 kms to collect it. MGNREGA

methods with minimum external inputs and with better

programme could hardly make any dent in the area.

management

natural

PDS at subsidized prices has better record for the poor

resources, (d) plan, budget, schedule and strategize the

in general than the tribal poor in particular. Hence,

activites of the producers/farmers at the village level to

Successful functioning of PDS holds the key in

be able to enhance the net income over 365 days of

improving the plight of the tribal poverty. The study

the year, and (e) continuously engage with the

harps

producer/farmers to build the faith and trust of the

programmes, control of over hacking and graszing and

people

provision of cheap fuel through alternatives such as

to

ownership,

of

of

land,

cooperate

and

the

management.

water

with

and

each

other

other

in

the

community. Based on the experience with Nava Jyoti


CES

developed

under

the

project,

the

to

withdrawal

of

the

manual

3.90

institutional

step

cooperative

towards
actions

in

catalysing
the

and

sustaining

community

enterprise

whether

for

massive

who

live

reforestation

A study titled, A Commons Story In The Rain

commons

survive

under

the

changing

production environment and also whether livestock


and agricultural production systems would remain
viable if support provided by them to commons would

system.
3.89

need

Adivasis,

Ecological Security (FES), Anand, Gujarat, probed into

development of local human competences is a

critical

the

on

Shadow Of Green Revolution done by Foundation for

champions / external agencies. The project concludes


that

on

focused

solar power or biogas.

delineates 15 steps starting from identification of the


community

Kolkata

cease. The study argues that the subsidy derived from


A study on Impact of Economic Reforms on

the Commons forms a critical contribution to both

Tribal Poverty, conducted by Indian Statistical Institute

livestock and agricultural production systems. In an

70

iii. NABARD Chair Professor Scheme

essentially unpredictable environment, the Commonslivestock agricultural complex provides stability and

3.92

control to households over their lives as 20-40% of

Directors, NABARD revived its Chair Unit Scheme

household incomes are derived from the Commons.

during

Community institutions help the poor in ensuring their


rights

on

commons.

Commons

as

well

as

the

by

the

elite,

state

policy

3.93

utilised from the Fund during the year for capacity

viz.,: 1. Formulating policy on Commons and securing

building of the staff of RFIs.

rights of communities on Commons, 2. Increasing


public investments for revitalising common land and
arrangements

for

better

governance

v.

institutional
of

enable

students

The students are assigned tasks/projects of relevance


to NABARD for generating new ideas, products and
services. During 2011-12, 94 students were assigned

institutes and other agencies for organising 139


conferences,

symposia

and

such projects by 19 ROs, TEs and HOs and all the 94

workshops

students

covering subjects/areas related to agriculture and rural


including
Micro

to

taken up by NABARD in agriculture and rural sectors.

crore was sanctioned to various universities, research

Marketing,

2005-06

institutes, to be associated with various projects/studies

During the year, grant assistance of `1.14

development

since

selected from reputed agriculture and management

Seminars, Conferences and Workshops

seminars,

The Summer Placement Scheme is being

implemented

on the Commons:

3.91

Summer Placement Scheme

3.94

natural

resources, and, 4. Influencing the common mindset

ii.

Apart from extending grant assistance for

various R&D activities, an amount of `0.02 crore was

delineated essential steps to revive Commons,

Strengthening

professors

iv. Training Activities

livestock and agriculture in the rainfed areas of India

3.

three

effect from 1 Aug 2011.

strengthen symbiotic relationships between Commons,

resources,

and

to NCAER, New Delhi, for a period of three years with

and

and mining interests. The study stresses on need to

water

2010-11

professor, Dr.Anil Sharma, was inducted with affiliation

privatisation by local landlords, real estate developers

and

year

01 January 2011. During the current year, one more

sustainably declined due to encroachments as a result


usurpation

the

commenced their tenure of three years with effect from

institutional mechanisms that enable them to function


of

Following the approval from the Board of

Green

Finance,

Revolution-II,
Financial

have

submitted

project

reports.

An

expenditure of `0.25 crore was incurred under this

Agri-

Scheme, during the year.

Inclusion,

Sustainable Livestock and Poultry Development, Plant

C. Training of Personnel of RFI

Bio Technology, Conservation of Animal Genetic

3.95

Resources Water Security and Climate Change, Food

RTC, Mangalore and RTC, Bolpur were

renamed as BIRD, Mangalore and BIRD, Bolpur

Security, Organic Farming, Economic Reforms and

respectively. BIRD - Lucknow , BIRD - Mangalore and

Agriculture, Advances in Aqua Culture, Regional

BIRD- Bolpur

Imbalance Inclusive Growth, SHG and Women

conducted

574 training programmes

and trained 13, 581 participants (Table 3.7).

Entrepreneurship and Coffee Research, etc. The grant


support extended to the organisers enabled them to

D. Other Developments

document the proceedings and publish background

a. BIRD, Lucknow:

papers, thus facilitating wider dissemination of the


recommendations/action points and initiate suitable

3.96

policy interventions by agencies concerned.

cadre of professionals to work in rural areas was

71

An innovative programme for Developing a

Shri Y C Nanda, Ex- Chairman, NABARD inaugurated

Table 3.7: Training of RFI Personnel


Institute

Programmes
Conducted

the seminar and delivered the key note address and

Personnel
Trained (Nos.)

158 delegates who included delegates from wide

2009-10 2010-11 2011-12 2009-10 2010-11 2011-12


BIRD,
Lucknow

261

377

344

6139

9645

8140

93

106

113

2474

2649

2842

BIRD,
Bolpur

113

93

117

2894

2373

2599

Total

467

576

574

11507

14667

13581

BIRD,
Mangalore

spectrum of policy makers, academicians and experts


from MFI sector participated in the seminar. In order
to build a competent cadre of professionals in the field
of rural banking, BIRD started a Post Graduate
Diploma in Rural Banking (PGDRB). The second
batch of the Course has commenced in July 2011,
with the programme being affiliated to IGNOU.

designed by BIRD, Lucknow during the year to

b. BIRD, Mangalore

develop capacity of rural youth to implement various

3.97

development projects of NABARD, Government and

officers and branch managers of SCBs and DCCBs in

the project areas, two exposure visits to NABARD

select five states. Two exposure visits of one week

assisted watershed and tribal development (wadi)

each

projects and a producer company were organised. A


finance

consisting

of

CEOs

and

Heads

SANASA

of

Credit

collaboration

with

Centre

for

Bank

(SDB)

and

Sanasa

Appraisal

of

Farm

&

Non-Farm

Sector,

Negotiation Skills for NPA Management Investment

Promotion and Financing of SHGs & JLGs was


countries,

Development

Financing MSMEs, REDP and Skill Development,

Agriculture Projects. Trainers Training Programme on


4

SANASA

Finance, Business Development & Profit Planning,

attended a training programme on Appraisal of

from

to

different topics, viz., KYC, AML, RTI Act, micro

Nigeria. Ten participants from the Bank of Bhutan Ltd.

participants

sector

Insurance Ltd. Colombo, Sri Lanka. Programmes on

Group Heads etc. of different micro finance banks of

for

finance

processing and dairy farming for 11 Officers of

Departments, officials from Central Bank of Nigeria,

conducted

micro

Institute conducted an Exposure Visit on Agro-

Studies

Academy Limited, Nigeria for 15 Micro finance


practitioners,

on

Development Bank, Sri Lanka were conducted. The

programme was organised by BIRD in collaboration


Micro

programmes

under Vaidyanathan Committee Package for senior

further interventions for enhancing credit support in

of

113

Programmes covering 844 participants were conducted

developmental initiatives of NABARD and the need for

Institute

conducted

during the year 2011-12. Of these 36 Orientation

the senior bankers and government officials about the

HASAL

institute

covering 2842 participants with 10434 trainee days

other agencies in rural areas. With a view to sensitize

with

The

Portfolio Management for CCBs, ALM and Investment

in

Management, Government Sponsored Programmes,

International

Management

Development

Programme,

Legal

Cooperation and Training in Agriculture Banking

Aspects of Banking and Health Management were

(CICTAB) Pune. Eleven studies were conducted during

conducted as per the needs and requirements of the

the year which included, inter-alia, Case study on

client institutions.

Nalgonda DCCB and Thrissur DCCB, Agriculture


Growth story of Gujarat and Chhatisgarh, NIDA,

c. BIRD, Bolpur

Producers Groups, Direct Lending to RFIs, NRLM,

3.98

Back Ended Subsidy System Advantages and

The

Institute

conducted

117

programmes

covering 2,599 participants during the year 2011-12.

Disadvantages Alternate Model etc..A National

Of these, 26 Orientation Training Programmes (OTPs)

Seminar on Micro finance in India- Issues and

for Branch Managers and senior officers of SCBs/

Challenges

DCCBs were conducted. As a part of collaborative

was

organised

by

BIRD,

Lucknow.

72

effort, training programmes were conducted jointly

interest. Director BIRD participated in APRACA Fin-

with BIRD, Lucknow and ACMART, Kolkata. Further,

power programme held in Bangkok and presented a

training infrastructure of Agriculture Cooperative Staff

paper on Rural Innovations.

Training Institute (ACSTI) of Odisha State Cooperative


Bank and Kalna Chamber of Commerce, Kalna (West

3.100

NABARD in collaboration with GIZ (earlier

Bengal)

GTZ)

established

were

utilised

for

conducting

training

the

Centre

for

Professional

programmes. In a collaborative arrangement with

Excellence in Cooperatives (C-PEC) at BIRD, Lucknow

Agriculture

in

Institute

of

Viswa

Bharati

University,

2008.

During

the

year,

C-PEC

revised

the

Santiniketan, Agriculture Scientists/Professors from the

accreditation parameters for cooperative banks and

University

participants/

enrolled 57 co-operatives, institutions and 151 PACS

trainees of different training programmes on topics

as members and accredited 35 Cooperative Training

relating

Institutions.

regularly

to

interacted

agriculture/allied

with

activities

of

different

Further, Course designs, content and

training programmes and latest technology adopted in

syllabus for following four distance learning flagship

these sectors. BIRD, Bolpur also collaborated with

courses each of six month duration were finalised:

Womens Study Centre of

Visva Bharati University,

Santiniketan . Training Programmes for Federations of

CTFC - Certified Trainer for Financial Cooperatives

FCs/SHGs for promotion of JLGs/TFGs and Producers

CPS

Organisation, sponsored by West Bengal RO were


conducted.

The

Organisational

Institute

Development

also

CPCB - Certified

conducted

Initiatives

in

- Certified PACS Secretary


in

Cooperative

in

Cooperative

Banking (Level I)

Assam

CPCB - Certified

Cooperative Apex Bank Ltd. and Langpi Dehangi

Professional

Banking (Level II)

Rural Bank, Assam.


3.99

Professional

3.101 During the year, NABARD sanctioned grant

The Centre for Micro finance Research (CMR)

set up in BIRD in 2008 has been continuing its

assistance of

research activities on various themes relating to the

Rural Banking (NIRB), Bangalore for conducting 21

micro finance sector to facilitate policy initiatives and

programmes. An amount of `4.76 lakh has been

improve the design and delivery of various micro

released to NIRB, Bangalore for conducting 11 training

finance products. The Centre has completed 20 studies

programmes

which

covered.

are

available

on

BIRDs

website

`7.92 lakh to the National Institute of

under

Further,

which
IIBM,

169

participants

Guwahati

was

were

granted

www.birdindia.org.in. The Centre has brought out two

assistance of `9.63 lakh towards15 per cent share of

issues of its half yearly journal The Micro finance

revenue expenditure for the year 2011-12 and `15.90

Review during the year and has conducted a seminar

lakh contributed towards Infrastructure Development

on Micro-finance Issues and Challenges. The

Fund of IIBM, Guwahati.

cumulative grant assistance to the Centre by NABARD


aggregated

3.102

`560.95 lakh as on the end of 2011-12.

NABARD has been extending funding support

APRACA Centre of Excellence (ACE) set up in CMR

under SOFTCOB to Junior Level Training Centres

conducted

from

(JLTCs) of SCARDBs, Agricultural Co-operative Staff

Cambodia on SHG Bank Linkage Programme

Training Institutes (ACSTIs) of SCBs and Integrated

(SBLP).

General,

Training Institutes (ITIs) out of the Co-operative

APRACA visited BIRD and held discussions with the

Development Fund (CDF). The scheme has been

Director and Joint Director on various issues of mutual

revised and extended for a period of three years from

an
Mr

exposure
Won-Sik

visit
Noh,

for

team

Secretary

73

1 April 2010 to 31 March 2013. The ACSTIs, JLTCs

programmes

and ITIs will be eligible for additional assistance under

2010-11.

the revised scheme as support from NABARD for

covering

18,306

participants

during

linking their activities with C-PEC. During the year, the

3.103

NABARDs development initiatives have been

bank provided technical and financial support to seven

carved

out

JLTCs, twelve ACSTIs and three ITIs set up by

sustainable inclusive growth of Indias development

SCARDBs and SCBs, respectively, to enable them to

policy.

improve their training system. A total amount of

addressing the concerns of the small operators and

`564.13 lakh was disbursed to the JLTCs, ACSTIs and

excluded areas, deploying technology, finding space

ITIs out of the CDF for conducting 941 programmes

for location/product specific viable delivery models

covering

which can be upscaled, have been the principles

21,468

participants

during

2011-12

as

against `490.58 lakh disbursed for conducting 855

under

the

overarching

objective

To make a perceptible difference on ground,

which have guided the development initiatives.

74

of

IV
Capacity Building of Client Institutions
The Co-operative Banks and Regional Rural Banks

institutions

play a very crucial role in financial intermediation in

supervisory initiatives so as to enable them to

agriculture

and

NABARD

compete effectively with other financial institutions

endeavours

to

of

and to purvey ground level credit flow efficiently.

rural

development.

strengthen

the

capacity

these

through

various

developmental

and

Institutional Development
A. Rural Co-operative Credit
Institutions:

Banks (SCARDBs) marginally increased by 1.04 per

a. Performance

Rural Development Banks (PCARDBs) marginally

cent and that of Primary Co-operative Agriculture and

4.2

An analysis of the financial position of SCBs

(Table

4.1)

indicated

that

their

deposits

as

decreased by 1.13 per cent over the previous year.


The loans issued by SCARDBs and PCARDBs have

on

marginally decreased by 0.65 and 1.22 per cent

31 March 2011 decreased by 4.53 per cent; however

respectively. Loans outstanding of SCARDBs marginally

in the case of DCCBs, deposits by 8.4 per cent; the

increased by 0.82 per cent and PCARDBS decreased

borrowings of SCBs increased by 37.07 per cent and

by 2.60 per cent over the previous year (Table 4.2).

that of DCCBs increased by 50.31 per cent. Loans


issued by SCBs increased by 32.07 per cent and that
of DCCBs by 35.02 per cent during the year 2010-11.
Loans outstanding of SCBs increased by 30.41 per cent
and that of DCCBs have marginally increased by 3.89

during

Co-operative

2010-11,

Agriculture

Rural

Profitability
During 2010-11, 29 out of 31 SCBs earned

SCBs were in the loss (`317 crore), resulting in

State

aggregate profit of `204 crore. While 317 out of 370

Development

DCCBs earned profit of `1457 crore, 53 DCCBs

borrowings

and

i.

profit aggregating `521 crore while the remaining 2

In the case of Long Term co-operative credit

structure,

Working Results

4.4

per cent during 2010-11 as compared to previous year.


4.3

b.

by

Table 4.1: Growth of Short-Term Co-operative Credit Structure


(As on 31 March)
(` crore)
Particulars

SCB

DCCB

2010

2011*

% Growth

2010

2011*

% Growth over

31

31

370

370

1636

2024

23.72

7235

7950

9.88

Reserves

10555

12048

14.14

22807

25040

9.79

Deposits

82937

79179

-4.53

153585

166489

8.40

Borrowings

23530

32252

37.07

28188

42370

50.31

Loans Issued

53621

70818

32.07

118393

159859

35.02

Loans Outstanding

49239

64213

30.41

126356

131280

3.89

2010
Number
Share Capital

* Data Provisional - The data for the year 2010-11 in respect of Assam and Bihar states is repeated from the previous year.

75

Table 4.2: Growth of Long-Term Co-operative Credit Structure


(As on 31 March)
(` crore)
Particulars

SCARDBs
2010

Number

2011*

PCARDBs

%Growth over 2010

2010

2011*

%Growth over 2010

20

20

697

697

821

833

1.46

1528

1520

0.52

Reserves

3321

3578

7.74

3304

3312

0.24

Deposits

759

822

8.30

449

431

(-)4.00

15646
3210
17002

15809
3189
17141

1.04
(-)0.65
0.82

12698
2465
11666

12555
2434
11363

(-)1.22
(-)2.60

Share Capital

Borrowings
Loans Issued
Loans Outstanding
*

(-)1.13

Data Provisional - The data for the year 2010-11 in respect of Assam, Bihar, Gujarat, Haryana, Kerala, Odisha, Puducherry, Punjab, Tamil Nadu,
Tripura and West Bengal is repeated from the previous year. Manipur SCARDB is defunct.

incurred loss to the extent of `443 crore resulting in

367 incurred an aggregate loss of `358 crore during

overall profit of `1,014 crore.

the year, resulting in a loss of `212 crore. (Table 4.3)

4.5

4.6

Five SCARDBs earned an aggregate profit of

The amount of accumulated losses of SCBs

`76 crore, while 14 SCARDBs incurred an aggregate

and DCCBs have decreased and that of SCARDBs

loss of `237 crore in 2010-11. Out of 696 PCARDBs,

and PCARDBs have shown increasing trend during

329 earned an aggregate profit of `146 crore, while

the year 2010-11 over the previous year (Table 4.4).

Table 4.3: Working Results of Co-operative Banks


(` crore)
Agency
Year

SCB
2009-10

DCCB

2010-11 *

2009-10

SCARDB

2010-11 *

2009-10 $

PCARDB

2010-11 $* 2009-10

2010-11 *

Total (No.)
In Profit (No.)
Profit Amount
In Loss (No.)

31
29
491
2

31
29
521
2

370
324
1691
46

370
317
1457
53

20
10
136
9

20
5
76
14

696
295
131
401

696
329
146
367

Loss Amount

208

317

495

443

332

237

344

358

*: Data Provisional The STCCS data for the year 2010-11 in respect of Uttarakhand, Bihar, West Bengal, Arunachal Pradesh, Assam, Manipur, Mizoram,
Tripura and Delhi is repeated.
*: The LTCCS data for the year 2010-11 in respect of Haryana, Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry and Tripura is repeated
from the previous year.
$: Manipur SCARDB is defunct.

Table 4.4: Accumulated Losses


(As on 31 March)
(` crore)
Year

SCBs

DCCBs

2009

404

5204

1054

3631

2010

574

5302

1188

4087

2011

480

4188

1401

4299

*
*

SCARDBs *

PCARDBs*

Data Provisional The STCCS data for the year 2010-11 in respect of Uttarakhand, Bihar and West Bengal states is repeated.
The LTCCS data for the year 2010-11 in respect of Haryana, Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry and Tripura is repeated
from the previous year.

76

Table 4.5: Region-wise Working Results of SCB


(As on 31 March)
(` crore)
Region

Profit/Loss
(+)/ (-)
2009-10

Total NPAs

NPA as % to loans
outstanding

2010-11*

2009-10

2010-11*

2009-10

2010-11*

Recovery (%)
(As on 30 June)
2009-10 2010-11*

Central

45.56

70.26

469.30

507.07

7.29

6.13

92.42

94.46

Northern

71.30

124.79

364.20

434.59

3.15

3.01

97.99

97.41

Eastern

71.94

72.66

387.20

418.08

7.11

6.83

91.64

92.39

Western

64.06

14.72

1928.82

2828.76

18.42

20.57

81.59

96.24

(-)28.99

110.30

749.43

965.76

5.33

4.94

93.91

74.31

59.48

62.31

453.29

565.03

36.05

41.10

45.47

44.23

283.35

203.13

4352.24

5719.29

8.84

9.01

91.83

91.75

Southern
North-Eastern
All-India
*

Data Provisional- The data for the year 2010-11 in respect of Uttarakhand, Bihar, West Bengal, Arunachal Pradesh, Assam, Manipur, Mizoram, Tripura and
Delhi is repeated.

4.7

At the aggregate level, the non performing

loss in NE region, Southern and Western region

assets (NPA) in absolute terms as well as the

remained unchanged (Table 4.7).

percentage of NPAs to loans outstanding in respect of


SCBs have increased marginally due to a marginal fall

4.10

During 2010-11, information was available

in the recovery performance (Table 4.5).

from 696 PCARDBs and number of profit making


PCARDBs in all regions increased to 329 as on

4.8

At the aggregate level, the percentage of gross

NPA

to

loan

outstanding

in

respect

of

31 March 2011 from 295 in the previous year. Their

DCCBs

total profits increased from `130.87 lakh in 2009-10 to

decreased from 12.96 on 31 March 2010 to 11.61

`159.92 lakh in 2010-11 (Table 4.8).

per cent as on 31 March 2011 (Table 4.6).


4.9

During

2010-11,

profits

of

ii.

SCARDBs

Costs and Margins

increased in Northern region and that of SCARDBs in

4.11

During 2010-11, SCBs as a group earned

Eastern region, remained unchanged while SCARDBs

overall return of 6.9 per cent, while cost of funds

Table 4.6: Region-wise Working Results of DCCB


(As on 31 March)
(` crore)
Region

2009-10
DCCB
No.

Profit
No.

Amt.

2010-11*
Loss
No.

DCCB
No.
Amt.

Profit
No.

Amt.

Loss
No.

Amt.

Total NPAs
2010

Central

NPA % to

Recovery %

Loans
Outstanding

(As on 30
June)

2011 2010

2011 2010 2011

104

95

314.28

37.65

104

89

310.17

15 166.02

3134.98

2891.56 24.72

19.7 67.98 70.06

Northern

73

65

113.01

35.81

73

55

125.28

18

25.48

1812.21

1448.63

3.85

6.19 79.57 83.26

Eastern

64

48

55.96

16

86.83

64

47

49.27

17 204.78

1278.87

1438.00

5.69

18.75 68.41 69.27

Western

49

42

593.38

321.87

49

48

547.01

13.66

5597.24

4868.21 17.68

13.20 71.80 73.31

Southern

80

74

614.59

12.65

80

78

425.05

32.65

4553.10

4600.54 11.63

9.46 82.43 86.54

All-India

370

46 494.81

370

324 1691.22

317 1456.78

53 442.59

16396.40 15246.94 12.96 11.61 75.74 78.80

Data Provisional- The data for the year 2010-11 in respect of Uttarakhand, Bihar, West Bengal, Arunachal Pradesh, Assam, Manipur, Mizoram, Tripura and
Delhi is repeated.

77

Table 4.7: Region-wise Working Results of SCARDB


(As on 31 March)
(` crore)
Regions

No. of

Profit/Loss(-)

Total NPAs

NPA %

Recovery %
to demand

Branches
2010

2010

2011*

2010

2011*

2010

2011*

2010

2011*

Central

349

(-)52.91

(-)48.15

2265.76

2340.42

47.47

50.60

37.48

37.48

Eastern

138

7.07

7.07

368.93

313.99

69.77

67.64

36.47

36.47

33

(-)3.94

(-)3.94

17.31

17.31

39.77

39.77

54.45

54.45

North-Eastern
Northern

85

49.00

50.00

831.29

1306.71

18.42

17.16

58.00

58

Southern

56

(-)63.15

(-)63.15

722.95

725.79

20.23

20.39

57.94

56.85

Western

181

(-)132.08

(-)130.49

1441.66

1411.48

74.70

73.75

11.85

19.54

All-India

842

(-)196.01

(-)188.46

5647.90

6115.70

45.06

44.88

40.54

40.03

Data Provisional - The data for the year 2010-11 in respect of Haryana, Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry and Tripura is
repeated from the previous year.

worked out to 5.01 per cent, resulting in financial

per cent). The average transaction cost and risk cost as

margin of 1.92 per cent (excluding miscellaneous

a percentage of working funds were 2.09 per cent and

income of 0.49 per cent). The average transaction cost

1.37 per cent respectively, during 2010-11. The

and risk cost of SCBs during the year worked out to

DCCBs as a group, earned net margin of 1.41 per

1.37 per cent and 0.39 per cent respectively. SCB as a

cent during 2010-11.

group earned a positive net margin 0.71 per cent in

iii. Non-Performing Assets and Recovery


Performance

2010-11 compared to net margin of 1.06 per cent in


2009-10.

4.13
4.12

At the aggregate level, the percentage of gross

In the case of DCCB, the overall return on

NPA to total loans and advances outstanding in

working funds was 7.62 per cent, while the cost of

respect of SCBs slightly increased from 8.84 per cent

funds was 5.11 per cent, yielding a financial margin of

to 9.01 percent as on 31 March 2011, while that of

2.51 per cent (excluding miscellaneous income of 2.30

DCCBs improved from 12.96 per cent to 11.61

Table 4.8: Region-wise Working Results of PCARDB


(As on 31 March)
(`
` crore)
2009-10
Region

No.

2010-11

Profit
No.

Loss

Amt. No.

No.

Amt.

Total NPAs

Profit
No.

Loss

Amt.

No.

Amt.

2010

2011

NPA % to
Loans
Outstanding
2010

2011

Recovery %
As on
30 June
2010 2011

Central

50

16

2.21

34

35.74

50

10

15.00

40

80.47

623.47

638.76

52.30

57.89

44.06 37.55

Eastern

66

38

33.61

28

16.37

66

38

33.61

28

16.37

249.33

174.29

63.90

58.75

46.70 46.70

Northern

145

104

50.52

41

205.03

145

105

52.15

40

205.15

2,260.42

2256.91

30.85

30.89

46.40 47.36

Southern

406

137

44.53 269

Western

29

All-India 696

86.68

406

176

59.16

230

55.83

1,273.80

1283.80

37.30

37.29

40.96 44.47

29

29

29

480.60

480.60

75.00

75.00

7.97 20.83

295 130.87 401

343.82

696

329

159.92

367 357.82 4887.62 4834.36

51.87

51.96

37.22 39.38

78

per cent (table 4.5 and 4.6). In absolute terms, gross

Meghalaya, Mizoram, Nagaland, and Tripura continued

NPA was estimated at `5,719.29 crore for SCB and

to have high level of NPA. In the case of DCCBs, as

`15,246.94 crore for DCCB as on 31 March 2011,

compared to the all India average of 11.61 per cent,

registering an increase of 31.41 per cent for SCB and

NPA

decline of 7.0 per cent for DCCB over the previous

(9.46%) regions were lower during 2010-11.

in

Northern

region

(6.19%)

and

southern

year. The percentage of gross NPA to total loans and


advances outstanding in the SCARDBs as on 31

4.15

The average loan recovery of SCBs showed

March 2011 decreased to 44.88 per cent from 45.06

no change and remained at 92 per cent as on 30 June

per cent in the previous year. Similarly, gross NPA for

2011, while that of DCCBs increased from 76 per cent

PCARDBs marginally increased to 51.96 per cent as

as on 30 June 2010 to 79 per cent as on 30 June

on 31 March 2011 from 51.87 per cent in the previous

2011 (Table 4.10). The loan recovery of Andaman &

year. The gross NPA of SCARDBs and PCARDBs were

Nicobar SCB increased considerably to 92.11 per cent

estimated at `6115.70 crore and `4834.36 crore as on

as on 30 June 2011 from 59.18 per cent as on

31 March 2011 showing an increase of 8.28 per cent

30 June 2010. SCBs in Chhattisgarh, Chandigarh,

and a decline of 1.09 per cent respectively. The asset

Goa, Kerala and Meghalaya had improved their loan

classification of NPA of SCBs, DCCBs, SCARDBs and

recovery performance. However, SCB in Jammu &

PCARDBs are given in Table 4.9.

Kashmir, Maharashtra, showed decline in recovery of


loans during 2010-11.

4.14

The NPA of SCBs was lowest in Northern

region (3.01%) followed by Southern region (4.94%),

4.16

Central region (6.13%), Eastern region (6.83%) and

marginally declined to 40 per cent as on 30 June

these regions had a lower percentage of NPA as

2011 from 41 per cent as on 30 June 2010. While, in

compared to the all-India average of 9.01 per cent

the case of PCARDB, recovery of loans improved to

during 2010-11. In the Western (20.57%) and North-

39 per cent as on 30 June 2011 compared to 37 per

Eastern (41.10%) regions, the gross NPA was higher

cent during the previous year. The loan recovery of

than the all-India average. SCBs in Chandigarh,

SCARDBs in Jammu & Kashmir, Rajasthan, Gujarat

Jammu

Kerala,

and Uttar Pradesh increased fairly. However, declining

Manipur,

trend in recovery performance was recorded by

&

Puducherry,

Kashmir,
Arunachal

Bihar,

Maharashtra,

Pradesh,

Assam,

The average loan recovery of SCARDBs

SCARDBs in Chhattisgarh, Madhya Pradesh, Himachal


Pradesh,

Table 4.9: Composition of NPA of Co-operative Banks


(As on 31 March 2011)

Karnataka

and

Maharashtra.

The

loan

(` crore)
Asset
Classification

SCB*

DCCBs* SCARDBs

Table 4.10: Percentage of Recovery of loans to Demand


(As on 30 June)

PCARDB#

Agency

Sub-Standard

1714.82

6031.73

2832.64

2521.17

Doubtful

2505.19

6496.99

1771.70

1802.65

2009

2010

2011*

SCBs

92

92

92

DCCBs

72

76

79

Loss Assets

1499.27

2718.22

127.27

53.58

Total NPAs

5719.28

15246.94

4731.61

4377.40

SCARDBs

41

41

40

PCARDBs

39

37

39

Provisions required

3523.99

10983.67

1188.28

1040.60

Provisions made

3997.93

12392.75

1445.56

1113.13

Data Provisional -The STCCS data for the year 2010-11 in respect
of Uttarakhand, Bihar and West Bengal states repeated.

* Data Provisional - The STCCS data for the year 2010-11 in


respect of Uttarakhand, Bihar, West Bengal, Assam,
Manipur, Mizoram and Tripura states repeated.

# The LTCCS data for the year 2010-11 in respect of Haryana,


Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry
and Tripura is repeated from previous year.

* The LTCCS data for the year 2010-11 in respect of


Haryana, Kerala,Odisha, Punjab, Tamil Nadu, Assam, Bihar,
Puducherry and Tripura is repeated.

79

Table 4.11: Frequency Distribution of Co-operative Banks According to Range of Loan Recovery Percentage
(As on 30 June)
(Number)
Recovery (%)
(Recovery to
demand)

SCBs*
(No.)

DCCBs*
(No.)

SCARDBs**@
(No.)

PCARDBs*@
(No.)

2010

2011

2010

2011

2010

2011

2010

2011

<40
>40 to < 60
>60 to < 80

1
1
12

3
1
9

47
77
121

47
77
121

10
4
4

10
4
4

337
205
113

337
205
113

>80

17

18

124

124

42

42

Total

31

31

369

369

19

19

697

697

*: Data Provisional - The data for the year 2010-11 is repeated from previous year in respect of SCBs & DCCBs in Uttarakhand, Bihar, Assam,
Manipur, Mizoram and Tripura. Data for one DCCB in MP not available.
@: The LTCCS data for the year 2010-11 in respect of Haryana, Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry and Tripura is
repeated from the previous year.
**: Manipur SCARDB is defunct.

recovery of PCARDBs had improved in Maharashtra,

4.17

Karnataka, Rajasthan, while it showed decline in

banks in the co-operative structure is presented in

The frequency distribution of loan recovery of

PCARDBs in Chhattisgarh, Madhya Pradesh states.

Table 4.11 to Table 4.13.

Table 4.12: Frequency Distribution of States/UTs according to Level of Loan Recovery of SCBs and DCCBs
(As on 30 June 2011)
Recovery (%)

SCBs*

DCCBs*
Manipur

Jammu & Kashmir (1), Bihar (5), Jharkhand (7) West Bengal
Madhya Pradesh (9), Uttar Pradesh (15), Uttarakhand (2), Maharashtra (3)

(3),

<40

Arunachal Pradesh,
and Meghalaya (3)

>40 and <60%

J & K (1)

Haryana (3), Rajasthan (4), Bihar (10), Jharkhand (1), Odisha (3),
West Bengal (5), Madhya Pradesh (7), Uttar Pradesh (15), Gujarat (1),
Maharashtra (9), Karnataka (1), Kerala (1), Tamil Nadu (3)

>60 and <80%

Chandigarh, Himachal

Haryana (15), Himachal Pradesh (1), Jammu & Kashmir (2) Punjab (1),
Rajasthan (15), Bihar (6), Odisha (11), West Bengal (7), Madhya Pradesh (14),

Pradesh, Bihar, Maharashtra,


Assam, Nagaland, Sikkim,

>80%

Chhattisgarh

(6),

Uttar

Pradesh

(12),

Uttarakhand

(2),

Gujarat

(7),

Mizoram and Tripura (9)

Maharashtra (9), Andhra Pradesh (6), Karnataka (3), Kerala (2), Tamil Nadu (5)

Chhattisgarh, MP, UP,


Uttarakhand, Delhi, Haryana,

Haryana (1), Himachal Pradesh (1), Punjab (19), Rajasthan (10),


Bihar (1), Odisha (3), West Bengal (2), Madhya Pradesh (8), Uttar Pradesh (8),
Uttarakhand (6), Gujarat (10), Maharashtra (10), Andhra Pradesh (16),

Punjab, Rajasthan, Andaman


& Nicobar, Odisha, West
Bengal, Goa, Gujarat, Andhra
Pradesh, Karnataka, Kerala,

Karnataka (17), Kerala (11), Tamil Nadu (15)

Puducherry and
Tamil Nadu (18)
Total
*

31

370

Data Provisional - The data for the year 2010-11 is repeated from previous year in respect of SCBs & DCCBs in Uttarakhand, Bihar, Assam,
Manipur, Mizoram and Tripura.

80

Table 4.13: Frequency Distribution of States/UTs according to Levels of Loan Recovery of SCARDBs and PCARDBs
(As on 30 June 2011)
Recovery

SCARDBs

< 40 %

PCARDBs *

Chattisgarh, Madhya Pradesh,

Chhattisgarh (2), Haryana (15), Karnataka (59), Kerala (3), Madhya Pradesh

Bihar, Assam, J & K, Tamil

(29), Maharashtra (29), Odisha (26), Punjab (8), Rajasthan (16), Tamil Nadu

Nadu and Maharashtra

(170) West Bengal (11) (368)

> 40 % and

Uttar Pradesh, Odisha, West

Chhattisgarh (7), Haryana (4), Karnataka (77), Kerala (15), Madhya Pradesh (7),

< 60%

Bengal,

Odisha (11), Punjab (24), Rajasthan (15), Tamil Nadu (8), West Bengal (9) (177)

Pradesh,

Haryana,

Himachal

Rajasthan

and

Gujarat
> 60% and

Chattishgarh

Tripura and Punjab

< 80%

(3),

Himachal

Pradesh

(1),

Karnataka

(37),

Kerala

(20),

Madhya Pradesh (2), Odisha (5) Punjab (29), Rajasthan (4), Tamil Nadu (2),
West Bengal (2) (105)

> 80%

Kerala and Puducherry

Karnataka (4) Kerala (8), Odisha (4), Punjab (28), Rajasthan (1), West Bengal (2)
(47)

Total
*

19*

697

Data in respect of Manipur SCARDB and Maharastra SCARDB not available ; Data in respect of SCARDB and PCARDB for the states in
Bihar, West Bengal, Punjab, Kerala, Gujarat, and Maharashtra repeated from previous year

c. Supersession of Elected Boards

DCCBs in ST structure. Supersession was done in 7

4.18

SCARDBs also and in 284 PCARDBs in the LT

NABARD, as a matter of policy, continues to

emphasize the need for co-operative banks to be

structure (Table 4.14).

managed by duly elected Boards of Management (one

4.19

of

of

resource base, high dependence on higher financing

understanding (MoU), executed by State Governments

agencies, imbalances, poor business diversification and

under the GoI revival package for STCCS). Despite

recoveries,

this, the practice of superseding elected Boards

professionalism and skilled staff, weak MIS, poor

continued in some States. As on 31 March 2011, duly

internal checks and control systems, etc. leading to

elected Boards were superseded in 9 SCBs and 86

heavy accumulated losses.

the

covenants

of

the

memorandum

Co-operative credit institutions suffer from low

huge

accumulated

losses,

lack

of

Table 4.14: Elected Boards under Supersession


(As on 31 March 2011)
Particulars
Total Institutions (No.)
Boards under Supersession (No.)
Boards under Supersession (%)

SCBs*

DCCBs*

SCARDBs*

PCARDBs*

31

370

20

697

86

284

29

23

35

41

*: The data for the year 2010-11 is provisional

81

d. Development Action Plan (DAP)/


Memorandum of Understanding
(MoU)4.20

functional

efficiency.

During

2011-12,

financial

assistance of `7.09 crore was sanctioned and `5.34


crore

disbursed

(including

disbursements

against

sanctions of previous years). As on 31 March 2012,

Keeping in view the viability of the bank on

cumulative sanctions and disbursements were `105.26

sustainable basis, the process of preparing institution

crore and `92.91 crore, respectively. The balance in

specific DAP and executing MoU began in 1994-95.

the Fund as on 31 March 2012 stood at `125 crore.

It was implemented in four phases, 1994-95 to


1999-2000 (Phase I), 2000-01 to 2003-04 (Phase II),

f.

2004-05 to 2006-07 (Phase III). The PACS were


advised to prepare Viability Action Plans under the

Organisation Development
Initiatives (ODI)

guidance of DCCBs and to enter into MoUs with the

4.22

Organisation Development Initiatives (ODI),

respective DCCBs in the third phase. The fourth

being conducted by NABARD since 1994-95 is a

phase of DAP/ MoU was for the period April 2007 to

re-engineering process which facilitates and aims at

March 2012. As many as 21 SCBs and 10 SCARDBs

achieving change in the organisational structures.

and State Governments concerned had executed

Keeping in view the changing environment for RRBs

DAP/MoU with NABARD for fourth phase. The

(Amalgamation) and co-operative banks (adoption of

progress in implementation of DAPs is monitored and

revival package for STCCS), the design, methodology

review is held during quarterly meetings of State

and objective of ODIs would now be more focused

Level Task Force (SLTF) at State level and District

towards enabling financial inclusion and sustainable

Level Monitoring and Review Committee (DLMRC) at

viability. As RRBs and co-operative banks face

district level. The banks have been advised by ROs to

different kind of problems and opportunities, separate

prepare DAP for 2012-13 based on the existing

approaches were worked out for these institutions.

guidelines. The banks which seriously follow the

During the year, emphasis was laid on conducting

targets under DAP have grown financially stronger.

ODIs in RRBs which are not compliant with section

Further,

an

42(6) of RBI Act, 1934 and the SCB and DCCBs not

opportunity to learn from past experience and refine

complying with section 11 of BR Act 1949 (AACS).

their policies.

With a view to assess the impact of ODI, the ROs

implementing

DAP

in

phases

gives

were advised to evaluate the process for fine-tuning

e. Co-operative Development Fund

the ODI process. During 2011-12, 03 ODI viz. ODI

The Co-operative Development Fund (CDF)

(phase I) in Vizianagaram DCCB (Andhra Pradesh),

was constituted in 1993 under Section 45 of NABARD

Hazaribagh DCCB (Jharkhand) and Phase I - follow

Act 1981, with an initial contribution of `10 crore. The

up visit of Cuttack DCCB (Odisha) have been

fund is replenished every year through contributions

conducted . ODI has been able to inculcate a sense

from NABARDs surplus. Assistance from the Fund is

of responsibility among the employees in achieving the

available to co-operatives in the form of soft loans/

targets set by the management. Further, ODI is a

grants for resource mobilisation, human resource

motivation to employees and helps in increasing their

development,

operational

productivity and profits of the organisation, given that

streamlining, setting up of PACS Development Cells in

the functioning of other internal and external factors

DCCBs

remain the same.

4.21

etc.,

capacity
which

in

building
turn

and

contribute

to

their

82

g. Standard Audit Manual for PACS


4.23

NABARD-GIZ

Rural

Financial

i.

Institutions

Revival Package for Short-Term Rural


Co-operative Credit Structure

Programme (RFIP) undertook the task of preparation

4.25

of Standard Audit Manual for PACS through study

STCCS in the country), have executed the MoU with

visits to Gujarat and Odisha. The objectives were:

GoI and NABARD, for implementing the revival

(i) Revising audit framework for PACS in consultation

package

with

Model/

integrated package for the STCCS units envisages

Standard Audit Manual for PACS based on the revised

introduction of legal/institutional reforms, initiating

audit frameworks; (iii) Developing audit rating tool for

measures to improve the quality of management and

PACS; and (iv) Developing a training programme for

provision of financial assistance for cleansing the

PACS auditors on the revised audit system. The

balance sheets and meeting CRAR of 7 per cent as

contents of the draft Audit Manual for PACS were

assessed through Special Audits and for capacity

discussed with the select Government Auditors and

building & computerisation.

the

stakeholders;

(ii)

Developing

Twenty-five States (covering 96 per cent of the

announced

by

the

GoI

in

2006.

The

Banks and the inputs have been incorporated in

i.

updating the manual. The manual will be printed and

Recapitalisation assistance

circulated among all concerned in 2012-13.


4.26

h. Centre for Professional Excellence


in Co-operatives (C-PEC)
4.24

Under

the

purview

of

Special Audit and Release of

The special audits of STCCS, as on 31 March

2004, to arrive at the precise amount of losses after


factoring in prudential provisioning norms and the

institutional

sharing pattern, was completed in 80,837 PACS

development efforts, NABARD established a Centre

across 25 States. Special audit of DCCBs has been

for Professional Excellence in Co-operatives (C-PEC)

completed in all fifteen States (except Punjab &

in BIRD, Lucknow. The Centre will get support for a

Uttarakhand) which have DCCBs. Special Audit of

period of 5 years from January 2009 from NABARD,

SCBs have been completed in 17 States/UTs and is in

GTZ and Govt. of India under Rural Financial

progress in 3 States. An amount of `9002.98 crore

Institutions Programme, India (RFIP) formulated as a

has been released by NABARD as GoI share for

result of Indo-German bilateral technical cooperation

recapitalisation of 53,205 eligible PACS in seventeen

negotiations.

States, 1510 ineligible PACS affiliated to 30 DCCBs


in three States and 13 DCCBs in Orissa, while the

Broad objectives of C-PEC are:


y

State Governments concerned have released `855.53


crore as their respective share. Of this, `412.84 crore

To coordinate the training efforts of various

was released to DCCBs as GoI share in respect of

Co-operative Training Institutes (CTIs)


y

1,510 ineligible PACS in 3 States viz., Gujarat,

To develop a process of accreditation of

Maharashtra and Odisha. An amount of `67.87 crore

national and state level CTIs

has been released by NABARD as GoI share for

To evolve uniform standards for training

To

build

and

certify

the

recapitalisation of 13 DCCBs in Orissa. Statutory


audit as on 31 March 2011 in SCB and all DCCBs
from NABARD approved panel has been completed

professional

in all 24 States.

competence in CCS

83

ii.
4.27

Legal and institutional Reforms

dry run of the software is required to be done in each


of the States before roll out. Accordingly, 13 States

The participating States are required to amend

have initiated dry run in three PACS each. Dry run of

their Co-operative Societies Acts (CSA) for securing


the

democratic

character

and

autonomy

the software has been completed in eight States viz.,

of

Assam, Chhattisgarh, Gujarat, Maharashtra, Madhya

co-operatives and for their regulatory control by RBI.

Pradesh, Odisha, Uttar Pradesh and West Bengal and

So far, twenty one States have amended their CSA.

is in progress in 5 States. The remaining 7 States have

The draft amendments proposed by the remaining four

been advised to initiate the process at the earliest.

States have been vetted by NABARD, even as


previous amendments in two of these States are

iv. HRD Initiatives

awaiting Presidential assent. Consequent upon the


amendment to the State Co-operative Societies Act,

4.31

the rules and bye laws are amended/being amended

capacity building of Board Members and functionaries

The package lays emphasis on training and

by the States.

of STCCS. Till date, training has been imparted to 410


master trainers from 25 States, who in turn have

iii. Common Accounting System and

4.28

trained 2637 district level trainers. As on 31 March

Management Information System and

2012,

Computerisation in PACS

Secretaries of PACS from twenty one States, 1,29,599

The

Accounting

process

of

adoption

System

(CAS)

and

of

bank supervisors/ departmental auditors. 38,940 PACS


staff in 12 States have been trained on Business
Development and Profitability so far. Further, 8169

been imparted to the PACS functionaries in all the

Branch Managers/Senior Officers of DCCBs/SCBs in

implementing States.

25 States have been trained on business development/


diversification.

Computerisation has been envisaged under


facilitate
of

speedier

CAS/MIS.

and

Andhra

During

the

year,

three-day

Orientation programme for Supervisors/ Inspectors of

smooth

PACS has been developed. Forty-five Master trainers

Pradesh,

have

Haryana and Tamil Nadu have developed State

been

trained

in

the

module

by

BIRD

Lucknow.The programme is in the process of being

specific software to implement CAS/MIS in the PACS

rolled out.

in their respective States. The softwares are in different


stages of roll out in these three States.
4.30

86,276

imparted to 76,237 PACS functionaries and 4,490

suggested by NABARD. Training on CAS/MIS has

implementation

to

16 states. In addition, training on CAS/MIS has been

have been advised to adopt CAS on the lines

to

imparted

NER States and 3,519 Directors of DCCBs/SCBs from

where the MoU has been signed, the RCS concerned

package

been

CEOs of DCCBs from 17 states, CEOs of SCBs in 8

Management

underway in 20 States, while in the remaining States

the

has

elected Board Members of PACS from 18 States, 374

Common

Information System (MIS) formulated for PACS is

4.29

training

v. Incentive Scheme for Audit clearance in


PACS

As decided in the VIII meeting of the National

Implementing and Monitoring Committee (NIMC) held

4.32

in September 2009, common software (referred to as

completed in 80,837 PACS to facilitate implementation

Core Software) was finalised by NABARD and sent to

of Revival Package. A need was felt to provide a

all 20 States that had opted for it. As per guidelines,

one-time assistance to PACS to facilitate/update the

84

Statutory audit as on 31 March 2004 was

audit so that it is regularly completed on continuous

recapitalisation assistance, have increased substantially

basis. Hence, a one- time Scheme for Audit clearance

as could be observed from the credit disbursement

in PACS has been formulated and circulated among

patterns during the period from 2007-08 to 2009-10.

the ROs. The objective of the scheme is to provide an

Business

incentive to PACS for clearing arrears of audit by 31

prepared by PACS across the states in general and

December 2011. One time incentive of `8000/- will be

specially

given to each PACS for clearing the arrears of audit

Chhattisgarh,

upto the financial year ending 31 March 2011, latest

Programme

by 31 December 2011. The incentive is applicable to

Secretaries/ staff has shown positive impact. Second

PACS having arrears in audit and those that complete

Phase of Impact Studies on Implementation of the

the audit upto 2010-11 latest by 31 December 2011.

Revival Package in 13 States has been awarded to

The Scheme was operative till 31 March 2012.

three agencies. The impact studies have brought out a

Expenditure under the Scheme will be met out of CDF

number of positive features (Box 4.1).

Development
in

most

of

Plan
the

Karnataka,
on

BDP

(BDP)

entities

etc.

and

have

in

states

Specialised

governance

been
like

Training
to

PACS

of NABARD.

vii. Revival of Long-Term Rural Co-operative


Credit Structure

vi. Impact of the Revival Package


4.33

In most of the SCBs/DCCBs of implementing

4.34

The Task Force constituted by GoI under the

States, fit and proper criteria for CEO/Professional

Chairmanship of Shri G. C. Chaturvedi, to review the

Directors has been adopted which had a positive

need for a separate package for Revival of LTCCS

impact on the governance of the STCCS and helped

submitted its report to the Government of India on 25

in improving their financial position. The credit

February 2010. Announcement of the Package by the

absorption capacity of those PACS which had received

GoI is awaited.

Box 4.1: GoI Revival Package for STCCS : Impact Assessment Study
y

development, and responsibility & accountability


of Boards to run the affairs.

Overall outcome of the Revival Package has been


positive and visible in several ways such as the
institutional and legal reforms that have been

Financial indicators have shown varying degrees


of improvement in all three tiers of CCS during
the implementation period of the Package.

Loans disbursed by PACS during the period


2006-07 to 2009-10 have registered growth rates
ranging from 73 per cent in Uttar Pradesh to 53
per cent in Madhya Pradesh and 23 per cent in
Odisha. The Annual Average Growth Rate
(AAGR) during the period 2003-04 to 2009-10
ranged from 62 per cent to 38 per cent (in States
like Odisha and Haryana).

SF/MF coverage was a priority with the CCS and


continued to be around 70 per cent during the
period 2006-07 to 2009-10 in Madhya Pradesh
& Uttar Pradesh.

undertaken so far. Co-operative Societies Act,


Rules and Bye-laws have been amended thus
creating the basis for autonomy to the banks/PACS.
y

Release

of

recapitalisation

assistance

has

improved liquidity of PACS and has enabled


them to re commence lending and restore cash
flow and income streams.
y

The overall efficiency and functioning of PACS


has improved after implementation of the Revival
Package. There is increased awareness among
members regarding the reforms process like
autonomy of CCS, reduction of government
interference,

need

for

diversified

business

85

Regional Rural Banks


a. Financial Performance
4.35

75 with `2420.75 crore in 2010-11. The remaining 3


RRBs incurred losses of `25.77 crore as compared to

Post amalgamation, the number of RRBs in

loss of `71.32 crore posted by 7 RRB in 2010-11. The

the country as on 31 March 2012 stood at 82, with a

number of sustainably viable RRBs (i.e. RRBs making

network of 16,914 branches covering 635 notified

net current profit and having no accumulated losses)

districts in 26 States and the UT of Puducherry. Over

had increased to 60 as on 31 March 2012 as

a period of three years (200910 to 2011-12), the

compared to 58 as on 31 March 2011. The aggregate

deposits and investments increased by 29.18 per cent

reserves of RRBs increased to `11,135.19 crore and

and 12.30 per cent, respectively, the borrowings

net worth increased to `14786.77 crore as on

increased by 61.28 per cent and loans and advances

31 March 2012. (Table 4.15) The accumulated losses

(outstanding)

of RRBs have decreased by 27.90 per cent over the

increased

by

45.56

per

cent

previous year. The performance of RRBs varied across

(Table 4.15).

the regions in 2011-12. While all RRBs in the


4.36

Financial results of RRBs for the year 2011-12

indicate

that

there

was

improvement

in

Northern, Southern, and Western region made profit,

their

22 (of 23), 13 (of 14) and 7 (out of 8) RRBs posted

performance with 79 out of 82 RRBs showing pre-tax

profit in the Central, Eastern and North Eastern

profit to the extent of `2469.18 crore as compared to

regions, respectively, (Table 4.16).

Table 4.15: Indicators of Performance


(As on 31 March)
(` crore)
Particulars
No .of RRB (No.)
Branch Network (No.)
Share Capital
Share Capital Deposit

2009

2010

2011

2012#

86 *

82*

82

82

15181

15480

16001

16914

197.00

197.00

197.00

197.00

3959.30

3984.91

4076.34

4559.43

Reserves

6753.99

8065.26

9565.58

11135.19

Deposits

120188.90

145034.95

166232.34

187351.37
30271.71

Borrowings

12734.65

18770.06

26490.80

Investments

65909.92

79379.16

86510.44

89145.79

Loans & Advances (Outstanding)

67802.10

82819.10

98917.43

120550.66

Loans Issued

43367.13

56079.24

71724.19

78546.55

80

79

75

79

1823.55

2514.83

2420.75

2469.18

RRB earning Profit (No.)


Amount of Profit (A)$
RRB incurring Losses (No.)

35.91

5.65

71.32

25.77

Gross Profit (A B)$

1787.64

2509.18

2349.43

2443.41

Accumulated Losses

2299.98

1775.06

1532.39

1104.85

31

27

23

22

77.85

80.09

81.18

82.63

4.14

3.72

3.75

4.14

8610.31

10472.10

12306.53

14786.77

Amount of Losses (B)

RRB with no accumulated losses (No.)


Recovery (%)
NPA to loans outstanding (%)
Net worth
*: Number reduced due to amalgamation.

$ Before Tax

# Data is Provisional

86

Table 4.16: Region-wise Working Results of RRB


(As on 31 March 2012*)
(` crore)
Region

RRB
No.

Profit
Earning

Loss
Incurring

No.

Amt.

No.

Amt.

Net
Profit

Accumu
lated
Losses

Loans &
Advances
O/S

Gross NPA

Recovery (%)
(As on 30 June)

Amount

2010

2011

Central

23

22

752.53

3.70

579.89

77.80

31477.15

2040.71

6.48

76.10

81.29

Eastern

14

13

400.45

18.10

326.99

702.00

20109.98

990.53

4.93

73.46

72.03

Northern

15

15

404.86

0.00

264.15

181.66

17546.74

370.80

2.11

88.71

88.76

North - Eastern 8

201.53

3.97

154.18

95.16

5429.02

259.25

4.78

74.49

74.69

Southern

16

16

614.53

0.00

473.67

0.00

40462.11

1164.15

2.88

83.97

84.92

Western

95.28

0.00

55.35

48.23

5525.66

168.71

3.05

75.96

75.77

82

79

2469.18

25.77

1854.23

1104.85

120550.66

4994.15

4.14

81.18

82.63

NPA

of

All India
*

Data Provisional

b. Recovery Performance

c. Non-Performing Assets

4.37

4.38

The recovery performance of RRBs was 82.63

The

aggregate

gross

all

RRBs

per cent, as on 30 June 2011 as compared to 81.18

increased from 3.75 per cent, as on 31 March 2011 to

per cent as on 30 June 2010 (Table 4.16). Further, 05

4.14 per cent as on 31 March 2012.

out of 23 RRB in Central Region, 1 out of 14 in


Eastern, 13 out of 15 in the Northern, 2 out of 6 in

d. Branch Expansion Programme/Core

Western and 08 out of 16 RRBs in Southern region

Banking Solution

had registered a recovery performance above 80% per


cent in the year 2010-11 (Table 4.17). Twelve RRBs in

4.39

RRBs were given a target of opening 2000

the country had achieved a recovery percentage of

new branches by March 2012. In the current year, as

above 90 while four RRBs had a poor recovery

on 31 March 2012, RRBs had opened 913 new

percentage of less than 60.

branches, taking the cumulative number of branches

Table 4.17: Frequency Distribution of States According to Levels of Recovery of RRB


(As on 30 June 2011)
Recovery (%)

States

< 40

Nil

> 40 and < 60

Bihar (1), Jharkhand (1), Manipur (1), West Bengal (1) (4)

> 60 and < 80

Andhra Pradesh (2), Arunachal Pradesh (1), Assam (1), Bihar (2), Chhatisgarh (2), Haryana (1), J & K (1),
Jharkhand (1),Karnataka(3), Maharashtra (3), Madhya Pradesh (5),Meghalaya (1),Nagaland (1), Odisha (5),
Uttar Pradesh (7), Uttarakhand (1), West Bengal (2) (39)

>80

Andhra Pradesh (3), Assam (1), (Bihar (1), Chhatisgarh (1), Gujarat (3), Haryana (1), Himachal Pradesh
(2), J & K (1), Karnataka (3), Kerala (2), M.P (3), Mizoram (1), Puducherry (1), Punjab (3), Rajasthan (6),
Tamil Nadu (2), Tripura (1), U.P. (3), Uttaranchal (1) (39)

87

of all RRBs to 16,914 spread over 635 districts in 26

RRBs for strengthening their CRAR to the level of 9

states and one UT. It is now compulsory for all new

per cent by 31 March 2012. According to the

branches to be equipped with Core Banking Solution

Committee, the remaining RRBs are in a position to

(CBS). The sponsor banks are required to extend all

achieve the desired level of CRAR on their own.

necessary help in this regard, including financial

Accepting the recommendations of the committee, the

assistance, training, back office support, etc. RRBs

GoI

were directed by GoI to implement CBS in all their

recapitalise the RRBs by infusing funds to the extent of

branches by September 2011. As on date, CBS has

`2,200 crore. The shareholder wise proportion (GoI/

been fully implemented in 80 RRBs. J & K GB has

Sponsor

implemented

respectively.

CBS

in

90

branches

out

of

184

along

with

other

Banks/State

shareholders

decided

Governments)

is

to

50:35:15

branches. Kisan Kshetriya Gramin Bank (UP) has not


been

able

to

make

any

progress

on

4.42

CBS

As

on

31

March

2012,

an

amount

of

implementation in the bank, as it is linked to its

`1,046.11 crore has been released to 27 RRBs in 16

merger with Aryavrat GB.

States.

The

released

amount

includes

GoIs

contribution of `468.92 crore, State Governments


contribution of `173.16 crore and Sponsor banks

e. Financial Inclusion
4.40

The

RRBs

have

emerged

as

contribution of `404.03 crore. The recapitalisation is

strong

completed in respect of 16 RRBs (5 in Odisha, 3 in

intermediary for Financial Inclusion in rural areas by

MP, 2 in Uttarakhand and one each in Assam,

opening a large number of No Frills accounts and

Arunachal Pradesh, Nagaland, Tripura, J&K and

financing under General Credit Card (GCC). Total

Karnataka). Further, amount pending for release by

number of business accounts (deposit plus loan

GoI in respect of nine RRBs is `108.25 crore. After

accounts) with RRBs stood at 1,363.09 lakh, as on

release by GoI recapitalisation will be completed in

31 March 2012 (Table 4.18).

f.

respect of these nine RRBs also. Maharashtra State


Government. has released the amounts partially in

Recapitalisation of RRBs

4.41
financial

respect of two RRBs. The six State Govts. viz.,


Manipur (2), UP (3), West Bengal (4), Rajasthan (5),

The Chakrabarty Committee reviewed the


position

of

all

RRBs

in

2010

Mizoram (6), and J&K have not released any amount

and

in respect of 13 RRBs operating in their states.

recommended for recapitalisation of 40 out of 82

Table 4.18: Status of Financial Inclusion - RRB


(As on 31 March 2012)*
(No. in lakh)
Of total Loan Accounts, major areas of
Financial Inclusion
Year

2011-12

No. of
Deposit
Accounts

Of which,
No-Frills
Accounts

No. of
Loan
Accounts

GCC

SHG

KCC

Tenants
Farmers

SSI, Artisans,
SCC & retail
trade

1157.47

260.94

205.62

5.2

8.62

9.74

1.91

28.15

*: Data provisional

88

g. Recruitment in RRBs
4.43

Selection (IBPS) for recruitment of officers and staff in

Government of India, Ministry of Finance,

Department of Financial Services vide their letter no.

RRBs.

NABARD

has

F No.3/8/2010-RRB dated 23 February 2012 has

responsibility of coordination and Supervision of the

instructed that from the year 2012-13 and onwards,

selection

there will be a Common Written Examination which

methodology for the conduct of the Common Written

will be conducted by Institute of Banking Personnel

Examination.

process

been

besides

entrusted

with

finalization

of

the
the

Supervision of Banks
4.44

which were communicated to the banks concerned,

NABARD inspects SCBs and CCBs in terms of

the powers vested under Section 35(6) of the Banking

Registrar

Regulation Act, 1949 (As Applicable to Co-operative

Governments (in respect of co-operative banks) and

Societies) and RRBs under Section 35(6) of the B.R.

Sponsor Banks (in respect of RRBs) for corrective

Act,

voluntary

action. NABARD also held discussions with the Board

inspection of SCARDBs, Apex level Co-operative

of Directors of SCBs/DCCBs/RRBs apprising them of

Societies and Federations. Considering the unique

the deficiencies found in the inspection and urging

nature of all these institutions, the supervisory role of

them to initiate immediate remedial action. Besides,

NABARD,

with

meetings were also held with the CEOs of the banks

banking regulations and prudential norms, is a very

concerned to secure satisfactory compliance wherever

comprehensive

necessary. Supervisory ratings were also conveyed in

1949.

NABARD

apart

from
and

also

conducts

ensuring

holistic

conformity

one,

encompassing

of

Co-operative

Societies

(RCS),

State

confidence to the Top Management of the banks.

inspections (on-site and off-site), portfolio studies,


monitoring, guiding and facilitating functions. The

b. Board of Supervision

periodicity of statutory inspections of all SCBs and


those CCBs and RRBs not complying with minimum

4.46

capital requirements as stipulated under the B. R Act,

by the Board of Directors of NABARD in 1999, met

1949 (AACS)/RBI Act 1934 and voluntary inspections

four times during the year 2011-12. The BoS reviewed

of all SCARDBs, continues to be annual. The statutory

(i) the functioning of SCBs, CCBs and SCARDBs as

inspections of those CCBs and RRBs with positive net

brought out in the inspections, (ii) the working of

worth and voluntary inspections of Apex Co-operative

RRBs sponsored by Bank of Baroda, Central Bank of

Societies/Federations are conducted once in 2 years.

India, Associate Banks of SBI and Andhra Bank,


(iii)

A. Operational Matters

reports

of

frauds

in

the

supervised

banks,

(iv) functioning of weak CCBs in Uttar Pradesh,


Maharashtra and Gujarat (v) review of a few good

a. Inspection of Banks
4.45

The Board of Supervision (BoS) constituted

working banks, (vi) major observations from the

During 2011-12, statutory inspections of 319

investment portfolio in SCBs, CCBs and RRBs and

banks (31 SCBs, 240 CCBs and 48 RRBs) and

(vii) banks adherence to exposure norms. The BoS

voluntary inspections of 15 SCARDBs have been

also approved (i) the revised Supervisory Rating

conducted as programmed. The inspections brought

Scales of RRBs, (ii) the revised Guidelines for the on-

out supervisory concerns relating to these institutions,

site inspection of RRBs, (iii) the revised exposure


89

norms under Credit Monitoring Arrangements (CMA)

become Scheduled Banks only with the approval of

for co-operative banks, etc.

the RBI, on the basis of recommendations given by


the NABARD, after conducting statutory inspection.

c. Health of Supervised Banks


i.

4.47

Forty-four amalgamated RRBs were included by the

Compliance with Minimum Share Capital

RBI in the Second Schedule to the RBI Act, 1934,

Requirement

after
found

During the year 2011-12, one SCB and 18

CCBs improved their financial position and recomplied


with the provisions of Section 11(1) of the B.R. Act,

complying
provisions

of

11(1) of the B.R. Act,

4.50

As on 31 March 2012, 4 SCBs and 45 CCBs

of the B.R.Act, 1949 (AACS), as regards their capacity


to pay their depositors in full and 9 SCBs and 93
CCBs did not comply with Section 22(3)(b) of the Act,
ibid/Section 42(6)(a)(ii) of RBI Act, 1934, as the affairs

norms for co-operative banks during October 2009.

of these banks were construed to have not been

The number of licensed SCBs and CCBs stood at 24

conducted in a manner not detrimental to the interests

and 222, respectively, as on 31 March 2011. During

of their depositors. Similarly, out of the 31 SCBs, four

the year 2011-12, RBI issued licenses to 4 SCBs and

were not compliant with Section 11 (1) of the BR Act,

82 CCBs, thus increasing the number of licensed

1949

banks to 332 (28 SCBs and 304 CCBs) as on 31

(AACS)

in

regard

to

minimum

capital

requirement. As on 31 March 2012, out of 82 RRBs,

March 2012. The number of scheduled SCBs remained

75 complied with Section 42(6) (a) (i) of the RBI Act,

unchanged at 16. The problems in attaining licensing

1934 and 59 complied with Section 42(6)(a)(ii) of the

eligibility by co-operative banks in some States were

Act, ibid.

reviewed periodically by the Honble Minister for


and

RRBs

were found to be non-compliant with Section 22(3) (a)

Governor of RBI), the RBI had revised the licensing

India

of

Provisions

(Chairman: Dr. Rakesh Mohan, the then Deputy

of

number

With the implementation of the


Govt. of Indias Package for
Revival of Short-Term Rural Cooperative
Credit
Structure,
NABARD, in collaboration with
the ICAI, has initiated the
process of preparation of Audit
Manual for the guidance of
Chartered
Accountants
undertaking the Statutory Audit
of SCBs/CCBs.

iii. Compliance with various Statutory

1949 (AACS).

Committee on Financial Sector Assessment (CFSA)

Government

the

2012.

Section

Pursuant to the recommendations of the

Agriculture,

of

82 as on 31 March

the

ii. Grant of Licence/Scheduling of Banks


4.48

42(6)(a)(ii)

stood at 80 out of

not

with

Section

scheduled

banks (4 SCBs and 45


were

complying

with

the

on 31 March 2012, 49
CCBs)

were

Act, ibid. With this,

1949 (AACS) i.e., minimum capital requirements. As


For strengthening the Risk
Management Systems in the
supervised
entities,
NABARD has partnered
with GIZ for implementation
of RFIP Programme under
which pilot implementation
of Risk Management Tools is
in progress.

they

Secretary,

B. Policy Decisions

Ministry of Agriculture, GoI.

4.51

During the year a number of instructions

From its very inception, all the RRBs were

involving policy matters were issued to the SCBs,

included in the Second Schedule to the RBI Act 1934.

CCBs and RRBs. A few important among them are

However, amalgamated RRBs being new entities could

indicated below:

4.49

90

a. SCBs/CCBs
4.52

necessary action to ensure that whenever payments


are

SCBs and CCBs were advised (i) about the

are

done

Operational Guidelines for conduct of Concurrent

brought out in the seminars, (iii) to review the IT

Audit in RRBs.

system afresh and incorporate proper control measures


the

same

submission of Revised Returns under OSS and (ix)

internal checks and control systems in the banks as

in

the

Guidelines on Off-site Surveillance System (OSS) &

follow the best practices to further strengthen the

frauds

received,

of Frauds and Reporting System, (viii) Operational

enable them to take necessary precautions, (ii) to

preventing

or

electronically, (vii) Revised Guidelines on Monitoring

modus operandi of an attempted fraud in a bank to

for

made

computerized

C. Supervisory Interventions and


other initiatives:

environment, (iv) to submit revised returns under Offsite Surveillance System, (v) to review the financial
statements of borrowers diligently for strengthening the

4.54

credit assessment/monitoring framework of the banks,

in collaboration with the Tata Consultancy Services,

(vi)

for

for submission and processing of Off-Site Surveillance

submission of compliance on inspection reports from

System Returns has been introduced from December

90 days to 60 days (vii) initiate necessary action to

2011, (ii) in order to improve the quality and

ensure that whenever payments are made or received,

effectiveness of the statutory audit in Co-operative

the

Revised

Banks, besides a Seminar at National Level, 13

Guidelines on Monitoring of Frauds and Reporting

Workshops for Statutory Auditors were conducted at

System and (ix) Operational Guidelines on Off-site

the State Level, (iii) Regional Offices of NABARD &

Surveillance System (OSS) & submission of Revised

Training Establishments had conducted sensitisation

about

same

the

are

reduction

done

in

the

electronically,

time

(viii)

limit

(i) Revised Software developed by NABARD,

Returns under OSS.

workshops on KYC (Know Your Customer) /AML (Anti-

b. RRBs

(CMA),

4.53

Money Laundering), Credit Monitoring Arrangement


Frauds,

Controls,

During the year under review, instructions

Investments,

Corporate

Internal

Checks

Governance,

&

Investment

Management, Asset Liability Management (ALM) etc.

were issued to RRBs on the following:

for supervised entities, (iv) training programmes were


also arranged for Inspecting Officers of NABARD at

(i) Modus operandi of an attempted fraud was brought

IDRBT, Hyderabad & the Punjab National Bank

to the notice of all RRBs, (ii) to follow the best

Institute

practices to further strengthen internal checks and

of

Information

Inspecting

review the IT system afresh and incorporate proper

Officers

control

the

Environment and under the Core Banking Solutions,

computerised environment, (iv) submission of revised

(v) a training programme on Risk Based Supervision

returns under Off-site Surveillance System, (v) review

was also arranged

the financial statements

for the Inspecting

Towards

Officers

of

Management Skills of supervised

NABARD

in

entities,

for

preventing

Computerisation of OSS
New Software developed by
NABARD under the OSS has
been forwarded to all the
supervised
entities
for
submission of revised returns.

frauds

in

of borrowers diligently
for
credit

strengthening

the

Reserve

assessment/

conduct

inspection

in

improving
NABARD

Computerised

the
has

Risk
taken

Bank

up the task of preparation of

College,

Risk Management Manual for

monitoring framework of

Staff

the banks, (vi) initiate

Chennai, in July

91

equip

NABARDs

Lucknow,

to

better

(PNBIIT),

control systems as brought out in seminars, (iii) to


measures

to

Technology

Co-operative Banks and RRBs.

2011, (vi) during the year, NABARD conducted 3

banks, NABARD had taken up the task of preparation

Regional

of Risk Management Manual separately for Co-

Supervision

Seminars

for

its

inspecting

officers to discuss various issues involved in the

operative banks and RRBs.

inspection of banks, (vii) NABARD HO in association

4.55

with the Financial Intelligence Unit-India (FIU-IND),

towards supervision, NABARD continued to forge

Government

two

partnerships with other related agencies, especially in

workshops-cum-review meets of supervised banks to

strengthening the Risk Management Systems in the

review and sensitise the Principal Officers regarding

supervised banks under the GIZ - RFIP programme

implementation of KYC/AML and (viii) with a view to

and Institute of Chartered Accountants of India (ICAI)

improving the Risk Management skills in supervised

for preparation of Audit Manual.

of

India

had

also

conducted

92

For a holistic and more effective approach

V
Organisation, Corporate Governance and Management
NABARD has been entrusted with the responsibility of

transparency, governance and efficiency. Introduction of

handling diverse functions ranging from refinance, credit

Human

planning, institutional development and supervision of

e-payments, recruitment, training of staff, schemes for

client

and

higher studies and incentive schemes for attaining

organisation management is crucial to deliver on these

professional qualifications by the staff are some of these

multi-dimensional

initiatives.

banks.

Human

resource

tasks

development

efficiently.

NABARD

has

undertaken several initiatives in recent years to improve

Resources

Some

Management

departments

System

of

(HRMS),

NABARD

were

reorganised with a view to harnessing greater synergies.

Management
A. Board of Directors
5.2

(d)

and Prof. M L Sharma were appointed as

The Board of Directors met seven times

Directors on the Board with effect from 16 May,

during the year, while the Executive Committee and

12 October and 19 December 2011 respectively.

the Sanctioning Committee for loans under RIDF, met


once and nine times respectively.
5.3

(e)

Additional

Secretary

(f)

vice

Department

(APD),

Shri

Navin

Kumar

Choudhary.

Shri

Choudhary was appointed as Director with effect


from 16 December 2011, vice Shri Mohd. Iqbal

Shri H R Khan, Deputy Governor, RBI and Shri

Khandey and was on the Board of NABARD only

Dipankar Gupta were appointed as Directors on

for a brief period.

the Board with effect from 19 August and 30


November 2011 vice Dr. K C Chakrabarty,

(g)

Deputy Governor, RBI and Shri Lakshmi Chand

Shri S Vijay Kumar, Secretary, Ministry of Rural


Development,

respectively.

Government

of

India

was

appointed Director on the Board with effect from


01 February 2012 vice Shri B K Sinha.

Smt. Shashi Rekha Rajagopalan, Director passed


away during the year.
Umesh

Production

as Director with effect from 24 February 2012

office on 01 June 2011.

Shri

was

Government of Jammu & Kashmir was appointed

Finance, Government of India who demitted

(c)

Rajasthan

Shri Shaleen Kabra, Commissioner/ Secretary,


Agriculture

(FS),

Department of Financial Services, Ministry of

(b)

of

2011 vice Shri R K Meena.

NABARD with effect from 02 June 2011 vice Shri


Singh,

Government

appointed as Director with effect from 01 August

Dr. Prakash Bakshi assumed charge as Chairman,


Rakesh

Shri D B Gupta, Principal Secretary, Ministry of


Agriculture,

The following changes took place in the

composition of the Board during the year:


(a)

Shri Jainti Kumar Batish, Prof. Trilochan Sastry

Kumar,

B. Senior Management
Joint

Secretary

(BA),

5.4

Management

Committee,

an

important

Department of Financial Services, Ministry of

governance structure continued to meet regularly

Finance, Government of India was appointed

during the year. Chaired by the Chairman, the

Director on the Board with effect from 15

Committee deliberated on important issues having inter

November 2011 vice Shri Alok Nigam.

departmental or larger policy ramifications. Executive

93

Director (ED) and concerned Chief General Managers

Information Officers (CPIOs), with Shri V Ramakrishna

participated in the deliberations. Meetings of the Top

Rao, Executive Director as the Appellate Authority and

Management Team comprising of Chairman, EDs and

Shri S K Mitra, Executive Director as the Transparency

all CGMs was another forum which met regularly to

Officer for the Bank. During the period ended 31

discuss key issues and strategic interventions.

March 2012, 744 applications and 101 appeals were


received and information provided. Twenty hearings

C. Right to Information Act (RTI), 2005

on appeals made to Central Information Commission

As part of its goal of achieving transparency

were attended to. Workshops were conducted on Right

and complying with statutory obligations, NABARD

to Information Act, 2005 through Video Conferencing

has been providing necessary information under the

for selected Regional Offices at HO and one for core

RTI Act. The Chief General Managers of Regional

HO departments. The third workshop for Rajasthan

Offices

RO was held at Jaipur.

5.5

have

been

designated as Central

Public

Human Resources Management


A. Human resource development
initiatives

empowerment,

a. Training/deputation/higher studies/
distance learning

Centre (NBTC), Lucknow and Zonal Training Centre

5.6

During

the

year,

103

programmes

for 976 Group B and C staff.

were

The Colleges also

officers cadre. One programme each conducted by


NBTC, ZTC and HO, Mumbai covering 31 ST/SC

Microcredit, HRMS, Financial Inclusion, Appraisal and

Group

monitoring of Infrastructural projects etc. Out of 2,232

staff.

One

pre-recruitment

training

programme was conducted at IES, Bandra covering 84

officers, 1,704 and 528 officers were trained in

SC/ST participants. Further, a consultancy assignment

In-house and On-location programmes, respectively.

on Training Needs Assessment study of Haryana State

Major training programmes conducted were: International

Co-operative Bank was completed by NBSC Lucknow.

programme on Financial Inclusion, SHG-Bank linkage


etc.

water

Group B staff for promotion to higher grade in the

covering training on Watershed Development, TDF,

programme,

ground

conducted pre-promotion training programmes for

(2,049 from NABARD and 103 officials from RFIs)

training

skills,

(ZTC), Hyderabad conducted 74 training programmes

conducted by NBSC Lucknow covering 2,232 officers

advanced

negotiation

recharge etc. During 2011-12, National Bank Training

Customised

5.7

During the year, 20 staff members availed of

Programmes on Faculty Development for 25 faculty

the facility of the Incentive Scheme for staff members

Members from various training establishments of

to pursue professional studies. Various courses being

NABARD was conducted at IIM, Lucknow. In addition,

pursued by employees were CFA, CS and MBA from

25 officers were deputed for a customised training

reputed institutions viz. C F Institute of USA and

programme on Advances in Citriculture at National

Institute of Company Secretaries of India, Sikkim

Research Centre on Citriculture, Nagpur. Besides, 212

Manipal University, etc. During the year, 177 officers

officers

completed

were

deputed

for

101

Off-the-Shelf

the

e-learning

programme,

Harvard

Programmes, workshops, seminars and conferences

Mentor 10 in collaboration with Harvard Business

organised by various institutions of repute in India.

School, USA. This programme aimed at building

The major areas covered in these programmes were

capabilities in wide ranging areas such as change

strategic

management and leadership time management

HRM,

management,

information
treasury

systems

audit,

management,

risk

women

94

b. Overseas Training / Visits by Top


Management
5.8

Table 5.1: Promotions effected during the year


Particulars

Total

During the year, 54 officers from NABARD

Of which
SC

ST

and 10 officers from client banks were deputed for

Officers from Grade E to F

33

various

exposure

Officers from Grade D to E

51

visits, seminars, meetings, etc. BIRD, Mangalore

Officers from Grade C to D

103

conducted a customised exposure visit on micro-Finance

Officers from Grade B to C

83

10

Officers from Grade A to B

Group B to officers cadre

115

20

16

Total

392

42

24

overseas

training

programmes,

to SANASA Development Bank, Colombo, Sri Lanka,


wherein 5 officials each from NABARD, RRBs and
DCCBs from priority states were included. A team
of 05 officers was deputed to participate in 3rd
International Co operative Dialogue conducted by

Tribes (8.72%) (Table 5.2).

Academy of German Co operative at Montabaur,


Germany. Further, two teams of six officers each were

stood at 80 and 88, constituting respectively, 1.7 per

deputed for a training programme on Enterprise Risk


Management

conducted

by

AIM,

Manila.

The staff strength of

ex-servicemen and physically handicapped employees


cent and 1.9 per cent of the total staff strength.

Other

officers were deputed for exposure visits to different

5.11

With a view to ensuring optimum utilisation of

countries, viz. Philippines, China, USA, Germany,

the qualified, experienced and relatively younger staff

Spain, Netherlands, Sri Lanka, Thailand, Malaysia,

in Group B cadre, an opportunity to take up

Iran, etc. Dr. Prakash Bakshi, Chairman led a team to

promotion to officer cadre, was offered under the

2011 Global Microcredit Summit at Valladolid, Spain.

Special Non-Transferability Scheme (SNTS). Under

Further, he attended Mini Consultation Meet conducted

the scheme, Group B staff opting for promotion can

by APRACA in Bangkok on finalisation of project report

seek posting to their centre of choice on a long term

on Fin Power Programme for seeking grant assistance

basis and 273 eligible officers opted for the scheme.

from IFAD. Shri Amaresh Kumar, ex-Executive Director


participated in Financial Inclusion Policy Makers

c. Special drive for promoting SC/ST staff

Forum

Shri

5.12

60th

Group A cadre, an exclusive Special drive for SC and

held

S.K.Mitra,

at

Kuala

Executive

Lumpur,

Director

Malaysia.

attended

the

EXCOM Meeting of APRACA held at Tehran, Iran.

In order to fill the vacancies reserved in

ST staff was conducted and 17 Group B staff were


promoted as officers in Grade A.

B. Promotion and Staff Strength


a. Promotion

d. PAR System

5.9

5.13

A total of 392 promotions were effected

With a view to making the assessment of

during the year. This included 17 employees in Group

performance of officers more objective, an In-house

B promoted to Group A under the Special drive of

Committee was set up under the Chairmanship of

promotion for SC/ST employees conducted to fill the


backlog.

Details

of

promotions

effected

Table 5.2: Total Staff Strength

grade/
Cadre

group-wise are given in the Table 5.1.

b. Staff Strength
5.10

The total staff strength of the Bank as on 31

March 2012 stood at 4552, of which, 836 belong to

95

Of which
SC

ST
226

Group A

2842

431

Group B

868

104

69

Group C

842

301

102

4552

836

397

Total

Scheduled Castes (18.36%) and 397 to Scheduled

Total

Shri S K Mitra, ED, HRMD to examine the existing

recommendations of the Committee, new PAR formats

Performance Appraisal parameters, Ratings, Formats,

have

etc. and to suggest modifications thereof. Based on the

31 March 2012.

been

introduced

for

the

year

ending

Administrative and Other Matters


A. Industrial Relations

E. Seminar on Administrative Issues

5.14

5.19

Industrial relations in the Bank continued to

be harmonious during the year.

Two

seminars

on

Administrative

Matters,

Periodic discussions

including one for Senior Officers at Head Office were

were held between the Management and the All India

organised during the year. 100 Officers from Head

National Bank Officers Association and the All India

Office and

NABARD Employees Association.

the seminars. The main objective of the seminars was


for

B. Transparency/Consultative
Approach

5.20

Twenty one

workload

Committee

of

for

also

considered

(JCC)

DDMs

DDMs

recommendations

ii. Joint Consultation Scheme for Officers


Consultative

as

handling

disciplinary

of
and

A Committee comprising GM (HRMD) and

facilities/amenities

grievances and 6 appeals were processed.

Joint

issues,

effective

GM (CPD) set up to review and recommend the

grievances and six appeals were received, of which 19

The

for

F. Committee for revision in various


facilities/amenities to DDMs

Committee and three meetings of the Appellate

5.16

officers

RTI cases.

Five meetings of the Grievances Redressal

Committee were held during the year.

sensitising

administrative

i. Grievances Redressal System


5.15

various ROs/TEs have been covered in

submitted

made

for

and

policy

by

the

decisions

to
its

assess

the

report.

The

Committee

were

and

necessary

instructions were issued.

comprising representatives from Bank Management


and National Bank Officers Association, met during

G. Welfare Measures for SC/ST


employee

the year to discuss HR issues.

C. Other Welfare Measures for the


Staff

5.21

5.17

Quarterly meetings of the Senior Executives and

to

adhere

to

the

Chief Liaison Officer with the representatives of the

between 18-22 December 2011.

Welfare Association of SC/ST employees were held at


HO

D. Other Developments
Central

continued

SC/ST employees in recruitment and promotions.

The fifteenth Annual Sports and Cultural

The

Bank

instructions issued by GoI regarding reservations for

Festival of the Bank, NABOTSAV was held at Jaipur

5.18

The

Complaints

and

programmes
Committee

conducted

for

ROs.
for
at

Two
31

pre-promotion

SC/ST

training

staff

centres.

training

members
Other

were

benefits

at

extended to SC/ST employee included grant of

workplace in HO and Committees in RO continued to

scholarship to 13 wards of SC/ST employees and

function

providing

prevention

of

sexual

effectively.

harassment
The

of

Central

women

Complaints

compassionate

appointment

dependants of 05 deceased employees.

Committee met 4 times during the year.

96

to

the

H. IT roadmap implementation in
NABARD

2011-12,

5.22

Accounting & Management System (CLMAS) was

have

taken

place

during

of

Human

Resources

Management System (HRMS) and Centralised Loan

The following Information Technology related

developments

implementation

initiated after due system studies done in previous

the

year 2011-12:

financial year.

a. Video Conferencing facility:

c. Strengthening of IT infrastructure:

5.23

5.25

For the whole year, the Video Conferencing

The need for a strong Data Centre and

(VC) facility was utilised very effectively by all the

Disaster Recovery System (DRS) emerged with the

functional departments as per needs. The VC facility,

migration to centralised HRMS and CLMAS. After

definitely helped in increasing the staff productivity by

examining

enabling sharing of all information/data dynamically. It

decided

to

commissioning of Data Centre, DRS, will be set up in

proved a big money and time saver for the Bank apart

Mumbai.

from saving the travel time and other hassles related


with tour and travel. So far 980 conferences/seminars /

d. Improvements in computer network


environment:

workshops/training sessions and 1696 interviews have


used VC facility. During the year 690 Conferences/
and

Bank

technology driven Data Centre at HO. After successful

responses from ROs/TEs quickly. Obviously, it has

sessions

alternatives,

upgrade its existing Data Centre to state-of-the-art

helped in decision making process, by obtaining

Seminars/Workshops/Training

various

246

5.26

During the year, the computer network in the

Interviews made use of the VC facilities. Some of the

Banks Head Office has been revamped through the

important communications facilitated by VC facility are

procurement of latest network switches. For the

the following:

purpose, Bank had successfully carried out the process

of e-reverse bidding for the very first time. The

Dissemination of important policy decisions to

e-reverse bidding process resulted in ensuring a more

ROs/TEs by top management

Chairmans
Secretary,

interaction
Department

with
of

the

Finance

Financial

Services,

competitive, speedy and transparent bidding process.

e. Wide Area Network:

Government of India, in New Delhi

Performance Review of ROs by Chairman.

In-house trainings like Trainers training on VC,

5.27

these

Tracker System (ATS).

to

provide

uniform

access

to

applications,

improved

IT

security

and

centralised control over IT systems, the Bank has

Internal Promotional Interviews All promotional

decided to implement the Wide Area Network (WAN)

interviews from Group B to Grade A, Grade A

using its existing secured MPLS backbone. The MPLS

to B, Grade B to C, Grade C to D, Grade

network has been moulded in such a way so as to

D to E, and Grade E to F were conducted

integrate existing LANs at ROs with HO LAN, hence

through VC.

making it WAN of the Bank. It is also proposed to


provide the Internet services to all ROs/Training

b. Centralised IT application systems:


5.24

order

Intranet, HRMS, CLMAS etc., better management of

training on Disaster Management, Application

In

computer applications, across the Bank, like e-mail,

Establishments

centrally

from

HO.

The

Bank has taken steps in implementing IT

operationalisation of WAN will also reduce significant

systems as per IT roadmap. In continuation with the

expenditure incurred by the Bank in decentralised IT

Banks efforts in this direction, in the financial year

application environment.
97

f. Capacity building:
5.28

occasion by the Bank. CVC, HO actively participated


in the meetings of Vigilance Study Circle, Mumbai

The IT personnel of the Bank were trained

Chapter.

with the latest system application, software, databases


etc.

K. Inspections and Concurrent Audits

This capacity building would help them to

understand the scope of centralised IT systems and

5.31

address the issues effectively as and when the need


arises.

to perform its role to ensure transparency in the


decision

I. Offices Premises / Residential


Quarters
5.29

The

project

for

the

construction

of

effectiveness with focus on the follow-up of major


areas of concern in housekeeping. The Committee
followed up on all the issues raised in the Statutory

The process of purchase of plots for construction of

Auditors report, inspection reports of RBI, etc., and

office building / residential quarters at Chhattisgarh,


Uttarakhand

and

Purchase of

plot for construction of office building/

interacted

completed.

report.

expected

to

The

Management,

underway. The premises for both office and staff


is

with

the

external

auditors

before

the

finalisation of the annual financial accounts and

residential quarters at Agartala, Shillong and Patna is


Chandigarh

and

function in the institution - the system, its quality and

quarters at Raipur and Ranchi is at an advanced stage.

at

bank

thrice. The ACB reviewed the internal inspection/audit

Mangalore is in progress. The acquisition of residential

quarters

the

Management Committee of the Board (RMCB) met

Bengaluru, Jammu, Itanagar and RTC Complex at

been

of

the Board (ACB) met four times, while the Risk

work relating to construction of office premises at

has

process

guidelines. During the year, the Audit Committee of

RO

completed and the same occupied in May 2011. The

Sikkim

making

accountability of staff on adherence to set rules and

building and residential quarters at Port Blair has been

RMCB
Asset

reviewed
and

the

Liability

Credit

Risk

Management,

Operational Risk Management and other risks areas of

reach

the bank and guided in formulating the policy and

construction phase during 2012-13. Structural Audit of

strategy for integrated risk management. ID continued

NABARD properties at Mumbai has been taken up so

to monitor defaults by client institutions and apprise

that necessary repairs and maintenance of these

the Top Management of the status and follow-up

buildings can be initiated during 2012-13.

action initiated for recovery of default, on a fortnightly


basis. During the year, ID conducted Inspection of 09

J. Vigilance
5.30

In keeping with the principles of corporate

governance, the Inspection Department (ID) continued

ROs and 18 HODs. The concurrent audit at HO

Central Vigilance Cell, Head Office conducts

continued to be outsourced to external auditors, while

Preventive Vigilance Inspections (PVI) of Regional

the Concurrent Audit of all ROs/TEs were undertaken

Offices/Training Establishments once in two years, to

by the internal Concurrent Audit Cells (CAC) set up

check that these systems are in place. Three PVIs

in the respective RO/TEs. The Department also

have been conducted during the year. The Bank

inspected NABARD Subsidiaries, viz., Agri Business

observed

from

Finance Ltd, Hyderabad, Agri Development Finance

31 October to 5 November 2011 at Head Office and

Vigilance

Awareness

Week

Ltd, Chennai, NABARD Financial Services, Bengaluru

all Regional Offices/ Training Establishments to create

and

awareness about vigilance among the staff. The

subsidiaries revealed their sound financial health. The

theme for the year was Participative Vigilance.

synopses of

Vigilance oath was administered to all the employees

areas of concern were placed before the ACB for

and eminent personalities invited to deliberate on the

deliberation and guidance.

98

NABCONS,

Mumbai.

The

working

of

the

Inspection Reports containing major

iv.

L. Visits of Parliamentary Committees


5.32

During the year, the following Parliamentary

Committees have visited NABARD:


i.

Rajya

Chandigarh

and

Sabha

to

Shimla

Amritsar,

from

16

to

Study visit by the Parliamentary Committee

The

on

Mumbai,

Rajya Sabha had discussions with regard to

Chandigarh and Shimla from 13 to 18 June

fulfillment of the assurances given in Rajya Sabha

2011

to (i) USQ No. 1452 dated 23.11.2010 regarding

Subordinate

Legislation

Legislation

had

representatives

to

discussions

of

the

with

Employees

Committee

regarding fraudulent practices adopted by MFIs.


v.

Study visit by the Parliamentary Committee


on Subordinate Legislation, Rajya Sabha to

Act.

Mumbai and Goa from 25 September to


01 October 2011

Visit of the Committee on Subordinate


Legislation,

Rajya

Sabha

to

The

Bengaluru,

Committee

Cochin & Munnar from 19th to 25th June,

Rajya

2011

representatives

The

Committee

on

Subordinate

Sabha

had

discussions

Rajya

with

RRBs,

Sponsor

representatives

of

Banks,

along

Ministry

of

with

with

Priority

Finance

Sector

Leh

on

Government

dated

of

Officers)

of

the

Nagar

Committee

Rules,

2010

and

Draft

&

Evidence

Rajbhasha

on

29

Implementation

September

2011

at

Jaipur

Assurances,

The Committee had discussions on Progressive


use of Official Language.

appointment on compassionate ground in RRBs


2054

Meeting

Jaipur

to (i) USQ No. 2053 dated 08.12.2009 regarding


No.

Finance

on Official Language with member offices of

and

fulfillment of the assurances given in Rajya Sabha

USQ

of

Sub-Committee of Committee of Parliament

Rajya Sabha had discussions in connection with

(ii)

Ministry

farmers.

Srinagar from 22 to 27 June 2011


Committee

of

advances with special reference to micro-credit to

lending

Visit of the Committee on Government


to

the

Union/

(ii) current status of Priority Sector Lending

vi.

Sabha

representatives

Promotion

Sector Schemes.

Rajya

with

Employees

on (i) Regional Rural Banks (Appointment and

(ii) Reverse Mortgage Scheme and (iii) Social

Assurances,

discussions
the

(Department of Financial Services) and NABARD

Promotion of Officers) Rules, 2010 along with


of

had
of

Legislation,

Sponsor Bank and Private Sector Banks along

on (i) Regional Rural Banks (Appointment and


status

Subordinate

followed by discussions with the officials of RRBs,

the

(Department of Financial Services) and NABARD

current

Sabha

on

Association of RRBs in Gujarat & Maharashtra

Legislation,

representatives of Employees Association/Unions

and

Assurances,

the needy and (iii) SQ No.277 dated 15.03.2011

Union/

Rules/Regulations framed under the relevant

The

Government

15.03.2011 regarding provision of direct loans to

the

with the officials of NABARD, Mumbai on the

of

on

Agriculture Debt Waiver (ii) USQ No.2054 dated

Association of NABARD, followed by discussion

iii.

Assurances,

22 September 2011

The Parliamentary Committee on Subordinate

ii.

Visit of the Committee on Government

vii. Inspection/Tour Programme of the Third

15.03.2011

Sub-Committee of Committee of Parliament


on

regarding direct loans to needy.


99

Official

Language

for

the

Central

Government

offices

located

in

Delhi,

suicides by farmers, rehabilitation works, access

Guwahati, Kohima, Dimapur & Imphal from

to bank credit, availability of agricultural inputs,

28 October to 05 November 2011

crop insurance and implementation of various

The Committee had discussions on Progressive

programmes at State and Central Governments.

use of Official Language.

M. Promotion of Hindi

viii. Visit of the Committee on Subordinate

5.33

Legislation, Rajya Sabha to Kolkata, Port

GoI

Blair & Chennai from 23 to 29 February

Implementation of Official Language Policy of


was

monitored

by

Official

Language

Implementation Committees constituted in all offices,

2012 :

including

HO

through

their

quarterly

meetings.

The Committee discussed the following issues

Further, monitoring was also done at HO level through

with

Commercial

quarterly progress reports received from ROs/TEs.

Banks, RRBs, Insurance Companies, RBI, IRDA

Financial Services Department, Ministry of Finance,

and NABARD:

GoI carried out Rajbhasha inspection of our HO on 08

representatives

of

various

November 2011.

RRBs (Appointment and promotion of officers

capacity building of staff in order to enable them to

and employees) Rules, 2010


Insurance
(Licensing,

Surveyors

and

professional

Loss

use Hindi in their day-to-day official work, 92

Assessors

requirements

workshops were conducted across the offices in which

and

843 staff members were trained. Further, training was

code of conduct) Regulations, 2000


Implementation
committee

of

on

the

183rd

imparted on use of APS Saral, Unicode-compliant

report

Banking

As a part of its efforts towards

of

the

version of our Official Language Software in the

Ombudsman

aforesaid workshops.

Scheme, 2006
5.34

Current status of priority sector lending and

published in the book titled Vittiya Samaveshan aur

Complaint redressal mechanism for customers

Vittiya Saksherta (Financial Inclusion and Financial

and employees of banks.


ix.

Six articles of officers of NABARD were

Literacy) published by CAB, RBI, Pune and which


were selected for the national level seminar organised

Study visit of the Parliamentary Committee

by

on Agriculture to Ranchi, Patna, Bhopal,

NABARD

under

the

aegis

of

Coordination

Committee on Training in Hindi. In addition, in-house

Yavatmal & Nagpur from 27 February 2012

publication Rashtriya Bank Srijana bagged two silver

to 2 March 2012 :

trophies from Association of Business Communicators

The Committee visited Moregaon village in

of India (ABCI). To encourage the officers to prepare

Yavatmal

PLP and Inspection Reports in Hindi, a Special Cash

district

of

Maharashtra

state

and

Award Scheme was also introduced.

interacted with the villagers on the reasons for

100

VI
Financial Performance & Management of Resources
NABARD

has

put

in

place

sound

resource

the

previous

period.

The

funds

deployed

for

The management of funds by

investment operations (including rural infrastructure

the Bank and its financial performance during the

development & warehousing) and for production and

year are detailed in this chapter.

marketing activities (including conversion) increased

management system.

by `9,723 crore and `14,390 crore, respectively as


6.2

The financial resources of NABARD (Table

6.1) increased from `1,58,872 crore as on

on 31 March 2012. The total market borrowing

31

which stood at `43,203 crore, as on 31 March

March 2011 to `1,82,075 crore as on 31 March

2012, constituted 23.73 percentage of the total

2012, registering an increase of 14.60 per cent over

resources of the bank.

Table 6.1: Sources of Funds


(As on 31 March 2012)
(` crore)
Particulars

31.03.2011
Amount

31.03.2012

Share (%)

Amount

Share (%)

Capital, Reserves & Surplus

13,863

8.7

16,408

9.0

NRC (LTO) and NRC (Stabilisaton) Funds

16,045

10.1

16,058

8.8

STCRC Fund

14,622

9.2

20,000

11.0

277

0.2

291

0.2

RIDF Deposits

67,878

42.7

75,107

41.3

Bonds & Debentures

21.2

Deposits

26,788

16.9

38,584

Certificate of deposits

137

0.1

1,281

0.7

Term Money Borrowings

110

0.1

182

0.1
1.2

Commercial Paper

6,448

4.0

2,245

Borrowings from GoI

124

0.1

85

Foreign Currency Loan

503

0.3

503

0.3

Borrowings against STDs

360

0.2

0.0

33

11,717

7.4

11,298

6.2

158,872

100.0

182,075

100.0

Borrowings under JNN Solar Mission Programme


Other Liabilities/Funds
Total

Sources of Funds
A. Capital, Reserves & Surplus

amount of reserves and surplus increased by `2,545

6.3

crore, as on 31 March 2012.

The paid up capital, as on 31 March 2012

was `3,000 crore against the authorised capital of

B. NRC (LTO) & NRC (Stabilisation)


Funds

`5,000 crore, with the share of GoI being at 99.33


per

cent

and

that

of

RBI

at

0.67

per

cent.

Government of India contributed `1,000 crore to

6.4

NABARDs paid up capital during the year. The

Operations)
101

The

National
and

the

Rural

Credit

National

(Long
Rural

Term
Credit

(Stabilisation)

Funds

are

utilised

for

`75,107 crore, as against `67,878 crore at the end

investment

operations and for conversion/ reschedulement of

of March 2011, resulting in a net inflow

short-term

crore, an increase of 10.65 per cent over the

credit,

respectively.

These

Funds

are

deposits held as on 31 March, 2011.

augmented by internal accruals and contributions


made by RBI. During the year, an amount of `13

E. Borrowings

crore was contributed to these Funds.

i.

C. STCRC Fund
6.5

With

Capital Gains Bonds

6.8

view

to

augmenting

Capital Gains Bonds aggregating `0.76 crore

were redeemed during the year 2011-12

NABARDs

resources for ST credit facilities to Co-operative

outstanding

Institutions,

2012.

the

Short

Term

Co-operative

of `7,229

Rural

Credit (Refinance) Fund (STCRC Fund) was set up in

stood

and the

at `7 crore as on 31 March

2008-09, with contributions by scheduled commercial

ii.

Corporate Bonds

banks not achieving their priority sector obligations.

6.9

From an initial corpus of `4,622 crore, it was

crore were issued during the year while `6,019 crore

augmented with an additional allocation of `5,000

were redeemed. The amount outstanding at the end

Corporate

Bonds

amounting

to

`17,914

crore each for 2009-10 and 2010-11 and `10,000

of the March 2012 stood at `33,578 crore as against

crore for the year 2011-12. An amount of `4,622

`21,682 crore as on 31 March 2011.

crore was repaid during the year. The outstanding


balance under the STCRC Fund as on 31 March

iii. Statutory Liquidity Ratio (SLR) Bonds

2012 stood at `20,000 crore.

6.10

SLR Bonds was redeemed during the year and there

D. Deposits
i.

was no outstanding as on 31 March 2012.

Term Deposits

6.6

The

deposits

iv. Bhavishya Nirman Bonds (BNB)

amount

received

of

from

term
tea,

deposits
coffee

and

and

the

6.11

rubber

increase of `14 crore,

v.

during the current year.

6.7

6.12

the

Warehousing

No fresh bonds were issued during the year.

at `24 crore.
year,

RIDF

Deposits

from

vi. Certificates of Deposits (CD)

commercial banks under RIDF XII to XVII, RIDF


XVII

NABARD Rural Bonds

The outstanding at the end of 31 March 2012 stood

RIDF Deposits
During

`4,975 crore

as on 31 March 2012.

2012, as against `277 crore at the end of the 31


March 2011, reflecting an

No fresh bonds were issued during the year.

The outstanding under BNB stood at

companies aggregated `291 crore as on 31 March

ii

The entire outstanding of `99 crore under

XIII

6.13

with

of deposits of `1,281 crores were mobilised and

repayments being `8,012 crore under RIDF VI to

`137 crore were redeemed during the year. The

mobilised

and

aggregated

Bharat
to

XIV and BN XII & XIII.

Nirman(BN)

`15,241

crore,

As on 31 March 2012,

Fresh borrowings through issue of Certificates

balance outstanding against CDs issued was `1,281

aggregate outstanding of RIDF deposits stood at

crore as on 31 March 2012.


102

vii. Commercial Paper (CP)


6.14

Commercial

papers

aided projects. The outstanding balance in respect of


amounting

to

borrowing made from GoI stood at `85 crore as on

`7,308

31 March 2012, as against `124 crore, as on 31

crore were issued and `11,511 crore were repaid

March 2011.

during the current year. The CPs outstanding as on


31 March 2012 stood at `2,245 crore as against

x. Borrowings in Foreign Currency

`6,448 crore as on 31 March 2011.

6.17

this segment during the year and a sum of

viii. Term Money Borrowings (TMB)


6.15

An amount of `41 crore was repaid under


`41

crore was drawn under KfW (UPNRM) which resulted

Term Money Borrowings (TMB) of three to

in maintaining the balance under the borrowings in

six months tenor were resorted in order to meet the

foreign currency from KfW, Germany, at `503 crore,

short-term requirements. TMB worth `438 crore were

as on 31 March 2012. The foreign exchange risk on

raised and repayments to the tune of `366 crore

forex borrowings as well as interest payments, have

made, leaving an outstanding of `182 crore as on

been hedged at an average cost of 1.79 per cent

31 March 2012, compared to the outstanding at

p.a. for 10 years.

`110 crore as on 31 March 2011.

xi. Borrowings against Short term Deposits


ix. GoI Borrowings
6.16

There

Government

were
of

(STD)
no

India

fresh

during

borrowings
the

year

from

6.18

2011-12,

The

entire

amount

of

borrowing

made

against STD at `360 crore was repaid during the

whereas repayment of `39 crore was made on

current year. As such

maturity of loans drawn under various externally

under this head as on 31 March 2012.

no amount was outstanding

Uses of Funds
F. ST Loans, MT (Conversion) Loans

G. Project Loans under RIDF

6.19

6.20

The ST (SAO) loans outstanding against

Loans provided to State Governments for

advances to the SCBs at `33,682 crore, RRBs at

implementation of rural infrastructure development

`13,764 crore

and Commercial banks for financing

stood at `70,860 crore as on 31 March 2012

PACS at `79 crore together with ST (OSAO) loans

compared to outstanding at `66,078 crore as on 31

to SCBs at `311 crore and RRBs at `502 crore had

March 2011, recording a net outflow of `4,782 crore

resulted

during the year.

in

increased

loans

outstanding

for

production and marketing credit at `48,338 crore as


on

31

March

2012,

compared

to

the

H. Non-Project Loans

loan

outstanding at `33,885 crore in the corresponding

6.21

The

period last year. There has been an increase of

(LT)

loans

42.65 per cent in the outstanding of credit under

contributing to the share capital of co-operative

this

credit institutions, stood at

segment.

Outstanding

balance

under

MT

outstanding in respect of long-term


granted

to

State

Governments

for

`140 crore as on 31

conversion loan stood `129 crore as on 31 March

March 2012 compared to `167 crore as on 31

2012 (Table 6.2).

March 2011.
103

Table 6.2: Uses of Funds


(As on 31 March 2012)
(` crore)
Particulars

31.03.2011
Amount

Cash and Bank Balance


Government Securities and other Investments
CBLO
Production and Marketing Credit
Conversion of Production Credit into MT Loans
MT & LT Project Loans *
LT Non Project Loans
Loans out of RIDF

31.03.2012

Share (%)

Amount

Share (%)

10537

6.6

8313

4.6

5868

3.7

5867

3.2

228

0.1

231

0.1

33885

21.3

48338

26.6

193

0.1

129

0.1

38896

24.5

43107

23.7

167

0.1

140

0.1

66078

41.7

70860

38.9

88

0.1

72

0.0

Co Finance Loans(net of provision)


NIDA Loan

423

0.2

Direct Refinance to DCCBs

910

0.5

RIDF- Warehousing infrastructure

759

0.4

Other Loans
Fixed Assets & Other Assets
Total

182

0.1

231

0.1

2750

1.7

2695

1.5

158872

100.0

182075

100.0

(* Including the amount subscribed to Special Development Debentures of SCARDBs which are in the nature of Deemed Advances.)

I. Investment Credit
6.22

`72 crore (net of provision), as against `88 crore


(net of provision) at the end of previous year.

Refinance assistance of `43,107 crore was

extended to banks in respect of the

medium and

K. NIDA

long term investment loans provided by them as as

6.24

on 31 March 2012 as against the assistance at


`38,896 crore provided at the end of
2011.

During

the

year,

refinance

available

31 March

provided,

NIDA,

new

during

the

line

of

credit

was

made

current

year

for

rural

infrastructure investment to state-owned institutions,

by

with sustained income streams which can repay the

NABARD for investment credit activities increased

loan directly to NABARD, without depending upon

by 10.82 per cent.

budgetary

resources

of

the

State

Governments.

Assistance is provided based on viability of the

J. Co-finance

borrowing entity and its financial condition, including

6.23

The Bank has entered into agreements with

services related to the specific investment being

commercial banks to co-finance various projects. The

financed. The outstanding loans under the segment

outstanding balance as on 31 March 2012 stood at

stood at `423 crore as on 31 March 2012.

track record of execution of works and delivery of

104

L. Direct lending to CCBs


6.25

Short-term

multipurpose

The loans outstanding under the Warehousing stood


credit

at `759 crore as on 31 March 2012.

product

designed for direct lending to DCCBs for meeting the


working capital and farm asset maintenance needs

N. Other Loans

of the individual borrowers and affiliated PACS has

6.27

been launched, on a pilot basis. The quantum of

(CDF, MFDEF, WDF and TDF, KfW UPNRM, FIPF,

outstanding under this line of credit stood at `910

JNN Solar Mission and PODF ) stood at `231 crore

crore as on 31 March 2012.

as on 31 March 2012.

M. RIDF Warehousing Infrastructure


6.26

Government

of

India

has

accorded

O. Investment of Surplus Funds

top

6.28

priority for creation of quality warehouse facilities


management.

Financial

assistance

The

quantum

of

surplus

deployed

by

NABARD in various financial instruments stood at

in the country for reducing the inefficiencies in post


harvest

Other loans extended out of different Funds

`12,862 crore during the year. Out of this `6,097

is

crore was deployed in Government securities

available under this scheme to State Government,

and

State

other financial instruments and an aggregate sum of

Government, Cooperatives etc. All RRBs / DCCBs

`6,765 crore was kept in the form of Short Term

and Scheduled commercial banks are also eligible

Bank

for refinance from NABARD under this Scheme.

contingency requirements, as on 31 March 2012.

agencies

owned/

supported

by

Central/

Deposits

in

order

to

meet

liquidity

and

Income and Expenditure


6.29

u/s 36(1) (viii) of IT Act 1961, NRC (LTO) Fund,

The total income of NABARD during the

year amounted to `10,979 crore as against `9,202

NRC

crore for the year 2010-2011.

respectively. Further, an aggregate of `145 crore was

The profit before tax

transferred

(PBT) and profit after tax (PAT) were at `2,252

Investment

2012, as against the previous years PBT and PAT

various

and

Funds

Reserve
viz.,

Fund,

Cooperative

Fluctuation

Reserve,

FIPF,

FTTF

and

FITF.

crore, respectively. The

Capital Adequacy

average cost of borrowings (interest expenditure as


percent of average borrowings) increased from 6.64
percent per annum during 2010-11 to 6.96

to

Fund

Development Fund, Research and Development Fund,

crore and `1,635 crore respectively as on 31 March


`1,824 crore and `1,279

(Stabilisation)

6.30

percent

The capital to risk-weighted assets ratio

(CRAR) was at 20.55

per cent as on 31 March

per annum during 2011-12 due to rising interest

2012 as compared to 21.76 percent as on 31

rates. An amount of `310 crore, `10 crore, `1 crore

March 2011, as against a minimum 9 per cent

and `1,238 crore was transferred to Special Reserve

norm stipulated by RBI.

105

Asset-Liability Management (ALM)

and

6.31

prudential

The

Asset-Liability

Committee

(ALCO)

monitoring

and

of

the

Management

Bank

oversees

interest-rate

Besides

the

limits

evaluating

sensitivity
prescribed
the

positions
by

market

the
risk

vis-a-vis
RBI/Board.

of

treasury

risk,

operations, the ALCO reviews at periodic intervals,

liquidity risk and interest rate risks, as per the

the interest rates fixed for various products and

comprehensive ALM / liquidity management policies

effect modification in the interest rates wherever

approved by the Board. The role of ALCO includes,

considered

inter-alia, reviewing the Banks structural liquidity

market scenario.

management

of

market

106

essential,

taking

into

account

the

Annual
Accounts
2011-2012

107

P. Parikh & Associates


Chartered Accountants

AUDITORS REPORT
We have audited the attached Balance Sheet of NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
(the Bank) as at March 31, 2012 and the Profit and Loss Account and the Cash Flow Statement for the year ended on that date
annexed thereto in which are incorporated the returns of 11 Regional Offices and 1 Training Centre audited by us. These Offices
and Training Centre have been selected in consultation with the Bank in terms of notification no.F.No.1/14/2004-BOA dated January
23, 2012 issued by Government of India, Ministry of Finance, Department of Financial Services. Also incorporated in the Balance
Sheet, Profit and Loss Account and Cash Flow Statement are the returns from 18 Regional Offices and 2 Training Centres which
have not been subjected to audit. These unaudited offices account for 26.18% of advances (includes deemed advances as per
Note B-14(c) of Schedule 18), 0.38% of deposits and term money borrowings, 24.85% of interest income (includes interest on
deemed advances as per Note B-14(b) of Schedule 18) and 0.34% of interest expenses. These financial statements are the
responsibility of the Banks management. Our responsibility is to express an opinion on these financial statements based on our
audit.
We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the
overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.
Subject to the limitations of the audit mentioned in paragraph 1 above, we report that:
a.

We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for
the purposes of our audit and have found them to be satisfactory;

b.

In our opinion, the transactions of the Bank which have come to our notice have been within the powers of the Bank;

c.

The returns received from the Regional Offices and Training Centres of the Banks have been found adequate for the
purpose of our audit;

d.

The Balance Sheet and Profit and Loss Account have been drawn up in accordance with Schedule A and Schedule B of
Chapter IV of the National Bank for Agriculture and Rural Development (Additional) General Regulations, 1984;

e.

In our opinion and to the best of our information and according to the explanations given and as shown by the books of
the Bank:
i.

the Balance Sheet, read with Significant Accounting Policies and notes on accounts contain all necessary particulars
and is properly drawn up in conformity with the accounting principles generally accepted in India so as to exhibit
a true and fair view of the state of affairs of the Bank as at March 31, 2012; and

ii.

the Profit and Loss Account, read with Significant Accounting Policies and notes on accounts, shows a true
balance of the profit for the year ended on that date and is in conformity with accounting principles generally
accepted in India; and

iii. the Cash Flow Statement gives a true and fair view of the cash flows of the Bank for the year ended on that date.
Place: Mumbai
Date: May 26, 2012

For and on behalf of


P. Parikh & Associates
Chartered Accountants
Firm Registration No. 107564W
Ashok Rajagiri
Partner,
Membership No.: 046070
HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009,
Tel : 23443549, 23437853, Fax : 23415455,
Website : www.pparikh.com

108

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT


BALANCE SHEET AS ON 31 MARCH 2012
Sr.
No.

FUNDS AND LIABILITIES

SCHEDULE

(` in thousands)

As on
31.03.2012

As on
31.03.2011

3000,00,00

2000,00,00

Capital

Reserve Fund and other Reserves

13407,68,56

11862,72,33

National Rural Credit Funds

16058,00,00

16045,00,00

Funds out of grants received from International Agencies

139,20,78

138,89,56

Gifts, Grants, Donations and Benefactions

657,92,20

2601,89,23

Other Funds

4157,12,25

3431,47,40

Deposits

95397,75,23

82776,67,53

Bonds and Debentures

38583,86,29

26788,21,49

Borrowings

4328,48,40

7681,29,10

Current Liabilities and Provisions

6345,16,85

5546,09,80

182075,20,56

158872,26,44

632,33,09

592,09,63

10

Total
Forward Foreign Exchange Contracts (Hedging) as per contra

(` in thousands)
Sr.
No.

PROPERTY AND ASSETS

SCHEDULE

As on
31.03.2012

As on
31.03.2011

Cash and Bank Balances

10

8544,37,38

10765,26,79

Investments

11

18209,82,72

19329,50,93

Advances

12

152625,95,23

126027,99,95

Fixed Assets

13

225,05,62

229,48,63

Other Assets

14

2469,99,61

2520,00,14

182075,20,56

158872,26,44

632,33,09

592,09,63

Total
Forward Foreign Exchange Contracts (Hedging) as per contra
Commitment and Contingent Liabilities

17

Significant Accounting Policies and Notes on Accounts

18

Schedules referred to above form an integral part of accounts


As per our attached report of even date
P. Parikh & Associates
Chartered Accountants
FRN . 107564W
Ashok Rajagiri
Partner
M No.046070
Mumbai
Date : 26 May 2012
Prakash Bakshi
Chairman

K. S. Padmanabhan
Chief General Manager
Accounts Department
Mumbai : 26 May 2012

H R Khan
Director

Dipankar Gupta
Director

109

M L Sharma
Director

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2012
Sr.No. INCOME
1
2
3

SCHEDULE

Interest received on Loans and Advances


Income from Investment Operations / Deposits
(Refer Note B-4 of Schedule 18)
Other Receipts(Refer Note B-6 of Schedule 18)
Total A

(` in thousands)

2011-12

2010-11

9511,97,11
1346,02,32

8169,13,99
943,23,85

120,50,51

89,63,23

10978,49,94

9202,01,07
(` in thousands)

Sr.No. EXPENDITURE
1
2
3
4
5
6

SCHEDULE

2011-12

2010-11

15
16 A
16 B

7534,01,97
1027,10,81
144,18,23
21,22,00

6193,86,85
1126,09,88
35,60,34
22,57,98

8726,53,01
2251,96,93

7378,15,05
1823,86,02

455,00,00
162,00,00

460,00,00
84,65,00

1634,96,93

1279,21,02

Interest and Financial Charges(Refer Note B-5 of Schedule 18)


Establishment and Other Expenses
Provisions
Depreciation
Total B
Profit before Tax (A - B)
Provision for
a) Income Tax
b) Deferred Tax Asset (Refer Note B-13 of Schedule 18)
Profit after Tax
Significant Accounting Policies and Notes on Accounts

18

Schedules referred to above form an integral part of accounts

PROFIT AND LOSS APPROPRIATION ACCOUNT


Sr.No. APPROPRIATIONS / WITHDRAWALS
1.
2.

2.1

Profit for the year brought down


Add:
Withdrawals from funds against expenditure debited to Profit & Loss A/c
a) Co-operative Development Fund (Refer Schedule 1)
b) Research and Development Fund (Refer Schedule 1)
c) Watershed Development Fund (Refer Schedule 5)
d) Micro Finance Development and Equity Fund (Refer Schedule 5)
e) Investment Fluctuation Reserve (Refer Schedule 1)
f) Farm Innovation & Promotion Fund
Withdrawals of Funds which have been closed
i) Foreign Currency Risk Fund
ii) Soft Loan Assistance Fund for Margin Money
iii) Agriculture & Rural Enterprise Incubation Fund
Profit available for Appropriation
Less: Transferred to:
a) Special Reserves u/s 36(1) (viii) of IT Act, 1961
b) National Rural Credit (Long Term Operations) Fund
c) National Rural Credit (Stabilisation) Fund
d) Co-operative Development Fund
e) Research and Development Fund
f) Investment Fluctuation Reserve (Refer Schedule 1)
g) Farmers Technology Transfer Fund
h) Farm Innovation & Promotion Fund (Refer Schedule 1)
i) Producers Organizations Development Fund
j) Rural Infrastructure Promotion Fund
k) Financial Inclusion Technology Fund
l) Reserve Fund
Total

(` in thousands)
2011-12

2010-11

1634,96,93

1279,21,02

5,35,40
20,65,30
0
10,61,32
29,94,42
2,73,85

6,05,32
17,67,49
1,01,14
11,40,75
2,07,65
2,39,20

0
0
0
1704,27,22

147,06,04
10,00,00
5,00,00
1481,88,61

310,00,00
10,00,00
1,00,00
5,35,40
20,65,30
27,15,42
44,56,36
2,73,85
0
0
45,00,00
1237,80,89
1704,27,22

360,00,00
50,00,00
10,00,00
6,05,32
17,67,49
116,07,65
33,55,54
2,34,20
50,00,00
25,00,00
10,00,00
801,18,41
1481,88,61

Refer Schedule 18 for Significant Accounting Policies and Notes on Accounts.


As per our attached report of even date
P. Parikh & Associates
Chartered Accountants
FRN . 107564W

Ashok Rajagiri
Partner
M No.046070
Mumbai, Date : 26 May 2012
Prakash Bakshi
Chairman

K. S. Padmanabhan
Chief General Manager
Accounts Department
Mumbai : 26 May 2012
H R Khan
Director

Dipankar Gupta
Director

110

M L Sharma
Director

SCHEDULES TO BALANCE SHEET


Schedule 1 - Reserve Fund and Other Reserves
(` in thousands)
Sr. Particulars
No.
1

Reserve Fund

Opening
Exp./Add./
Balance as on
Adjust.
01.04.2011 during the year

Transferred
From P&L
Appropriation

Transferred to
P&L
Appropriation

Balance
as on
31.03.2012

6703,91,80

1237,80,89

7941,72,69

Research and Development Fund

50,00,00

20,65,30

20,65,30

50,00,00

Capital Reserve

74,80,53

74,80,53

Investment Fluctuation Reserve

259,00,00

27,15,42

29,94,42

256,21,00

Co-operative Development Fund

125,00,00

5,35,40

5,35,40

125,00,00

Special Reserves Created & Maintained


u/s 36(1)(viii) of Income Tax Act, 1961

4445,00,00

310,00,00

4755,00,00

Producers Organizations Development Fund

50,00,00

-1,64

49,98,36

Rural Infrastructure Promotion Fund

25,00,00

-4,01

24,95,99

MFDEF - Reserve Fund

80,00,00

80,00,00

10

Farm Innovation & Promotion Fund

50,00,00

2,73,85

2,73,85

50,00,00

Total

11862,72,33

-5,65

1603,70,86

Previous year

10674,59,96

5,00

1378,33,07

58,68,97 13407,68,57
190,25,70

11862,72,33

Schedule 2 - National Rural Credit Funds


(` in thousands)
Sr Particulars
No.
1

Opening Balance
as on 01.04.2011

Contribution by
RBI

Transferred from
P&L Appropriation

Balance as on
31.03.2012

14468,00,00

1,00,00

10,00,00

14479,00,00

1577,00,00

1,00,00

1,00,00

1579,00,00

Total

16045,00,00

2,00,00

11,00,00

16058,00,00

Previous year

15983,00,00

2,00,00

60,00,00

16045,00,00

National Rural Credit


(Long Term Operations) Fund
National Rural Credit (Stabilisation) Fund

Schedule 3 - Funds Out of Grants received from International Agencies


(` in thousands)
Sr.
No.

Particulars

1
2
3
4

Opening
Balance as on
01.04.2011

Grants received/
adjusted during
the year

Interest
credited to
the fund

Exp./Disb./ Adjust.
during the
year

Balance
as on
31.03.2012

National Bank - Swiss


Development Coop. Project

55,61,77

55,61,77

Rural Innovation Fund (RIF)


(Refer Note B-2 & B-10 of Schedule 18)

73,16,38

4,66,84

10,24,81

67,58,41

Rural Promotion Fund


(Refer Note B-2 & B-10 of Schedule 18)

9,19,49

63,10

5,45

9,88,05

91,92

5,23,64

3,00

6,12,55

Total

138,89,56

5,86,74

4,72,29

10,27,81

139,20,78

Previous year

149,87,64

16,39,37

4,15,31

31,52,76

138,89,56

KfW - NABARD V Fund for Adivasi Programme

111

Schedule 4 - Gifts, Grants, Donations and Benefactions


(` in thousands)
Sr.
No.

Particulars

Opening
Balance as on
01.04.2011

Grant received
during
the year

Interest
Credited to
the fund

Adjusted
against the
expenditure

Balance
as on
31.03.2012

A.

Grants from International Agencies

KfW - NB - IX Adivasi Development Programme Maharashtra (Refer Note B-10 of Schedule 18)

78,42

4,41,18

8,72

3,52,00

1,76,33

KfW UPNRM - Accompanying Measures

16,88

3,28,48

1,00

3,16,21

30,15

KfW NB UPNRM - Financial Contribution

81,00

28,29

16,09

93,19

KfW UPNRM - Risk Mitigation Fund

11,74

1,24,17

1,35,91

International Fund for Agriculture Development


(IFAD) Priyadarshini(Refer Note B-11 of Schedule 18)

4,66,44

4,66,44

GIZ - Uttarakhand Regional Economic Development

86,39

86,39

KfW-NB-Indo German Watershed Development Programme Phase III - Maharashtra (Refer Note B-10 & B-11 of Schedule 18)

2,32

18,79,53

4,81

18,86,67

Indo German Watershed Development Programme Andhra Pradesh (Refer Note B-10 & B-11 of Schedule 18)

73

7,86,68

25

7,87,67

Indo German Watershed Development Programme Gujarat (Refer Note B-10 & B-11 of Schedule 18)

15

5,53,18

2,94

5,56,25

10

Indo German Watershed Development Programme Rajasthan (Refer Note B-10 & B-11 of Schedule 18)

3,23,66

67

3,24,33

11

KfW Umbrella Programme on Natural Resource Management Fund


(Refer Note B-3 of Schedule 18)

9,20,51

2,73,36

2,16,46

9,77,42

12

NABARD Grant for Fixed Assets under NB-SDC HID Project

6,60

6,60

13

GIZ-NABARD RFP - Financial Component

1,00

1,00

14

NE Council Fund for Miscellaneous Training Programme


(Refer Note B-11 of Schedule 18)

1,79

1,79

15

KfW NB SEWA Bank Capitalisation of


Rural Financial Institutions (RFIs)

2,66

2,94,83

2,97,49

16

GIZ Rural Financial Institutions Program (RFIP)

58,00

76,86

36,56

98,31

17

GIZ UPNRM Technical Collaboration

39,21

51,40

63,50

27,11

18

United Nation Development Programme(UNDP) NABARD-Financial Inclusion Fund

-1,09,74

1,56,48

46,74

B.

Government Subsidy Schemes

Capital Investment Subsidy for Cold Storage Projects - NHB

19,18,67

11,35,46

26,63,82

3,90,32

Capital Subsidy for Cold Storage NHM

9,66

Capital Subsidy for Cold Storage TM North East

Credit Linked Capital Subsidy for Technology Upgradation of SSIs

Capital Investment Subsidy for Rural Godowns

Million Shallow Tubewell Programme Bihar

Bihar Ground Water Irrigation Scheme (BIGWIS)

9,66

4,37,96

1,65,03

6,02,99

6,23

4,89,64

4,95,87

39,38,94

121,00,00

148,68,54

11,70,39

2,63,15

2,63,15

182,89,03

2,39,65

34,78,22

150,50,47

Cattle Development Prog. - Uttar Pradesh


(Refer Note B-10 of Schedule 18)

26,61

1,68

26,60

1,69

Cattle Development Programme - Bihar


(Refer Note B-10 of Schedule 18)

99,46

1,71,40

6,19

99,46

1,77,59

10

National Project on Organic Farming

6,22

1,50,00

1,08,52

47,71

11

Integrated Watershed Development Programme Rashtriya Sam Vikas Yojana

14,22,55

10,58,00

17,74,18

7,06,37

12

Centrally Sponsored Scheme on Integrated Development of


Small Ruminants and Rabbits

3,44,55

4,00,00

7,14,53

30,02

112

Schedule 4 - Gifts, Grants, Donations and Benefactions


(` in thousands)
Sr.
No.

Particulars

13

Rain Water Harvesting Scheme

14

Kutch Drought Proofing Project

15

Dairy and Poultry Venture Capital Fund

16

Poultry Venture Capital Fund

Opening
Balance as on
01.04.2011

Grant received
during
the year

Interest
Credited to
the fund

Adjusted
against the
expenditure

Balance
as on
31.03.2012

89,93

-89,93

39,35

17,38

21,96

12,27,65

-5,00,36

17,28,00

5,61,71

3,79,11

1,82,60

5,00,00

4,14,73

85,27

20,65,63

149,25,88

166,79,31

3,12,19

5,97,03

2,28,12

8,25,15

17

Poultry Venture Capital Fund (Subsidy)

18

Capital Subsidy for Agriculture Marketing Infrastructure,


Grading and Standardisation

19

Centrally Sponsored Scheme for establishing Poultry Estate

20

Livelihood Advancement Business School Sultanpur, Uttar Pradesh

2,16

48,73

50,90

21

Livelihood Advancement Business School Rae - Bareli , Uttar Pradesh

54,47

54,47

22

Multi Activity Approach for Poverty Alleviation Sultanpur, Uttar Pradesh (Refer Note B-10 of Schedule 18)

51,14

3,36

54,49

1,37,01

2,86

1,25,93

13,95

23

Multi Activity Approach for Poverty Alleviation BAIF - Rae Bareli, Uttar Pradesh(Refer Note B-10 of Schedule 18)

24

CCS - on Pig Development

25

Dairy Entrepreneurship development Scheme

26

CCS - S & R Male Buffalo calves

27

CSS - JNN Solar Mission

28

CSS - JNNSM - Solar Lighting

29

CSS - on Rural Slaughter Houses

30

Capital Subsidy Scheme - Agri Clinics Agri Business Centres

31

Artificial Recharge of Groundwater in Hard Rock Area

32

Agriculture Debt Waiver and Debt Relief Scheme (ADWDR) 2008

33

Womens Self Help Groups [SHGs] Development Fund

C.

Interest Relief / Subvention

Interest Subvention (Sugar Term Loan)

Scheme for providing Financial Assistance to Sugar Undertakings 2007 (SEFASU - 2007)

Revival Package of Short Term Cooperative Credit Structure

Cost of Special Audit

Recapitalisation Assistance to Credit Cooperative Societies

Technical Assistance

Human Resources Development

5
E

1,58

6,37,00

5,81,75

56,83

10,45,52

110,00,00

100,75,18

19,70,34

1,92,00

1,92,00

41,69,88

31,39,19

29,60,00

46,80,00

19,29,30
46,80,00

9,92

9,92

1,59,61

6,00,00

5,69,82

1,89,79

1256,04,04

1232,17,58

23,86,46

419,85,25

35,69,00

263,64,41

191,89,84

100,00,00

100,00,00

19,64

30,00,00

30,08,33

11,31

134,82,85

134,37,52

45,33

10,49,15

10,49,15

340,64,24

88,78

341,53,03

13,90,73

13,30,17

60,57

9,10,27

1,59,00

10,68,71

56

Implementation Cost

18,82,00

15,21,22

34,15,83

-12,62

Revival Package for


Long Term Co-operative Credit Structure (LTCCS)

20,00,00

20,00,00

Revival, Reform and Restructuring of Handloom Sector

Implementation Cost [RRR] - Handloom Package

5,00,00

66,58

4,33,42

Expenditure on Loss Assessment [RRR] - Handloom Package

5,00,00

5,10

4,94,90

Total

2601,89,22

760,55,08

32,48

2704,84,58

657,92,20

Previous year

4706,76,57

2988,77,26

69,91

5094,34,52

2601,89,22

113

Schedule 5 - Other Funds


(` in thousands)
Sr. Particulars
No.

Watershed Development Fund

Opening
Additions/
Balance as on
Adjustments
01.04.2011 during the year

Transferred
from P & L
Appropriation

Interest
Credited

Expenditure/
Disb.during
the year

Transferred to
P&L
Appropriation

Balance
as on
31.03.2012

1897,68,75

109,46,03

201,12,19

1806,02,59

Micro Finance Development and


Equity Fund
(Refer Note B-10 of Schedule 18)

139,11,97

8,34,03

18,07,11

10,61,32

118,77,57

Interest Differential Fund (Forex Risk)

157,69,73

12,56,28

170,26,01

10,00

10,00

5,30,31

32,86

5,63,12

1054,50,93

1003,84,89

157,11,49

1901,24,33

Interest Differential Fund - (Tawa)

Adivasi Development Fund

Tribal Development Fund

Financial Inclusion Fund


(Refer Note B-10 of Schedule 18)

53,10,64

16,27,02

3,44,96

18,89,93

53,92,69

Financial Inclusion Technology Fund


(Refer Note B-10 of Schedule 18)

22,95,08

60,07,76

45,00,00

52,36

128,39,26

15,94

101,00,00

44,56,36

44,56,36

101,00,00

Total

3431,47,41

1093,08,81

89,56,36

121,77,38

568,16,39

10,61,32

4157,12,25

Previous year

2735,06,35

930,89,69

43,55,54

101,05,25

366,67,55

12,41,88

3431,47,41

8
9

Farmers Technology Transfer Fund

Schedule 6 - Deposits
(` in thousands)
Sr. Particulars
No.

As on
31.03.2012

As on
31.03.2011

Central Government

State Governments

Others
284,04,01

228,29,61

7,00,00

48,46,15

c) Commercial Banks (Deposits under RIDF)

75106,71,22

67877,63,52

d) Short Term Cooperative Rural Credit Fund

20000,00,00

14622,28,25

95397,75,23

82776,67,53

a) Tea / Rubber / Coffee Deposits


b) Term Deposits

Total

Schedule 7 - Bonds and Debentures


(` in thousands)
Sr. Particulars
No.
1

SLR Bonds

Non Priority Sector Bonds

Capital Gains Bonds

Bhavishya Nirman Bonds

NABARD Rural Bond


Total

114

As on
31.03.2012

As on
31.03.2011

98,99,70

33577,90,00

21682,50,00

6,77,20

7,52,70

4975,19,52

4975,19,52

23,99,57

23,99,57

38583,86,29

26788,21,49

Schedule 8 - Borrowings
Sr. Particulars
No.

(` in thousands)
As on
31.03.2012

As on
31.03.2011

Central Government

84,80,09

123,97,71

Jawaharlal Nehru National Solar Mission

32,82,00

Others :
1281,00,69
2245,26,97
181,81,00
0

136,86,14
6447,64,81
110,16,00
360,00,00

502,77,65

502,64,44

4328,48,40

7681,29,10

(A) In India
(i) Certificate of Deposits
(ii) Commercial Paper
(iii) Term Money Borrowings
(iv) Borrowing against STD
(B) Outside India
(i) International Agencies
Total

Schedule 9 - Current Liabilities and Provisions

(` in thousands)

Sr. Particulars
No.

As on
31.03.2012

As on
31.03.2011

Interest / Discount Accrued

4905,56,26

3527,97,31

Sundry Creditors

370,76,97

401,73,28

Subsidy Reserve (Co-finance, Cold Storage)

1,15,23

93,89

Subsidy Reserve - CSAMI under RIDF

2,27,06

1,45,00

Provision for Gratuity(Refer Note B-21 of Schedule 18)

17,44,81

Provision for Pension(Refer Note B-21 of Schedule 18)

245,62,63

934,44,01

Provision for Encashment of Ordinary Leave (Refer Note B-21 of Schedule 18)

Unclaimed Interest on Bonds

15,89,20

5,07,12

2,01,28

3,90,27

Unclaimed Interest on Term Deposits

71

41,96

10

Term Deposits Matured but not claimed

8,32,11

5,48,20

11

Bonds matured but not claimed

5,82,48

20,06,38

12

Application money received pending allotment of Bonds

44

50

13

Provisions and Contingencies


(a) Amortisation in Value of Investment a/c - G Sec.
(b) For Standard Assets
(c) Depreciation in value of investments - equity
(d) Countercyclical Provisioning Buffer
(e) Sacrifice in interest element of restructured loans
(Refer Note 29.6 of Schedule 18)
(f) Provision for Other Assets & Receivables

30,62,12
673,31,00
3,19,22
25,51,00
51,37,00

0
594,57,00
3,36,93
25,51,00
0

Total

3,72,14

3,72,14

6345,16,85

5546,09,80

Schedule 10 - Cash and Bank Balances


Sr. Particulars
No.
1
Cash in hand
2
Balances with :
A) Reserve Bank of India
B) Others
(I) Other Banks in India
a) in Current Account
b) Deposit with Banks
(i) Remittances in Transit
(ii) Collateralised Borrowing and Lending Obligations
(II) Outside India
Total

115

(` in thousands)

As on
31.03.2012
9

As on
31.03.2011
7

1168,79,91

38,85,26

379,62,31
6765,00,00
2,54
230,92,53
0

801,32,40
9002,46,14
694,44,37
228,18,56
0

8544,37,38

10765,26,80

Schedule 11-Investment
(` in thousands)
Sr.
No.

Particulars

As on
31.03.2012

As on
31.03.2011

Government Securities
2146,81,84

2548,31,03

58,28,37

1,00,00

1,00,00

(b) Small Industries Development Bank of India


[1,60,00,000 (1,60,00,000) - Equity shares of `10 each]

48,00,00

48,00,00

(c) Agriculture Insurance Company of India Ltd.


[6,00,00,000 (6,00,00,000) - Equity shares of ` 10 each]

60,00,00

60,00,00

(d) Multi Commodity Exchange of India Ltd.


[15,62,500 (15,62,500) - Equity shares of ` 10 each]

1,25,00

1,25,00

(e) National Commodity and Derivatives Exchange Ltd.


[56,25,000 (56,25,000) - Equity shares of ` 10 each]

16,87,50

16,87,50

(f) Universal Commodity Exchange Ltd [UCX]


[1,60,00,000 (NIL) Shares of ` 10 each]

16,00,00

1,21,83

1,21,83

12343,53,09

13461,16,56

375,01,62

225,00,00

36,36,82

18,80,00

5,00,00

5,00,00

(i) Commercial Paper


[Face Value ` 1115,00,00,000 (` 1950,50,00,000)]

1036,60,64

1861,99,91

(ii) Certificate of Deposit


[Face Value ` 2125 crore (` 700 crore)]

a) Securities of Central Government


[Face Value `2174,08,20,000 (`2599,65,70,000)]
[Market Value `2105,40,99,310 (`1971,99,03,930)]
b) Treasury Bills
2
3

Other Approved Securities


Equity Shares in :
(a) Agricultural Finance Corporation Ltd.
[1,000 (1,000) - Equity shares of `10,000 each]

(g) Other Equity Investments

(i) Coal India Ltd.

` 42,60,305

(ii) Power Grid Corporation of India Ltd.

` 25,73,280

(iii) Mangnese Ore India Ltd.

` 43,94,625

(iv) Punjab & Sindh Bank

` 9,54,960

Debentures and Bonds


(i) Special Development Debentures of SCARDBs (Refer Note B-16 of Schedule 18)
(ii) Non Convertible Debentures

Shareholding in subsidiaries and Joint Venture


(i) NABARD Financial Services Ltd, Karnataka

` 25,96,82,000

[2,59,68,200(84,00,000] - Equity shares of ` 10 each]


(ii) Agri - Business Finance [Andhra Pradesh] Ltd.
[52,00,000(52,00,000) - Equity shares of ` 10 each]

` 5,20,00,000

(iii) Agri Development Finance [Tamil Nadu] Ltd.


[52,00,000 (52,00,000) - Equity shares of ` 10 each]

` 5,20,00,000

(iv) NABARD Consultancy Services Pvt. Ltd.


[50,00,000 (50,00,000) - Equity shares of ` 10 each]
6

Others

2037,93,74

680,42,26

(iii) Units of Liquid Mutual Funds

390,11,34

(iv) SEAF - Indian Agri- Business

2,07,59

37,50

(v) APIDC - Ventureast Life Fund III

5,85,45

4,98,00

(vi) BVF (Bio-Tech Venture Fund) - APIDC-V Investment


[49835.46 (50,000) Class A Units of ` 1,000 each]

4,98,35

5,00,00

(vii) Tata Capital Innovation Fund


Total

116

13,00,88

18209,82,72

19329,50,93

Schedule 12 - Advances
Sr.
Particulars
No.
Refinance Loans
a)
Production & Marketing Credit
b)
Conversion Loans for Production Credit
c)
Other Investment Credit :
i) Medium Term and Long Term Project Loans (Refer Note B-16 of Schedule 18)
ii) Interim Finance
iii) Direct refinance to DCCBs
iv) Loans out of RIDF warehousing infrastructure
v) JNN Solar Mission
Direct Loans
a)
Loans under Rural Infrastructure Development Fund
b)
Long Term Non-Project Loans
c)
Loans under NABARD Infrastructure Development Assistance (NIDA)
d)
Loans under Producers Organization Development Fund (PODF)
e)
Other Loans out of:
i) Co-operative Development Fund
ii) Micro Finance Development Equity Fund
iii) Watershed Development Fund
iv) Tribal Development Fund
v) KfW UPNRM Fund
vi) Farm Innovation & Promotion Fund
vii) NFS Promotional Activities Fund
viii) Farmers Technology Transfer Fund
f)
Co-Finance Loans (Net of provision)
Total

As on
31.03.2012

(` in thousands)
As on
31.03.2011

48337,74,51
128,81,10

33884,82,33
193,21,67

30761,75,91
1,60,00
910,34,00
759,09,58
30,32,29

25435,26,23
0
0
0
0

70860,30,56
140,06,20
422,90,33
7,41,32

66077,96,22
167,20,61
0
0

2,61,43
72,91,49
36,25,01
7,02,99
71,22,51
32,39
2,85,94
2,17
72,35,50
152625,95,23

3,11,68
89,23,20
32,09,56
3,47,16
53,11,82
40,75
50,00
0
87,58,72
126027,99,95

Schedule 13 - Fixed Assets


Sr. Particulars
No.
1 LAND : Freehold & Leasehold (Refer Note B-15 of Schedule 18)
Opening Balance
Additions/adjustments during the year
Closing Balance (at cost)
Less: Amortisation of Lease Premia
Book Value
2 PREMISES (Refer Note B-15 of Schedule 18)
Opening Balance
Additions/adjustments during the year
Closing Balance (at cost)
Less: Depreciation to date
Book Value
3 FURNITURE & FIXTURES
Opening Balance
Additions/adjustments during the year
Sub-Total
Less: Cost of assets sold/written off
Closing Balance (at cost)
Less: Depreciation to date
Book Value
4 COMPUTER INSTALLATIONS & OFFICE EQUIPMENTS
Opening Balance
Additions/adjustments during the year
Sub-Total
Less: Cost of assets sold/written off
Closing Balance (at cost)
Less: Depreciation to date
Book Value
5 VEHICLES
Opening Balance
Additions/adjustments during the year
Sub-Total
Less: Cost of assets sold/written off
Closing Balance (at cost)
Less: Depreciation to date
Book Value
Total
Note: Refer note A-12.6 & B-19 of Schedule 18 for change in capitalization policy.

117

As on
31.03.2012

(` in thousands)
As on
31.03.2011

148,08,29
-51,23
147,57,06
42,04,17
105,52,89

146,12,13
1,96,16
148,08,29
40,59,65
107,48,64

263,42,46
2,41,99
265,84,45
164,28,77
101,55,68

259,08,11
4,34,35
263,42,46
156,33,58
107,08,88

58,54,15
9,24
58,63,39
33,15
58,30,24
56,54,82
1,75,42

57,24,47
1,43,23
58,67,70
13,56
58,54,15
55,77,96
2,76,19

72,99,45
11,72,44
84,71,89
2,10,14
82,61,75
70,07,77
12,53,98

68,22,68
8,85,36
77,08,04
4,08,59
72,99,45
62,68,28
10,31,17

4,43,30
4,44,55
8,87,85
2,57,52
6,30,33
2,62,68
3,67,65

4,39,48
1,63,09
6,02,57
1,59,27
4,43,30
2,59,55
1,83,75

225,05,62

229,48,63

Schedule 14 - Other Assets


(` in thousands)
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
12

Particulars
Accrued Interest
Deposits with Landlords
Deposits with Government Departments and Other Institutions
Housing loan to staff
Other Advances to staff
Advances to Landlords
Capital Work in Progress [Purchase of Staff Quarters & Office Premises]
Sundry Advances
Advance Tax (Net of Provision for Income Tax)
Deferred Tax Assets (Refer Note B-13 of Schedule 18)
Expenditure recoverable from Government of India/International Agencies
Discount Receivable

As on
31.03.2012
1804,09,10
1,39,26
3,15,19
164,74,61
77,03,84
3,27
70,75,72
51,49,02
102,55,89
71,15,00
28,75,78
94,82,93

As on
31.03.2011
1815,75,35
1,48,04
2,97,86
140,22,37
65,08,79
1,03
51,48,84
38,58,47
130,80,93
233,15,00
5,35,57
35,07,89

Total

2469,99,61

2520,00,14

Schedule 15 - Interest and Financial Charges


Sr. Particulars
No.
1

2
3
4

(` in thousands)
2011-12

2010-11

Interest Paid on
a)
Deposits under RIDF
b)
Short Term Cooperative Rural Credit Fund
c)
Term Deposits
d)
Tea / Coffee / Rubber Deposits
e)
CBS Deposits
f)
Deposits / Borrowings
g)
Loans from Central Government
h)
Bonds (Refer Note B-5 of Schedule 18)
i)
Commercial Paper (Refer Note B-5 of Schedule 18)
j)
Term Money Borrowings
k)
Borrowing against ST Deposit
l)
Discount Cost Paid on Certificate of Deposits
m)
Corporate Borrowings from Banks and FIs in India
n)
Borrowings from International Agencies
o)
Watershed Development Fund
p)
Micro Finance Development and Equity Fund
q)
Rural Innovation Fund
r)
Financial Inclusion Fund
s)
Financial Inclusion Technology Fund
t)
Indo German Watershed Development Programme - Andhra Pradesh
u)
Indo German Watershed Development Programme - Rajasthan
v)
Indo German Watershed Development Programme - Gujarat
w)
KfW UPNRM - Accompanying measures
x)
KfW - NB Indo German Watershed Development Programme - Phase III - Maharashtra
y)
KfW - NB - IX Adivasi Development Programme
z)
KFW NB V - Adivasi Project
aa) Commitment Charges -KfW UPNRM Borrowings
ab) Livelihood Advancement Business School RF Project - Sultanpur, Uttar Pradesh
ac) Livelihood Advancement Business School RF Project - Rae Bareli, Uttar Pradesh
ad) Multi Activity Approach for Poverty Alleviation BAIF Project - Sultanpur, Uttar Pradesh
ae) Multi Activity Approach for Poverty Alleviation BAIF Project -Rae Bareli, Uttar Pradesh
af)
Cattle Development Programme (UP & Bihar)
Discount on Collateralised Borrowing and Lending Obligations
Discount, Brokerage, Commission & issue exp. on Bonds and Securities
Swap Charges

4078,35,01
376,74,20
2,68,39
16,84,86
50,39
0
7,27,66
2420,01,48
372,08,50
14,74,67
2,65,85
37,53,31
0
20,85,03
109,46,03
8,34,03
4,66,84
3,44,96
52,36
25
67
2,94
1,00
4,81
8,72
5,81,92
6,84
0
0
3,36
2,86
7,86
40,71,13
6,63,94
3,72,10

3714,32,70
259,76,37
22,78,08
10,86,63
0
3
10,21,19
1680,25,58
247,82,46
21,06,65
31,11,00
6,29,72
21,35,58
22,58,86
81,25,55
11,29,46
4,14,13
4,15,86
4,34,39
71
1,78
53
1,07
5,80
18,84
0
20,74
2,08
5,62
4,14
11,08
18,26
26,59,91
5,78,80
6,93,25

Total

7534,01,97

6193,86,85

118

Schedule 16 A - Establishment and Other Expenses


(` in thousands)
Sr.
No.

Particulars

1
2
3
4

Salaries and Allowances (Refer Note B-20 of Schedule 18)


Contribution to / Provision for Staff Superannuation Funds
Other Perquisites & Allowances
Travelling & Other allowances in connection with Directors &
Committee Members Meetings
Directors & Committee Members Fees
Rent, Rates, Insurance, Lighting, etc.
Travelling Expenses
Printing & Stationery
Postage, Telegrams & Telephones
Repairs
Auditors Fees
Legal Charges
Miscellaneous Expenses
Expenditure on Miscellaneous Assets
Expenditure on Study & Training
[Including `9,35,82,458 (`7,58,70,397)
pertaining to establishment expenses of
Regional Training Colleges]
Expenditure on promotional activities under:
(i) Cooperative Development Fund
(ii) Micro Finance Development and Equity Fund
(iii) Watershed Development Fund
(iv) Farm Innovation and Promotion Fund
(v) Exp. for NFS Promotional Measures/ Activities
Wealth Tax

5
6
7
8
9
10
11
12
13
14
15

16

17

Total

2011-12

2010-11

442,63,36
345,27,10
27,18,08

586,57,40
327,61,90
22,96,15

21,67
1,36
21,81,60
29,03,51
3,20,71
8,73,17
8,51,53
9,46
28,55
42,25,15
5,84,70

13,35
1,08
20,82,98
24,49,56
2,81,21
8,48,85
6,55,87
8,06
17,86
40,77,59
44,37

39,24,95

33,46,06

5,35,40
10,61,32
0
2,73,85
30,24,32
3,81,02

6,05,32
11,40,75
1,01,14
2,39,20
27,52,58
2,28,60

1027,10,81

1126,09,88

Schedule 16 B - Provisions
(` in thousands)
Sr.
No.
1
2
3
3a
4
5
6
7
8

Particulars

2011-12

2010-11

Provisions for :
Amortisation of G. Sec
Standard Assets (Refer Note 29.6 of Schedule 18)
Non Performing Assets
Non Performing Assets - Staff
Nabard General Advices
Depreciation in Investments G.Sec
Depreciation in Value of Investment Account - Equity
Sacrifice in interest element of restructured Accounts
Other Assets / Receivable

0
78,74,00
14,80,00
7,23
0
0
-80,00
51,37,00
0

0
0
32,86,00
4,00
-53,24
0
-5,08
-8,00
3,36,66

144,18,23

35,60,34

Total
Schedule 17 - Commitments and Contingent Liabilities

(` in thousands)
Sr.
No.
1
2
(i)
(ii)

Particulars

As on
31.03.2012

As on
31.03.2011

Commitments on account of capital contracts remaining to be executed


Sub Total A
Contingent Liabilities
Claims against the Bank not acknowledged as debt (Refer Note B-24 of Schedule 18)
Income Tax matters in appeal
Sub Total B

229,32,01
229,32,01

37,81,29
37,81,29

23,93
0
23,93

0
0
0

Total (A + B)

229,55,94

37,81,29

119

Schedule 18

SIGNIFICANT ACCOUNTING POLICIES

NOTES FORMING PART


MARCH 31, 2012

AND

FOR THE YEAR ENDED

OF

ACCOUNTS

A.

SIGNIFICANT ACCOUNTING POLICIES

3.

1.

Basis of Preparation

3.1
Fixed assets are stated at cost of acquisition, less
accumulated depreciation and impairment losses, if any. The
cost of assets includes taxes, duties, freight and other
incidental expenses related to the acquisition and installation
of the respective assets. Subsequent expenditure incurred
on existing asset is capitalized, only when it increases the
future benefit from the existing assets beyond its previously
assessed level of performance.

1.1
The accounts are prepared on the historical cost
convention and comply with all material aspects contained
in the National Bank for Agriculture and Rural Development
Act, 1981 and Regulations thereof, applicable Accounting
Standards (AS) issued by the Institute of Chartered
Accountants of India (ICAI) and regulatory norms prescribed
by the Reserve Bank of India (RBI). Except otherwise
mentioned, the accounting policies have been consistently
applied by the National Bank for Agriculture and Rural
Development (NABARD / the Bank) and are consistent with
those used in the previous year.

3.2

3.4
Depreciation on premises situated on free hold land
is charged at 10% p.a., on written down value basis.
3.5
Depreciation on leasehold land and premises
situated thereon is computed and charged at 5% on written
down value basis or the amount derived by amortising the
premium/cost over the remaining period of lease hold land,
on straight-line basis, whichever is higher.
3.6
The Bank has revised the Capitalisation Policy with
effect from 01 April 2011. As per the revised policy, Fixed
Assets costing ` 1 lakh and less (except easily portable
electronic assets such as laptops, mobile phones, etc. costing
more than ` 10,000/-) are charged to the Profit & Loss
Account in the year of acquisition. The valuable but easily
portable electronic assets such as laptops, mobile phones,
etc., shall be capitalised, if individual cost of the items is
more than `10,000/-. All software costing above ` 1 lakh
each, whether purchased independently or with hardware
and operating system software, is capitalised.

Income and expenditure

2.1
Income and expenditure are accounted on accrual
basis, except the following, which are accounted on cash
basis:
a.

Interest on non-performing assets identified as per RBI


guidelines.

b.

Income by way of penal interest charged due to delayed


receipt of loan dues or noncompliance with terms of
loan.

c.

Service Charges on loans given out of Micro Finance


Development and Equity Fund, Watershed
Development Fund.

d.

Expenses not exceeding ` 10,000 at each accounting


unit, under a single head of expenditure.

Land includes free hold and leasehold land.

3.3
Premises include value of land, where segregated
values are not readily available.

1.2
Preparation of financial statements as per Generally
Accepted Accounting Practices (GAAP) requires the
management to make several assumptions and estimates
that affect reported results and the reported state of affairs
of the Bank; the example of such cases include the estimated
life of fixed assets, liability on account of employee retirement
benefits, provision for anticipated losses, etc. Actual results
could differ from such estimates. Such differences are
recognized in the year of outcome of such results.

2.

Fixed Assets and Depreciation

3.7
Depreciation on other fixed assets is charged over
the estimated useful life of the assets ascertained by the
management at the following rates on Straight Line Method
basis:
Type of Assets

2.2
Issue expenses relating to floatation of bonds are
recognised as expenditure in the year of issue of Bonds.

Furniture and Fixtures


Computer Installations
Office Equipments

2.3
Dividend on investments is accounted for, when
the right to receive the dividend is established.

Vehicles

120

Depreciation Rate
w e f 01 April 2011
20%
33.33%
20%
20%

5.9
Brokerage, commission, etc. paid at the time of
acquisition, are charged to revenue.

Depreciation is charged for the full year, irrespective of the


date of purchase of asset. No depreciation is charged on
assets sold during the year.

4.

5.10
Broken period interest on debt investment is treated
as a revenue item.

Intangible Assets and Amortisation

Intangible assets are recognized /amortised, as per


the criteria specified in AS 26 Intangible Assets.

5.

5.11
Transfer of a security between the categories is
accounted for, at lower of the acquisition cost/book value/
market value on the date of transfer and depreciation, if
any, on such transfer, is fully provided for.

Investments

5.1
In accordance with the RBI guidelines, Investments
are classified into Held for Trading (HFT), Available for
Sale (AFS) and Held to Maturity (HTM) categories
(hereinafter called categories).

6.

6.1
Advances are classified as per RBI guidelines.
Provision for standard assets and nonperforming assets is
made in respect of identified advances, based on a periodic
review and in conformity with the provisioning norms
prescribed by RBI.

5.2
Securities that are held principally for resale within
90 days from the date of purchase are classified as HFT.
Investments that the Bank intends to hold till maturity are
classified as HTM. Securities which are not to be classified
in the above categories are classified as AFS.

6.2
In case of restructuring/rescheduling of advances,
the difference between the present value of future interest
as per the original agreement and the present value of future
interest as per the revised agreement is provided for.

5.3
Investments categorized under HTM are carried
at cost and provision for depreciation/diminution/
amortisation, if any, in value of investments, is included
under Current Liabilities and Provisions.

6.3
Advances are stated net of provisions towards Nonperforming Advances.

5.4
Provision for diminution, other than temporary, in
the value of investments in subsidiaries under the category
HTM is made, wherever necessary.

7.

Foreign Currency Transactions

7.1
Foreign currency borrowings are covered by
hedging agreements and are marked to market at every
reporting date, the resultant gain, if any, is ignored and loss,
if any, is provided for. The liability towards foreign currency
borrowings at the prevailing exchange rate on the reporting
date is mentioned under the Balance sheet, as a contra entry.

5.5
Profit on sale of investment categorized under
HTM is recognized in Profit & Loss A/c and then
transferred to Capital Reserve A/c. Loss on sale of
investment categorized under HTM is recognized in Profit
& Loss A/c.

7.2
Profit on cancellation of or renewal of currency
SWAP agreement, if any, is accounted for, on the final
settlement of agreement; however, loss on such transactions
is provided at the market rates, as on the date of Balance
Sheet.

5.6
Investments under AFS and HFT are marked
to market, scrip-wise, at the rate, declared by Primary Dealers
Association of India (PDAI), jointly with Fixed Income Money
Market and Derivative Association of India (FIMMDA), at
prescribed intervals. While only net depreciation, if any, is
provided for investments in the category classified as AFS,
depreciation / appreciation is recognised in the category for
investments classified as HFT.
5.7

Advances and Provisions thereon

8.

Retirement Benefits

8.1
The Bank has a Provident Fund Scheme managed
by RBI. Contribution to the Fund is made on actual basis.

Treasury Bills are valued at carrying cost.

8.2
Provision for gratuity is made based on actuarial
valuation, in respect of all employees including employees
transferred from RBI. The amount of gratuity due from RBI,
in respect of employees transferred from RBI, is accounted
on cash basis.

5.8
Unquoted Shares are valued at breakup value, if
the latest Audited Accounts of the investee companies is
available, or at ` 1/- per share as per RBI guideline.

121

and liabilities include those that relate to the Bank as a whole


and not allocable to any segment.

8.3
Employers contribution to Provident Fund relating
to the pension optees (part of Pension Fund) is maintained
with RBI.

11.

Impairment of Assets

8.4
Provision for Encashment of Ordinary Leave is
made on the basis of actuarial valuation.

11.1
As at each Balance Sheet date, the carrying amount
of assets is tested for impairment so as to determine:

9.

a)

the provision for impairment loss, if any,


required; or

b)

the reversal, if any, required for impairment loss


recognized in the previous periods.

Taxes on Income

9.1
Tax on income for the current period is determined
on the basis of taxable income and tax credits computed, in
accordance with the provisions of Income Tax Act, 1961
and based on expected outcome of assessments/appeals.

11.2
Impairment loss is recognized when the carrying
amount of an asset exceeds recoverable amount.

9.2
Deferred tax is recognized, on timing difference,
being the difference between taxable income and accounting
income for the year and quantified, using the tax rates and
laws that have been enacted or substantively enacted, as
on Balance Sheet date.

12

12.1
Provisions are recognised for liabilities that can be
measured only by using substantial degree of estimation if:

9.3
Deferred tax assets relating to unabsorbed
depreciation/business losses are recognised and carried
forward to the extent that there is virtual certainty that
sufficient future taxable income will be available against
which, such deferred tax assets can be realized.
9.4
Other deferred tax assets are recognised and carried
forward to the extent that there is a reasonable certainty
that sufficient future taxable income will be available against
which, such deferred tax assets can be realized.

a)

the Bank has a present obligation as a result of a past


event;

b)

a probable outflow of resources is expected to settle


the obligation; and

c)

the amount of the obligation can be reliably estimated.

12.2
Reimbursement, expected in respect of expenditure,
which require a provision, is recognised only when it is
virtually certain that the reimbursement will be received.
12.3

9.5
Provision for Wealth Tax is made, in accordance
with the provisions of Wealth Tax Act, 1956.

10.

Provisions, Contingent Liabilities and


Contingent Assets

a)

a present obligation arising from past events, when it is


not probable that an outflow of resources will be
required to settle the obligation,

b)

a present obligation when no reliable estimate is


possible, and

c)

a possible obligation arising from past events where


the probability of outflow of resources is not remote.

Segment Reporting

10.1
Segment revenue includes interest and other
income directly identifiable with / allocable to the segment.
10.2
Expenses that are directly identifiable with/allocable
to segments are considered for determining the segment
result. The expenses, which relate to the Bank as a whole
and not allocable to segments, are included under Other
Unallocable Expenditure.

Contingent liability is disclosed in the case of:

12.4
Contingent assets are neither recognized, nor
disclosed.
12.5
Provisions, contingent liabilities and contingent
assets are reviewed at each Balance Sheet date.

10.3
Income, which relates to Bank as a whole and not
allocable to segments is included under Other unallocable
bank income.

12.6
Change in accounting policy: There was a change
in accounting policy during the year in case of capitalization
of fixed assets. The details are indicated in para 3.6 and 3.7
of part-A of this schedule

10.4
Segment assets and liabilities include those directly
identifiable with the respective segments. Unallocable assets
122

B.

NOTES

FORMING PART OF THE

ACCOUNTS

(` in crore)

1.
In terms of TAWA Command Area Development
Project Agreement, the Interest Differential Fund is to be
utilized for certain specified purposes.

Particulars

2.
In accordance with the Memorandum of
Understanding entered into with the Swiss Agency for
Development Cooperation, repayment of loan, service
charges and other receipts made out of Rural Innovation
Fund (RIF) are being credited to the Rural Promotion Fund
(RPF).

Pledged for Business Segment


(Collateralised Borrowing and
Lending Obligation)

Pledged for Business


Segment (Securities)

Face Value

Book Value

35.00
(55.00)

34.08
(54.81)

2071.00
(2257.00)

2044.06
(2208.63)

10
Interest at the rate of 6.00% (6.00%) per annum
on unutilised balances of RIF, Watershed Development Fund,
KfW NB IGWDP(Andhra Pradesh, Gujarat, Maharashtra
and Rajasthan) and KfW NB IX Adivasi Development
Programme has been credited to respective funds based on
respective agreements. Further, interest at the rate of 6.57%
(8.80%) per annum on unutilised balances of Micro Finance
Development and Equity Fund, Cattle Development
Programme (Uttar Pradesh & Bihar), and Multi Activity
Approach for Poverty Alleviation (MAPA) BAIF (Sultanpur
and Rae Bareli), Financial Inclusion Fund and Financial
Inclusion Technology Fund has been credited to the
respective funds. The said interest is calculated based on
the mid-month average outstanding of the respective funds.

3.
In terms of the agreement with KfW, accretion/
income and certain expenditure under UPNRM have been
charged to the fund. The loans granted out of the fund have
been adjusted with direct loans.
4.
Income under the head Income from Investment
Operations / Deposits includes Discount and Commission.
5.
Subvention received/receivable from GOI
amounting to ` 1475.52 crore (` 989.34crore), being the
difference between the cost of borrowing by NABARD and
the refinance rate, has been reduced from interest and
financial charges and shown as accrued interest.

11.
The expenditure recoverable from Government of
India / international agencies as per Schedule-14 of balance
sheet amounting to ` 28.76 crore includes debit balance of
various funds viz. IGWDP Maharashtra (` 7.25 crore),
IGWDP Gujarat (` 0.88 crore), IGWDP Rajasthan (` 2.96
crore), IGWDP Andhra Pradesh (` 5.85 crore), IFAD
Priyadarshini (` 1.72 crore), Revival Reform Restructuring
of Handloom package (` 10.00 crore), NE council fund for
miscellaneous training (` 0.10 crore) which were shown as
debit balances in Schedule-4 in the respective funds in the
previous year.

6.
Other receipts includes ` 78.49 crore (` 54.49 crore)
received/receivable from GoI towards administration charges
on providing refinance under interest subvention scheme
to SCBs and RRBs, for financing Seasonal Agricultural
Operations.
7.
Government of India advised the bank that the
short term loans extended by the Long Term Co-operative
Credit Structure (LTCCS) are not covered under the interest
subvention scheme. Accordingly, the bank had refunded a
sum of ` 11.80 crore to the Central Government in May,
2012. As this amount has been identified for refund at the
time of audit, the same has been fully provided for, while
accounting the results for the financial year 2011-12.

12.
The Provision for Pension is made after considering
the employers contribution to PF maintained with RBI as
per the records available with the Bank as on 31 March 2012.

8.
An amount of ` 4.29 crore chargeable as penal
interest on account of default in repayment by MPSCARDB
has been waived during the year.

13.
The Bank, during the year, in accordance with AS
22 Accounting for taxes on Income, recognized in the Profit
and Loss account the difference of ` 162.00 crore between
net deferred tax assets of ` 71.15 crore and ` 233.15 crore
as at 31 March 2012 and 31 March 2011 respectively, as
detailed below:

9.
Investments in Government securities include the
following securities pledged with Clearing Corporation of
India Limited as collateral security for Business segments:
123

(` in crore)
Sr. Deferred Tax Assets
No.

31 March
2012

31 March
2011

Provision for Retirement


Benefits made in the books but
allowable for tax purposes on
payment basis

49.65

181.18

Depreciation on Fixed Assets

21.50

21.77

Amortisation of G Sec

0.00

30.20

71.15

233.15

Total

Interest earned on the same is shown as a part of


Interest received on Loans and Advances in the Profit
and Loss Account, treating them as deemed advances.

c)

Deemed Advances for the purpose of IRAC norms,


capital adequacy and computation of ratios etc.

d)

The value of Allotment Letters / Debenture Scrips, yet


to be received, as at the year end, aggregates to NIL (`
238.15 crore)

17.
The bank with effect from 2 September 2011, has
decided to provide financial support to SCARDBs in the
form of refinance loans, instead of subscribing to the Special
Development Debentures floated by them.

14.
Provision for Deferred Tax on account of Special
Reserve created u/s 36(1)(viii) of the Income Tax Act, 1961,
is not considered necessary, as the Bank has decided not to
withdraw the said reserve.

18.
The tax liability of the bank for the Assessment Year
2002-03 amounting to ` 373.15 crore was assessed by the
Income Tax department and fully paid by the bank. However,
the bank has filed an appeal against the taxability of
NABARD for the AY 2002-03 with Income Tax Appellate
Tribunal.

15.
Land and Premises include ` 34.77 crore
(` 29.88 crore) paid towards Office Premises and Staff
Quarters for which conveyance is yet to be completed.
16.
Pursuant to the directives of RBI, the project loans
provided to SCARDBs by way of subscription to the Special
Development Debentures (SDDs) floated by these agencies,
are treated as under:
a)

b)

19.
The net impact due to change in accounting policy
as per para 12.6 of part-A of the schedule was as under:
19.1
Net Effect on Revenue A/c due to change in
Capitalisation Policy

classified as Investments and shown in Schedule 11


under the head Debenture and Bonds.

(` in crore)

Amount that would have been charged


to Revenue A/c as per Previous
Capitalisation Policy (Depreciation on
items under Computer Installations, F&F
& Other CIOE which would have been
capitalised, and cost of Software)

Amount taken to Revenue A/c as per New


Capitalisation Policy (Cost of items under
Computer Installations, F&F & Other
CIOE which are charged to Revenue A/
c, and Depreciation on Software which
is capitalised)

Computer
F&F
Other CIOE
Software

0.97
0.19
0.35
5.61

2.92
0.93
1.73
1.87

1.95
0.74
1.38
-3.74

Total

7.12

7.45

0.33

19.2

Net Effect in
Revenue A/c due
to change in Policy

21.
Disclosure required under AS 15
(Revised) on Employee Benefits is as under:

Impact due to change in Depreciation rate:

An amount of ` 0.22 crore was additionally charged as


depreciation in the current year for assets purchased in earlier
years (2009-10 and 2010-11) for items under Computer
and Communication devices and electrical installations, due
to change in Depreciation rate.

21.1

Defined Benefit Plans

Employees Retirement Benefit plans of the bank include


Pension, Gratuity and Leave Encashment, which are defined
benefit plans. The present value of obligation is determined
based on actuarial valuation using the Projected Unit Credit
Method, which recognizes each period of services as giving
rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation.

20.
The salaries and allowances for the year amounting
to ` 442.63 crore was arrived at after deduction of excess
provision of ` 5.33 crore towards salary arrears.
124

a.

Reconciliation of opening and closing balances of defined benefit obligations:


(` in crore)

Particulars
Present value of defined benefit obligation at
the beginning of year
Current Service Cost

Pension

Gratuity

Leave
Encashment

1223.03 (958.76)

242.57 (221.20)

144.88 (117.63)

33.42

(22.76)

17.53

(16.90)

3.77

(6.54)

Interest Cost

100.90

(79.10)

20.01

(18.25)

11.95

(9.70)

Actuarial gain/ loss

283.32 (207.42)

-8.61

(8.16)

4.42

(17.67)

Benefits paid

-83.80

(-45.01)

-31.82 (-21.94)

-11.99

(-6.66)

1556.87 (1223.03)

239.68 (242.57)

153.03 (144.88)

Present value of defined benefits


obligations at the year end
b.

Amount recognized in the Balance Sheet as on 31 March 2012:


(` in crore)

Particulars

Pension
(Partly Funded)

Gratuity
(funded)

Present value of defined benefits obligations


as at the year end

1556.87 (1223.03)

239.68 (242.57)

153.03 (144.88)

Fair value of plan assets as at the year end

1311.25 (288.11) @

260.82 (227.85)

137.14 (143.66) $

Liability recognized in the Balance sheet


as at the year end

245.63 (934.92)

Leave Encashment
(Funded)

-21.14* (14.72)

15.89

(1.22)

@ Includes the Banks contribution of ` 363.79 crore (` 288.11 crore) towards PF for pension optees available with RBI.
$ Represents the amount invested with Insurance companies towards the liability for Leave

Encashment.

* Negative amount is shown as other assets under Schedule-14


c.

Expenses recognized in the Profit and Loss Account during the year:
(` in crore)

Particulars

Pension

Gratuity

Leave
Encashment

33.42 (22.76)

17.53 (16.90)

3.77

Interest Cost

100.90 (79.10)

20.01 (18.25)

11.95

Net Actuarial gain/ loss

220.54 (172.83)

-8.65

Expected return on Plan Assets

-37.10

Expense recognized in the statement of Profit & Loss

Current Service Cost

d.

(6.54)
(9.70)

(8.16)

12.12 (17.67)

(0.00)

-21.62 (-16.92)

-13.17 (-12.26)

317.76 (274.69)

7.27 (26.39)

14.67 (21.65)

Actuarial assumptions:

Particulars

Pension

Gratuity

Leave
Encashment

1994-96 (Ultimate)

199496 (Ultimate)

199496 (Ultimate)

Discount rate (per annum)

8.75% (8.25%)

8.75% (8.25%)

8.75% (8.25%)

Salary growth (per annum)

5.50% (4.00%)

5.50% (7.00%)

5.50% (7.00%)

Withdrawal rate

1.00% (1.00%)

1.00% (1.00%)

1.00% (1.00%)

Mortality Table (LIC)

125

23.
In the opinion of the Banks management, there is
no impairment to assets to which AS 28 Impairment of
Assets applies requiring any provision.

21.2
The estimates of rate of escalation in salary
considered in actuarial valuation, take into account inflation,
seniority, promotion and other relevant factors including
supply and demand in the employment market.

24.
The movement in Contingent Liability as required
in AS 29 Provisions, Contingent Liabilities and Contingent
Assets is as under:

21.3
The aforesaid liabilities include liabilities of
employees deputed to subsidiaries.
21.4 The above information is certified by the actuary and
the provision for pension is recognized in the profit and loss
account after considering the outstanding balance of the
Banks contribution to the Provident Fund of pension optees.

(` in crore)
Particulars

21.5
The income of ` 22.78 crore recognized during the
year 2011-12 on investments earmarked towards leave
encashment includes the overall impact for the financial years
2010-11 and 2011-12.

21.6

2010-11

Opening Balance

0.00

3.37

Addition during the year

0.24

0.00

Deletion during the year

0.00

3.37

Closing Balance

0.24

0.00

25.
Prior period items included in the Profit and Loss
account are as follows:

Defined Contribution Plan:

The bank contributes a defined sum of 10% on the basic


salary for both pension optees and non pension optees every
month towards Provident Fund. The contribution made for
the pension optees forms part of the plan assets of pension
scheme. The total contribution charged to Profit and Loss
account during the year is ` 12.68 crore (` 11.87 crore)

(` in crore)
Sr. Particulars
No.
1
2.

22.
During the year 2011-12 the bank has created
NABARD Pension Fund Trust and transferred a sum of
` 934.44 crore being the provisions for pension held in the
books of the bank as on 31 March 2011 to the Trust.
27.

2011-12

2011-12

2010-11

Depreciation
Revenue Expenditure

0.00
5.27

2.895
0.00

Total

5.27

2.895

26. Capital adequacy ratio of the Bank as on 31 March


2012 was 20.55% (21.76%) as against a minimum of 9%
as stipulated by RBI.

Investments in Mutual Funds are as under:


(` in crore)

Sr. Name of the


No Mutual Fund
1
2
3
4
5
6
7
8
9
10
11

As at 31 March 2012

As at 31 March 2011

No. of
units

Book
Value

Market
Value

No. of
units

Book
Value

Market
Value

Kotak Mahindra
ICICI Prudential
Canara Robeco
IDFC
UTIMoney Market
Tata
DWS
SBI
IDBI
Peerless
Taurus

0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0

0
0
0
0
0
0
0
0
0
0
0

31178095.5170
2069242.3680
25172008.7263
25159975.5110
310661.2930
276239.8430
2356602.6900
19254837.7780
285224.8670
28065186.0720
284381.6460

50.01
30.01
30.01
30.01
50.01
50.01
30.01
30.01
30.01
30.01
30.01

50.01
30.01
30.01
30.01
50.01
50.01
30.01
30.01
30.01
30.01
30.01

Total

390.11

390.11

126

29.2 Asset Quality and Credit Concentration

28.
As per the information available with the Bank,
there are no dues payable under Micro, Small and Medium
Enterprises Development Act 2006.

(a)

Particulars

29.
The following additional information is disclosed
in terms of RBI circular No.RBI/201112/68
DBOD.No.FID.FIC.2/01.02.00/201112 dated 01 July
2011.

29.1

Capital

(a)

Capital to Riskweighted Assets Ratio


(CRAR)

Net NPA position

0.02136

Asset classification
(` in crore)

31 March
2011

CRAR

20.55

21.76

Core CRAR

19.42

20.43

1.13

1.33

(b)

0.02249

Net Loans & Advances


(b)

31 March
2012

Supplementary CRAR

31 March
2011

Percentage of Net NPAs to

2011-12

(Percent)
Particulars

31 March
2012

Classification
Standard

Subordinated Debt

Amount

2010-11
(%)

165174.11

Amount

(%)

99.945 139459.40 99.950

Sub-standard

22.19

0.013

0.00

0.000

Doubtful

68.21

0.041

68.13

0.049

Loss

1.02

0.001

1.02

0.001

Total

165265.53

100.000

139528.56 100.000

(` in crore)
Particulars
31 March 2012
Amount of subordinated
debt raised and outstanding
Nil
as Tier II Capital

(c)

31 March 2011

(c)Provisions made during the year


(` in crore)

Nil

Provisions against

Risk weighted assets


(` in crore)

Particulars

31 March 2012 31 March 2011

On Balance Sheet Items

80736.44

63515.55

Off Balance Sheet Items

19.44

20.30

(d)

Pattern of Capital contribution as on


the date of the Balance Sheet:

Reserve Bank of India

31 March 2012
0.67%

20.00

1.00%

Government of India 2,980.00

99.33%

1,980.00

99.00%

Total

Standard Assets

78.74

0.00

Non Performing Assets

14.87

32.90

Investments (Net)

30.44

1.93

Income Tax

455.00

460.00

Total

579.05

494.83

Movement in Net NPAs


(` in crore)

Particulars
(A) Net NPAs as at
beginning of the year
(B) Add: Additions during the year
(C) Sub-total (A+B)
(D) Less: Reductions during the year

31 March 2011

20.00

2010-11

(d)

NABARD has received an amount of ` 1000 crore from


Government of India vide their letter no. F.No.20/16/2010AC dated 30 March 2012 towards Share Capital.
Consequent to this the shareholding of Government of
India and RBI in the Paid up capital of NABARD as on 31
March 2012 was at 99.33% : 0.67% as per details given
below.
(` in crore)
Contributor

2011-12

(E) Net NPAs as at


the end of the year (C-D)

2011-12

2010-11

29.83

32.72

7.32

19.44

37.15

52.16

0.00

22.33

37.15

29.83

Note: Net NPA includes ` 0.07 crore (` 0.04 crore) relating to staff
advances.

3000.00 100.00% 2,000.00 100.00%

127

(e)

Credit exposure as percentage to Capital Funds and as percentage to Total Assets

Category

2011-12
Credit Exposure as % to

Largest Single Borrower

2010-11
Credit Exposure as % to

Capital Funds

Total Assets

Capital Funds

Total Assets

91.60

8.35

128.67

11.08

II Largest Borrower Group

Not Applicable

III Ten Largest Single Borrowers for the year

331.83

IV Ten Largest Borrower Groups

Not Applicable

30.24

378.64

Not Applicable

32.59

Not Applicable

(f)

Credit exposure to the five largest industrial sectors as percentage to total loan assets: Not Applicable

29.3

Liquidity

Maturity pattern of Rupee Assets and Liabilities and Maturity pattern of Foreign Currency Assets and Liabilities
(` in crore)
Sr. Item
No
1
2

3
4

Less than
or equal to
1 year

More than
1 year upto
3 years

More than
3 years upto
5 years

More than
5 years upto
7 years

More than
7 years

Total #

82177.97
(68088.65)
Foreign currency assets
0.00
(0.00)
Total Assets
82177.97
(68088.65)
Rupee Liabilities
29159.71
(36715.00)
Foreign currency liabilities
39.88
(39.92)
Total Liabilities
29199.59
(36754.92)

45084.24
(40360.96)
0.00
(0.00)
45084.24
(40360.96)
57562.03
(39438.72)
79.77
(79.75)
57641.80
(39518.47)

34177.67
(31910.59)
0.00
(0.00)
34177.67
(31910.59)
32583.53
(29124.49)
79.77
(79.74)
32663.30
(29204.23)

15242.53
(13478.17)
0.00
(0.00)
15242.53
(13478.17)
25013.99
(18524.70)
34.78
(64.82)
25048.77
(18589.52)

4660.17
(4410.44)
0.00
(0.00)
4660.17
(4410.44)
36520.54
(33943.27)
268.58
(238.42)
36789.12
(34181.69)

181342.58
(158248.82)
0.00
(0.00)
181342.58
(158248.82)
180839.80
(157746.17)
502.78
(502.64)
181342.58
(158248.81)

Rupee Assets

# Net of provision made as per RBI directives on Standard Assets as well as for diminution in value of Investments aggregating
to ` 732.63 (` 623.45 crore)

29.4 Operating results


Particulars
(a)
(b)
(c)
(d)
(e)

Interest income as a percentage to average working funds


Non interest income as a percentage to average working funds
Operating profit as a percentage to average working funds
Return on average Assets (%)
Net Profit per Employee (Rs. in crore)

2011-12

2010-11

6.53
0.07
1.44
0.98
0.36

6.22
0.10
1.25
0.88
0.27

29.5 Movement in the provisions


(a)

Provision for Non Performing Assets (Loan Assets)

Particulars
Opening balance as at the beginning of financial year
Add: Provision made during the year
Less: Write off, write back of excess provision
Closing balance at the close of financial year

2011-12
39.39
14.87
0.00
54.26

128

(` in crore)
2010-11
32.00
23.73
16.34
39.39

(b)

29.12 Disclosure on risk exposure in


Derivatives

Provision for depreciation in investments


(` in crore)
Particulars

A Opening balance as at
the beginning of the financial year

2011-12 2010-11
3.37

1.44

31.74

2.08

(ii) Appropriation, if any, from


Investment Fluctuation
Reserve Account during the year

0.00

0.00

Sub Total [A+B (i)+B (ii)]

35.11

3.52

Write off / Write back of


excess provision

1.30

0.15

(ii) Transfer, if any, to Investment


Fluctuation Reserve Account

0.00

0.00

1.30

0.15

The Bank does not trade in derivatives. However, it has


hedged its liability towards bor rowings from KfW
Germany to the extent of 93.63 million Euro and interest
thereon for the entire loan period. Consequent upon
hedging of foreign currency borrowings the same is shown
at contracted value as per the Swap agreement. The Bank
does not have any open exposure in foreign currency.

B Add
(i)

Provisions made during the year

The value of outstanding principal amount of hedge


contract at the year-end exchange rate stood at ` 632.33
crore and the value of outstanding principal liability in
the books of account stood at contracted value i.e.
` 502.77 crore. The quantitative disclosure in this regard
is as under:

D Less
(i)

Sub Total [D]


E

Closing balance as at
the close of financial year (C-D)

33.81

(` in crore)
Sr. Particulars
No.

3.37

Currency Interest Rate


Derivatives Derivatives

1 Derivatives
(Notional Principal amount)

29.6 Restructured accounts

A) For Hedging

During the current financial year, five loan accounts


outstanding to the extent of ` 788.25 crore (including
loans to MPSCARDB-outstanding ` 770.60 crore) have
been rescheduled. All the said five loans are classified as
Standard Asset and an additional provision at the rate of
1.6% has been made on these assets as per RBI guidelines.
As per IRAC norms provisions for ` 51.37 crore has been
made during 2011-12 towards sacrifice in interest element
on restructuring of MPSCARDB.

632.33
(592.10)

NA

NA

NA

a) Asset (+)

129.55
(89.45)

NA

b) Liability (-)

(0.00)

NA

109.41

NA

B) For Trading
2 Marked to Market Positions [1]

3 Credit Exposure [2]

4 Likely impact of one percentage


change in interest rate (100*PV01)

29.7 Assets sold to securitisation company /


reconstruction company: NIL (NIL)

a) on hedging derivatives

8.70@

NA

NA

NA

a) on hedging

NA

NA

b) on trading

NA

NA

b) on trading derivatives

29.8 Forward Rate Agreements and


Interest Rate Swaps : NIL (NIL)

5 Maximum and Minimum of


100*PV01 observed during the year

29.9 Interest Rate Derivatives: NIL (NIL)


29.10 Investments in Non Government Debt
Securities: NIL (NIL)

@ If MIBOR rate decrease by 100 bps across tenure MTM gain would be
reduced by ` 8.70 crore

29.11 Corporate Debt Restructuring (CDR)

29.13
Exposures where the FI had
exceeded prudential exposure limits during
the year: NIL (NIL)

There are no loan accounts subjected to Corporate


Debt Restructuring during the current year.
129

29.14

Related Party Transactions

List of Related Parties:


Key Management Personnel:

As the Bank is state controlled enterprise within the

1.
2.
3.
4.

meaning of AS-18 "Related Party Transactions", the details


of the transactions with other state controlled enterprises
are not given.

Shri U. C. Sarangi - Ex-Chairman


Shri Rakesh Singh - Ex-Chairman
Dr. Prakash Bakshi - Chairman
Dr. K G Karmakar - Ex-Managing Director
(` in crore)

Name of the Party

Nature of
Relationship

Nature of
Transaction

Amount of
transaction
during the year

Outstanding

Shri U. C. Sarangi

Key Management
Personnel- Ex-Chairman

Remuneration
including perquisites

0.082

0.00

Shri Rakesh Singh

Key Management
Personnel- Ex-Chairman

Remuneration
including perquisites

0.020

0.00

Dr. Prakash Bakshi

Key Management
Personnel-Chairman

Remuneration
including perquisites

0.107

0.00

Key Management PersonnelEx- Managing Director

Remuneration
including perquisites

0.119

0.00

Dr. K G Karmakar

No amounts, in respect of the related parties have been written off/back, or provided for during the year.
Related party relationships have been identified by the management and relied upon by the auditors.

29.15

Issuer categories in respect of investments made


(` in crore)

Sr.
No.

Issuer

(1)

(2)

PSUs

FIs

Banks

Private Corporate

Subsidiaries/Joint ventures

Others (Net of Provision)


including Mutual Funds
Provision held towards depreciation

Total

Amount

Investment
made
through
private
placement

'Below
investment
grade'
Securities
held

'Unrated'
Securities
held

'Unlisted'
Securities

(3)

(4)

(5)

(6)

(7)

180.27
(80.34)
123.00
(123.00)
0.09
(0.00)
216.00
(150.00)
41.37
(23.80)
3100.47
(2262.47)
3.19
(3.37)

154.13
(79.13)
123.00
(123.00)
-

77.88
(79.13)
48.00
(48.00)
-

216.00
(150.00)
41.37
(23.80)
25.92
(10.35)
-

80.25
(19.13)
48.00
(0.00)
0.09
(0.00)
16.00
(0.00)
41.37
(23.80)
25.92
(10.35)
0.59
(0.00)

16.00
(0.00)
41.37
(23.80)
3100.47
(2262.47)
0.59
(3.37)

560.42
(386.28)

0.00
(0.00)

211.04
(53.28)

3283.13
(2410.03)

3658.01
(2636.24)

130

29.16 Non performing investments: NIL


(NIL)

29.19
Sr. Sector
No

29.17 Disclosure on Repo transactions: NIL (NIL)


29.18 Concentration of Deposits, Advances,
Exposure and NPAs
(a)

Concentration of Deposits
(` in Crore)
2011-12

Total Deposits of twenty largest


depositors

Sector-wise NPAs
Percentage of NPAs
to Total Advances
in that sector

Agriculture and allied activities

Industry (Micro & Small,


Medium and Large)

2011-12

2010-11

0.00

0.00

72.35

54.46

Services

0.00

0.00

Personal Loans-Staff Loans

0.06

0.02

2010-11

29.20

85859.17 73761.25

Movement of Gross NPAs


(` in Crore)

Percentage of Deposits of twenty


largest depositors to
Total Deposits of the Bank

90.00%

89.00%

Particulars

2011-12

2010-11

69.19

50.73

Additions (Fresh NPAs) during the year 22.23

25.70

Sub-total (A)

91.42

76.39

(i) Upgradations

0.00

5.40

(ii) Recoveries (excluding recoveries


made from upgraded accounts)

0.00

1.84

(iii) Write-offs

0.00

0.00

0.00

7.24

91.42

69.19

Gross NPAs as on 1st April of


par ticular year (Opening Balance)

(b)

Concentration of Advances
(` in Crore)
2011-12 2010-11

Total Advances to twenty


largest borrowers

Less:-

86213.95 75077.75

Percentage of Advances to twenty


largest borrowers to
Total Advances of the Bank

52.24%

53.81%

Sub-total (B)
(c)

Concentration of Exposure

Gross NPAs as on 31st March of


following year (closing balance) (A-B)

(` in Crore)
2011-12
Total Exposure to twenty largest
borrowers/ customers
Percentage of Exposure to twenty
largest borrowers/customers to
Total Exposure of the bank on
borrowers/customers

2010-11

29.21 Overseas Assets, NPAs and Revenue:


NIL (NIL)

87413.95 75077.75
50.88%

29.22 Off-balance sheet SPVs sponsored


(which are required to be consolidated
as per accounting norms): NIL (NIL)

50.32%

29.23 Information on Business Segment


(d)

Concentration of NPAs

(a)

(` in Crore)

Total Exposure to Top four NPA accounts

2011-12

2010-11

57.40

50.71

Brief Background

The Bank has recognized Primary segments as under:


i)

131

Direct Finance: Includes Loans given to state


governments for rural infrastructure development, cofinance loans and loans given to voluntary agencies/

non-governmental organisations for developmental


activities.

iii) Treasury: Includes investment of funds in treasury


bills, short-term deposits, government securities, etc.

ii)

Refinance: Includes Loans and Advances given to


State Governments, Commercial Banks, L and
Development Banks, State Coop. Banks, Regional
Rural Banks etc. as refinance against the loans
disbursed by them to the ultimate borrowers.

iv) Unallocated: Includes income from staff loans and


other miscellaneous receipts and expenditure
incurred for the developmental role of the bank and
common administrative expenses.

(b)

Information on Primary Business Segment


(` in crore)
Direct Finance

Refinance

Treasury

Unallocated

Total

4,401.32
(4,085.61)

5,198.78
(4,086.49)

1,346.02
(943.24)

32.38
(86.68)

10978.50
(9,202.01)

246.37
(268.69)

1,638.63
(1,567.59)

1302.00
(912.21)

-935.03
(-924.63)

2251.97
(1,823.86)

Total carrying amount of


Segment Assets

71,728.35
(66,409.32)

94,696.77
(74,643.27)

13,226.02
(15,316.71)

2,424.07
(2,502.96)

1,82,075.21
(1,58,872.26)

Total carrying amount of


Segment Liabilities

76190.61
(68,908.87)

84520.54
(69,320.39)

291.17
(266.47)

21,072.89
(20,376.54)

1,82,075.21
(1,58,872.26)

Cost to acquire Segment


Assets during the year

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

18.16
(18.22)

18.16
(18.22)

Amor tization & Depreciation

0.00
(0.00)

0.00
(0.00)

0.00
(0.00)

21.22
(22.58)

21.22
(22.58)

15.13
(32.90)

129.62
(-0.08)

-0.80
( -0.05)

129.34
(100.21)

273.29
(132.98)

Segment Revenue
Segment Results

Other Items:

Non Cash Expenses

(c)

Since the operations of the Bank are confined to India only there is no reportable secondary segment.

30.

Figures in brackets pertain to previous year.

31.

Previous year's figures have been regrouped / rearranged wherever necessary.

As per our attached report of even date


P. Parikh & Associates
Chartered Accountants
FRN . 107564W
Ashok Rajagiri
Partner
M No.046070
Mumbai
Date : 26 May 2012
Prakash Bakshi
Chairman

K. S. Padmanabhan
Chief General Manager
Accounts Department
Mumbai : 26 May 2012

H R Khan
Director

Dipankar Gupta
Director

132

M L Sharma
Director

National Bank for Agriculture and Rural Development


Cash Flow for the year ended 31 March 2012
Particulars

(` in thousands)

2011-2012

2010-2011

2251,96,93

1823,86,02

21,22,00
-80,00
14,87,23
78,74,00
51,37,00
12,58

22,57,98
2,78,34
32,90,00
0
-8,00
4,64

139,38,43
0
-1346,02,32
-3283,28,78
-2072,42,94

118,36,63
0
-938,79,85
-5492,54,83
-4430,89,07

(a) Cash flow from Operating activities


Net Profit as per Profit and Loss a/c before tax
Adjustment for:
Depreciation
Provisions and Amortisations
Provision for Non performing Assets
Provision for Standard Assets
Provision for sacrifice in interest element of Restructured Loan
Profit / Loss on sale of Fixed Assets
Interest credited to various Funds
(including addition/ adjustment made to Interest Differential Fund)
Other Expenses
Income from Investment (including Discount Income)
Expenditure from various Funds
Operating profit before changes in operating assets
Adjustment for net change in:
Current Assets
Current Liabilities
Increase in Loans and Advances
(Including Housing Loan & Other Advances to Staff
Cash generated from operating activities
Payment of Income Tax

2133,68,93
799,07,04

-373,55,50
681,46,96

-25661,77,32
-24801,44,29
-426,74,97

-19035,55,28
-23158,52,90
-539,24,46

Net cash flow from operating activities

(A)

-25228,19,26

-23697,77,35

(B)

1346,02,33
-16,91,56
2,84,72
1331,95,49

943,23,85
-17,39,41
-2087,23,63
-1161,39,19

1848,88,70
11795,64,80
-3352,80,70
12621,07,70
1000,00,00

3925,65,16
6783,83,37
2503,49,41
12780,65,51
0

(b) Cash flow from Investing activities


Income from Investment (including Discount Income)
Increase / Decrease in Fixed Asset
Increase / Decrease in Investment
Net cash used / generated from investing activities
(c)Cash flow from financing activities
Grants / contributions received
Proceeds of Bonds
Increase / Decrease in Borrowings
Increase / Decrease in Deposits
Share capital
Net cash raised from financing activities

23912,80,50

25993,63,45

Net increase in cash and cash equivalent (A)+(B)+(C )


Cash and Cash equivalent at the beginning of the year

(C)

16,56,73
1762,80,65

1134,46,91
628,33,75

Cash and cash equivalent at the end of the year

1779,37,38

1762,80,66

1. Cash and cash equivalent at the end of the year includes :

2011-2012

2010-2011

Cash in hand
Balance with Reserve Bank of India
Balances with other Banks in India
Remittances in Transit
Inter fund transfer
Collateralised Borrowing and Lending Obligations

9
1168,79,91
379,62,31
2,54
0
230,92,53

7
38,85,26
801,32,40
694,44,37
0
228,18,56

Total

1779,37,38

1762,80,66

Previous years figures have been regrouped/ rearranged to confirm to the current years presentation, wherever necessary.
As per our attached report of even date
P. Parikh & Associates
Chartered Accountants
FRN . 107564W
Ashok Rajagiri
Partner
M No.046070
Mumbai
Date : 26 May 2012
Prakash Bakshi
Chairman

K. S. Padmanabhan
Chief General Manager
Accounts Department
Mumbai : 26 May 2012
H R Khan
Director

Dipankar Gupta
Director

133

M L Sharma
Director

Consolidated Balance Sheet


Profit and Loss Account
&
Cash Flow
of
NABARD
&
its Subsidiaries
(NABCONS, ADFT, ABFL, NABFINS)

2011-2012

134

P. Parikh & Associates


Chartered Accountants

Auditors' Report on Consolidated Financial Statements


To the Board of Directors
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
1.

We have examined the attached Consolidated Balance Sheet of NATIONAL BANK FOR AGRICULTURE AND RURAL
DEVELOPMENT (the Bank) and its Subsidiaries as at March 31, 2012, the Consolidated Profit & Loss Account and the
Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the
responsibility of the Banks management. Our responsibility is to express an opinion on these financial statements based on our
audit.

2.

We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in all
material respects, in accordance with an identified financial reporting framework and are free of material misstatement. An
audit also includes assessing the accounting principles used and significant estimates made by the management as well as
evaluating overall financial statements. We believe that our audit provides a reasonable basis of our opinion.

3.

We did not carry out the audit of financial statements of subsidiaries of the Bank. The total Assets and total Revenues in respect
of these subsidiaries are ` 353.65 crore and ` 46.90 crore respectively. The financial statements in respect of two subsidiaries
viz., Agri Development Finance (Tamil Nadu) Ltd. and NABARD Financial Services Ltd., being unaudited, any adjustments to
their balances could have consequential effects on the attached Consolidated Financial Statements, the impact of which is not
ascertained. These financial statements have been certified by the managements of the respective subsidiary companies and
have been furnished to us. In our opinion, in so far as it relates to the amounts included in respect of the Subsidiaries in
Consolidated Financial Statements is based solely on such management certified financial statements.

4.

We report that the Consolidated Financial Statements have been prepared by the Bank in accordance with the requirements of
Accounting Standard (AS) 21 Consolidated Financial Statements issued by the Institute of Chartered Accountants of India
and on the basis of the separate audited/certified financial statements of the Bank and its Subsidiaries included in the consolidated
financial statements.

5.

We report that on the basis of the information and explanations given and on the consideration given of separate audited/
certified financial statements of the Bank and its Subsidiaries and subject to our comment in Para 3 above, we are of the
opinion that the said consolidated financial statements give a true and fair view in conformity with the accounting principles
generally accepted in India.
i.

in the case of the Consolidated Balance Sheet, of the state of affairs of the Bank as at March 31, 2012;

ii. in the case of the Consolidated Profit and Loss Account of the consolidated results of operations of the Bank for the year
ended on that date; and
iii. in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Bank for the year ended on
that date.
Place: Mumbai
Date: May 26, 2012

For and on behalf of


P. Parikh & Associates
Chartered Accountants
Firm Registration No. 107564W
Ashok Rajagiri
Partner,
Membership No.: 046070
HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009,
Tel : 23443549, 23437853, Fax : 23415455,
Website : www.pparikh.com

135

National Bank for Agriculture and Rural Development


Consolidated Balance Sheet as on 31 March 2012
(` in thousands)
Particulars

As on 31.03.2012

As on 31.03.2011

3000,00,00

2000,00,00

Reserve Fund and Other Reserves

13442,36,69

11888,71,64

National Rural Credit Funds

16058,00,00

16045,00,00

Funds Out of Grants received from International Agencies

139,20,78

138,89,56

Gifts Grants, Donations and Benefactions

657,95,94

2601,94,77

4157,17,24

3431,47,40

32,09,12

21,69,85

Deposits

95397,75,23

82776,67,53

Bonds and Debentures

38582,89,64

26787,24,84

Borrowings

4328,48,39

7681,29,09

Current Liabilities and Provisions

6349,96,46

5605,55,85

182145,89,50

158978,50,53

8673,66,91

10881,89,37

18168,55,91

19305,80,92

152593,77,37

126031,30,66

Fixed Assets

225,83,24

229,99,83

Other Assets

2484,06,07

2529,49,75

182145,89,50

158978,50,53

FUNDS AND LIABILITIES


Capital

Other Funds
Minority Interest

TOTAL FUNDS AND LIABILITIES


PROPERTY AND ASSETS

Cash and Bank Balances


Investments
Advances

TOTAL PROPERTY AND ASSETS


As per our attached report of even date
P. Parikh & Associates
Chartered Accountants
FRN . 107564W
Ashok Rajagiri
Partner
M No.046070
Mumbai
Date : 26 May 2012
Prakash Bakshi
Chairman

K. S. Padmanabhan
Chief General Manager
Accounts Department
Mumbai : 26 May 2012

H R Khan
Director

Dipankar Gupta
Director

136

M L Sharma
Director

National Bank for Agriculture and Rural Development


Consolidated Profit and Loss Account for the year ended 31 March 2012
(` in thousands)
2011-12

2010-11

Interest Received on Loans and Advances

9516,42,24

8170,20,18

Income from Investment operations

1354,73,85

946,91,62

139,32,23

107,08,08

11010,48,33

9224,19,88

Interest and Financial Charges

7530,76,44

6194,38,06

Establishment and other expenses

1045,79,85

1135,57,54

21,34,47

22,67,16

145,20,03

35,79,92

TOTAL EXPENDITURE

8743,10,79

7388,42,68

Profit before Income Tax

Income:

Discount Received
Other Receipts
TOTAL INCOME
Expenditure:

Depreciation
Provisions

2267,37,54

1835,77,20

Provision for Income Tax

459,04,55

463,67,98

Deferred Tax Asset Adjustment

161,93,99

84,93,30

1646,39,00

1287,15,92

2,13,27

88,93

1644,25,73

1286,26,99

1644,25,73

1286,26,99

69,30,30

202,67,59

1713,56,03

1488,94,58

310,00,00

360,00,00

Profit after Tax


Share of Profit / Loss in Subsidiaries attributable to Minority Interest
Profit available for Appropriation
Appropriations:
Profit as above
Add: Withdrawals from various funds against expenditure
debited to Profit & Loss Account
Total Profit Available for Appropriation
Transferred to:
Special Reserve u/s 36(I)(viii) of the Income Tax Act, 1961
National Rural Credit (Long Term Operations) Fund

10,00,00

50,00,00

National Rural Credit (Stabilisation) Fund

1,00,00

10,00,00

Co-operative Development Fund

5,35,40

6,05,32

Research & Development Fund

20,65,30

17,67,49

Investment Fluctuation Reserve

27,15,42

116,07,65

50,00,00

Producers Organization Development Fund


Rural Infrastructure Promotion Fund

25,00,00

Financial Inclusion Technology Fund

45,00,00

10,00,00

2,73,85

2,34,20

44,56,36

33,55,54

Reserve Fund

1247,09,69

808,24,38

Total

1713,56,03

1488,94,58

Farmers Technology Transfer Fund


Farm Innovation and Promotion Fund
MFDEF Reserve Fund

137

Additional Notes to Consolidated Accounts


1.

Consolidation has been done pursuant to the listing agreement with stock exchange.

2.
3.

Financial statement in respect of Agri Development Finance (Tamilnadu) Ltd. and NABARD Financial Services Ltd. are unaudited.
Details of the subsidiaries:

Name of the Subsidiary

Country of Incorporation

Proportion of Ownership

Agri Development Finance (Tamilnadu) Ltd.

India

52.10

Agri Business Finance (AP) Ltd.

India

47.82*

NABARD Financial Services Limited

India

61.71

NABARD Consultancy Pvt. Ltd.

India

100

*NABARD controls the Board of Directors of Agri Business Finance (AP) Ltd. and hence considered as a subsidiary.

4.
The financial statements of the company and its subsidiary companies are combined on a line to line basis by adding together expenses
after fully eliminating intra-group balances and intra-group transactions in accordance with Accounting Standard (AS) 21 Consolidated
Financial Statement.
5.
Depreciation on fixed asset is provided on Written Down Value Method (WDV), at the rates specified in Schedule XIV to the Companies
Act, 1956 by Agri Development Finance (Tamilnadu) Ltd and Agri Business Finance (AP) Ltd., whereas NABARD Financial Services provided
Streight Line Method (SLM) at the rates specified in Schedule XIV to the Companies Act, 1956 on prorata basis. Thus the Accounting Policy
followed by subsidiaries for depreciation are different from the Accounting Policy for depreciation followed by NABARD in the preparation of
Consolidated Financial Statements. Thus out of the total depreciation of Rs. 21.34crore (22.67 crore) included in the Consolidated Financial
Statement, 0.13 % (0.14%) of that amount is determined based on depreciation provided by following WDV / SLM at the rates as specified in
Schedule XIV to the Companies Act, 1956.
6.

Income on foreign assignments by NABCONS is accounted on receipt basis. The amount of such fees receivable is not material.

7.

Disclosures as required under AS-17 Segment Reporting in consolidated financial statements are as under:
(` in crore)

Financial Year 2011-12


(Consolidated)
Segment Revenue
Segment Results

Direct Finance

Refinance

Treasury

Unallocated

Total

4412.77 (4090.85)

5198.78 (4086.49)

1346.02 (943.24)

52.91 (103.63)

11010.48 (9224.20)

252.21 (271.38)

1638.63 (1567.59)

1302.00 (912.21)

-925.46 (-915.41)

2267.38 (1835.77)

Total carrying amount of


Segment Assets

71768.21 (66434.55)

94696.77 (74643.27)

13226.02 (15316.71)

2454.89 (2583.97)

182145.89 (158978.51)

Total carrying amount of


Segment Liabilities

76230.47 (68934.10)

84520.54 (69320.39)

291.17 (266.47)

21103.71 (20457.56)

182145.89 (158978.51)

18.42 (18.54)

18.42 (18.54)

0.08 (0.06)

0.00 (0.00)

0.00 (0.00)

21.26 (22.61)

21.34 (22.67)

15.98 (33.10)

129.62 (-0.08)

-0.80 (-0.05)

129.34 (100.21)

274.14 (133.18)

Other Items :
Cost to acquire Segment
Assets during the year
Amortization & Depreciation
Non Cash Expenses
(other than above)

Note: There are no reportable secondary segments for the bank and its subsidiaries

8. Previous Year figures have been regrouped / rearranged wherever necessary


As per our attached report of even date
P. Parikh & Associates
Chartered Accountants
FRN . 107564W
Ashok Rajagiri
Partner
M No.046070
Mumbai
Date : 26 May 2012
Prakash Bakshi
Chairman

K. S. Padmanabhan
Chief General Manager
Accounts Department Mumbai
Mumbai : 26 May 2012

H R Khan
Director

Dipankar Gupta
Director

138

M L Sharma
Director

National Bank for Agriculture and Rural Development


Consolidated Cash Flow Statement for the year ended 31 March 2012
(` in thousands)
Particulars
(a) Cash flow from Operating Activities
Net profit as per P & L a/c before tax
Depreciation
Provisions and Amortisations
Provision for Non performing Assets
Provision for Standard Assets
Provision for Sacrifice in interest element of restructured loan
Interest credited to various funds
Other expenses
Income from Investment
Profit / Loss on sale of Fixed Asset
Expenditure from various funds
Operating profit before working capital changes
Adjustment for net change in:
Current Assets
Current liabilities
Increase/Decrease in Loans and Advances
Cash generated from operating activities
Payment towards Income tax
Net cash flow from operating activities (A)

During 2011-12

During 2010-11

2266,99,31
21,34,47
-31,23
14,87,45
79,53,55
51,37,00
139,38,43
0
-1346,02,32
12,58
-3283,28,78
-2055,99,56

1835,77,20
22,67,16
2,78,34
32,90,00
0
-8,00
118,36,63
0
-938,79,85
4,64
-5492,54,83
-4418,88,71

2126,04,74
746,43,46
-25803,53,80
-24987,05,16
-431,06,93

-377,80,87
717,32,21
-19087,50,88
-23166,88,25
-541,65,19

-25418,12,09

-23708,53,44

1346,02,32
-17,27,32
2,74,03

943,23,85
-17,72,70
-2087,33,45

1331,49,03

-1161,82,30

11821,71,62
-3174,99,77
12557,92,51
1848,86,90
999,30,27
24052,81,52
-33,81,54
1815,57,69

6793,53,37
2555,88,70
12762,20,26
3925,65,06
-58,30
26036,69,09
1166,33,35
649,24,34

1781,76,15

1815,57,69

(b) Cash flow from Investing Activities


Income from Investment
Increase / Decrease of Fixed Assets
Increase / Decrease in Investments
Net cash used in investing activities

(B)

(c) Cash flow from Financing Activities


Proceeds of Bonds / Shares
Increase / Decrease in Borrowings
Increase / Decrease in Deposits
Grants / contributions received
Dividend paid
Net cash raised from financing activities (C)
Net increase in cash and cash equivalent (A)+(B)+(C)
Cash and cash equivalent at the beginning of the period
Cash and cash equivalent at the end of the period
Cash and cash equivalent at the end of the period includes :

2011-12

2010-11

Cash in hand
Balance with Reserve Bank of India
Balances with other Banks in India
Remittances in Transit
Collateralised Borrowing and Lending Obligations

4,04
1168,79,91
381,97,13
2,54
230,92,53

10
38,85,26
854,09,40
694,44,37
228,18,56

Total

1781,76,15

1815,57,69

As per our attached report of even date


P. Parikh & Associates
Chartered Accountants
FRN . 107564W
Ashok Rajagiri
Partner
M No.046070
Mumbai
Date : 26 May 2012
Prakash Bakshi
Chairman

K. S. Padmanabhan
Chief General Manager
Accounts Department
Mumbai : 26 May 2012
H R Khan
Director

Dipankar Gupta
Director

139

M L Sharma
Director

E-mail Addresses of NABARD Head Office Departments at Mumbai


Chairman's Secretariat

chairman@nabard.org

Executive Director (S.K. Mitra)'s Secretariat

ed1@nabard.org

Executive Director (V. Ramakrishna Rao)'s Secretariat

ed2@nabard.org

Accounts Department

ad@nabard.org

Business Initiatives Department

bid@nabard.org

Central Vigilance Cell

cvc@nabard.org

Corporate Communication Department

ccd@nabard.org

Corporate Planning Department

cpd@nabard.org

Department of Core Banking Solutions

dcbs@nabard.org

Department of Economic Analysis & Research

dear@nabard.org

Department of Information Technology

dit@nabard.org

Department of Premises, Security & Procurement

dpsp@nabard.org

Department of Supervision

dos@nabard.org

Development Policy Department-Farm Sector

dpd.fs@nabard.org

Development Policy Department-Non-Farm Sector

dpd.nfs@nabard.org

Finance Department

fd@nabard.org

Financial Inclusion Department

fid@nabard.org

Human Resources Management Department

hrmd@nabard.org

Inspection Department

id@nabard.org

Institutional Development Department

idd@nabard.org

Investment Credit Department

icd@nabard.org

Law Department

law@nabard.org

Micro Credit Innovations Department

mcid@nabard.org

Nabcons

nabcons@nabard.org

Production Credit Department

pcd@nabard.org

Rajbhasha Prabhag

rajbhasha@nabard.org

Secretary's Department

secy@nabard.org

State Projects Department

spd@nabard.org

Telephone Nos.
Reception : 022-26539895/96/99
Protocol & Security : 022 - 26539046
140

Regional Offices / Cell / Training Establishments


REGIONAL OFFICES
ANDAMAN & NICOBAR
NABARD Complex
VIP Road
Port Blair - 744 103
Tel No. : (03192) 233308, 242180
Fax No. : (03192) 237696
E-mail : portblair@nabard.org

GOA
Third floor, Nizari Bhavan
Menezes Braganza Road
Panaji - 403 001
Tel No. : (0832) 2220490, 2430504
Fax No. : (0832) 2223429
E mail : panaji@nabard.org

KARNATAKA
113/1, Jeevan Prakash Annexe
J.C. Road, P. B. No. 29
Bengaluru - 560 002
Tel No. : (080) 22225241/44
Fax No. : (080) 22222148
E mail : bangalore@nabard.org
nabbng@dataone.in

MIZORAM
Ramhlun Road (North)
Bawngkawn
Aizawl - 796 014
Tel No. : (0389) 2343428, 2305290
Fax No. : (0389) 2340815
E mail : aizawl@nabard.org

ANDHRA PRADESH
1-1-61, RTC Cross Roads
Musheerabad
Hyderabad - 500 020
Tel No. : (040) 27685555, 27612651
Fax No. : (040) 27611829
E-mail : hyderbad@nabard.org

GUJARAT
NABARD Tower
Opp. Municipal Garden
Usmanpura
Ahmedabad - 380 013
Tel No. : (079) 27552257-59
Fax No. : (079) 27551584
E mail : ahmedabad@nabard.org

KERALA
Punnen Road, Statue
P. B. No. 220
Thiruvananthapuram - 695 001
Tel No. : (0471) 2323859
Fax No. : (0471) 2324358
E mail : trivandrum@nabard.org

NAGALAND
NSCB Head Office Administrative
Bldg, 4th Floor, West Wing
Khermahal, Circular Road
Dimapur - 797 112
Tel No. : (03862) 234063, 235600
235601
Fax No. : (03862) 227040
E-mail : dimapur@nabard.org

ARUNACHAL PRADESH
Bank Tinali, VIP Road, TT Marg
Opposite State Bank of India
Itanagar - 791 111
Tel No. : (0360) 2215967,
09436040732
Fax No. : (0360) 2212675
E mail : itanagar@nabard.org

HARYANA
Plot No.3, Post Box No. 7
Sector - 34 'A'
Chandigarh - 160 022
Tel No. : (0172) 5046703, 5046728
Fax No. : (0172) 2604033
E mail : haryana@nabard.org

MADHYA PRADESH
E-5, Arera Colony, Bittan Market
Ravishankar Nagar Post Office
Bhopal - 462 016
Tel No. : (0755) 2463341/69
2466695
Fax No. : (0755) 2466188
E mail : bhopal@nabard.org
nabmpro@dataone.in

NEW DELHI
NABARD Tower
24 Rajendra Place
New Delhi - 110 125
Tel No. : (011) 25818733
25721723
Fax No. : (011) 41539187
41539185
E mail : delhi@nabard.org

ASSAM
Opposite Assam Secretariat
G.S. Road, Post Box No.1
Dispur, Guwahati - 781 006
Tel No. : (0361) 2235661
2238004 to 025
Fax No. : (0361) 2235657
E mail : guwahati@nabard.org
nabassam@dataone.in

HIMACHAL PRADESH
NABARD Bhavan, Block No. 32
S.D.A. Complex, Kasumpti
Shimla - 171 009
Tel No. : (0177) 2624373
2624379
Fax No. : (0177) 2622271
E-mail : shimla@nabard.org
nabardsm@dataone.in

MAHARASHTRA
54, Wellesley Road
Post Box No. 5, Shivaji Nagar
Pune - 411 005
Tel No. : (020) 25541083
25542090
Fax No. : (020) 25542250
E-mail : pune@nabard.org

ORISSA
'Ankur', 2/1, Nayapalli Civic Centre
Bhubaneswar - 751 015
Tel No. : (0674) 2553884
Fax No. : (0674) 2552019
E mail : nabbhu@sancharnet.in
bhubaneswar@nabard.org

BIHAR
Maurya Lok Complex
Block B, 4th & 5th floor
Dak Bungalow Road
Patna - 800 001
Tel No. : (0612) 2223985
Fax No. : (0612) 2238424
E mail : patna@nabard.org
pat_nab@dataone.in

JAMMU & KASHMIR


B-II, 4th South Block
Bahu Plaza Complex, P.B. No. 2
Jammu - 180 012
Tel No. : (0191) 2472355, 2472620
Fax No. : (0191) 2472337
E mail : jammu@nabard.org

MANIPUR
Leiren Mansion
Opposite Lamphel Supermarket
Lamphelpat, Imphal - 795 004
Tel No. : (0385) 2410706, 2416192
Fax No. : (0385) 2416191
E-mail : imphal@nabard.org

PUNJAB
Plot No.3, Sector 34-A
Post Box No. 7
Chandigarh - 160 022
Tel No. : (0172) 5046700, 5046701
Fax No. : (0172) 5046702
E mail : chandigarh@nabard.org

CHHATTISGARH
1st & 2nd Floor, Pithalia Complex
K.K. Road, Fafadih Chowk
Raipur - 492 009
Tel No. : (0771) 2888496/99
Fax No. : (0771) 2884992
E mail : raipur@nabard.org
nab_rpr@dataone.in

JHARKHAND
Opp. Adivasi College Hostel
Karamptoli Road
Ranchi - 834 001
Tel No. : (0651) 2361107
Fax No. : (0651) 2361108
E-mail : nabardjh@dataone.in

MEGHALAYA
'U' Pheit Kharmihpen Building
Plot No.28(2), 2nd & 3rd Floor
Dhankheti, Shillong - 793 003
Tel No. : (0364) 2221602, 2503499
2501518
Fax No. : (0364) 2227463
E mail : shillong@nabard.org

RAJASTHAN
3, Nehru Place
Tonk Road, Post Bag No. 104
Jaipur - 302 015
Tel No. : (0141) 2740821, 2743416
Fax No. : (0141) 2742161
E mail : Jaipur@nabard.org

141

SIKKIM
Om Nivas, Church Road
Post Box No. 46
Gangtok - 737 101
Tel No. : (03592) 203015, 204173
Fax No. : (03592) 204062
E mail : nabard_gtk@dataone.in
gangtok@nabard.org

TRIPURA
Palace Compound (East)
Uzirbari Road, Post Box No.9
Agartala - 799 001
Tel No. : (0381) 2302378
Fax No. : (0381) 2224125
E mail : agartala@nabard.org

UTTARAKHAND
113/2, Hotel Sunrise Building
2nd & 3rd Floor, Post Bag No.139
Rajpur Road
Dehradun - 248 001
Tel No. : (0135) 2748611
Fax No. : (0135) 2748610
E mail : dehradun@nabard.org
nabarddoon@dataone.in

TAMIL NADU
48, Mahatma Gandhi Road
Post Box No.6074, Nungambakkam
Chennai - 600 034
Tel No. : (044) 28276088, 28304444
Fax No. : (044) 28275732
E mail : chennai@nabard.org

UTTAR PRADESH
11, Vipin Khand
Gomti Nagar
Lucknow - 226 010
Tel No. : (0522) 2304530
Fax No. : (0522) 2304531
E mail : lucknow@nabard.org

WEST BENGAL
Abhilasha, 2nd floor
Post Box No.9083, 6, Royd Street
Kolkata - 700 016
Tel No. : (033) 22552255, 22667943
Fax No. : (033) 22494507
E-mail : nabardkol@dataone.in
kolkata@nabard.org

CELL
SRINAGAR
Opp. Amar Singh College Gate
Gogji Bagh
Srinagar - 190 008
Tel No. : (0194) 2310280
Fax No. : (0194) 2310479

TRAINING ESTABLISHMENTS
BOLPUR
Bankers Institute of Rural Development
NABARD, Bolpur Lodge
Bolpur 731 204
Birbhum (West Bengal)
Tel No. : (03463) 252812, 252783
Fax No.: (03463) 252295
E-mail : nabbol@rediffmail.com

LUCKNOW
Bankers Institute of Rural Development
Section 'H', L.D.A. Colony
Kanpur Road
Lucknow - 226 012
Tel No. : (0522) 2421 954 / 137 / 187
Fax No.: (0522) 2421 006 /176 / 047
E mail : bird@bsnl.in
birdindia@yahoo.co.in

142

MANGALORE
Bankers Institute of Rural Development
NABARD, Post Box No. 1117
Manjusha Building
Above Automatrix Showroom
Near KSRTC Bus Stand
Bejai Church Road
Bejai, Mangalore - 575 004
Tel No. : (0824) 2225836, 2225844
Fax No.: (0824) 2225835
E mail : rtc.mangalore@nabard.org

LIST OF ABBREVIATIONS
AA

Administrative Approval

ASP

Application Service Provider

AS

Accounting Standards

ATM

Automated Teller Machine

AAGR

Average Annual Growth Rate

ATS

Application Tracker System

AAY

Antyodaya Anna Yopjana

BADP

Border Area Development Programme

A & N Islands

Andaman & Nicobar Islands

BAIF

Bharatiya Agro Industries Foundation

ABCI

Associated Business Communicators of


India

BC

Business Correspondents

BCM

Billion Cubic Meters

ACABC

Agri Clinic and Agri Business Centres

BDP

Business Development Plan

ACB

Audit Committee of the Board

BF

Business Facilitators

ACE

APRACA Centre of Excellence

BKGB

Bihar Kshetriya Gramin Bank

ACSTI

Agriculture Co-operative Staff Training


Institute

BIRD

Bankers Institute of Rural Development

ADFC

Agriculture Development Finance


Company

BMCU

Bulk Milk Chilling Unit

BNB

Bhavishya Nirman Bonds

ADWDRS

Agricultural Debt Waiver and Debt Relief


Scheme, 2008

BoS

Board of Supervision

AEPS

Aadhar Enabled Payment Service

BPL

Below Poverty Line

AEZ

Agricultural Export Zone

C-PEC

Centre for Professional Excellence in


Cooperatives

AFC

Agricultural Finance Corporation Ltd.

CAC

Concurrent Audit Cell

AFPRO

Action for Food Production

CAGR

Compound Annual Growth Rate

AgDSM

Agriculture Demand Side Management

CARE

Credit Analysis & Research Limited

AGMARKNET

Agricultural Marketing Information


Network

CAS

Common Accounting System

AH

Animal Husbandry

CAT

Capacity Building for Adoption of


Technology

AIBP

Accelerated Irrigation Benefit Programme

CB

Commercial Banks

AIDIS

All India Debt and Investment Survey

CBLO

ALCO

Asset Liability Management Committee

Collateralised Borrowing and Lending


Obligation

ALM

Asset Liability Management

CBP

Capacity Building Phase

AMI

Agriculture Marketing Infrastructure

CBS

Core Banking Solution

AML

Anti-Money Laundering

CCB

Central Co-operative Bank

APB

Aadhar Payment Bridge

C-DAC

Centre for Development of Advanced


Computing

APCOB-CTI

Andhra Pradesh State Cooperative


Bank-Cooperative Training Institute

CDF

Co-operative Development Fund

APMC

Agricultural Produce Market Committee

CDP

Cattle Development Project

APRACA

Asia-Pacific Rural and Agricultural Credit


Association

CER

Certified Emission Reduction

CERFI

Centre of Excellence for Rural Financial


Institutions

CES

Community Enterprise System

ARWIND

Assistance to Rural Women in Non-Farm


Development

143

CFSA

Committee on Financial Sector Assessment

DDM

District Development Manager

CGTMSE

Credit Guarantee Fund Trust for Micro


and Small Enterprises

DDSD

Demand Driven Skill Development

DEDS

CIBIL

Credit Information Bureau (India) Limited

Dairy Entrepreneurship Development


Scheme

CIP

Central Issue Price

DLMRC

CISS

Capital Investment Subsidy Scheme

District Level Monitoring and Review


Committee

CLA

Central Loan Assistance

DLT

District Level Trainers

CLMAS

Centralised Loan Accounting and


Management System

DMI

Directorate of Marketing and Inspection

DPR

Detailed Project Reports

CMA

Credit Monitoring Arrangement

DRDA

District Rural Development Agency

CMIE

Centre for Monitoring of Indian Economy

DRIP

District Rural Industries Project

CMR

Centre for Micro-finance Research

DTL

Demand and Time Liabilities

CPI

Consumer Price Index

DTP

Development of Tribal Population

CPI-AL

Consumer Price Index for Agricultural


Labour

DVCF

Dairy Venture Capital Fund

EC

Extension Counter

CPIO

Central Public Information Offices

FC

Farmers Clubs/Financial Co-operation

CPI-RL

Consumer Price Index for Rural Labour

FCI

Food Corporation of India

CPIS

Coconut Palm Insurance Scheme

FDI

Foreign Direct Investment

CRAR

Capital to Risk-Weighted Assets Ratio

FIF

Financial Inclusion Fund

CRIDA

Central Research Institute for Dryland


Agriculture

FIMMDA

Fixed Income Money Market and


Derivatives Association of India

CRISIL

Credit Rating Information Services of


India Limited

FINO

Financial Information Network &


Operations Ltd.

CRR

Cash Reserve Ratio

FIP

Full Implementation Phase

CS

Capital Support/Company Secretary

FIPF

Farm Innovation and Promotion Fund

CSA

Co-operative Societies Act

FITF

Financial Inclusion Technology Fund

CSP

Customer Service Provider

FIU-IND

Financial Intelligence Unit - India

CTFC

Certified Trainer in Financial Cooperatives

FLCC

CTI

Co-operative Training Institute

Financial Literacy and Credit


Counselling Centres

CUC

Carcass Utilisation Centre

FR

Flash Reports

CV

Coefficient of Variation

FRC

Farmers Resource Centre

CVC

Central Vigilance Cell

FRL

Full Reservoir Level

CWC

Central Water Commission

FSR

Feasibility Study Report

DADI

District Agricultural Development Index

FSS

Farmers Service Societies

DAHDF

Department of Animal Husbandry,


Dairying and Fisheries

FTRDC

Farmers Training and Rural


Development Centres

DAP

Di-Ammonium Phosphate/
Development Action Plan

FTTF

Farmers Technology Transfer Fund

GAAP

Generally Accepted Accounting Policies

GCC

General Credit Card

DCCB

District Central Co-operative Bank

144

GCF

Gross Capital Formation

GDP

Gross Domestic Product

GDS

Gross Domestic Savings

GIZ

Deutsche Gesellschaft fur Internationale


Zusammenarbeit

IPDSS

Institutional Protection and Deposit


Safety Scheme

IPM

Integrated Pest Management

IR

Inspection Reports

IRDA

Insurance Regulatory and Development


Authority

IRR

Internal Rate of Return

IRV

Individual Rural Volunteers

ISAP

Indian Society of Agri-business Professionals

GLC

Ground Level Credit

Ha

hectare

HFT

Held for Trading

HPC

High Power Committee

HRMS

Human Resource Management System

ISEC

Institute for Social and Economic Change

HTM

Held to Maturity

ISMW

Indian School of Micro-Finance for Women

HWG

Handloom Weavers Groups

ISRO-VSAT

IARI

Indian Agricultural Research Institute

Indian Space Research Organisation Very Small Aperture Terminal

IAS

Indian Administrative Service

ISS

Investment Specific Studies

IBPS

Institute of Banking Personnel Selection

ITI

Integrated Training Institute

ICAI

Institute of Chartered Accountants of India

IWDP

Integrated Watershed Development


Programme

ICM

Institutes of Cooperative Management

JCC

Joint Consultative Committee

ICRA

Investment Information and Credit


Rating Agency of India

JLG

Joint Liability Group

ICRISAT-WWF

International Crops Research Institute for


the Semi-Arid Tropics - World Wide
Fund for Nature

JLTC

Junior Level Training Centres

JNNSM

Jawaharlal Nehru National Solar Mission

KADFC

ICT

Information and Communications


Technology

Karnataka Agriculture Development


Finance Company Ltd.

KCC

Kisan Credit Card

IDRBT

Institute for Development & Research in


Banking Technology

KfW

IEC

Information, Education, Communication

Kreditanstalt fur Wiederaufbau


(German Development Bank)

IES

Indian Economic Service

KVIC

Khadi and Village Industries Commission

IFAD

International Fund for Agriculture


Development

KVK

Krishi Vigyan Kendras

KYC

Know Your Customer

IGWDP

Indo-German Watershed Development


Programme

LABS

Livelihood Advancement Business School

LAMPS

Large-sized Adivasi Multipurpose Society

IHDS

Integrate Handloom Development


Scheme

LBSNAA

Lal Bahadur Shastri National Academy


of Administration

IIBM

Indian Institute of Bank Management

LPA

Long Period Average

IIM

Indian Institute of Management

LT

Long Term

IIMPS

Invest India Micro-Pension Services

INM

Integrated Nutrient Management

LTCCS

Long Term Co-operative Credit Structure

IIT

Indian Institute of Technology

LWE

Left Wing Extremism

IMF

International Monetary Fund

MAAPA

Multi-activity Approach for Poverty


Alleviation

145

MACS

Mutually Aided Co-operative Societies

NER

North-Eastern Region

MDMI

Manpower Development & Management


Institute

NFS

Non-Farm Sector

MEDP

Micro-Enterprise Development Programme

NFSM

National Food Security Mission

MF

Micro-Finance

NGO

Non-Governmental Organisation

MFDEF

Micro-finance Development and Equity Fund

NHM

National Horticulture Mission

MFI

Micro Finance Institution

NIDA

NABARD Infrastructure Development


Assistance

MIS

Management Information System/Market


Intervention Scheme

NIMC

National Implementing and Monitoring


Committee

MMS

Mandal Mahila Samakhya

NIRB

National Institute of Rural Banking

MMTC

Minerals and Metals Trading Corporation

NLUP

New Land Use Policy

MNAIS

Modified National Agricultural Insurance


Scheme

NMCP

National Manufacturing Competitiveness


Programme

MNRE

Ministry of New and Renewable Energy

NMMI

National Mission on Micro Irrigation

MoA

Ministry of Agriculture/Memorandum of
Agreement

NPA

Non Performing Asset

MOP

Muriate of Potash

NPCI

National Payments Corporation of India

MoSPI

Ministry of Statistics and Programme


Implementation

NPDP

National Pulses Development


Programme

MoT

Ministry of Textiles

NPOF

National Project on Organic Farming

MoU

Memorandum of Understanding

NPRI

National Programme on Rural


Industrialisation

MPLADS

Member of Parliament Local Area


Development Scheme

NPS

New Pension System

MPKV

Mahatma Phule Krishi Vidyapeeth

NPW

Net Present Worth

MRP

Maximum Retail Price

NR

Natural Rubber

MSP

Minimum Support Price

NRC(LTO)

MSTP

Million Shallow Tubewell Programme

National Rural Credit


(Long Term Operations)

MT

Medium Term / Metric Tonne

NRMC

Natural Resources Management Centre

MU

Mother Units

NRC(Stab.)

National Rural Credit (Stabilisation)

Nabcons

NABARD Consultancy Services Pvt. Ltd.

ODI

Organisational Development Initiative

NABFINS

NABARD Financial Services Ltd.

OMSS

Open Market Sale Scheme

NAFSCOB

National Federation of State Cooperative


Banks

OPP

Oilseeds Production Programme

OSS

Off-site Surveillance System

NAIS

National Agricultural Insurance Scheme

OSAO

Other than Seasonal Agricultural Operations

NBFC

Non-Banking Finance Company

PACS

Primary Agricultural Credit Societies

NBS

Nutrient Based Susidy

PARFI

PanIIT Alumni Reach for India

NCCT

National Council for Cooperative Training

PAT

Profit After Tax

NCOF

National Centre of Organic Farming

PBT

Profit Before Tax

NEDFi

North Eastern Development Finance


Corporation Ltd.

PCARDB

Primary Co-operative Agriculture and


Rural Development Bank

146

PDAI

Primary Dealers Association of India

RMCB

Risk Management Committee of the Board

PDS

Public Distribution system

RNFS

Rural Non-Farm Sector

PEC

Project Equipment Corporation

RRB

Regional Rural Bank

PFRDA

Pension Fund Regulatory &


Development Authority

RSVY

Rashtriya Sam Vikas Yojana

RTC

Regional Training College

PGDRB

Post Graduate Diploma in Rural Banking

RTI

Right to Information

PIA

Project Implementing Agency

PLP

Potential Linked Credit Plan

RUDSETI/R-SETI Rural Development and Self


Employment Training Institute

PMU

Programme Management Unit

R&D

Research and Development

POS

Point of Sale

SAO

Seasonal Agricultural Operations

PPID

Pilot Project for Integrated Development


of Backward Blocks

SAS

Situation Assessment Survey

SAU

State Agricultural University

PODF

Producer Organisation Development Fund

SBLP

SHG-Bank Linkage Programme

PPP

Public Private Partnership

SBPC

PRI

Panchayat Raj Institution

Standardised Banking Programme for


Co-operatives

PUCB

Primary Urban Co-operative Bank

SCARDB

PVCF

Poultry Venture Capital Fund

State Co-operative Agriculture and Rural


Development Bank

PVI

Preventive Vigilance Inspections

SCB

State Co-operative Bank

RBI

Reserve Bank of India

SCC

Swarojgar Credit Card

RASS

Rashtriya Seva Samiti

SDC

Swiss Agency for Development and


Cooperation

RCMB

Risk Management Committee of the Board

SDD

Special Development Debentures

RCS

Registrar of Co-operative Societies

SDP

Skill Development Programmes

RDBS

Rural Development Banking Service

SEWA

Self Employed Womens Association

REDP

Rural Entrepreneurship Development


Programme

SFAC

Small Farmers Agribusiness Consortium

RDA

Rural District Association

SF/MF

Small Farmers/Marginal Farmers

RFA

Revolving Fund Assistance

SFP

State Focus Paper

RFI

Rural Financial Institutions

SGSY

Swarnjayanti Gram Swarozgar Yojana

RFIP

Rural Financial Institutions Programme

SHG

Self Help Group

SHLS

Solar Home Lighting System

RGCT

Rajiv Gandhi Charitable Trust

SHPI

Self Help Promoting Institution

RGMVP

Rajiv Gandhi Mahila Vikas Pariyojana

SIDBI

RICM

Regional Institute of Cooperative


Management

Small Industries Development Bank


of India

SLIC

State Level Implementation Committee

RIDF

Rural Infrastructure Development Fund

SLR

Statutory Liquidity Ratio

RIPF

Rural Infrastructure Promotion Fund

SLSMC

RIF

Rural Innovation Fund

State Level Sanctioning and Monitoring


Committee

RLP

Realistic Lending Programme

SLTF

State Level Task Force

RML

Reuters Market Light

SMS

Short Messaging Service

147

SNTS

Special Non-Transferability Scheme

TMB

Term Money Borrowings

SOFTCOB

Scheme of Financial Assistance for


Training of Co-operative Banks Personnel

TMT

Top Management Team

TPDS

Targeted Public Distribution System

SPA

Special Programme Assistance

ToR

Terms of Reference

SPV

Special Purpose Vehicles

UIDAI

Unique Identification Authority of India

SRI

System of Rice Intensification

UNDP

SRTO

Small Road Transport Operators

United Nations Development


Programme

SS

Special Studies

UPNRM

SSI

Sustainable Sugarcane Initiative

Umbrella Programme on Natural


Resources Management

STCCS

Short Term Co-operative Credit Structure

USAID

US-Agency for International


Development

STCRC

Fund Short Term Co-operative Rural


Credit (Refinance) Fund

USQ

Unstarred Question

STD

Short Term Deposit

UT

Union Territory

ST(SAO)

Short Term (Seasonal Agricultural


Operations)

VA

Voluntary Agency

VC

Video Conferencing

ST(OSAO)

Short Term (Other than Seasonal


Agricultural Operations)

VDP

Village Development Programme

VSAT

Very Small Aperture Terminal

SWC

State Warehousing Corporation

VWC

Village Watershed Committee

SWOT

Strength, Weakness, Opportunities,


Threats

WAN

Wide Area Network

TANGEDCO

Tamil Nadu Generation and Distribution


Company

WBCIS

Weather Based Crop Insurance Scheme

WDC

Women Development Cell

TC

Technical Component

WDF

Watershed Development Fund

TDF

Tribal Development Fund

WPI

Wholesale Price Index

TE

Training Establishment

WSHG

Women Self Help Group

TFO

Total Financial Outlay

ZoC

Zone of Consideration

148

National Bank for Agriculture and Rural Development


C-24, G Block, Bandra-Kurla Complex, Bandra ( East ), Mumbai - 400 051.
website : http://www.nabard.org