bank for agriculture and rural development plot: c-24/‘g’, bandra-kurla complex post box: 8121,...
TRANSCRIPT
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./ 697 / AR-1/2011-12
11 July 2011
20 Ashadha 1933 (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 :
i. A copy of the audited Annual Accounts for the year ended 31st
March 2011 alongwith
a copy of the Auditors’ Report and
ii. Two copies of the Annual Report of the Board of Directors on the working of
National Bank during the year ended 31st
March 2011.
Yours faithfully
Prakash Bakshi
Letter of Transmittal
Board of Directors
Directors appointed
under Section 6(1)(c) of the
NABARD Act, 1981
Directors appointed
under Section 6(1)(d) of the
NABARD Act, 1981
Directors appointed
under Section 6(1)(e) of the
NABARD Act, 1981
Rakesh Singh
Chairman
Dr. K. C. Chakrabarty Lakshmi Chand Shashi Rekha
Rajagopalan
P. K. Basu B. K. Sinha Alok Nigam
R. K. Meena A. K. Sinha K. Jayakumar M. I. Khandey
Dr. K. G. Karmakar
Managing Director
ContentsPage No.
NABARD at a Glance
Key Data References
Principal Officers
Highlights .................................................................................................................................................................................... i
I. Economic Environment ....................................................................................................................................................1
• Global Economy ...........................................................................................................................................................1
• Indian Economy ............................................................................................................................................................2
II. Development and Promotional Initiatives ..................................................................................................................17
• Credit Planning ...........................................................................................................................................................17
• Farm Sector .................................................................................................................................................................17
• Rural Non-Farm Sector ...............................................................................................................................................26
• Financial Inclusion ......................................................................................................................................................28
• Micro-Finance ..............................................................................................................................................................30
• NABARD Consultancy Services ..................................................................................................................................34
• Research and Development Activities .........................................................................................................................35
III. Business Operations .......................................................................................................................................................39
• Production Credit ........................................................................................................................................................39
• Investment Credit ........................................................................................................................................................43
• Rural Infrastructure Development Fund ......................................................................................................................54
IV. Capacity Building of Client Institutions .....................................................................................................................63
• Institutional Development ...........................................................................................................................................63
• Supervision of Banks ..................................................................................................................................................76
V. Organisation, Corporate Governance and Management ..........................................................................................79
• Management ...............................................................................................................................................................79
• Human Resources Management .................................................................................................................................80
• Administration and Other Matters ...............................................................................................................................82
VI. Financial Performance & Management of Resources ...............................................................................................87
• Sources of Funds .........................................................................................................................................................87
• Uses of Funds ..............................................................................................................................................................89
• Income and Expenditure .............................................................................................................................................90
Annual Accounts 2010-11 ......................................................................................................................................................91
Auditors’ Report .......................................................................................................................................................................92
Balance Sheet ..........................................................................................................................................................................93
Profit and Loss Account ..........................................................................................................................................................94
Schedules to Balance Sheet ...................................................................................................................................................95
Cash Flow Statement .............................................................................................................................................................117
Consolidated Financial Statements 2010-11 ....................................................................................................................118
E-mail Addresses of NABARD Head Office Departments at Mumbai ...................................................................124
Regional Offices/Cell/Training Establishments .................................................................................................................125
Abbreviations ........................................................................................................................................................................127
1.1 Union Budget 2011-12: Highlights on Agricultureand Rural Development ................................................ 8
1.2 Working Groups for Twelfth Five Year Plan(2012-2017) .................................................................... 8
1.3 Task Force "to look into the issue of a large number offarmers, who had taken loans from privatemoneylenders, not being covered under the loanwaiver scheme" : Recommendations .......................... 14
2.1 Mid-Course Evaluation of Watershed Projectssupported under WDF ................................................. 18
2.2 Outcome of Village Development Programmes -Phase I .......................................................................... 19
2.3 Exotic Vegetables in Low Cost Poly-houses .............. 20
Boxes
2.4 UPNRM Projects - A Success Story ............................ 25
2.5 Salient features of Natueco Farming(10 Gunta Model) ......................................................... 26
2.6 Dalbandhus of Tripura ................................................. 32
2.7 Findings of the Study on Organised Agri-foodRetailing and Supply Chain Management ................. 36
3.1 Evaluation Studies on RIDF Projects : Feedback onBenefits Realised .......................................................... 61
3.2 NABARD Infrastructure Development Assistance ...... 62
4.1 Impact of GoI Revival Package for STCCS ............... 72
5.1 Repositioning of NABARD - Pilot interventions ........ 80
Table 1.1 : Overview of Global Economy .............................. 1
Table 1.2 : Production of Cereals, Vegetables &
Milk in the World ................................................. 2
Table 1.3 : Economic Indicators ............................................. 3
Table 1.4 : Sectoral Growth Rates of GDP ............................. 3
Table 1.5 : Trends in Exports and Imports ............................. 5
Table 1.6 : Trends in Rainfall and Water Storage ................... 5
Table 1.7 : Area Sown under Major Crops ............................. 6
Table 1.8 : Agency-wise Ground Level Credit Flow ............... 7
Table 1.9 : Sub-sector-wise Ground Level Credit Flow for
Agriculture & Allied Activities ............................... 9
Table 1.10 : Production of Major Crops ................................ 10
Table 1.11 : Production, Consumption and
Exports of Major Plantation Crops ..................... 11
Table 1.12 : Area and Production of Major Horticulture Crops . 12
Table 1.13 : Gross Capital Formation in Agriculture .............. 12
Table 1.14 : Agency-wise, Year-wise Kisan Credit Cards Issued .. 13
Table 1.15 : Minimum Support Prices for Major Crops ................ 15
Table 2.1 : Artificial Groundwater Recharge through dugwells 23
Table 2.2 : Externally Aided on-going Projects ................... 24
Table 2.3 : Funds Utilisation - FIF and FITF ........................ 29
Table 2.4 : Progress of the Micro-Finance Programme ........ 30
Table 2.5 : Grant Assistance Extended to various
Partners in SHG-Bank Linkage Programme....... 31
Table 2.6 : Training of RFI Personnel ................................... 37
Table 3.1 : Short-Term Refinance (Production Credit)
for the Last Five Years ........................................ 39
Table 3.2 : Sanction of ST(SAO) Credit Limits to SCB ...... 39
Table 3.3 : Sanction of ST(SAO) Credit Limits to RRB ...... 41
Table 3.4 : Rates of Interest on Refinance ............................ 42
Table 3.5 : Agency-wise Disbursements ................................ 44
Table 3.6 : Region-wise Disbursements ................................ 45
Table 3.7 : Sector-wise Disbursements ................................ 46
Table 3.8 : Projects Sanctioned under
Cold Storages and Rural Godowns .................... 47
Table 3.9 : Units Financed and Completed under
Refinance Support .............................................. 53
Table 3.10 : Sector-wise Projects and Amounts Sanctioned .. 55
Tables
Chart 1.1-(a) : Annual Average Inflation Rate forMajor Sub-groups of WPI .................................... 4
Chart 1.1-(b) : Monthly Inflation Rate for MajorSub-groups of WPI .............................................. 4
Chart 3.1 : Financial Support by NABARD ......................... 39
Chart 3.2 : Agency-wise Share in Refinance Disbursements . 44
Table 3.11 : Tranche-wise Sanctions and Disbursements -
On-going – RIDF XI to XVI ................................ 56
Table 3.12 : Utilisation Percentage under RIDF (I TO XVI) ... 57
Table 3.13 : Year/Tranche-wise Disbursements and
Deposits received under RIDF ............................ 58
Table 3.14 : Cumulative Economic and
Social Benefits of RIDF Projects ......................... 59
Table 3.15 : State-wise Benefits Estimated Under RIDF I to XVI . 60
Table 4.1 : Growth of PACS ................................................. 63
Table 4.2 : Growth of Short-Term Co-operative Banks ........ 63
Table 4.3 : Growth of Long-Term Co-operative Banks ........ 64
Table 4.4 : Working Results of Co-operative Banks ............. 64
Table 4.5 : Accumulated Losses ............................................ 64
Table 4.6 : Region-wise Working Results of SCB ................. 65
Table 4.7 : Region-wise Working Results of DCCB .............. 65
Table 4.8 : Region-wise Working Results of SCARDB ......... 66
Table 4.9 : Region-wise Working Results of PCARDB ......... 66
Table 4.10 : Composition of NPA of Co-operative Banks ..... 67
Table 4.11 : Percentage of Recovery of loans to Demand ..... 68
Table 4.12 : Frequency Distribution of Co-operative
Banks according to Range of
Loan Recovery Percentage ................................. 68
Table 4.13 : Frequency Distribution of States/UT
according to Level of Loan Recovery of
SCB and DCCB .................................................. 69
Table 4.14 : Frequency Distribution of States/UT
according to Levels of Loan Recovery of
SCARDB and PCARDB ...................................... 69
Table 4.15 : Elected Boards under Supersession ................... 70
Table 4.16 : Indicators of Performance of RRB ........................ 73
Table 4.17 : Region-wise Working Results of RRB ................. 74
Table 4.18 : Frequency Distribution of States According to
Levels of Recovery of RRB ................................. 74
Table 4.19 : Status of Financial Inclusion - RRB .................... 76
Table 5.1 : Promotions Effected During the Year ................. 81
Table 5.2 : Total Staff Strength ............................................. 81
Table 6.1 : Sources of Funds .................................................. 87
Table 6.2 : Uses of Funds ...................................................... 89
Charts
Chart 3.3 : Region-wise Share in Refinance Disbursements . 45
Chart 3.4 : Tranche-wise Sanction-RIDF I to XVI ................. 55
Chart 3.5 : Sector- wise Share inAmounts Sanctioned under RIDF ..................... 55
Chart 3.6 : Year-wise Disbursements under RIDF I to XVI ... 56
NABARD AT A GLANCE
(` crore)
Sources of Fund 2011 2010 Net
Accretion
Capital 2,000 2,000 0
Reserves & Surplus 11,863 10,675 1,188
NRC(LTO) Fund 14,468 14,417 51
NRC (Stabilisation) Fund 1,577 1,566 11
Deposits 277 505 (-)228
Bonds and Debentures 26,788 20,004 6,784
Borrowings from GoI 124 147 (-)23
Borrowings from
Commercial Banks 0 500 (-)500
Foreign Currency Loan 503 494 9
Borrowings against STD 360 0 360
Certificate of Deposits 137 379 (-)242
Commercial Paper 6,448 2,680 3,768
Collateralised Borrowing
and Lending Obligation 0 215 (-)215
Term Money Borrowings 110 763 (-)653
RIDF Deposits 67,878 59,869 8,009
STCRC Fund 14,622 9,622 5,000
Other Liabilities 5,546 4,863 683
Other Funds 6,171 7,593 (-)1,422
Total 1,58,872 1,36,292 22,580
Uses of Funds 2011 2010 Net
Utilisation
Cash and Bank Balances 11,218 9,628 1,590
Collateralised Borrowing
and Lending Obligation 228 0 228
Investments in
a) GOI Securities 2,548 1,991 557
b) ADFC Equity 19 15 4
c) AFC Equity 1 1 0
d) SIDBI Equity 48 48 0
e) AICI Ltd. 60 60 0
f) NCDEX Ltd. & MCX Ltd. 18 15 3
g) Nabcons 5 5 0
h) Mutual Fund 390 900 (-)510
i) Biotech Venture Fund 10 5 5
j) Treasury Bills 0 0 0
k) Commercial Paper 1,862 744 1,118
l) Non Convertible Bonds 225 0 225
m) Equity Shares of other 1 0 1
Institutions
n) Debentures in Nature of Advance 13,461 0 13,461
Loans and Advances
a) Production &
Marketing Credit 33,885 24,073 9,812
b) Conversion of Production
Credit into MT Loans 193 0 193
c) Liquidity Support 0 20 (-)20
d) MT & LT Project Loans 25,435 35,742 (-)10,307
e) Interim Finance 0 1 (-)1
f) LT Non-Project Loans 167 199 (-)32
g) Other Loans 182 131 51
h) RIDF Loans 66,078 60,255 5,823
i) Co-finance 88 84 4
(Net of Provision)
Fixed Assets 230 235 (-)5
Others Assets 2,520 2,140 380
Total 1,58,872 1,36,292 22,580
KEY DATA REFERENCES
Page Particulars Unit Numerical Value Amount (` crore)
No.2009-10 2010-11 2009-10 2010-11
Economic Indicators
1 Overall GDP1 % Growth 8.0 QE 8.5 RE – –
2 Agri GDP1+ % Growth 0.4 QE 6.6 RE – –
2 Share of Agri GDP in total GDP % 14.6 14.4 RE – –
4 South-west Monsoon % deviation from normal (-)23 2 – –
5 North-east Monsoon 8 21 – –
7 GLC % increase 27.36 16.19 3,84,514 4,46,779
9 Foodgrains production million tonnes 218.11 235.88 3rd AE – –
10 Oilseeds production million tonnes 24.88 30.25 3rd AE – –
10 Sugarcane production million tonnes 292.30 340.54 3rd AE – –
10 Cotton production million bales++ 24.22 33.92 3rd AE – –
13 KCC Issued million 9.01 7.26 34,982 43,370
Development and Promotional initiatives
18 Watersheds No. 59 66 196 220.57
20 Tribal development projects No. 79 126 236 373.97
20 FIPF- projects No. 17 45 1.55 5.47
21 FTTF No. of projects 151 512 4.9 44.97
21 Farmers’ Club No. of clubs 16,590 21,903 – –
24 NABARD-KfW Projects No. 8 8 7 135.75
26 RIF- promotional programmes No. of projects 155 122 17.7 11
27 REDP No. 2,627 3,327 10.48 12.34
27 SCC Issued lakh 0.63 1.20 240 514.26
29 FITF & FIF No. of projects 47 205 40.97 120.10
30 SHG Loan Disbursed* lakh 16.09 15.86 12,253 14,453
34 Consultancy Assignments - Contracted No. of projects 83 62 17.11 24.13
35 R&D Fund - Sanction No. of projects 9 10 1.01 1.09
Business Operations
39 Financial Support by NABARD – – – 57,068 60,483
Refinance - ST Credit 24,715 34,196
40 ST (SAO) - SCB No. 20 21 18,109 23,759
40 Weavers’ - SCB No. 5 4 177 215.75
41 - RRB No. 74 80 6,832 9,799.69
41 ST (OSAO) - RRB – – – 542 600
42 Refinance - Investment Credit 12,009.08 13,485.87
46 Farm Sector – – – 4,029 5,055
46 NFS – – – 3,466 3,446
46 SHG – – 3,174 2,545
46 Co-financing projects No. 8 3 12 14
55 RIDF Loans - Sanction No. of projects 39,015 41,779 15,630 18,314.88
55 - Disbursement – – – 18,888 12,060.04
Capacity Building of Client Institutions
ST Co-operatives
64 SCB in profit @ No. 26 28 395 463
64 DCCB in profit @ No. 321 323 1,603 1,545
LT Co-operatives
64 SCARDB in profit @ No. 12 11 404 97
64 PCARDB in profit @ No. 343 307 220 154
ST Co-operatives - NPA Position
65 SCB - NPA @ % to loan O/S 11.91 9.08 5,764 4,469.16
65 DCCB - NPA @ % to loan O/S 18.02 13.00 17,928 16,015.45
LT Co-operatives - NPA Position
66 SCARDB - NPA@ % to loan O/S 30 33 4,948 5,627.56
66 PCARDB - NPA @ % to loan O/S 42 43 4,742 4,867.04
RRB
73 RRB in profit No. 79 79 2,515 3,470
73 RRB - NPA Position % to loan O/S 3.72 3.50 – –
76 Inspection of banks^@@ No. 343 302 – –
76 Co-operative banks@@ No. 282 260 – –
76 RRB@@ No. 61 42 – –
Financial Performance &
Management of Resources
87 Market Borrowings – – – 25,254 34,747
87 Total Financial Resources – – – 1,36,292 1,58,872
RE : Revised Estimate 1 : At Factor Cost at 2004-2005 prices AE : Advanced Estamate
+ : Includes agriculture, forestry and fishing ‘++: Of 170 kgs each ^ : Voluntary inspections ‘@@ : Statutory Inspections
@ : Data pertains to financial years 2008-09 & 2009-10 * : Data pertain to 2008-09&2009-10
PRINCIPAL OFFICERS(31 March 2011)
EXECUTIVE DIRECTORS
S. K. Mitra Amaresh Kumar Dr. A. K. Bandyopadhyay Dr. Prakash Bakshi
CHIEF GENERAL MANAGERS
(Rural Development Banking Service)
V. Ramakrishna Rao C. R. Patnaik B. S. Shekhawat R. Narayan C. K . Gopalakrishna P. Satish K C Shashidhar
(Odisha) (Tamil Nadu) (Maharashtra) (Kerala)
Pankaj Pandit Dr. Venkatesh Tagat S . C . Kaushik P. Mohanaiah S. T. Raghuraman Suraj Bhan J. C. Mishra
(Uttarakhand) (Karnataka) (Punjab ) (Andhra Pradesh)
D. P. Mishra M. V. Ashok G. C. Panigrahi S. G. Siddesh K . K. Gupta S. Akbar A. K. Srivastava
(Uttar Pradesh) (Jharkhand) (Gujarat) (Madhya Pradesh) (Assam)
B. B. Nayak S. Balan H. K. Talreja M. L. Sukhdeve K. Muralidhara Rao Dr. S. L. Kumbhare P. C. Mishra
(Haryana) (Jammu & Kashmir) (Rajasthan)
J. G. Menon V. Mohan Doss S. K . Singh Niraj Kumar Gupta A. D. Ratnoo M. V. Patro N. S. P. Rao
(Bihar) (Himachal Pradesh) (NABCONS) (West Bengal)
K. S. Padmanabhan R. Amalorpavanathan Dr. H. N. V. Prasad A. N. Rajwani P. C. Sahoo
NBSC, Lucknow (Chhattisgarh)
CHIEF GENERAL MANAGERS
(Legal/Technical Service)
U. N. Srivastava Neeraj Kumar Dr. P. Renganathan
(Legal) (Technical) (Technical)
OFFICERS-IN-CHARGE OF REGIONAL OFFICES/CELL
TRAINING INSTITUTIONS
H. R. Dave A. P. Sandilya B. G. Mukhopadhyay
(New Delhi) (Goa) (Arunachal Pradesh)
G. R. Chintala B. K. Dey M. M. Baheti
(Andaman & Nicobar Islands) (Sikkim) (RTC, Mangalore)
Dr. P. M. Ghole Dr. U. S. Saha R. S. Jodha
(Mizoram) (Nagaland) (Meghalaya)
R. Sundar S. V. Nemlekar P. L. Negi
(Tripura) (Manipur) (Srinagar Cell)
i
Highlights
1. The World Economic Outlook (WEO) of the
International Monetary Fund has projected the growth
in global output at 4.4 per cent in 2011, a decline of
0.6 percentage points relative to 2010. The Gross
Domestic Product (GDP) of the country has registered
a growth of 8.5 per cent in 2010-11 compared to a
growth of 8.0 per cent in 2009-10.
2. The high growth trajectory of GDP has been
facilitated due to a rebound in agriculture from 0.4 per
cent during 2009-10 to 6.6 per cent during 2010-11.
The contribution of agriculture sector to the GDP was
14.2 per cent during 2010-11, a marginal decline of
0.2 per cent, as compared to 2009-10. The livestock
sector contributed 3.5 per cent to the GDP and 28.4
per cent to GDP from agriculture.
3. The overall inflation rate as measured by changes in
the Wholesale Price Index on a monthly basis was 9.4
per cent during 2010-11 as compared to 3.6 per cent
during the fiscal 2009-10. Food inflation was high due
mainly to rise in prices of rice, vegetables, fruits, milk,
eggs, meat and fish.
4. Agricultural exports increased from ` 81,750 crore
during 2008-09 to ` 85,269 crore during 2009-10, registering
a growth of 4.30 per cent. The percentage share of
agriculture and allied products in the total exports was
9.9 during 2009-10 as compared to 9.0 in 2008-09.
The share of food and allied products in the total imports
of the country increased from 2.1 per cent in 2008-09 to
3.7 per cent in 2009-10.
5. The country as a whole received 912.8 mm of
rainfall, which was 2.0 per cent more than the Long
Period Average (LPA) during the South-West monsoon
(June-September) 2010, as compared to 23 per cent
less than the LPA in the corresponding period last year.
Rainfall during the North-East monson was also 21 per
cent more than the LPA.
Economic Environment
6. Total crop acreage under both kharif and rabi
during 2010-11 indicated an increase of 9.40 million
hectares over the previous year. The crop acreage
under various crops during kharif 2010 was 103.90
million hectares, which was 6.88 million hectares
more than the area covered during the corresponding
period of kharif 2009. The major increase in area was
under rice (2.3 million hectares). Area sown under
rabi crops in 2010-11 was more by 2.52 million
hectares, with growth in area under rabi foodgrains at
3.41 per cent.
7. The production of breeder and foundation seed is
estimated at 1.1 and 18.5 lakh quintals, respectively,
while certified/quality seed distribution was 321.36 lakh
quintals during 2010-11. The irrigation potential created
under all types of irrigation structures has increased from
81.10 million hectares in 1991-92 to 108.2 million
hectares by March 2010. Utilisation was to the extent of
85 per cent.
8. As against the target of ̀ 3,75,000 crore of credit flow
to agriculture for 2010-11, the banking system disbursed
` 4,46,779 crore, as on 31 March 2011, achieving 119.14 per
cent of the target. Commercial Banks, Co-operative Banks and
Regional Rural Banks (RRB) disbursed ` 3,32,706 crore,
` 70,105 crore and ̀ 43,968 crore, contributing 74 per cent,
16 per cent and 10 per cent respectively, of the total credit flow
during 2010-11.
9. During 2010-11, 7.26 million Kisan Credit Cards
were issued by banks with sanctioned credit limit of
` 43,370 crore. Of the cumulative 100.93 million
credit cards issued, as at the end of March 2011,
45.03 million cards were issued by commercial banks,
followed by 40.70 million cards by co-operative
banks and 15.20 million cards by Regional Rural
Banks.
ii
10. Out of ` 29,240 crore received under the
Agriculture Debt Waiver and Debt Relief Scheme
2008, the cumulative disbursements by NABARD was
` 29,071 crore against claims of ` 29,102 crore. The
share of SCB, SCARDB and RRB stood at
` 18,289 crore, ` 3,810 crore and ` 6,972 crore,
respectively.
11. The GCF in agriculture and allied sectors
increased from ` 86,611 crore in 2005-06 to
` 1,33,377 crore (at 2004-05 prices) in 2009-10. The
GCF in agriculture and allied activities, as a proportion
to GDP in the sector, increased from 14.57 per cent in
2005-06 to 20.30 per cent in 2009-10.
12. According to the 3rd Advance Estimates, the
foodgrain production during 2010-11 has been
estimated at 235.88 million tonnes, as compared to
218.11 million tonnes (final estimate) during 2009-10,
registering an increase of over 8 per cent compared to
the previous year. Area and production under
horticulture crops increased from 20.7 million hectares
and 214.7 tonnes, respectively, during 2008-09, to 20.9
million hectares and 223.1 million tonnes, respectively,
during 2009-10. India’s global share in world
production, on a two year average basis, as per Food
and Agriculture Organisation (FAO) estimates, was
10.29 per cent for cereals, 9.23 per cent for vegetables
and 15.81 percent for milk.
Development and Promotional Initiatives
Credit Planning
13. During the year, Potential Linked Credit Plans
(PLP) were prepared for 624 districts in the country, to
guide the banks in the credit planning excercise and
for infrastructure development in 2011-12. State Focus
Papers, presenting a comprehensive picture of the
potential available in various sectors of the rural
economy and critical infrastructure gaps to be bridged,
were discussed with all State Governments and banks.
Farm Sector
14. During the year, 66 watershed projects were
sanctioned, taking the cumulative number of such
projects to 579, covering an area of 4.86 lakh ha., in 14
states, with a total commitment (loan and grant
component) of ` 220.57 crore. Under the Prime
Minister's Relief package for 31 distressed districts in four
States, 71,127 ha., were taken up for implementation
during the year, taking the cumulative area and
financial commitment to 9.42 lakh ha., and ` 1,023
crore, respectively.
15. An amount of ` 152.26 crore and ` 3.18 crore were
disbursed under watershed projects as grants and loans
during the year; the cumulative disbursements under
these components were ` 350.03 crore and
` 33.18 crore, respectively. Under the Special Plan for
Bihar component of the Rashtriya Sam Vikas Yojana
(RSVY), a total of 79 projects covering an area of 84,444
ha., had been sanctioned, of which six are at Capacity
Building Phase and 73 at Full Implementation Phase. A
sum of ` 20.18 crore was disbursed during the year under
the programme and the cumulative disbursement, as on 31
March 2011, stood at ` 34.17 crore.
16. The Climate Change Adaptation Project in
Akole & Sangamner Talukas of Ahmednagar District,
Maharashtra implemented by the Watershed
Organistion Trust is the first of its kind being
considered under WDF. It involves a total financial
outlay of ` 34.15 crore, with grant assistance from
Swiss Agency for Development and Cooperation
(` 10.80 crore) & NABARD (` 20.62 crore) and
contributions from villagers (` 2.73 crore). The project
is expected to develop a replicable model for Climate
Change Adaptation in semi-arid and rainfed regions of
the country.
17. The Village Development Programme is now
being implemented in 801 villages spread across 25
iii
States. The programme was completed in 115 villages
and is under different stages of implementation in
686 villages.
18. During the year, financial assistance of ` 373.97
crore under Tribal Development Fund was sanctioned for
126 projects benefiting 94,163 tribal families in various
states. Cumulatively, ` 917.60 crore was sanctioned to
317 projects covering 2.50 lakh families.
19. During 2010-11, under Farm Innovation and
Promotion Fund (FIPF), 45 projects were sanctioned in
15 states, with grant assistance of ` 5.47 crore.
Cumulatively, 123 projects were sanctioned with a
financial support of ` 11.65 crore. Under the Farmers’
Technology Transfer Fund (FTTF), 512 diverse and
innovative projects in 27 states were sanctioned during
the year 2010-11 with grant assistance of ` 44.97 crore.
20. During the year, 21,903 Farmers' Clubs (FC) were
launched, taking the total number of clubs to 76,708, as
on 31 March 2011. Agency-wise, NGO promoted
maximum number of clubs (13,599), followed by co-
operative banks (2,922), commercial banks (2,733), RRB
(2,215), State Agricultural Universites (SAU)/Krishi
Vigyan Kendras (KVK) [255] and other agencies (179).
During 2010-11, three Farmers' Training and Rural
Development Centres (FTRDC) were provided a total
grant assistance of ` 1.02 crore under FTTF. During the
year, 282 exposure visits for 7,548 farmers were
arranged in collaboration with select research institutes,
KVK and SAU.
21. During the year, 44 projects covering 220
villages were launched with a financial commitment of
` 15.41 crore under ‘Pilot Project on augmenting
productivity of lead crops/activities through adoption
of sustainable agricultural practices’.
22. Under the Special Project on Livelihood Based
Development, ` 0.41 crore and ` 0.33 crore
respectively, were released for Sultanpur and Rae
Bareli districts of Uttar Pradesh, during the year, taking
the cumulative disbursements to ` 8.98 crore and
` 7.72 crore. An amount of ` 27.48 crore was
sanctioned for 2,816 units under Dairy Venture
Capital Fund (DVCF), ` 28.57 crore for 342 units
under Poultry Venture Capital Fund (PVCF) and ` 9.69
crore for 1,978 units under Dairy Entrepreneurship
Development Scheme (DEDS). The cumulative
sanctions as on 31 March 2011 stood at ` 174.39
crore for 18,184 units under DVCF, ` 48.18 crore for
633 units under PVCF, and ` 9.69 crore for 1,978
units under DEDS. Under the programme of Artificial
Groundwater Recharge through Dugwells, net subsidy
of ` 280.637 crore was released by NABARD, for
construction of 7.13 lakh Artificial Recharge Structures.
23. NABARD received ` 132.27 crore during 2010-11
and disbursed ` 135.76 crore as grant assistance during
the year under the Kreditanstalt für Wiederaufbau (KfW)
supported externally aided projects, which are at various
stages of implementation.
Rural Non-Farm Sector
24. During the year, 122 innovative projects were
sanctioned under the NABARD-SDC Rural Innovation
Fund, taking the cumulative number to 375. An amount
of ` 10.42 crore was sanctioned for these projects, taking
the cumulative sanctions to ` 49.28 crore. The
disbursement during the year, including for projects
sanctioned earlier, was ` 14.42 crore.
25. Under the 'Scheme for Strengthening of Rural
Haats', grant support of ` 5.74 crore was sanctioned to
118 rural haats during 2010-11. Cumulative grant
assistance was ` 13.19 crore for 307 rural haats across
23 States. A total of 113 clusters across
84 districts in 22 States had been approved during the
year, while 3,327 Rural Entrepreneurship Development
Programme (REDP) / Skill Development Programme
iv
(SDP) were supported with financial assistance of
` 12.34 crore. As many as 20 clusters are supported in
the NER. Cumulatively, 17,859 REDP/SDP have been
supported with grant of ` 83.35 crore.
26. During the year, 1.20 lakh Swarojgar Credit
Cards (SCC) with credit limit of ` 514.26 crore were
issued for facilitating hassle-free availability of credit
for investment and working capital requirements of
small / micro-entrepreneurs. The cumulative total of
SCC was 12.12 lakh involving credit limit of
` 4,949.51 crore.
Financial Inclusion
27. RBI contributed ` 3.46 crore [` 3.05 crore towards
Financial Inclusion Fund (FIF) and ` 0.41 crore towards
Financial Inclusion Technology Fund (FITF)], during the
year 2010-11, while the GoI contributed
` 30 crore each to the two Funds. NABARD contributed
` 30 crore (FIF) and ` 40 crore (FITF). An amount of
` 19 crore under FIF and ` 101.10 crore under FITF were
sanctioned during the year. As on 31 March 2011, ` 38.66
crore for 150 projects under FIF and ` 122.41 crore
under FITF for 55 projects have been sanctioned.
Under NABARD-UNDP collaboration, ` 173.22 lakh
had been utilised during 2010-11 for activities
conducted by NABARD in seven focus states : Bihar,
Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha,
Rajasthan and Uttar Pradesh.
Micro-Finance
28. There were more than 69.53 lakh savings-linked
SHG and more than 48.51 lakh credit-linked SHG
covering 9.7 crore poor households, as on 31 March
2010, under the microfinance programme. The share
of outstanding bank loans to SHG as a percentage of
bank loans to weaker sections by scheduled
commercial banks (31 March 2010) was 16.3 per cent,
compared to 15.8 per cent in the previous year.
29. Under the Microfinance Development and
Equity Fund, ` 47.38 crore was released during 2010-
11, of which ` 29.95 crore was grant support for
promotional activities and ` 17.43 crore for Capital
Support / Revolving Fund Assistance to Micro Finance
Institutions, as against ` 20.49 crore and ` 60.42 crore,
respectively, in the previous year. During the year, grant
assistance of ` 37.86 crore was sanctioned to various
agencies for promoting and credit linking 81,890
groups, taking the cumulative assistance sanctioned to
` 146.22 crore for 5.81 lakh groups. Grant assistance
of ` 51.06 crore was released during the year for the
formation of 4.01 lakh SHG. Nearly 2.60 lakh SHG
were credit linked.
30. Under the Rajiv Gandhi Mahila Vikas
Pariyojana, 25,571 SHG were promoted, of which
14,979 were credit linked by end March 2011. In
addition, 951 Cluster Level Federations and 26 Block
Level Federations have been formed.
31. An amount of ` 24.74 crore was sanctioned as
grant for promoting 1.25 lakh Joint Liability Groups
across the country till March 2011. During the year,
1,606 Micro Enterprise Development Programmes
were conducted for 37,138 members on various
location-specific farm, non-farm and service sector
activities. Cumulatively, 4,449 MEDP were conducted
for 1.09 lakh participants.
32. NABARD continued to support the project
sanctioned to the Government of Arunachal Pradesh
for implementing 'Micro-Finance Vision 2011'.
The project involves promoting and credit linking of
1,650 SHG at a cost of ` 39.15 lakh. An amount of
` 9.49 lakh has been released so far.
33. NABARD Financial Services Ltd. disbursed an
amount of ` 50.64 crore to 2,019 groups through 31
v
Business Correspondents (BC) during 2010-11. In
addition, disbursements to the extent of ` 1.50 crore
were made to MFI and Federations, taking the aggregate
disbursements during the year to ` 52.14 crore. Grant
assistance of ` 153.18 lakh was released during the year
to Centre for Microfinance Research (CMR) established
by NABARD in Bankers Institute of Rural Development
(BIRD), taking the cumulative assistance to ` 347.36
lakh. Of the prioritised 27 themes for research, 6 have
been completed and the remaining are ongoing.
NABARD Consultancy Services
34. NABARD Consultancy Services Pvt Ltd
(NABCONS), the wholly owned subsidiary of
NABARD, achieved ` 24.13 crore of contracts and
executed `16.65 crore worth assignments during
2010-11; the profit after tax was ` 5.80 crore. During
the current year, NABCONS significantlly diversified
its business by entering into new areas of business,
viz., development of web based MIS for various State
Government Programmes, monitoring of various
infrastructure projects in different states adjoining the
international borders of the country, under Border
Area Development Programme (BADP).
Research and Development Activities
35. During the year, ` 17.68 crore was utilised from
the Research and Development Fund for supporting
activities like research projects/studies (` 0.80 crore),
seminars (` 0.80 crore), training/summer placement
(` 15.77 crore), occasional papers (` 0.02 crore),
NABARD Chair Professor Scheme (` 0.14 crore) and
other activities (` 0.15 crore). The cumulative
disbursement stood at ` 136.19 crore. During 2010-11,
ten research projects involving a grant assistance of
` 1.09 crore were sanctioned. Further, six projects/studies
sanctioned earlier were completed during the year.
36. During the year, grant assistance of ` 1.27 crore was
sanctioned to various universities, research institutes and
other agencies for organising 131 seminars, conferences,
symposia and workshops covering subjects/ areas related
to agriculture and rural development including
agricultural marketing.
37. During the year, five Occasional Papers titled Kisan
Credit Card, Infrastructure for Agriculture and Rural
Development, Economics of sugarcane production and
processing, Micro-finance for micro-enterprises and
Promoting Rural non-farm sector were published. Under
the NABARD Chair Professor Scheme, three Professors
affiliated to IARI, Alagappa University and Xavier
Institute of Management, Bhubaneswar were appointed
by the Bank.
38. Grant assistance of ` 15.58 crore was utilised
from the Fund during the year on training of staff of
client banks. During the year, 576 training
programmes were conducted by the Training
Establishments of the Bank for 14,667 participants.
BIRD conducted a special on-location programme on
Credit Planning and Development Finance for IAS
probationers undergoing Phase I course, at the Lal
Bahadur Shastri National Academy of Administration,
Mussorie and an in-house programme on financial
system and development finance for probationers of
the Indian Economic Service. RTC, Mangalore
organised an International Exposure Programme on
Micro Finance for a batch of 14 officers from SANASA
Development Bank, Sri Lanka during the year.
39. During the year 2010-11, the bank provided
technical and financial support to seven Junior Level
Training Centres, 12 Agricultural Co-operative Staff
Training Institutions and three Integrated Training
Institutes to enable them to improve their training
system.
vi
Business Operations
40. The total financial support extended by
NABARD during 2010-11 stood at `60,483 crore,
registering a growth of 5.98 per cent over 2009-10.
Production Credit
41. The total production credit disbursed, at end-
March 2011, was ` 34,196 crore. During 2010-11,
Short-term Seasonal Agricultural Operation (SAO)
credit limits were sanctioned to 21 State
Co-operative Banks (SCB) aggregating `23,759 crore,
as against `18,109 crore sanctioned to 20 SCB during
2009-10. The credit limits included ` 2,249.90 crore
for the Oilseeds Production Programme, `210.97 crore
for National Pulses Development Programme and
`752.76 crore for credit requirements of tribals under
the Development of Tribal Population. The maximum
outstanding was `23,696.72 crore.
42. During 2010-11, Short-Term weavers credit
limits aggregating `215.75 crore were sanctioned to
four SCB (Andhra Pradesh, Karnataka, Pondicherry
and Tamil Nadu), as against `177.32 crore during
2009-10. Further, during the last three years, 4,607
Handloom Weavers’ Groups were formed by banks
in various States. Of these, 1,989 HWG have been
credit linked.
43. The scheme of extending ST refinance to State
Co-operative Agriculture and Rural Development
Banks for SAO was continued during the year.
Refinance of ` 140.01 crore was extended to Kerala
(` 79.39 crore) and Rajasthan (` 60.62 crore)
SCARDB at 4.5 per cent interest rate for lending to
the ultimate borrowers at 7 per cent.
44. During 2010-11, limits of ` 9,799.69 crore were
sanctioned to 80 RRB under ST-SAO as against
` 6,832.13 crore sanctioned to 74 RRB in 2009-10. The
limits included ` 820.31 crore for Oilseeds Production
Programme, ` 201.23 crore for Development of Tribal
Population and ` 16.20 crore for National Pulses
Development Programme. The aggregate limit for ST-
OSAO sanctioned to RRB during 2010-11 was ` 600
crore, as against ` 542 crore in the previous year. The
maximum utilisation was ` 598 crore.
45. The continuance of the interest subvention
scheme was announced in the Union Budget 2010-11.
Interest subvention of 1.5 per cent per annum was
available to public sector banks, co-operative banks
and RRB for deploying their own funds for crop loan
upto ` 3 lakh per farmer, provided the ultimate
borrower got such loans at 7.0 per cent interest rate
per annum. Additional subvention of one per cent,
announced in the year 2009-10 to those farmers who
repaid crop loans promptly within one year of
disbursement was enhanced to 2 per cent during 2010-11.
During the year, an amount of ` 1,261.40 crore was
disbursed as subvention for 2009-10. Interest
subvention for 2010-11 has been estimated at
` 2,000 crore.
46. NABARD continued to act as nodal agency for
GoI package for restructuring of Term Loans of
Co-operative sugar mills. Out of ` 170.14 crore
received from GoI towards interest subvention,
` 169.94 crore was disbursed to 77 co-operative sugar
mills in Maharashtra and Odisha. NABARD also acted
as nodal agency for channelising the interest
subvention to Co-operative Banks and RRB under the
"Scheme for Extending Financial Assistance to Sugar
Undertakings -2007". Out of ` 383.59 crore received
from GoI towards interest subvention, ` 249 crore
was released to 212 sugar mills operating in 11 states.
Investment Credit
47. During the year, the total investment credit
(including co-finance) disbursed was ` 13,485.87
crore, as against the target of ` 12,980 crore. The
achievement against target was 103.90 per cent. The
growth in refinance disbursed during the year was
12.30 per cent over that of the previous year. The
vii
policy of preferential treatment to states in North-
Eastern, Eastern, Hilly Regions, Sikkim and
Lakshadweep was also extended to Chhattisgarh
during 2010-11. RRB, SCB and SCARDB continued to
be classified under A/B/C/D categories based on the
level of Net NPA reckoned as a percentage to net
loans and advances outstanding/ recovery
performance and profitability.
48. Changing market conditions, impacting cost of
funds for NABARD, necessitated the revision of
interest rates on refinance five times during the year.
Interest rates, with effect from 07 February 2011 stood
at 9.75 per cent for Commercial Banks, 9.25 per cent
for RRB, 9.15 per cent for co-operative banks/ PUCB/
NEDFi, 8.15 per cent for ADFC/NABFINS and 10.5
per cent for NBFC. However, for NER, including
Sikkim, the rate of interest for all agencies was pegged
at 9.15 per cent.
49. Refinance distribution across regions varied
widely with the south accounting for the highest share
(43%), followed by north (21%), central (14%) and
other regions (22%). During the year, the major share
of sector-wise refinance was accounted for by NFS
(25.6%), followed by SHG (18.9%), Farm
Mechanisation (13.1%), Minor Irrigation (6.8%) and
Dairy Development (6.8%). Of the total refinance
disbursed, 43.80 per cent was for thrust areas.
50. During the year, MoU for co-financing were
executed with 5 RRB in Andhra Pradesh and
a commercial bank. In all, MoU were executed with 27
banks. During the year, three new projects were
sanctioned, taking the cumulative number of sanctioned
projects to 51, with a total financial outlay (TFO) of
` 840.64 crore. The disbursement during 2010-11 was
to the extent of ` 14.00 crore. Cumulative sanction
and disbursement were ` 240.35 crore and ` 153.64
crore, respectively.
51. NABARD is the nodal agency for channelising
subsidy, monitoring and coordinating with others
under the Capital Investment Subsidy Scheme of GoI.
Under the scheme for Agricultural Marketing
Infrastructure, Grading and Standardisation, 654
projects with TFO of ` 978.45 crore were considered
for sanction. Subsidy of ` 83.15 crore was released to
the banks during the year. Cumulatively, 4,492 units
involving TFO of ` 2,912 crore were granted subsidy of
` 274.03 crore. Subsidy of ` 1.49 crore was disbursed
for 110 projects, involving a TFO of
` 7.75 crore under the Scheme for Agri Clinics and
Agri Business Centres (ACABC). Cumulatively, 390
projects were sanctioned under the scheme involving
TFO of ` 28.62 crore and release of subsidy of ` 5.38
crore. Under the Schemes on Animal Husbandry, an
amount of ` 1.69 crore was released as subsidy for
poultry processing and sheep/goat rearing units. An
amount of ` 3.61 crore towards the subsidy
component, was released for 8,987 units under the
Jawaharlal Nehru National Solar Mission.
52. Under National Project on Organic Farming
(NPOF), a total of 667 units (vermi-hatchery units-627,
bio-fertilizers units-36 and fruit & vegetable waste
compost units-13) had been sanctioned with net subsidy
release of ` 12.45 crore till 31 March 2011.
53. During the year 2010-11, NABARD conducted
seven evaluation studies covering four investments,
viz., rural godowns, agricultural market infrastructure,
agri-clinics and agri-business centres and solar
homelighting system. NABARD also conducted 16
Investment Specific Studies (ISS) and 8 Special
Studies (SS) covering farm and rural non-farm sectors.
Rural Infrastructure Development Fund
54. The annual allocation under the Rural
Infrastructure Development Fund (RIDF) was ` 16,000
crore during 2010-11 taking the cumulative allocation
to ` 1,16,000 crore. Additionally, a separate window
was introduced in 2006-07 for funding rural roads
component of Bharat Nirman Programme, with
allocation of ` 18,500 crore, till 2009-10. The total
allocation for RIDF, thus, stood at ` 1,34,500 crore, as
on 31 March 2011.
viii
55. During 2010-11, a total of 41,779 projects
involving loan amount of ` 18,314.88 crore was
sanctioned under RIDF XVI, taking the cumulative
number of projects to 4,44,162 and cumulative
amount sanctioned to ` 1,21,888.40 crore.
56. During the year, disbursements were made to the
tune of ` 12,060.04 crore. The cumulative
disbursements under RIDF (I to XVI) and Bharat
Nirman aggregated to ` 98,999.78 crore. The state-
wise analysis of ratio of disbursements to the approved
phasing of sanctions revealed that Mizoram topped
with 120 per cent, followed by Uttarakhand and Goa
(100%), Meghalaya (90%), Tamil Nadu (89%),
Haryana and Maharashtra (88%), Punjab and Gujarat
(87%), and UP, Jammu & Kashmir (86%). The
cumulative amount of loan sanctioned and disbursed
to States in the North-Eastern region, including
Sikkim, aggregated ` 6,328.24 crore and ` 3,293.18
crore, respectively, as at the end of March 2011.
57. NABARD is exploring possibilities of funding
implementation of specific projects under the Public
Private Partnership model. The bank is in the process
of networking with the private sector and encouraging
partnerships to bring about private sector competence
and funds into the realm of rural infrastructure.
Capacity Building of Client Institutions
Institutional Development
58. The total membership of Primary Agricultural
Credit Societies (PACS) during 2009-10 stood at
12.64 crore, of which borrowing members were 5.98
crore, constituting 47.31 per cent of total membership.
Both deposits and loans issued of PACS (as on 31
March 2010) showed increase of 34.45 per cent and
27.47 per cent, respectively, over the previous year.
The borrowings of PACS, however, registered only a
marginal increase of 5.77 per cent over the previous
year.
59. The financial position of the SCB and District
Central Co-operative Bank (DCCB), as on 31 March
2010, indicate that while their deposits increased by
15 per cent each, the borrowings of SCB and DCCB
increased by 12 per cent and 3 per cent, respectively,
over the previous year. Loans issued by SCB
decreased by 17 per cent and that of DCCB increased
by 26 per cent. Loans outstanding of SCB and DCCB
increased by 2 per cent and 24 per cent, respectively.
60. The borrowings of State Co-operative
Agriculture and Rural Development Banks (SCARDB)
as on 31 March 2010, decreased by 0.5 per cent over
the previous year while that of Primary Cooperative
Agriculture Rural Development Banks (PCARDB)
increased by 2 per cent, during the corresponding
period. Loans issued by SCARDB and PCARDB
increased by 19 per cent and 13 per cent respectively,
while their loans outstanding increased by 4 per cent
and 1 per cent, respectively, over the previous year.
61. SCB as a group earned a positive net margin of
1.02 per cent during 2009-10 as compared to the net
margin of 0.57 per cent during 2008-09. The DCCB,
as a group, earned net margin of 1.80 per cent during
2009-10. During the year 2008-09, out of 19
SCARDB, 13 had positive net margins and the
remaining 6 had negative net margins. PCARDB in
only 4 States had positive net margin.
62. During 2010-11, under Co-operative
Development Fund (CDF), financial assistance of
`6.43 crore was sanctioned and ` 6.05 crore disbursed.
ix
As on 31 March 2011, cumulative sanctions and
disbursements were ` 98.17 crore and ` 87.57 crore,
respectively. The balance in the Fund as on 31 March
2011 stood at ` 125 crore.
63. The impact studies conducted by different
agencies on the implementation of GoI revival package
for Short Term Co-operative Credit Structure in 10
States, revealed positive features like improved share
capital position of PACS and DCCB, increase in
volume of busines and credit flow of DCCB, reduction
in NPA of PACS and DCCB, increased coverage of
Small and Marginal Farmers and improved recovery
rates of SCB and DCCB.
64. Post amalgamation, the number of RRB
operating in the country, as on 31 March 2011, stood
at 82, with a network of 15,938 branches. During the
year, the aggregate reserves of RRB, deposits and
investments increased by 20 per cent each, while loans
& advances (outstanding) increased by 22 per cent.
65. Financial results of RRB for the year 2010-11
indicated that 79 out of 82 RRB had earned pre-tax
profit to the extent of ` 3,470 crore. While all RRB in
the Eastern, Western and Northern regions were in
profit, one RRB each in the Central, North-Eastern
and Southern region incurred losses. The recovery
performance of RRB was estimated at 80.03 per cent,
as on 30 June 2010, as compared to 80.09 per cent
as on 30 June 2009.
66. Regional Rural Bank have emerged as a strong
intermediary for Financial Inclusion in rural areas by
opening a large number of “No Frills” accounts and
financing under General Credit Cards (GCC). Total
number of business accounts with RRB stood at 11.88
crore as on 31 March 2010.
67. Based on the recommendations of Amaresh
Kumar Committee, the GoI issued the RRB Service
Regulations 2010. GoI also notified the RRB
Appointment & Promotion Rules 2010, in July 2010.
Supervision of Banks
68. During 2010-11, statutory inspection of 302
banks (31 SCB, 229 DCCB and 42 RRB) and voluntary
inspections of 18 SCARDB and 3 Apex Societies, were
conducted. The inspections brought out supervisory
concerns relating to these institutions, which were
communicated to the banks concerned, Registrar of
Co-operative Societies, State Governments (in respect
of cooperative banks) and Sponsor Banks (in respect of
RRB) for corrective action.
69. During the year 2010-11, twenty DCCB
improved their financial position and recomplied with
the provisions of Section 11(1) of B.R. Act,
1949(AACS). As on 31 March 2011, 68 banks (5 SCB
and 63 DCCB) were not complying with the provisions
of Section 11(1) of the B.R. Act, 1949(AACS), i.e.,
minimum capital requirement. Applications for grant
of exemption in respect of 50 banks (1 SCB and 49
DCCB) were under the consideration of RBI/GoI.
70. Pursuant to the recommendations of Committee
on Financial Sector Assessment, RBI issued licences,
based on revised norms, to 2 SCB and 49 DCCB
during the year, thus, increasing the number of
licensed banks to 246 (24 SCB and 222 DCCB) as on
31 March 2011. During the year, no SCB was included
in the Second Schedule to the RBI Act, 1934. Thus,
the number of scheduled SCB remained unchanged
at 16.
x
71. Thirty-nine amalgamated RRB were included by
RBI in the Second Schedule to the RBI Act, 1934, after
they were found complying with Section 42(6)(a)(ii) of
the Act. With this, the number of Scheduled RRB stood
at 75 as on 31 March 2011. Inclusion of five more RRB
in the Second Schedule to the RBI Act, 1934, was
recommended to RBI in 2010-11.
72. During the year, instructions / circulars were
issued to SCB and DCCB on (i) issuing engagement
letters to Statutory Auditors, specifying the areas to be
covered, (ii) a questionnaire / check list for the use of
concurrent auditors to ensure that all aspects are
covered by the auditors while reviewing the Investment
Portfolio of banks, (iii) fraud prevention measures and
constituting Fraud Risk Management Group, (iv) a
Model Know Your Customer (KYC)/Anti-Money
Laundering (AML) Policy for adoption, (v) detailed
guidelines for inspection of DCCB, branches of SCB/
DCCB and affiliated societies and (vi) clarification on
calculation of Demand and Time Liabilities (DTL) for
maintenance of CRR / SLR.
73. During the year, (i) RRB were permitted to
induct Nominee Director of NABARD on the Audit
Committee of the Banks, with approval of the Board;
(ii) a Model KYC / AML Policy was circulated to all
RRB for adoption with suitable modifications and (iii)
clarifications were issued to RRB on Disclosure in
Financial Statement in Half Yearly Review.
74. For a holistic and more effective approach towards
supervision, especially in strengthening the internal
checks and control systems in the supervised banks,
NABARD continued to forge partnerships with other
agencies under the GIZ-RFIP programme and with ICAI
for preparation of Audit Manual for Co-operatives and
RRB. NABARD also actively supported National
Federation of State Co-operative Banks in revising the
operational manuals for Co-operative Banks.
Organisation, Corporate Governance and Management
75. The Board of Directors met six times during the
year, while the Executive Committee and the Board’s
Projects Sanctioning Committee for Loans under RIDF,
met thrice and seven times, respectively. The Audit
Committee of the Board (ACB) as well as the Risk
Management Committee of the Board (RMCB) met
thrice during the year.
76. NABARD started the ‘Project Reposition’ in
March 2010, with a view to networking resources,
building capabilities and partnering institutions for
bringing about effective integrated rural
development in India. The project seeks to address
the present day challenges without conflict with the
long-term role mandated to NABARD by GoI and
RBI. During the year, diagnostic and design phases
under ‘Project Reposition’ were completed.
77. Reserve Bank of India conducted the
13th Financial Inspection of NABARD (with reference
to its financial position, as on 31 March 2010) from
01 November 2010 to 13 December 2010. Under RTI
Act, 737 applications were provided requisite
information within the stipulated time. Ninety-four
appeals were responded to and 15 hearings on the
appeals made to Central Information Commission
were attended by officials of the Bank.
78. A total of 2,131 officers were imparted training
through 103 programmes conducted during the year
xi
by the National Bank Staff College, Lucknow. Further,
18 on-location programmes were conducted for 425
officers on various topics. During the year, 145 officers
from NABARD, three from client institutions and 18
NGO participants were deputed for various Overseas
programmes. Two batches of 10 senior officers each
were deputed to a programme on Risk Management
and Performance organised by World Savings Bank
Institute and to RIPA, London.
79. During the year, 126 officers were appointed in
Grade ‘A’ in the Rural Development Banking Service
of the Bank. A total of 396 staff was promoted during
the year. The total staff strength of the Bank, as on 31
March 2011, was 4,607. Of these, 18 per cent
belonged to Scheduled Castes and 9 per cent to
Scheduled Tribes. The strength of ex-servicemen and
physically handicapped employees stood at 80 and 94,
respectively.
80. Industrial relations in the Bank continued to be
harmonious during the year. Three meetings each of
the Grievances Redressal Committee and the Appellate
Committee were held during the year. Two pre-
promotional training programmes for 120 SC/ST staff
were conducted at training centres. Other benefits
extended to SC/ST employees included granting
scholarship to 12 wards of the employees and
providing compassionate appointment to dependents
of ten deceased employees.
81. Based on the report of KPMG and the
subsequent study undertaken by BCG
(the repositioning consultant), the Bank finalised its
future IT architecture and IT road map to be
implemented in phases. These consist of the following:
(a) Human Resources Management (Phase I), (b)
Centralised Loan Management & Accounts (Phase II),
(c) Business Processes (Phase III), (d) Enterprise Data
Warehouse (Phase IV).
82. During the year 2010-11, the Inspection
Department of the Bank carried out inspection of
16 HO Departments, 22 Regional Offices and two
Training Establishments, i.e., RTC Mangalore and
NBSC Lucknow. Inspection Reports were issued and
compliance ensured.
83. During the year, five Parliamentary Committees
visited NABARD. Two RO, viz., Karnataka and
Chhattisgarh were notified under Section 10(4) of
Official Languages Act by the GoI. The Regional
Implementation Office, Department of Official
Language, Ministry of Home Affairs, GoI awarded
prizes to Andhra Pradesh RO, Maharashtra RO and
RTC, Mangalore. During the year, 109 Potential-linked
Credit Plans and 69 Inspection Reports were prepared/
issued in Hindi.
Financial Performance & Management of Resources
84. The total financial resources of NABARD
increased to ` 1,58,872 crore, as on 31 March 2011,
registering an increase of 16.57 per cent, over the
previous year. Total market borrowings of ` 34,747
crore, as on March 31, 2011, constituted 21.87 per cent
of the total resources of the bank.
85. The paid up capital, as on 31 March 2011, was
` 2,000 crore against the authorised capital of
` 5,000 crore; with the share of GoI being 99 per cent
and that of the RBI at one per cent. The amount of
reserves and surplus increased by ` 1,188 crore, as on
31 March 2011.
xii
86. The amount outstanding under the non-project
long-term (LT) loans granted to State Governments for
contributing to the share capital of co-operative credit
institutions, amounted to ` 167 crore as on
31 March 2011. There was a decrease of ` 32 crore as
compared to the position as on 31 March 2010.
87. The total income of NABARD during the year
amounted to ` 9,202 crore as against ` 7,965 crore for
the year 2009-10. The profit before tax and profit after
tax were at ` 1,824 crore and ` 1,279 crore respectively
as on 31 March 2011, as compared to ` 2,272 crore
and ` 1,558 crore respectively, in the previous year.
The average cost of borrowings (interest expenditure as
a per cent of average borrowings) decreased from 6.83
per cent per annum during 2009-10 to 6.64 per cent
per annum during 2010-11. The capital to risk-
weighted assests ratio (CRAR) was 21.76 per cent as on
31 March 2011, as compared to 24.95 per cent as on
31 March 2010.
1
I
Economic Environment
The global economy witnessed a growth of 5.0 per cent
in 2010, which is the highest in the post-crisis period.
The Indian economy is also expected to regain the pre-
crisis growth levels with the growth rate estimated at 8.5
per cent in 2010-11 as compared to 8.0 per cent in
2009-10. This broad based growth is due to the growth
of 6.6 per cent in agriculture, 7.8 per cent in industry
and 9.3 per cent in services. The impressive growth
performance has enabled the per capita income (at
2004-05 prices) to increase from ` 33,731 during
2009-10 to ` 35,917 during 2010-11. Inflation, at
9.4 per cent during 2010-11, largely driven by primary
food articles as against 3.6 per cent during 2009-10,
has emerged as a major cause of concern.
Global Economy
1.2 The World Economic Outlook of the
International Monetary Fund has projected growth in
global output at 4.4 per cent in 2011, a decline of 0.6
percentage points relative to 2010. Economic growth
in advanced economies was a modest 3 per cent in
2010 and is projected at 2.4 per cent in 2011. In the
emerging and developing economies, the growth rate
improved in 2010 as compared to 2009 and is
expected to remain buoyant at 6.5 per cent in 2011.
Economic growth of China (10.3 per cent) and India
(10.4 per cent) rebounded in 2010 and it is estimated
that the growth in China and India would be 9.6 per
cent and 8.2 per cent, respectively, in 2011
(Table 1.1).
1.3 Commodity prices (both oil and non-oil)
increased by 27.9 per cent and 26.3 per cent,
respectively in 2010, due to strong global demand and
supply shocks. The commodity prices are projected to
remain high in 2011 due to continued robust demand
and slow supply response to the market conditions.
The consumer price inflation in the emerging and
developing economies at 6.2 per cent in 2010 was
attributed mainly to higher food prices and is expected
to rise to 6.9 per cent in 2011. Comparatively,
inflation in the advanced economies was 1.6 per cent
in 2010 and is projected at 2.2 per cent in 2011.
1.4 As per the Food and Agriculture Organisation
data, the world production of cereals decreased by
1.2 per cent; vegetables and milk increased by 2.44
per cent and 0.87 per cent, respectively, in 2009 as
compared to 2008. Asia is a major producer of cereals
(47.46%), vegetables (75.55%) and milk (35.83%).
India’s share on a two-year average basis was 10.29
Table 1.1: Overview of Global Economy
(Annual per cent change)
Growth 2009 2010 2011*
A. GDP (Real)
a. World output (-)0.5 5.0 4.4
b. Advanced Economies (-)3.4 3.0 2.4
i. United States (-)2.6 2.8 2.8
i. Euro Area (-)4.1 1.7 1.6
iii. Japan (-)6.3 3.9 1.4
iv. Newly Industrialised
Asian Economies (-)0.8 8.4 4.9
c. Other Emerging and
Developing Economies 2.7 7.3 6.5
i. Developing Asia 7.2 9.5 8.4
ii. China 9.2 10.3 9.6
iii. India 6.8 10.4 8.2
iv. ASEAN - 5** 1.7 6.9 5.4
B. Consumer Prices
a. Advanced Economies 0.1 1.6 2.2
b. Other Emerging and
Developing Economies 5.2 6.2 6.9
C. World Trade Volume
(goods & services)
a. Imports by Emerging and
Developing Economies (-)8.3 13.5 10.2
b. Exports by Emerging and
Developing Economies (-)7.5 14.5 8.8
D. Commodity Prices
a. Oil Prices (-)36.3 27.9 35.6
b. Non-Fuel Prices (-)15.8 26.3 25.1
* : Projections
** : Includes Indonesia, Malaysia, Philippines, Thailand and
Vietnam
Source: World Economic Outlook, IMF, April 2011
per cent for cereals, 9.23 per cent and 15.81 per cent
for vegetables and milk, respectively (Table 1.2).
2
Indian Economy
Table 1.2: Production of Cereals, Vegetables & Milk in the World, 2008 and 2009
(Million Tonnes)
Country/Group Cereals Vegetables* Milk
% share in % share in % share in
2008 2009 World@ 2008 2009 World@ 2008 2009 World@
India 267.56 248.81 10.29 91.73 92.77 9.23 109.00 112.11 15.81
Africa 152.46 158.67 6.20 64.10 63.68 6.39 37.94 38.65 5.48
Americas 648.28 634.18 25.56 81.56 81.71 8.17 170.11 171.45 24.43
Asia 1182.29 1198.81 47.46 744.48 765.55 75.55 247.69 253.24 35.83
Europe 504.39 465.83 19.34 93.81 97.07 9.55 215.86 213.94 30.74
Oceania 36.4 36.1 1.44 3.43 3.44 0.34 24.51 24.86 3.53
World 2523.84 2493.61 100 987.37 1011.46 100 696.11 702.14 100
* Incudes Melons
@ Share based on the average of 2008 & 2009
Source : FAOSTAT @ FAO Statistics Division, 21 June 2011
A. Economic Scenario
a. Gross Domestic Product
1.5 As per Revised Estimates, the Gross Domestic
Product (GDP) of the country has registered a growth of
8.5 per cent in 2010-11 as compared to 8.0 per cent in
2009-10 and 6.8 per cent in 2008-09
(Table 1.3). The high growth trajectory of the GDP has
been facilitated due to a rebound in agriculture growth
from 0.4 per cent during 2009-10 to 6.6 per cent
during 2010-11. Industry and services registered a
growth of 7.8 and 9.3 per cent, respectively, during
2010-11 as compared to 8.0 per cent and 10.1 per
cent, respectively, during 2009-10. Against an average
growth rate of 9.0 per cent envisaged in the Eleventh
Five Year Plan, the average growth was 8.0 per cent for
the period 2007-08 to 2010-11. The agriculture sector
is estimated to grow at 2.9 per cent during 2007-08 to
2010-11 as against the Plan target of 4.0 per cent.
1.6 Sectoral analysis of growth rates revealed an
increase in agricultural growth by 6.2 per cent;
decrease in services and industrial growth by 0.80 and
0.20 per cent respectively, during 2010-11 as
compared to the previous year. The contributions of
agriculture, industry and services to the GDP were
14.4, 27.9 and 57.7 per cent, respectively, during
2010-11 (Table 1.4).
b. Consumption, Savings and
Investments
1.7 The relative share of Private Final Consumption
Expenditure (PFCE) and Government Final
Consumption Expenditure (GFCE) (at 2004-05 prices),
3
as estimated by Central Statistical Organisation,
Government of India increased by 8.60 and 4.76 per
cent respectively in 2010-11 over 2009-10. The private
expenditure on food items as a proportion to total
private consumption, as per the Economic Survey,
2010, has been gradually declining since 2004-05 from
40.0 per cent to 32.6 per cent in 2009-10 while that of
miscellaneous goods and services has been increasing.
1.8 The Gross Domestic Savings (GDS), as a
proportion of GDP is estimated to have increased from
33.7 per cent during 2009-10 to 35.6 per cent during
2010-11. While private sector savings has remained
virtually stagnant at 31 per cent, public sector savings
increased from 0.5 per cent during 2008-09 to 2.1 per
cent during 2009-10. The Gross Capital Formation
(GCF), as a proportion of GDP, is estimated at 36.5
per cent with the contribution of public and private
sectors at 9.2 and 24.9 per cent, respectively during
2009-10. Within the private sector, the investment rate
for the corporate sector increased from 11.5 per cent
in 2008-09 to 13.2 per cent in 2009-10 while that of
the household sector declined from 13.1 per cent to
11.7 per cent.
Table 1.3: Economic Indicators
(Annual percent change)
Particulars 2008-09 2009-10 2010-11
Gross Domestic Product 6.8 8.0 (QE) 8.5 (RE)
GDP from Agriculture & Allied Activities (-)0.1 0.4 (QE) 6.6 (RE)
Foodgrains Production 1.0 (-)7.1 6.8
Industrial Production 3.2 10.5 7.8
Inflation as measured by WPI 8.0 3.6 9.4
Gross Domestic Savings (as % of GDP) 32.2 33.7 35.6
Gross Domestic Investment (as % of GDP) 34.5 36.5 38.0
Fiscal Deficit (as % of GDP) 6.0 6.3 4.8
Imports 20.7 (-)5.0 21.8
Exports 13.6 (-) 3.5 37.7
Trade Balance (as % of GDP*) (-)9.5 (-)7.9 (-)6.06
External Debt (as % of GDP*) 20.5 18.1 -
QE: Quick Estimates RE: Revised Estimates
*At current market prices
Source: Economic Survey 2010-11; CMIE, May 2011; Central Statistical Organisation, GoI
Table 1.4: Sectoral Growth Rates of GDP
(2004-05 prices)
Sector 2006-07 2007-08 2008-09 2009-10 2010-11(RE)
Agriculture & Allied 3.7(17.2) 4.7(16.4) (-)0.1(15.7) 0.4(14.6) 6.6(14.4)
Industry# 12.7(28.7) 9.5(28.8) 4.4(28.1) 8.0 (28.1) 7.8(27.9)
Services 10.2(54.2) 10.5(54.8) 10.1(56.2) 10.1(57.3) 9.3(57.7)
Total GDP at factor cost 9.7(100.0) 9.2(100.0) 6.8(100.0) 8.0(100.0) 8.5(100.0)
Figures in parentheses indicate percentage shares in GDP RE: Revised Estimates
#: Includes mining & quarrying, manufacturing, electricity, gas and water supply and construction
Source: 1. Monthly Economic Report (April 2011), Ministry of Finance, GoI 2. Economic Survey 2010-11
4
c. Inflation
1.9 A revised Wholesale Price Index (WPI) series
with changes in weights and commodities, and with
the base year as 2004-05 has been released. The WPI
also includes an addition of 241 items in the
commodity basket and increase in the number of price
quotations from 1,918 to 5,482.
1.10 In order to give a clear picture of price
behaviour of goods and services consumed by rural/
urban population, a new initiative of compiling
Consumer Price Index (CPI) for rural and urban India
has been undertaken. Inflation in Consumer Price
Index for Rural Labour (CPI-RL) and Consumer Price
Index for Agricultural Labour (CPI-AL) has declined
from 14.96 per cent each in April 2010 to 8.96 and
9.14 per cent, respectively, in March 2011.
1.11 The overall inflation rate as measured by
changes in the WPI on a monthly basis was 9.4 per
cent during 2010-11 as compared to 3.6 per cent
during the fiscal year 2009-10. The rise has been due
to high prices in primary articles, which was recorded
at 17.61 per cent. Food inflation has been mainly due
to increase in prices of rice, vegetables, fruits, milk,
eggs, meat and fish, condiments, spices and tea. WPI
in the other major groups-manufactured goods and
fuel & power has also risen by 5.43 per cent and
12.24 per cent, respectively (Chart 1.1 (a) & (b)).
d. Trade
1.12 Exports and imports are projected to grow by
22.5 and 13.2 per cent, respectively, during 2010-11.
Agricultural exports increased from ` 81,710 crore
during 2008-09 to ` 85,211 crore during 2009-10,
registering a growth of 4.28 per cent. Increase in
agricultural exports has been mainly due to higher
exports of basmati rice, unmanufactured tobacco, meat
and meat preparations, castor oil and tea. The
percentage share of agriculture and allied products in
the total exports was 10.1 during 2009-10 as
compared to 9.7 in 2008-09. The share of food &
allied product imports in the total imports of the
country also increased from 2.1 per cent in 2008-09 to
3.7 per cent in 2009-10 (Table 1.5).
B. Agriculture & Rural Economy
a. Rainfall Situation
1.13 The country as a whole received 912.8 mm of
rainfall, which was 2.0 per cent more than the Long
Period Average (LPA) during the South-West monsoon
(June-September) 2010 as compared to 23 per cent
5
less than the LPA in the corresponding period in 2009.
Apart from North-East India, where the rainfall was
18 per cent less than the LPA, rainfall received in all
other divisions: Central, North-West and Southern
Peninsula was more than the LPA. Out of the 36
sub-divisions, 5 recorded deficient rainfall during the
South-West monsoon in 2010.
1.14 During the North-East monsoon (October-
December), the cumulative rainfall received for the
country as a whole was 153.2 mm, which was 21 per
cent above the LPA as compared to 8 per cent more
during the previous year. The core regions (Tamil
Nadu, Kerala, coastal Andhra Pradesh, Rayalseema
and south interior Karnataka) receiving North-East
monsoon had excess rainfall to the extent of 55 per
cent above the LPA. In terms of spatial distribution,
25 sub-divisions recorded excess/normal rainfall and
the remaining 11 sub-divisions recorded deficient
rainfall during the North-East monsoon period
(Table 1.6).
1.15 Total live water storage, in 81 major reservoirs
across the country, at 104.68 billion cubic meters was
69 per cent of the Full Reservoir Level of 151.77
billion cubic metres by the end of December 2010
which was 32.18 per cent higher than the previous
year's level of 79.19 billion cubic metres.
Table 1.5: Trends in Exports and Imports
(`'000 crore)
Year Total Agriculture & Total Food &
Exports Allied Products Imports Allied Products
2005-06 456.4 46.7 (10.2) 660.4 16.5 (2.5)
2006-07 571.8 58.9 (10.3) 840.5 24.3 (2.9)
2007-08 655.9 65.2 (9.9) 1012.3 23.2 (2.3)
2008-09 840.8 81.7 (9.7) 1374.4 28.8 (2.1)
2009-10 845.5 85.2 (10.1) 1363.7 50.4 (3.7)
2010-11* 1118.8 – 1596.8 –
* Provisional; Figures in parantheses indicate percentage share to total
Source: Economic Survey, Various Isssues; Ministry of Commerce & Industry, GoI
Table 1.6: Trends in Rainfall and Water Storage
Particulars South-West Monsoon* North-East Monsoon**
2008 2009 2010 2008 2009 2010
A. Cumulative rainfall (% variation from normal) (-)2 (-)23 2 (-)31 8 21
B. Number of Sub- Divisions with Normal/Excess Rainfall 32 13 31 6 23 25
Deficient/Scanty/No Rainfall 4 23 5 30 13 11
C. Reservoir status (% of FRL$@) 73.2 58.6 75.4 56.4 52.1 69
Normal: +/-19%; Excess: +20% or more; Deficient: -20 to -59%; Scanty: -60% or less; No Rain: -100%
*: Cumulative position between 1 June and 30 September;
**: Cumulative position between 1 October and 31 December
$: Full Reservoir Level in 81 major reservoirs accounting for 67% of total reservoir capacity in the country as at the end of the season
@: As on 30 September in the case of SW Monsoon and 31 December in the case of NE Monsoon
Source: Indian Meteorological Department; CMIE, April 2011
6
b. Crop Acreage
1.16 Total crop acreage under both kharif and rabi
during 2010-11 indicated an increase of 9.40 million
hectares (Mha) over the previous year. The crop
acreage under various crops during kharif 2010 was
103.90 Mha which was 6.88 Mha more than the area
covered during the corresponding period of kharif
2009. The major increase in area sown was under rice
(2.3 Mha). Increase in area sown under cotton,
oilseeds and sugarcane increased marginally by 0.75,
0.10 and 0.86 Mha, respectively, in kharif 2010 as
compared to the period of kharif 2009. Area sown
under foodgrains during kharif 2010 was higher by 5.0
Mha as compared to kharif 2009.
1.17 The growth in rabi foodgrains during 2010-11
was 3.87 per cent over the previous year. Area sown
under all rabi crops was 65.79 Mha during 2010-11 as
compared to 63.27 Mha in the corresponding period
of 2009-10 (Table 1.7).
c. Inputs Use in Agriculture
i. Seeds
1.18 The Indian Seed Programme involving Central/
State Governments, Indian Council of Agricultural
Research, State Agricultural Universities, Co-operatives
and private sector has been addressing the issue of low
seed replacement rate. Besides, the scheme for
'Development and Strengthening of Infrastructure
Facilities for Production and Distribution of Quality
Seeds' is being implemented since 2005-06 to ensure
timely availability of quality seeds at affordable prices
to farmers. The scheme has covered 1.31 lakh seed
villages and 183.10 lakh quintals of certified/ quality
seeds have been produced upto 2009-10. Breeder
seed production and foundation seed production
reached 0.94 lakh quintals and 11.46 lakh quintals,
respectively during 2009-10, registering 26.96 and
18.27 per cent growth over the previous year. During
2010-11, the production of breeder and foundation
seeds is estimated at 1.1 lakh quintals and 18.5 lakh
quintals, respectively. Certified/quality seed distribution
during 2010-11 at 321.36 lakh quintals was
14.8 per cent higher than the previous year.
ii. Chemical Fertilizers
1.19 Production of urea, Di-Ammonium Phosphate
(DAP) and complex fertilisers increased by 5.98, 41.86
and 17.38 per cent, respectively during 2009-10 as
compared to the previous year. Fertiliser consumption
in nutrient terms increased by 6.33 per cent from
249.09 lakh tonnes during 2008-09 to 264.86 lakh
tonnes during 2009-10. The per hectare consumption
of fertilisers also increased from 127.2 kg to 135.3 kg
during the same period. To meet the current level of
fertiliser consumption, urea, DAP and Muriate of
Table 1.7: Area Sown under Major Crops
(Million hectares)
Crop Kharif (a) Rabi (b) Total (a+b)
2009-10 2010-11 2009-10 2010-11 2009-10 2010-11
Rice 33.53 35.86 4.39 4.39 37.92 40.25
Wheat 0.00 0.00 28.36 29.40 28.36 29.40
Coarse Cereals 20.61 21.21 6.58 6.18 27.19 27.39
Pulses 10.53 12.60 14.30 15.72 24.83 28.32
Total Foodgrains 64.68 69.68 53.64 55.72 118.32 125.40
Oilseeds@ 17.44 17.54 9.63 10.07 27.07 27.61
Cotton 10.09 10.84 0.00 0.00 10.09 10.84
Sugarcane 4.20 5.06 0.00 0.00 4.20 5.06
All crops 97.02 103.90 63.27 65.79 160.29 169.69
@: Includes rapeseed & mustard, groundnut, safflower, sunflower, castorseed, nigerseed, soyabean, sesamum and linseed
Source: Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India
7
Potash (MOP) were imported to the extent of 52.09,
58.89 and 52.86 lakh tonnes, respectively, during
2009-10. Import of fertilizers, which accounted for
10.60 per cent of total fertilizer consumption in
2000-01, increased to 34.53 per cent during 2009-10.
1.20 A nutrient based subsidy for phosphatic and
potassic fertilisers to promote balanced use of fertlisers
has been under implementation since April 1, 2010.
The price of urea has been increased by 10 per cent
while the price of other subsidized fertilisers is being
maintained at current level. Additional subsidy on
micro-nutrients like boron and zinc has also been
introduced.
iii. Irrigation
1.21 Total irrigation potential created under all types
of irrigation structures has increased from 81.10
million hectares in 1991-92 to 108.2 million hectares
by March 2010. Utilisation was to the extent of 85 per
cent, leaving a gap of 15 per cent.
1.22 For extending assistance for incomplete
irrigation schemes, the Government of India initiated
the Accelerated Irrigation Benefit Programme (AIBP)
during the year 1996-97. As on 31 March 2010, 281
projects have been covered and 120 completed under
the AIBP scheme. Further, the cumulative Central
Loan Assistance/grant of an amount of ` 41,729.37
crore has been released under the scheme as on
March 31, 2010. With a view to enhance the water use
efficiency, the National Mission on Micro Irrigation
(NMMI) was launched in June 2010 in addition to the
Micro Irrigation Scheme to encourage the adoption of
drip and sprinkler irrigation systems. The scheme has
covered 2.27 lakh hectares under micro irrigation.
iv. Credit
1.23 As against the target of ` 3,75,000 crore of credit
flow to agriculture for 2010-11, the banking system
disbursed ` 4,46,779 crore as on 31 March 2011,
achieving 119.14 per cent of the target. Commercial
banks, Co-operative banks and Regional Rural Banks
disbursed ` 3,32,706 crore, ` 70,105 crore and
` 43,968 crore, respectively, sharing 74 per cent, 16
per cent and 10 per cent of the total credit flow during
2010-11 (Table 1.8, also see Box 1.1 and 1.2).
1.24 During the period 2005-10, the Ground Level
Credit (GLC) flow for agriculture and allied activities
registered a Compound Annual Growth Rate
(CAGR) of 19.57 per cent. The growth rate for crop
loans and term loans was 26.49 per cent and 7.56
per cent, respectively for the five year period (2005-
06 to 2009-10). An analysis of the term loans during
2009-10 for the broad sub sectors indicated that Minor
Table 1.8: Agency-wise Ground Level Credit Flow
(` crore)
Agency 2006-07 2007-08 2008-09 2009-10 2010-11 Growth Rate (%)
2006-10# 2009-10* 2010-11*
Co-operative Banks 42,480 48,258 45,966 63,497 70,105 15.66 38.14 10.41
Regional Rural Banks 20,435 25,312 26,765 35,217 43,968 20.40 31.58 24.85
Commercial Banks 166,485 18,1088 228,951 285,800 332,706 20.01 24.83 16.41
Total 229, 400 254,658 301,908** 384,514 446,779 18.97 27.36 16.19
#: Compound Annual Growth Rate; *: Percentage change over previous year. ** Includes ` 226 crore by other Agencies.
Source: NABARD
8
A. Agricultural Production and Productivity
• Allocation of ` 400 crore for realising Green Revolution
in the Eastern Region (Assam, Bihar, Chhattisgarh,
Jharkhand, Orissa and Eastern Uttar Pradesh) has been
proposed.
• To increase the productivity of pulses, oil palm andmillets, ` 300 crore each has been earmarked to
promote 60,000 pulse villages in rainfed areas, bringing
60,000 hectares under oil palm plantation and covering
25,000 villages under millets respectively.
B. Agricultural Credit
• Farm credit target has been raised from ` 3,75,000
crore in 2010-11 to ` 4,75,000 crore in 2011-12. Direct
lending for agriculture and credit to be enhanced for
small and marginal farmers.
• Interest subvention for timely repayment of loans
enhanced from 2 per cent during 2010-11 to 3 per cent
during 2011-12 making the effective rate of interest at
4 per cent.
• NABARD’s capital base to be increased from ` 2,000
crore to ` 5,000 crore in a phased manner.
• ` 10,000 crore to be contributed to NABARD's short-
term Rural Credit Fund from the shortfall in prioritysector lending by Scheduled Commercial Banks during
2011-12 for enabling NABARD to refinance short-term
crop loans to co-operative credit institutions and RRBs
at concessional rates.
• The Corpus of RIDF XVII raised from ` 16,000 crore to` 18,000 crore.
C. Financial Inclusion/ Micro Finance
• Banking facilities to all the identified 73,000 habitations
having a population of more than 2,000 to becompleted by 2011-12.
• 'Women's SHG's Development Fund' to be created with
a corpus of ` 500 crore to promote SHG.
• 'India Microfinance Equity Fund' with a corpus of ` 100
crore to be created with SIDBI for providing equity tosmaller MFIs.
D. Other Initiatives
• ` 3,000 crore to be provided to NABARD to providesupport to handloom weaver co-operative societies
which have become financially unviable due to non-
repayment of debt by weavers facing economic stress.
• To address the issue of storage of vegetables and fruits,15 more Mega parks to be set up during 2011-12. New
storage capacity of 150 lakh MT through private
entrepreneurs and warehousing corporations has been
augmented.
• ` 500 crore to be provided to RRBs during 2011-12 to
enable them maintain a CRAR of at least 9 per cent as
on March 31, 2012.
• Provision under Rural Housing Fund enhanced to
` 3,000 crore.
Box 1.1
Union Budget 2011-12: Highlights on Agriculture and Rural Development
The excercise for the XIIth Five Year Plan (2012-17) has
commenced with the setting up of several working groups on
various sectors of the economy.
A. The Working Group on Outreach of Institutional
Finance, Cooperatives and Risk Management for Twelfth Five
Year Plan has been constituted under the Chairmanship of
Dr. Y. S. P. Thorat, former Chairman, NABARD for the
formulation of the Twelfth Five Year Plan. Dr. Prakash Bakshi,
Chairman, NABARD, is the Member Secretary for the
Working Group. The specific Terms of Reference (ToR) are :
(i) To review the flow of credit to agriculture and allied
sectors during the XIth Plan, giving sub-sectoral analysis
and recommend measures to increase the flow of credit at
reasonable rates of interest throughout the country with
special consideration of disadvantaged sections such as
small and marginal farmers, women farmers, tenant
farmers, oral lessees and landless labourers and assess the
short-term and long-term credit requirements of agricultural
credit during XIIth plan.
(ii) To review the contribution and performance of
credit cooperatives towards outreach of credit to agriculture
and allied activities and recommend measures for their
increased proactive participation.
Box 1.2
Working Groups for Twelfth Five Year Plan (2012-2017)
(iii) To study the performance, efficiency and adequacy
of risk management policies, strategies and programmes
being implemented for agriculture and allied sectors and
recommend the course to be followed for risk management
during XIIth plan as well as measures required to increase
uptake and service levels of micro insurance products.
(iv) To study the issues concerning micro-financing
institutions such as their costs and rates of lending, their
contribution in credit outreach and recommend future
course of actions.
B. The Working Group on Savings under the
Chairmanship of Dr. Subir Gokarn, Deputy Govenor, RBI was
constituted to estimate the savings in line with the broad macro
economic parameters set for the Twelfth Five Year Plan. The
Working Group constituted six sub-groups to deal with various
sectors of the economy. The ‘Sub-group on Flow of Private
Investment for SME and Agriculture’ has been constituted under
Shri. S.K. Mitra, Executive Director, NABARD as Convenor. The
broad TOR of the Sub-Group is to estimate resources available
for private investment, including infrastructure, and the likely
flows for SME and agriculture. NABARD is providing the
Secretariat for both the Groups.
9
Table 1.9: Sub-sector-wise Ground Level Credit Flow for Agriculture & Allied Activities
(` crore)
Sl Sector/Sub-Sector 2005-06 2006-07 2007-08 2008-09 2009-10 Growth rate (%)
No.2005-10^ 2009-10*
I. Crop Loan 1,05,350 1,38,455 1,81,393 2,10,461 2,76,656 26.49 31.45
(ST-Production Credit)
II. Term Loan 75,136 90,945 73,265 91,447 107,858 7.56 17.91
(MT & LT Investment Credit)
i. Minor Irrigation 8,663 8,566 2,840 3,180 5,197 (-)18.23 63.43
ii. Land Development 1,749 2,285 2,553 2,887 3,669 18.72 27.09
iii. Farm Mechanisation 9,695 10,113 8,303 8,334 10,211 (-)0.89 22.52
iv. Plantation & Horticulture 4,481 5,266 5,910 6,045 6,407 8.9 5.99
v. Animal Husbandry 7,341 8,045 9,034 10,398 10,260 9.7 (-)1.33
vi. Fisheries 1,019 1,424 1,248 1,281 1,854 11.53 44.73
vii. Hi-tech agriculture 9,737 21,498 33,325 41,694 50,797 48.68 21.83
viii. Others$ 32,451 33,748 10,052 17,628 19,463 (-)15.4 10.41
Total (I + II) 1,80,486 2,29,400 2,54,658 3,01,908 3,84,514 19.57 27.36
$ : Others include storage/market yards, forestry/waste land development, RIDF, bullock and bullock carts, bio-gas and credit flow throughprivate sector commercial banks.^: Compound Annual Growth Rate; *: Percentage change over the previous year.
Source: NABARD
Irrigation witnessed the highest annual growth of
63.43 per cent, followed by Fisheries (44.73 per
cent), Land Development (27.09 per cent) and Farm
Mechanisation (22.52 per cent) in GLC flow over
2008-09 (Table 1.9).
d. Agricultural Production
i. Foodgrains & Non-foodgrains
1.25 According to the 3rd Advance Estimates, the
country's foodgrain production during 2010-11 was
estimated at 235.88 million tonnes as compared to
218.11 million tonnes (final estimate) during 2009-10,
registering an increase of 8.14 per cent over the
previous year. During the year, production of all crops
except jute & mesta was estimated to be higher, the
maximum increase being for cotton at 40.04 per cent
followed by oilseeds (21.58%), coarse cereals
(19.85%), pulses (17.94%), sugarcane (16.50%), rice
(5.63%) and wheat (4.29%). Production of Jute &
mesta was expected to be lower by 11.26 per cent
during 2010-11 as compared to the previous year
(Table 1.10).
ii. Plantation Crops
1.26 Tea production in the country during 2010-11
has been estimated at 9.66 lakh tonnes as against
9.91 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. (Table 1.11).
1.27 Coffee is cultivated in an area of around 3.99
lakh hectares confined mainly to Southern India. The
estimated coffee production for the year 2010-11 is
2.99 lakh tonnes, i.e., 0.99 lakh tonnes of Arabica and
2 lakh tonnes of Robusta. Export of Coffee at 3.22
lakh tonnes during 2010-11 was 65 per cent higher
than that exported during 2009-10 (Table 1.11).
1.28 Despite not having regions geographically best
suited to growing natural rubber, India continued to
record the highest productivity in the world with an
average yield of 1,867 kg/ha. The production of
Rubber (natural & synthetic) was 9.08 lakh tonnes
during 2010-11 (April, 2010-February, 2011) as
against 9.38 lakh tonnes during 2009-10.
10
The estimated export of natural rubber during the
corresponding period was 29 ,851 tonnes against an
import of 1,71,282 tonnes (Table 1.11).
iii. Horticulture Crops
1.29 Development of horticulture is recognised as an
avenue for diversification in agriculture to address
nutritional security, enhance employment opportunities
and provide export earnings. Among the various
horticulture crops, fruits and vegetables form the single
largest sub-sector constituting about 92.3 per cent of
the total horticultural production in the country.
Table 1.10: Production of Major Crops
(Million tonnes)
Year/Crop 2006-07 2007-08 2008-09 2009-10 2010-11*
Rice 93.35 96.69 99.18 89.09 94.11
Wheat 75.81 78.57 80.68 80.80 84.27
Coarse Cereals 33.92 40.76 40.03 33.55 40.21
Pulses 14.20 14.76 14.57 14.66 17.29
Foodgrains 217.28 230.78 234.47 218.11 235.88
Kharif 110.57 120.95 118.14 103.95 118.39
Rabi 106.71 109.83 116.33 114.16 117.48
Oilseeds 24.28 29.75 27.71 24.88 30.25
Cotton# 22.63 25.88 22.27 24.22 33.92
Sugarcane 355.52 348.18 285.02 292.30 340.54
Jute & Mesta## 11.27 11.21 10.36 11.81 10.48
*3rd Advance Estimates; # Million bales of 170 kgs each; ## Million bales of 180 kgs each.
Source: Agricultural Statistical Division, Ministry of Agriculture, Government of India; Economic Survey 2010-11.
Floriculture in Poly House
1.30 The National Horticulture Mission (NHM), in
operation in 372 districts of the country, aims to
promote holistic development of the horticulture sector
through area based and regionally differentiated
strategies. Under the mission, an area of 16.57 lakh ha.,
has been brought under horticulture crops and an
expenditure of ` 4,125.43 crore had been incurred upto
2009-10. Area and production under horticulture crops
increased from 20.7 million hectares and 214.7 million
tonnes, respectively during 2008-09 to 20.9 million
hectares and 223.1 million tonnes, respectively, during
2009-10 (Table 1.12).
e. Agriculture and Allied Sector
1.31 Agriculture and allied activities contributed to
14.6 per cent of GDP in 2009-10 with agriculture
accounting for 12.3 per cent, followed by forestry and
logging at 1.5 per cent, and fishing at 0.8 per cent.
i. Livestock and Poultry
1.32 During 2009-10, the livestock sector
contributed to 3.5 per cent of GDP and 28.4 per cent
of GDP from agriculture and allied activities. As per the
11
18th Livestock Census 2007, the livestock and poultry
population in the country were 529.7 million and
648.8 million, respectively. The production of milk was
112.5 million tonnes and the per capita availability of
milk increased from 258 grams per day to 263 grams
per day due to increase in milk production in the
country during 2009-10 over 2008-09. The production
of poultry meat was estimated to be 1.85 million
tonnes and egg production at 59.8 billion during
2008-09. The per capita availability of eggs has been
around 51 per annum.
ii. Fisheries
1.33 Fishing, aquaculture and allied activities are
reported to have provided livelihood to over 14 million
persons in 2008-09. During 2009-10, the fisheries sector
contributed to 0.8 per cent of GDP and 6.4 per cent of
GDP from agriculture and allied activities. Fish
production is projected to reach 10 million tonnes by
the end of 11th Five Year Plan from the base level of
6.87 million tonnes during 2006-07. During the period
between 2007-08 and 2009-10, the total fish
production in the country increased by 10.5 per cent
and reached 7.85 million tonnes (2.98 million tonnes
of marine fish and 4.87 million tonnes of inland fish).
Export of marine products was 6.64 lakh tonnes
valued at ` 9,921 crore during 2009-10 as compared
to 6.02 lakh tonnes with a value of ` 8,608 crore in
the previous year.
f. Agro and Food Processing Sector
1.34 Agro and Food Processing sector is regarded as
a promising sector of the Indian economy in view of
its large potential for growth and its socio economic
impact, specifically on employment and income
generation. Agro-processing helps in better utilization
and value addition of agricultural produce. The Vision
Document 2015 by the Ministry of Food Processing
Industries has set a challenging target of trebling the
size of processed food sector by 2015 through
appropriate enabling policies. The export of processed
foods including processed fruits and juices increased
from ` 3,176 crore during 2008-09 to ` 3,255 crore
during 2009-10.
Table 1.11: Production, Consumption and Exports of Major Plantation Crops
(lakh tonnes)
Year Tea Coffee Rubber
Prodn. Cons. Exports Prodn. Cons. Exports Prodn. Cons. 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 1.02 1.95 9.38 12.78 0.25
2010-11* 9.66 NA 1.78 2.99 1.08 3.22 9.08 $ 12.43 $ 0.29
NA: Not Available *: Estimated $: April 2010- February 2011
Source: Ministry of Commerce and Industry, GoI. Coffee Board, Tea Board and Rubber Board
Paddy cum fish Cultivation
12
Table 1.12: Area and Production of Major Horticulture Crops
(Area in million hectares and Production in million tonnes)
Year Area Production
Fruits Vegetables Flowers Total Fruits Vegetables Flowers Total
Horticulture Horticulture
2005-06 5.3 7.2 0.1 18.7 55.4 111.3 0.6 182.8
2006-07 5.6 7.5 0.1 19.4 59.6 114.9 0.8 191.8
2007-08 5.8 7.8 0.2 20.2 65.6 128.4 0.8 211.2
2008-09 6.1 7.9 0.2 20.7 68.4 129.1 0.9 214.7
2009-10 6.3 7.9 0.2 20.9 71.5 133.7 1.0 223.1
Source: National Horticulture Board
g. Agricultural Marketing
1.35 Seventeen States/Union Territories have
amended their APMC Acts for agricultural market
reforms. Initiatives have been undertaken by GoI for
setting up terminal market complexes for fruits,
vegetables and other perishables in States that have
amended their APMC Acts. Agricultural Marketing
Information Network (AGMARKNET) provides internet
connectivity to agricultural markets for establishing
information network of prices and other market related
information. Agricultural commodities valued at
` 8,614.58 crore and ` 306.65 crore were certified
under ‘Agmark’ for domestic trade and exports,
respectively during 2009-10 as compared to ` 7,865.25
crore and ` 241.08 crore, resepectively, during 2008-09.
h. Commodity Futures
1.36 Agriculture commodity futures market includes
21 commodity exchanges in the country. The value of
total trade in commodity futures market increased from
` 77,64,754 crore in 2009-10 to ` 119,48,942 crore in
2010-11 recording a growth of 53.89 per cent during
the period. The value of agricultural commodities as a
proportion to total trade in commodity futures market
decreased from 15.68 per cent in 2009-10 to 12.18
per cent in 2010-11.
i. Capital Formation
1.37 Gross Capital Formation (GCF) in agriculture and
allied sectors increased from ` 86,611 crore in 2005-06 to
` 1,33,377 crore (at 2004-05 prices) in 2009-10. The
GCF in agriculture and allied activities as a proportion to
GDP in the sector increased from 14.57 per cent in
2005-06 to 20.30 per cent in 2009-10. But the GCF in
agriculture and allied activities as a proportion of total
GDP varied between 2.66 to 3.09 per cent during the
same period (Table 1.13).
j. Kisan Credit Card Scheme
1.38 Kisan Credit Card (KCC) scheme introduced in
1998-99 has eased the flow of credit to farmers
(Box 1.3). During 2010-11, 7.26 million KCC were
issued by banks with sanctioned credit limit of
` 43,370 crore as against 9.01 milion cards and credit
limits of ` 34,982 crore during 2009-10. Of the
cumulative 100.93 million credit cards issued, as at end-
March 2011, 45.03 million cards (44.62%) were issued
Table 1.13: Gross Capital Formation in Agriculture
(at 2004-05 prices)
(` crore)
Year Ratio of GCF in Agriculture to (%)
GCF in Total GDP in Total
Agriculture & GCF Agriculture & GDP
Allied Activities Allied Activities
2005-06 86,611 7.3 14.57 2.66
2006-07 90,710 6.6 14.65 2.54
2007-08 1,05,034 6.5 16.03 2.69
2008-09 1,28,659 8.3 19.67 3.09
2009-10(QE) 1,33,377 7.7 20.30 2.97
QE: Quick Estimates Source: Economic Survey 2010-11
13
crore against the claims of ` 29,102 crore. The share
of SCB, SCARDB and RRB stood at ` 18,289 crore,
` 3,810 crore and ` 6,972 crore, respectively.
l. Agricultural Insurance
1.41 With a view to providing indemnity to farmers
in the event of crop failure due to natural calamities,
pests and diseases, the National Agricultural Insurance
Scheme (NAIS) has been in operation since rabi 1999-
2000. This scheme, based on 'Area Approach', is open
to all farmers irrespective of their size of holding and is
being implemented by 25 States and 2 Union
Territories. During the period from rabi 1999-2000 to
kharif 2010, the total claims was to the extent of
` 20,437 crore as against an amount of ` 6,213 crore
paid as permium by farmers. A Modified National
Agricultural Insurance Scheme (MNAIS) has been
notified in 34 districts covering 22 States during rabi
2010-11.
1.42 The pilot Weather Based Crop Insurance
Scheme (WBCIS) is under implementation since kharif
2007 to provide insurance to farmers against adverse
weather conditions affecting crop production. Between
kharif 2007 and kharif 2010, 81 lakh farmers have
been covered under the pilot scheme and
` 639.19 crore has been released as premium for
farmers. The Coconut Palm Insurance Scheme (CPIS)
was launched on a pilot basis in selected areas of eight
States, i.e., Andhra Pradesh, Goa, Karnataka, Kerala,
Maharashtra, Odisha, Tamil Nadu and West Bengal
during 2009-10. As on 30 July 2010, 27,023 farmers
were covered under the scheme.
m. Minimum Support Prices,
Procurement and Stock of Foodgrains
1.43 Minimum Support Price (MSP) for the major
kharif and rabi crops, except cotton, was increased
Table 1.14: Agency-wise, Year-wise Kisan Credit Cards Issued
(As on 31 March 2011)(million)
Year Co-operative Regional Commercial Total
Banks Rural Banks Banks
2006-07 2.29 1.41 4.81 8.51
2007-08 2.09 1.77 4.61 8.47
2008-09 1.34 1.41 5.83 8.59
2009-10 1.74 1.95 5.31 9.01
2010-11 2.81 1.78 2.67* 7.26
Cumulative# 40.70 15.20 45.03 100.93
* Data for commercial banks available up to 30 June 2010
# Since inception of the Scheme, i.e., August 1998
Source: NABARD
by commercial banks, followed by 40.70 million cards
(40.33%) by co-operative banks and 15.20 million cards
(15.05%) by Regional Rural Banks (Table 1.14).
1.39 State-wise analysis of KCC issued as at end-
March 2011, revealed that Uttar Pradesh accounted for
17.9 percent of the total cards issued, followed by
Andhra Pradesh (16.9 per cent), Maharashtra (9 per
cent), Tamil Nadu (6.5 per cent), Karnataka and Madhya
Pradesh (6 per cent each).
k. Agricultural Debt Waiver and Debt Relief
Scheme, 2008
1.40 The Agricultural Debt Waiver and Debt Relief
(ADWDR) Scheme, 2008 for farmers was announced
in the Union Budget 2008-09 to address the
indebtedness of farmers and difficulties of the farming
community, especially small and marginal farmers.
NABARD implemented the Scheme as the nodal
agency for co-operative banks and RRBs. About
192.59 lakh farmer borrowers of co-operative banks
and RRBs are estimated to have benefited under the
Scheme, of which small and marginal farmers,
constituting 83.5 per cent were the major beneficiaries.
Out of ` 29,240 crore received under the Agriculture
Debt Waiver and Debt Relief Scheme 2008, the
cumulative disbursements by NABARD was ` 29,071
14
The Government of India had constituted a Task Force (TF)
headed by Shri Umesh Chandra Sarangi, the then
Chairman of NABARD 'to look into the issue of a large
number of farmers, who had taken loans from private
moneylenders, not covered under the loan waiver scheme'.
The TF submitted its report to the Ministry of Agriculture,
Government of India in June 2010. The policy
recommendations of the Task Force are delineated below:
A. Relief measures for farmers not covered by
Agricultural Debt Waiver and Debt Relief
(ADWDR) Scheme, 2008
• Banks and co-operative credit institutions may
encourage farmers, who had defaulted on loans taken
prior to 1 April 1997, to access fresh farm loans.
B. Policy measures for addressing the issues of
farmer indebtedness to moneylenders and on
measures to provide relief to such farmers
• State Governments to continue to make available funds
for interest rebate/refund for timely repayment.
• Interest subvention be made available when loans are
rescheduled.
• A portion of the anticipated interest subvention amount
be parked with banks at the beginning of the year (as
in the case of subsidy oriented development schemes of
GoI) and adjusted at the end of the year to incentivise
banks to reach out to more farmers with crop loans.
• Insurance schemes be redesigned, using satellite
imagery and ground truths, with the panchayat as the
unit for arriving at crop loss.
• Budgetary support for developing weather insurance
products to be provided.
• JLG to be formed on a 'mission mode' so as to enable
the farmers to access collateral free loans from the
banking system.
• State governments to recognise the existence of tenant
farmers, oral lessees, sharecroppers and amend related
laws appropriately.
• All India Debt and Investment Survey (AIDIS) and
Situation Assessment Survey (SAS) be interspersed and
undertaken every 5 years.
• Other cooperatives of marginalised farmers, especially
for the supply of inputs, storage, processing and
marketing and banks be encouraged to lend to these
and other agro processing cooperatives.
• NBFC to be more closely monitored and their loans not
to be automatically considered as 'priority sector' loans.
BOX 1.3
Task Force "to look into the issue of a large number of farmers, who had taken loans from private
moneylenders, not being covered under the loan waiver scheme”: Recommendations
• User owned and not-for profit MFIs may be provided
access to finance from banks.
• Stamp duty on agricultural loan agreements to be
exempted.
• Farm Credit Rating Institution on lines of CIBIL to be
set-up.
C. Kisan Credit Card (KCC):
• KCC be technology enabled, including the conversion
to a smart card with withdrawals and remittances
enabled at ATMs, points of sale, and through hand held
machines. Banks need to have core banking solutions
in place at the earliest, to enable technology to benefit
the farmers.
• The KCC limit be fixed for five years, based on the
bankers assessment of total credit needs of the farmer
for a full year, and that the limit be operated by the
borrower as and when needed, with no sub limits for
kharif and rabi,or for stages of cultivation.
• Each withdrawal under KCC be allowed to be
liquidated in twelve months.
• Automatic renewal of and annual increase on credit
limit to be linked to inflation rate .
• Financial literacy and counselling campaigns to be
undertaken to increase awareness among farmers on
KCC.
• Cards issued to women farmers be reported separately,
and that for women members of SHG as well as of
thrift and credit cooperatives with a good savings
history be provided with specially designed credit cards
by banks, with limits linked to the value of their unpaid
labour on their own farms or on farms of relatives.
D. Legislation regulating loans from private
moneylenders
• Severe deterrent/punishment for non-registration and
for other violations of the law.
• Creation of a quasi-judicial authority for quick
redressal.
• Widening of definition of 'moneylender' to include all
forms of for-profit closely held financial organisations
lending money.
• Any other closely held entity whose lending rates are not
subject to other laws, to be covered by the money lending
law.
• Initiation of action on the grievance of an aggrieved
person and the constitution of a grievance redressal
committee at the district or Loan recovery mechanisms.
• Confidentiality of transactions for registered moneylenders.
15
during 2010-11 over the previous year (Table 1.15).
Maximum increase in the MSP during 2010-11, was
for arhar (30.43%) followed by lentil (20.32%), gram
(19.31%), moong (14.85%), groundnut in shell
(9.52%), sugarcane (7.14%) and common paddy
(5.26%). MSP for jowar, bajra and maize were raised
by ` 40 per quintal.
1.44 The procurement of rice and wheat as on March
1, 2011 (kharif marketing season for rice and rabi
marketing season for wheat) at 22.7 million tonnes
and 22.51 million tonnes, respectively, represents a
decline of (-) 1.3 per cent and (-) 11.30 per cent as
compared to the corresponding date last year. The
stock of foodgrains (rice and wheat) held by the Food
Corporation of India (FCI) and State Agencies as on
January 1, 2011 was 47.1 million tonnes against the
buffer norms including the strategic reserve of 25.0
million tonnes. The off-take of foodgrains (rice and
Table 1.15: Minimum Support Prices for Major Crops
(` per quintal)
Crop 2006-07 2007-08 2008-09 2009-10 2010-11
Kharif
Paddy (Common) 580 ^ 645 ^^ 850 $ 950 $ 1000
Jowar (Hybrid) 540 600 840 840 880
Bajra 540 600 840 840 880
Maize 540 620 840 840 880
Arhar 1410 1550 $$ 2000 2300 3000 *
Moong 1520 1700 $$ 2520 2760 3170 *
Groundnut in shell 1520 1550 2100 2100 2300
Soyabean (black) 900 910 1350 1350 1400
Cotton 1770 1800 2500 # 2500 # 2500 #
Sugarcane@ 80.25 81.18 81.18 129.84 139.12 **
Rabi
Wheat 750 ^^ 1000 1080 1100 1120
Gram 1445 1600 1730 1760 2100
Lentil 1545 1700 1870 1870 2250
Rapeseed/Mustard 1715 1800 1830 1830 1850
^ An additional incentive bonus of ` 40 per quintal was payable on procurement between 1 March 2006 to 31 March 2007
^^An additional incentive bonus of ` 100 per quintal was payable over MSP
$ An additional incentive bonus of ` 50 per quintal was payable over MSP
$$ A bonus of ` 40 per quintal was payable over MSP
* Additional incentive of ` 5 per kg for arhar and moong sold to procurement agencies was payable during the harvest/arrival
period of 2 months
# Staple length (mm) of 24.5-25.5 & micronaire value of 4.3-5.1
@ Statutory Minimum Price (SMP) upto 2008-09; Fair & Remunerative Price (FRP) since 2009-10
** At 9.5 per cent recovery, subject to a premium of ` 1.46 for every 0.1 per cent increase in the recovery above 9.5 per cent
Source: Directorate of Economics & Statistics, GoI
16
wheat) under Targeted Public Distribution System
(TPDS) and other schemes at 25.2 million tonnes
during April-September 2010-11 was 7.69 per cent
higher than that at 23.40 million tonnes during April-
September 2009-10.
n. Micro, Small & Medium Enterprises
1.45 Micro, Small and Medium Enterprises (MSME)
contribute significantly to the economic growth by
being inclusive, employment friendly and promoting
equitable development. The major advantage of the
sector is its employment potential at low capital cost.
The sector manufactures more than 6,000 products,
ranging from traditional to high-tech items. It is
estimated that in terms of value, MSME sector
accounts for about 45 per cent of the manufacturing
output and 40 per cent of the total exports of the
country. As per the 4th Census of the MSME Sector,
there were 28.5 million enterprises producing output
valued at ` 8,80,805 crore and providing employment
to 65.9 million persons during 2008-09. The sector
contributes 8 per cent to the country's GDP. Initiatives
taken for the development of MSME sector include the
implementation of MSMED Act, 2006, reservation of
21 items for exclusive manufacture in micro and small
enterprise sector, dereservation of certain items for
providing opportunities to MSME for technological
upgradation, promotion of exports and achieving
economies of scale and providing competitive edge to
these units under the National Manufacturing
Competitiveness Programme (NMCP).
17
I I
Development and Promotional Initiatives
NABARD continued to support various innovative
initiatives in addition to the Bank's ongoing activities.
Various initiatives and programmes of the Bank
during the year are detailed in this Chapter.
Programmes of the Government of India and the
State Governments, implemented in association with
the banks for the development of agriculture and
rural sectors are also discussed.
Credit Planning
2.2 There are 395 District Development Managers'
(DDM) offices of NABARD across the country. In
addition, 106 districts are tagged to specific DDM
districts to focus on credit planning, development
and promotional activities in these districts.
A. Potential Linked Credit Plans
2.3 In order to provide meaningful link between
development and credit planning for supporting
agriculture and rural development, NABARD prepares
Potential Linked Credit Plans (PLP). During the year,
PLP were prepared for 624 districts in the country to
guide the banks in their credit planning exercise and
infrastructure development for 2011-12. The sector-
wise credit flow projections captured in the PLP were
utilised for arriving at the credit flow target to
agriculture sector and priority sector.
B. Integrated District Plans
2.4 NABARD was involved as a Technical Support
Institution in the preparation of Integrated Development
Plans under Backward Regions Grants Fund in 17
districts covering five states, viz., Andhra Pradesh,
Jharkhand, Maharashtra, Tripura and Uttar Pradesh.
C. State Focus Paper
2.5 State Focus Papers, presenting a comprehensive
picture of potential available in various sectors of the
rural economy, critical infrastructure gaps to be filled
in and linkage support to be provided by various
Government departments, were prepared by the
Regional Offices at the State Level, based on PLP.
State Credit Seminars were organised for discussing
with the officials from State Government departments
and financial institutions to bridge the infrastructure
gaps for facilitating potential credit flow.
Farm Sector
A. Watershed Development
2.6 The objective of developing watersheds is to
significantly mitigate the drought induced distress of
farmers in the area. NABARD anchors four types of
watershed development programmes in the country
covering over 1.70 million hectare. These programmes
are: Indo-German Watershed Development
Programme (IGWDP) in Maharashtra, Andhra
Pradesh, Gujarat and Rajasthan (See Section L),
Participatory Watershed Development Programme
under Watershed Development Fund (WDF) in 15
States, Prime Minister’s package in four States, and
Integrated Watershed Development Programme
(IWDP) in Bihar, supported by the Planning
Commission.
2.7 The Watershed Development Fund was
established in NABARD in 1999-2000 with an initial
corpus of ` 200 crore. The Fund is replenished every
year and was augmented during the year with
` 947.12 crore. The Fund had a balance of
` 1,897.69 crore, as on 31 March 2011.
18
2.8 During the year, 66 watershed projects were
sanctioned, taking the cumulative number of such
projects to 579, covering an area of
4.86 lakh ha. in 14 states, with a total commitment (loan
and grant component) of ` 220.57 crore.
During the year, 45 projects graduated to Full
Implementation Phase (FIP), taking the number of
such projects to 255.
2.9 Under the Prime Minister's Relief package for 31
distressed districts in the four States, viz., Andhra
Pradesh, Karnataka, Kerala and Maharashtra (for
developing 15,000 ha. of watershed annually over two
years in each of these districts), 71,127 ha. were taken
up for implementation during the year, taking the
cumulative area and financial commitment to 9.42
lakh ha. and ` 1,023 crore, respectively.
2.10 The watershed projects are entirely grant based
in distressed districts while the assistance is
grant-cum-loan in non-distressed districts. During the
year, ` 152.26 crore and ` 3.18 crore were disbursed
under watershed projects as grants and loans,
respectively; the cumulative disbursements under these
components were ` 350.03 crore and ` 33.18 crore,
respectively. Major findings of the mid-course
evaluation of a few WDF supported projects are given
in Box 2.1.
2.11 The participatory watershed development
programme being implemented by NABARD under the
Special Plan for Bihar component of Rashtriya Sam
Vikas Yojana (RSVY), aims to develop 80,000 ha. of
wasteland in Aurangabad, Banka, Bhabua, Gaya,
Jamui, Munger, Nawada and Rohtas districts of Bihar
with an allocation of ` 60 crore. Under the
programme, a total of 79 projects in an area of 84,444
ha. had been sanctioned, of which six are at Capacity
Building Phase (CBP) stage and 73 at FIP stage.
During the year, 24 projects graduated to FIP stage. A
sum of ` 20.18 crore was disbursed during the year
and the cumulative disbursement, as on
31 March 2011, stood at ` 34.17 crore.
Box 2.1
Mid-Course Evaluation of Watershed Projects supported under WDF
(a) Chipni-Bandhoni and Lodhwara Watershed
Projects in Chitrakoot District of Uttar Pradesh -
Study by Dhan Foundation
• Gross cropped area increased as fallow land/waste land was
brought under cultivation. Ground water levels during
monsoon rose by 12-18 feet from pre-development work.
• Significant gains in crop yields were observed in bajra/
jowar/pulses (50%), followed by paddy (43%).
• Population of cross bred dairy animals increased from
12 to 37 in Chipni - Bandhoni; in Lodhwara, it was
21 to 57.
(b) Teliki, Nethigutlapalli, Kothapalli, Kosuvaripalli
Watersheds in Andhra Pradesh - Study by Action
for Food Production (AFPRO)
• Area under sweet orange increased from 20 acres to
58 acres.
• Reduction in distress migration due to improved
agricultural production and productivity.
• Agricultural income increased two fold.
(c) Chaitanya, Mabbugutta, GB Thanda, Gramajyoti
Watersheds in AP - Study by Central Research
Institute for Dryland Agriculture (CRIDA )
• Seventy acres of fallow/cultivable wastelands brought
under cultivation during Kharif. Productivity increased
in green gram (36%) & red gram (42%); bengal gram
(45%) & groundnut (18%) during rabi.
• Rabi cropped area increased from 136 ha to 404 ha.
• Milch animal population increased from zero to 294;
area under horticulture increased from 2.50 ha to
16 ha.
19
Box 2.2
Outcome of Village Development Programmes - Phase I
• Ten Essential Areas had been identified to facilitate
development of agriculture and allied sectors, with focus
on crop productivity, storage, processing and marketing
linkages. Towards this end, 6,634 training and
awareness programmes had been organised for the
benefit of 1.80 lakh farmers.
• Promotional interventions covered 1.55 lakh rural
people through training and capacity building, especially
in allied and non-farm sector activities, institution
building through promotion of Farmers’ Club (FC) and
Self-Help Groups (SHG), organising rural
entrepreneurship development programmes, etc.
• Credit related interventions facilitated access to
institutional credit with focus on financial inclusion,
Kisan Credit Card (KCC) scheme and investment in
agriculture sector. Financial inclusion varied from 50% to
100% in the VDP villages.
• Critical infrastructure needs identified during
Participatory Rural Appraisal have been addressed by
ensuring synergy and convergence through 1,921
infrastructure development projects involving a financial
outlay of `193.61 crore.
• Adoption of solar home/street lighting in several villages
under the programme, awareness on environment and
publications in vernacular for the benefit of the village
community.
B. Climate Change Adaptation Project in
Akole & Sangamner Taluka of
Ahmednagar District, Maharashtra
2.12 Ahmednagar, the largest district of Maharashtra,
lies in the direct rain-shadow of Western Ghats and is
vulnerable to frequent droughts. The project, therefore,
seeks to enable vulnerable rural communities in the
Akole and Sangamner taluks of the district, to cope
with the inpact of climate change. The project is
expected to develop a replicable model for Climate
Change Adaptation in semi-arid and rainfed regions of
the country. The project, being the first of its kind to be
considered by NABARD under WDF, involves a total
financial outlay of ` 34.15 crore, with grant assistance
from the Swiss Agency for Development and
Cooperation (SDC) (` 10.80 crore), NABARD (` 20.62
crore) and contributions from villagers (` 2.73 crore).
The Watershed Organisation Trust (WOTR) is the
implementing agency for the project.
C. Village Development Programme
2.13 The Village Development Programme (VDP)
introduced in 2007-08, is meant to fulfil NABARD's
mandate of bringing about integrated rural
development through credit and promotional efforts.
Under the programme, one village in each DDM
district and five villages in each of the Pilot Project for
Integrated Development of Backward Blocks (PPID)
blocks are to be developed in an integrated and
holistic manner. The programme is now being
implemented in 801 villages spread across 25 States,
through 482 Project Implementing Agencies (PIA),
including Non Governmental Organisations (NGO),
Farmers' Clubs (FC) and Krishi Vigyan Kendras (KVK).
The programme was completed in 115 villages and is
under different stages of implementation in 686
villages. The Programme has been upscaled with the
launch of Phase II of the programme (from April
2010), envisaging coverage of 1500 villages. The
outcome of implementing of VDP-I are highlighted in
Box 2.2.
High Density Mango plantation in Watershed of Barakar
20
D. Tribal Development
2.14 The Tribal Development Fund (TDF) was
created in 2004 with a corpus of ` 50 crore to support
integrated tribal development projects with wadi
(a small orchard) as the core component.
These projects provide sustainable livelihood for tribal
families through orchard based farming along with
social welfare measures to improve their living
standards. During the year, financial assistance of
` 373.97 crore (` 355.56 crore as grant and
` 18.41 crore as loan) was sanctioned for 126 projects
benefiting 94,163 tribal families in various states. The
cumulative sanction was `917.60 crore, as on
31 March 2011, covering 2,50,493 families in 317
projects across 24 States/Union Territories (UT).
E. Farm Innovation and Promotion Fund
2.15 The corpus under Farm Innovation and Promotion
Fund (FIPF) has been enhanced to ` 50 crore, from
1 April 2009. During 2010-11, 45 projects were
sanctioned in 15 states, with grant assistance of
` 5.47 crore, The projects cover activities like
(i) innovative participatory guarantee system as a low
cost alternative certification process for organic
products for small and marginal farmers;
(ii) production, distribution and processing of organic
milk; (iii) sustainable upscaling of weather insurance;
(iv) mass propagation of selected species of bamboo
through innovative techniques for rural resource
development; (v) standardisation of planting geometry
and growth stage based fertigation patterns for
commercial cultivation of selected vegetables using
drip irrigation system; (vi) identifying and developing
sustainable strategies for combating twisting malady in
onion; (vii) sustainable initiative for improving
production & productivity of sugarcane; (viii) seed
purification, multiplication and area expansion of
Navara rice; (ix) demonstration and field adaptation of
Phytotron Sugarcane Ripener technology innovation for
quantitative and qualitative improvement in sugarcane
production; (x) commercialisation of Anthurium and
Heliconia; and (xi) promotion of Natueco farming
across various states. Cumulatively, 123 projects were
sanctioned with a financial support of ` 11.65 crore,
of which 51 projects with financial assistance of ` 2.55
crore have been completed. Some of the major
completed projects include (i) promoting commodity
based marketing of agricultural produce on cluster
basis in Uttarakhand; (ii) system of wheat
intensification in Himachal Pradesh, (iii) development
of Bharath Chakra (animal drawn mechanical plough)
in Tamil Nadu; (iv) post- harvest value addition of
medicinal and aromatic crops produced through
dehydration in solar dryers in Uttarakhand;
(v) implementation of Kisan Bandhu Yojana in
Moradabad, Uttar Pradesh; (vi) study of commercial
viability of whole seed corn production of elephant foot
yam in West Bengal; (vii) skill upgradation for small and
marginal farmers through training and empowerment for
production of exotic vegetables in low cost poly-houses
in Tamil Nadu (Box 2.3); (viii) demonstration of Organic
Farming using the Phosphate Rich Organic Manure
technology in Rajasthan; and (ix) protected vegetable
cultivation in Uttarakhand.
Box 2.3
Exotic Vegetables in Low Cost Poly-houses
A project on "Skill Upgradation for Small and Marginal
Farmers for Production of Exotic Vegetables in Low-Cost
Poly- houses" was sanctioned under FIPF to TVS
Educational Society, Chennai. The project was
implemented in Shoolagiri block in Krishnagiri district with
NABARD assistance of ` 6.02 lakh. The major
interventions under the project included construction of
poly-houses, capacity building of farmers on low cost
poly-houses, improved methods of vegetable cultivation,
cultivation of exotic vegetables like coloured capsicum,
broccoli, chinese cabbage, zucchini, lettuce, training on
adoption of organic farming, installation of drip irrigation
system, hand holding support for the farmers on
construction of poly-houses and market and bank linkages.
The impact of the project was visible with increased water
use efficiency through drip, reduction in pest attack by 25-
30%, increase in yields of capsicum and lettuce by 100%
vis-a-vis crops in open condition, reduced labour, off-season
enhanced production, improved quality of the produce
fetching premium prices (5-10 % increase) and capturing
niche markets. The project, which was a demonstrative
model, has trained 30 entrepreneurs (small and marginal
farmers). The project is now being replicated in the states of
Karnataka and Uttarakhand.
21
F. Farmers' Technology Transfer Fund
2.16 Farmers' Technology Transfer Fund (FTTF) has
been augmented to ` 100 crore from 1 April 2010.
During the year, 512 diverse and innovative proposals
for transfer of technology, were sanctioned with grant
assistance of ` 44.97 crore in 27 states. The
cumulative disbursement was ` 33.55 crore. Some of
the major proposals sanctioned were: (i) setting up of
Very Small Aperture Terminal (VSAT) based Village
Resource Centres involving ISRO-VSAT; (ii) food
security and sustainable livelihood by upscaling
System of Rice Intensification (SRI); (iii) creating
sustainable livelihood through organic farming;
(iv) providing Short Messaging Service (SMS) services
to the Farmers' Clubs by Reuters Market Light (RML),
(v) intensive cultivation of vegetables through drip
irrigation system; (vi) demonstration of brackish water
poly-culture technology for rural development;
(vii) transfer of technology to farmers and livelihood
improvement through formation of technology users'
groups and formation of Joint Liability Groups (JLG);
(viii) scientific sericulture; (ix) preparation of web
based interactive packages for selected medicinal
crops; (x) developing organic farming technology and
package of practices for organic production of Navara
rice; and (xi) establishing Farmers' Resource Centre
(FRC).
G. Farmers' Club Programme
2.17 The programme aims to organise farmers to
facilitate accessing credit, extension services,
technology and markets. During the year, 21,903
Farmers' Clubs (FC) were launched, taking the total
number of clubs to 76,708 as on 31 March 2011.
Agency-wise, NGO promoted maximum number of
clubs (13,599), followed by co-operative banks
(2,922), commercial banks (2,733), RRB (2,215), State
Agricultural Universities (SAU)/Krishi Vigyan Kendras
(KVK) [255] and other agencies (179). An analysis of
the region-wise distribution of clubs indicated that the
Central region had the highest share (30.39%),
followed by the Southern (21.87%), Eastern (19.95%),
Western (13.15%), and the Northern (11.39%) regions,
while NER accounted for only 3.25 per cent. During
2010-11, NABARD launched a pilot project aimed at
development of a cadre of farmers from amongst the
members of Farmers' Clubs, trained in the areas of
Technology Transfer, Credit Counselling and Market
Advocacy. As on 31 March 2011, 25 projects had
been sanctioned in 12 states, viz., Arunachal Pradesh,
Bihar, Haryana, Jharkhand, Karnataka, Kerala,
Maharashtra, Odisha, Tamil Nadu, Uttar Pradesh,
Uttarakhand and West Bengal. Other initiatives
included (i) Entering into a Memorandum of
Understanding (MoU) for convergence of Farmers'
Club Programme with the developmental schemes of
Government of Uttar Pradesh and (ii) engaging 432
FC as Business Facilitators (in 13 states) and four FC
as Business Correspondents by banks. As an
Information and Communication Technology (ICT)
initiative, FC are being provided with information on
weather, market prices, crop advisory, etc., through
SMS on mobile phones (29,838 mobiles served till
31 March 2011). Three Farmers' Training and Rural
Development Centres (FTRDC) were provided grant
assistance of ` 1.02 crore under FTTF, as on
31 March 2011.
H. Capacity Building for Adoption of
Technology
2.18 The 'Scheme for Capacity Building for Adoption
of Technology (CAT)' aims at capacity building of
farmers for adopting new/innovative methods of
farming, through training and exposure visits. During
the year, 282 exposure visits for 7,548 farmers were
arranged in collaboration with select research
institutes, KVK and SAU. The areas covered were
vermi-compost, organic farming, tissue culture, nursery
management, off-season hybrid vegetable cultivation,
vegetable production in poly-house, drip irrigation in
medicinal plants, processing of horticulture produce,
milk processing & manufacture of milk products,
poultry farming, scientific cultivation of lac, etc.
22
I. Pilot Project on Augmenting
Productivity of Lead Crops
2.19 NABARD in 2009-10, had launched the 'Pilot
Project on augmenting productivity of lead crops/
activities through adoption of sustainable agricultural
practices'. The yield gap of crops would be bridged
through adoption of sustainable agricultural practices,
cost reduction and value addition, resulting in
improved standards of living for the rural farming
community. The project is to be implemented initially
in 4-6 clusters of five villages per state, proliferating to
600-900 villages at the national level. As on 31 March
2011, 44 projects covering 220 villages were launched
with a financial commitment of ` 15.41 crore.
J. Financing Purchase of Land for
Agriculture Purposes
2.20 The Scheme for "Financing Purchase of Land
for Agriculture Purposes", under implementation since
August 2001, aims to provide credit facility to SF/MF,
share croppers and tenant farmers for purchase of
agriculture land and fallow land with a view to
increasing agricultural production and taking up
diversified activities. During 2010-11, ` 20.55 crore
bank loan was disbursed to 464 borrowers in 7 states
with refinance of ` 18.99 crore.
K. Government Projects
2.21 NABARD continued to implement/coordinate
the following area specific projects of the Government
of India (GoI).
i. Cattle Development Projects
2.22 Cattle Development Projects (CDP) were
sanctioned in 2004-05 by GoI for implementation by
Bharatiya Agro Industries Foundation (BAIF), Pune in
17 districts of Uttar Pradesh and 13 districts of Bihar.
NABARD is the co-ordinating agency and facilitator for
channelising funds, ensuring its utilisation, project
supervision and monitoring. Against a total financial
outlay of ` 27.22 crore, GoI released ` 23.67 crore;
with the utilisation at ` 23.02 crore. While 100 Cattle
Development Centres have been established in each
state, 16 District Dairy Farmers' Associations have
been formed in Uttar Pradesh and 13 in Bihar. As
against a target of 80,000 families to be covered in
each state, a total of 83,938 and 99,230 families were
registered in Uttar Pradesh and Bihar, respectively. The
number of pregnancies confirmed (under the Artificial
Insemination component) was 3,20,296 and 2,51,294
in Uttar Pradesh and Bihar, respectively.
ii. Special Project on Livelihood Based
Development
2.23 The Special Project on Livelihood Based
Development was sanctioned under Swarnjayanti
Gram Swarozgar Yojana (SGSY) by GoI in 2006-07
for implementation in Sultanpur and Rae Bareli
districts of Uttar Pradesh. The project aims at covering
8,000 Below Poverty Line (BPL) families under Multi-
activity Approach for Poverty Alleviation (MAAPA) and
15,000 financially very needy youth under Demand
Driven Skill 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 Rae
Bareli. NABARD is the project holder while BAIF and
Dr. Reddy Foundation are the implementing agencies
for the two components. During 2010-11,
` 0.41 crore and ` 0.33 crore were released for
Sultanpur and Rae Bareli districts, respectively, taking
the cumulative disbursement to ` 8.98 crore and
` 7.72 crore.
iii. Dairy and Poultry Venture Capital Funds
2.24 Dairy Venture Capital Fund (DVCF) scheme was
modified as Dairy Entrepreneurship Development
Scheme (DEDS) with effect from 1 September 2010 by
replacing interest free loan with capital subsidy. However,
Poultry Venture Capital Fund (PVCF) continued in the
23
Interest Free Loan mode. During the year, an amount of
` 12 crore was received from the Ministry of Agriculture
(MoA), GoI for DVCF, ` 25.69 crore for PVCF and
` 20.40 crore for DEDS. An amount of ` 27.48 crore
was sanctioned for 2816 units under DVCF, ` 28.57
crore for 342 units under PVCF and ` 9.69 crore for
1978 units under DEDS. The cumulative sanctions as on
31 March 2011 stood at ` 174.39 crore for 18184 units
under DVCF, ` 48.18 crore for 633 units under PVCF,
and ` 9.69 crore for 1978 units under DEDS.
iv. Artificial Groundwater Recharge through
Dugwells
2.25 The programme covered 1155 Blocks/Talukas in
146 districts of seven states, viz., Andhra Pradesh,
Gujarat, Karnataka, Madhya Pradesh, Maharashtra,
Rajasthan and Tamil Nadu, phased over three years, i.e.,
from 2007 to 2010. An estimated 44.54 lakh recharge
structures was envisaged for construction adjacent to
dugwells, at a total cost of ` 1,871.10 crore. Out of this,
the subsidy to be distributed to the farmers/beneficiaries
is ` 1,499.25 crore (Table 2.1). Out of the total funds of
` 1,536.75 crore received from the Ministry of Finance,
GoI, net subsidy [including for IEC (Information,
Education, Communication) activities] released by
NABARD was ` 280.637 crore, for construction of 7.13
lakh Artificial Recharge Structures.
L. Externally Aided Projects
2.26 NABARD received ` 132.27 crore during 2010-11
and disbursed ` 135.76 crore as grant assistance during
the year under the Kreditanstalt für Wiederaufbau (KfW)
supported externally aided projects, which are at various
stages of implementation (Table 2.2).
a. Adivasi Development Programme in
Gujarat and Maharashtra
2.27 The KfW-NABARD-V-Adivasi Development
Programme in Gujarat is being implemented in
Valsad and Dangs districts through BAIF since
1994-95, with an outlay of ` 67.25 crore with
components of mango and cashew nut wadi (small
orchard), soil conservation, water resources
development, women/landless family development
and health. The programme covered 13,663 families
from 162 villages against the target of 10,000
families. A total area of 5,153 ha., was brought
under wadi, against the target of 4,047 ha.. KfW
also sanctioned a grant assistance of € 7 million
(approx. ` 38.15 crore) for Phase II (2006-2014) of
the programme, covering 4,700 families in these
districts. Under this Phase, 5,922 families had been
identified, 2,343 ha., of wadi established and 253
wadi tukadis (group of 8-10 wadi holders) formed,
as on 31 March 2011.
2.28 The KfW NABARD Adivasi Development
Programme in Maharashtra is under implementation
in Nashik and Thane Districts, since 2000, with KfW
assistance of € 14.32 million (` 82.22 crore). The
project covered 13,848 families against the target of
13,000 families and 4,975 ha. of wadi area against
the target of 4,047 ha..
b. Indo-German Watershed Development
Programmes
2.29 The Indo-German Watershed Development
Programmes (IGWDP) introduced in Maharashtra, is
an integrated programme implemented by Village
Watershed Committees (VWC) in association with
NGO for regeneration of natural resources. Phase I
(1990-2000) and Phase II (2001-2007) of the
Table 2.1:
Artificial Groundwater Recharge through dugwells
Sl. State No. of Amount of subsidy
No. Dug Wells for dug well recharge
(lakh) (`crore)
1 Andhra Pradesh 7.37 298.87
2 Gujarat 5.59 189.72
3 Karnataka 1.54 53.62
4 Madhya Pradesh 3.60 123.09
5 Maharashtra 3.28 100.68
6 Rajasthan 10.65 283.07
7 Tamil Nadu 12.51 450.20
Total 44.54 1499.25
Period : 2007-10
24
Table 2.2: Externally Aided on-going Projects
(As on 31 March 2011)
(` lakh)
Sl. Name of the Project External Amount received Disbursements made
No. assistance by NABARD by NABARD
(million) During Cumulative During Cumulative
2010-11 2010-11
1. KfW-NABARD
V-Adivasi Development Programme € 13.29
in Gujarat (Phase I) (+ 1.5 Suppl. 1310.31 8470.94 1108.41 8395.23
i. Grant)
Adivasi Development Programme € 7.00
in Gujarat
(Phase II)
ii. IX-Adivasi Development € 14.32 1685.25 7595.85 1632.35 7576.87
Programme in Maharashtra
iii. Indo-German Watershed € 8.69 1402.14 2434.29 1307.47 2591.02
Development Programme in Andhra Pradesh
iv. Indo-German Watershed Development € 19.94 2785.06 8495.56 3286.12 8683.86
Programme in Maharashtra (Phase III)
v. Indo-German Watershed € 9.20 346.06 789.91 394.59 816.87
Development Programme in Gujarat
vi. Indo-German Watershed € 11.00 230.84 642.12 418.70 872.70
Development Programme in Rajasthan
vii. KfW-Sewa Bank Project € 4.09 266.73 960.74 264.06 951.13
2. KfW-Umbrella Programme for Natural Resources Management (UPNRM)
i Loan FC Loan : 4738.86 5411.240 4765.454 6197.94
€ 15.00
ii Grant FC Grant : 82.484 97.122 80.804 108.414
€ 1.4
iii Grant for Accompanying Measures Grant for 286.837 373.410 263.726 357.852
Accompanying Measures :
€ 3.00
iv Technical Component (TC) FA of TC from GIZ 92.520 92.520 54.058 54.058
Assistance from GIZ € 1.50 #
Total 13227.091 35363.702 13575.742 36605.944
# Part of € 8.5 million total TC grant support from GIZ FC: Financial Co-operation
Sewa: Self Employed Women’s Association
programme were successfully completed, covering
95 watersheds on 1.02 lakh ha. Under Phase III
(2005-12), 114 projects have been sanctioned since
January 2005. Of these, 10 projects were completed,
100 watersheds reached FIP and four projects were
terminated.
c. Umbrella Programme on Natural
Resources Management
2.30 The Umbrella Programme on Natural Resources
Management (UPNRM) is a loan-cum-grant based
Indo-German programme being implemented since
2007-08 by NABARD in collaboration with KfW and
25
Efficient Irrigation System in Doddaballapur Taluk
of Bengaluru (Rural) District of Karnataka
The project is based on a pilot developed by the Bangalore
Electric Supply Company (BESCOM) in partnership with
the US Agency for International Development (USAID/
India) wherein, the energy service company, Enzen Global
Solutions Private Limited (ENZEN) has been engaged to
replace the IP sets in 37 villages spread over five Gram
Panchayats, viz., Melekote, Thubugere, Konaghatta,
Rajaghatta & Hadonahalli in Doddaballapur Taluka of
Bangalore (Rural) district of Karnataka.
Under UPNRM, NABARD sanctioned a financial assistance
of ` 3.28 crore [` 3.08 crore as term loan for replacing 647
irrigation pump sets and ` 0.20 crore as grant for
Agriculture Demand Side Management (AgDSM)] to
ENZEN.
The project being implemented in PPP mode envisages a
return for ENZEN and BESCOM in the ratio of 75:25,
respectively, from the revenue generated out of energy
savings. In this model, the farmer does not have to pay
anything for getting his inefficient pump replaced with a
New High Energy Efficiency Pump Set (NHEP). ENZEN
will be paid by BESCOM, through the energy savings
achieved. ENZEN will also benefit through the carbon
credits earned under the Clean Development Mechanism
(CDM) to ensure return on its investment in NHEP. On
an average, the project will generate an assured income
of ` 122.44 lakh (75% of the same to accrue to ENZEN)
out of energy savings from 647 pumpsets and the
income from Certified Emission Reductions (CER) from
the third year onwards, will be to the tune of ` 66.79
lakh per year.
Box 2.4
UPNRM Projects - A Success Story
GIZ (formerly GTZ). It aims at boosting rural
livelihoods by supporting community managed
sustainable natural resource management projects. The
total fund envisaged under the programme is € 30.90
million (€ 19.40 million from KfW, € 8.50 million
from GIZ and € 3.00 million from NABARD). During
the year, 34 projects were sanctioned, with a financial
assistance of ` 76.36 crore (` 71.72 crore as loan and
` 4.64 crore as grant). Cumulatively, 64 projects in
13 states and one UT (A & N Islands) have been
sanctioned financial assistance of ` 155.75 crore
(` 146.04 crore as loan and ` 9.71 crore as grant), as on
31 March 2011. A success story under UPNRM is given in
Box 2.4. An amount of ` 50.32 crore (` 47.65 crore as
loan and ` 2.67 crore as grant) was disbursed during the
year, taking cumulative disbursements to ` 65.87 crore
(` 61.98 crore as loan and ` 3.89 crore as grant) as
on 31 March 2011. An amount of ` 47.39 crore as
Financial Co-operation (FC) loan, ` 0.82 crore as FC
grant, ` 2.87 crore as Accompanying Measures (AM)
from KfW and ` 0.93 crore from GIZ under Technical
Component (TC) were received during the year. The
cumulative FC Loan, FC grant and AM received from
KfW was ` 54.11 crore, ` 0.47 crore and ` 3.73 crore,
respectively while ` 0.92 crore was received as TC from GIZ.
M. New Initiatives
(a) System of Rice Intensification
2.31 System of Rice Intensification (SRI) is a
combination of simple agronomic and management
practices that improve productivity. A project of 150
Model Units covering 28,800 ha and 84,000 farmers,
was launched in June 2010 in 13 identified states for
implementation over a period of three years, with total
financial outlay of ` 25.68 crore. A total of 158 Model
Units with a financial outlay of ` 22.35 crore was
sanctioned, against which an amount of ` 5.83 crore
was disbursed during the year. The Deptartment of
Agriculture & Cooperation, MoA, GoI has agreed for
financial convergence of SRI promotion programme
with National Food Security Mission (NFSM)
programme implemented in identified NFSM-Rice
districts.
26
Box 2.5
Salient features of Natueco Farming (10 Gunta Model)
• Adoption of zero tillage with simultaneous cultivation
of a combination of seasonal and perennial crops.
• High density planting and canopy management
through pruning (roots and foliage) for optimising yield
• In-situ incorporation of entire crop residue and other
biomass including weeds, which shall form the source
of nutrients on decomposing.
• Watering of the plant to maintain moisture instead of
irrigating the field
• Border planting with herbs and tree species of
commercial use
• Zero pesticide application, relying on pest and disease
management by Nature
• Preference for local varieties of food and non food
crops
• Total involvement of the family in production process
(b) Pilot Project on Natueco Farming
2.32 Keeping in view the opportunities for replicating
the Natueco Farming model, especially among small
and marginal farmers, pilot projects involving a
financial outlay of ` 2.29 crore were launched in six
States, viz., Andhra Pradesh, Gujarat, Madhya
Pradesh, Maharashtra, Tamil Nadu and West Bengal.
Seventeen projects with a financial commitment of
` 0.87 crore were sanctioned. The salient features of
Natueco farming are given in Box 2.5.
(c) Sustainable Sugarcane Initiatives
2.33 Sustainable Sugarcane Initiatives (SSI), developed
under ICRISAT-WWF Project for promoting farm-based
methods to improve water productivity, aims at providing
practical solutions to farmers in improving the
productivity of land, water and labour. In addition, it
reduces crop duration and provides factories a much
longer crushing season, hence increasing employment. A
proposal for promoting SSI technology was sanctioned
by Karnataka Regional Office under FIPF, involving an
outlay of ` 9.35 lakh during the year. Four workshops
were also organised in Karnataka, Tamil Nadu and
Maharashtra during the year, to understand the
operational issues, needs of the farmers and working out
effective linkages among the stakeholders. Based on the
feedback, necessary guidelines are being framed for
upscaling the programme.
Rural Non-Farm Sector
A. NABARD-SDC Rural Innovation
Fund
2.34 NABARD, in collaboration with the SDC
constituted the Rural Innovation Fund (RIF) from 1
October 2005, with a corpus of ` 140 crore. The
setting up of the Fund is intended to support
innovative and risk mitigating experiments in farm,
non-farm and micro-finance sectors. During 2010-11,
122 innovative projects were sanctioned, taking the
cumulative number to 375, as at end-March 2011. An
amount of ` 10.42 crore (including supplementary
assistance to projects sanctioned earlier) was sanctioned
during the year taking the cumulative sanctions, till 31
March 2011, to ` 49.28 crore, against which an
amount of ` 14.42 crore was disbursed during the year,
taking the cumulative disbursement to ` 32.99 crore.
Sixty-two projects had been successfully completed
and 34 projects were in advanced stages of
implementation.
B. Strengthening of Rural Haats
2.35 Under the 'Scheme for Strengthening of Rural
Haats' introduced in 1999, grant support of
` 5.74 crore was sanctioned to 118 rural haats during
2010-11. Cumulative grant assistance of
` 13.19 crore has been sanctioned for 307 rural haats
across 23 States.
27
C. Cluster Development
2.36 NABARD has been implementing the Cluster
Development Programme under the National
Programme on Rural Industrialisation (NPRI) from
1999-2000. The programme encompasses a
comprehensive strategy aimed at holistic development
of clusters and raising income levels and living
standards of artisans through various planned
interventions. A total of 113 clusters across 84 districts
in 22 States had been approved, as on 31 March
2011. During the year, four programmes under
participatory clusters and two under intensive clusters
were approved. As many as 20 clusters are being
supported in the North Eastern Region alone and a
large number of clusters are being promoted in less
developed states like Chhattisgarh, Jharkhand, Odisha
and Madhya Pradesh. In order to ensure smooth
implementation and monitoring of the initiatives,
capacity building programmes were organised for the
participants from banks, government departments/
NGO/ VA etc. During 2010-11, four on-location cluster
workshops were conducted, taking the total number of
such programmes to 29.
D. Rural Entrepreneurship Developmentand Skill Development Programmes
2.37 NABARD has been supporting Rural
Entrepreneurship Development Programmes (REDP)
and Skill Development Programmes (SDP), since early
nineties, as proven tools for generating self-
employment opportunities in rural areas. During the
year, 3,327 REDP/ SDP were supported with financial
assistance of ` 12.34 crore. Cumulatively, 17,859
REDP/SDP have been supported with grant of
` 83.35 crore. This included support extended to
RUDSETI and other similar institutes for incurring
capital and recurring expenditure.
E. Women Empowerment Programme
2.38 As on 31 March 2011, 201 Women
Development Cells (WDC) were supported to address
gender discrimination in credit and support services.
A sum of ` 0.37 crore was disbursed for the purpose.
Under Assistance to Rural Women in Non-Farm
Development (ARWIND) scheme, grant support of
` 0.36 crore was released.
F. Marketing
2.39 During 2010-11, 320 marketing events/
exhibitions, were supported with a grant assistance of
` 2.59 crore. The Bank continued to co-sponsor
SARAS Mahalaxmi Fair wherein 130 artisans and 61
agencies from 24 States participated in the 15-day
long exhibition, which helped the artisans to realise
sales of over ` 0.75 crore.
G. Swarojgar Credit Card Scheme
2.40 During the year, 1.20 lakh Swarojgar Credit
Cards (SCC) having credit limit of ` 514.26 crore were
issued for facilitating hassle-free credit for investment
and working capital requirements of small/micro-
entrepreneurs. The cumulative total of SCC was 12.12
lakh involving credit limit of ` 4,949.51 crore.REDP training in in tailoring in NER
28
2.41 The Financial Inclusion Fund (FIF) for meeting
the cost of developmental and promotional
interventions of financial inclusion, and Financial
Inclusion Technology Fund (FITF) for meeting the cost
of technology adoption, were set up in NABARD during
2007-08, as recommended by the Committee on
Financial Inclusion (Chairman : Dr. C. Rangarajan).
The corpus of each Fund is ` 500 crore, to be
contributed by the GoI, The Reserve Bank of India
(RBI) and NABARD in the ratio of 40:40:20 in a
phased manner over five years. GoI and NABARD
made initial contributions of ` 10 crore and ` 5 crore,
respectively, to each of these Funds. GoI again
contributed ` 10 crore for 2009-10 and 2010-11 to each
of the Funds. As on 31 March 2011, the contribution to
this corpus by GoI stood at ` 30 crore in each of the
Funds, and by NABARD at ` 30 crore (FIF) and ` 40
crore (FITF). The RBI has decided to contribute to these
Funds on a reimbursement basis. During the year 2010-
11, RBI contributed ` 3.46 crore (` 3.05 crore towards
FIF and ` 0.41 crore towards FITF), being its share of
expenditure incurred upto July 2009.
A. Policy Initiatives
2.42 The following policy inititatives were taken
during the year:
i. The capacity building component for authorised
functionaries of well-run SHG, to be identified by
banks, would be supported under FIF. Business
Correspondents (BC), being agents of banks, are
expected to work at the 'last mile'. As such
remuneration to BC is to be taken care of by the
banks themselves. Also, pilot projects of Farmers'
Clubs (FC) as Business Facilitator (BF) and SHG
as BC/BF in one district have been extended to all
villages having 2000 and more population in the
command area of RRB. Financial support of
` 3,000 per BC or Customer Service Provider
(CSP) for three-days training at ` 1,000 per day
through Financial Information Network &
Operations Ltd. (FINO)-Fintech Foundation would
be available and the cost would be reimbursed
through the bank engaging the BC/CSP.
ii. The Primary Agricultural Credit Societies (PACS)
have been permitted to function as BC of
Commercial Banks (CB) and RRB, as per RBI
guidelines. However, PACS cannot function as BC
of co-operative banks, till necessary guidelines are
issued by RBI.
iii. Support is being made available from FIF for
producing and telecasting financial literacy
programmes in Hindi, through Doordarshan, in six
states, viz., Bihar, Chhattisgarh, Jharkhand,
Madhya Pradesh, Rajasthan and Uttar Pradesh.
The production and telecast of financial literacy
programmes in regional languages is also
envisaged based on the experience with
Doordarshan. Support is being extended to
Agricultural Finance Corporation Ltd. (AFC) for
promoting financial literacy among rural adults in
West Bengal through SHG and FC.
iv. NABARD is working with the Indian School of
Microfinance for Women (ISMW) and has
identified state level partners on modalities for
alliance, monitoring systems and impact evaluation
mechanism, for formulating a National Alliance on
Financial Literacy.
Financial Inclusion
Financial Literacy Camp
29
v. As hardship areas need special attention, it has
been decided to extend financial support to all the
banks from FIF & FITF at 100 per cent the project
outlay for eligible activities in the North Eastern
Region, Andaman & Nicobar Islands, Chhattisgarh,
Himachal Pradesh, Jammu & Kashmir, Jharkhand,
Sikkim and Uttarakhand. Ten districts, viz.,
[Khammam (Andhra Pradesh); Bokaro, East
Singhbum, Latehar, West Singhbum (Jharkhand);
Deogarh, Gajapati, Malkangiri, Rayagada and
Sambalpur (Odisha)], which are considered
disturbed but do not figure in the list of 256
critically excluded districts are to be given the
same priority as the 256 critically excluded
districts. The existing quantum of support to CB,
RRB and Cooperatives has been enhanced to 60,
80 and 90 per cent, respectively, of the project
outlay. Fifty per cent of the sanctioned amount will
be released in advance to meet the start-up
expenses and to hasten the pace of
implementation.
vi. A simplified procedure linking the support (under
FITF) to cost of Smart Cards or Point of Sale (POS)
devices, at rates approved by the Advisory Board,
was introduced for RRB and Cooperatives, replacing
the present approach of Viability Gap Funding. This
was also extended to CB in the North Eastern
Region, Hilly Regions and those in the 256 excluded
and 10 disturbed districts.
vii. For implementing Core Banking Solutions (CBS) in
28 weak RRB in the first phase, support from FITF
will be to the extent of 40 per cent of the total
cost, with the balance to be met by the sponsor
banks and the RRB in the ratio of 50:10,
respectively. RRB will be extended support for
Information and Communications Technology
(ICT) solutions in all villages having population of
above 2,000 and falling in the command area of
the RRB.
viii. Support to Lead Banks to establish Financial
Literacy and Credit Counselling Centres (FLCC) is
extended, subject to certain conditions.
ix. The following major proposals were sanctioned
during the year under FIF and FITF: (i) project on
Micro-Pension Model among SHG members and
the Rural Poor, submitted by Invest India Micro-
Pension Services (IIMPS), (ii) project for promoting
finger print interoperability to IIT, Kanpur and (iii)
installation of 25 ATM by Langpi Dehangi Rural
Bank, Assam. The project submitted by Pension
Fund Regulatory and Development Authority
(PFRDA) and Dept. of Financial Services on
'Swavalamban Scheme' under New Pension System
(NPS) was accorded “in-principle” approval.
B. Fund Utilisation
2.43 An amount of ` 19 crore under FIF and ` 101.10
crore under FITF were sanctioned towards Financial
Inclusion during the year. As against the targets of
` 22 crore and ` 28 crore to be disbursed, respectively
under FIF and FITF during 2010-11, ` 9.21 crore and
` 54 crore were disbursed under the funds (Table 2.3).
The cumulative sanction as on 31 March 2011, was
` 38.66 crore for 150 projects under FIF and ` 122.41
crore for 55 projects under FITF.
Table 2.3: Funds Utilisation - FIF and FITF
(1 April 2010 to 31 March 2011)
(` crore)
Name of Target Commercial RRB Cooperative Others TOTAL
the Fund for 2010-11 Banks Banks
D S D S D S D S D S D
FIF 22.00 0.15 0.70 2.31 1.52 0.22 0.24 16.32 6.75 19.00 9.21
FITF 28.00 2.72 0.41 97.75 52.27 0.09 1.24 0.54 0.08 101.10 54.00
TOTAL 50.00 2.87 1.11 100.06 53.79 0.31 1.48 16.86 6.83 120.10 63.21
S: Sanctioned D: Disbursed
30
C. NABARD-UNDP Collaboration for
Financial Inclusion
2.44 UNDP-NABARD Financial Inclusion Fund has
been established in NABARD to provide better access
to financial products and services for reducing risks
and enhancing livelihood for the poor, especially the
SC and ST, minorities and the displaced. Under the
collaboration, ` 173.22 lakh had been utilised during
2010-11 for activities conducted by NABARD in
seven focus states; Bihar, Chhattisgarh, Jharkhand,
Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh.
The Annual Work Plan for 2011 (1 January to
31 December 2011) for NABARD is of the order of
` 228.55 lakh.
Micro-Finance
2.45 NABARD is instrumental in facilitating various
activities under micro-finance sector at the ground
level, involving all partners, viz., NGO, bankers,
socially spirited individuals, other formal and informal
entities and even government functionaries. This is
done through training and capacity building of
partners, promotional grant assistance to Self Help
Promoting Institutions (SHPI), Revolving Fund
Assistance (RFA) to Microfinance Institutions (MFI),
equity/Capital Support (CS) to MFI to supplement their
financial resources and 100 per cent refinance against
bank loans for micro-finance activities.
2.46 As on 31 March 2010, there were more than
69.53 lakh savings-linked Self Help Group (SHG) and
more than 48.51 lakh credit-linked SHG covering 9.7
crore poor households under the micro-finance
programme. As on 31 March 2010, the share of bank
loans outstanding to SHG, as a percentage to loans
outstanding to weaker sections by scheduled commercial
banks, improved marginally to 16.3 per cent from 15.8
per cent in the previous year. The progress of the micro-
finance programme is given in Table 2.4.
A. Micro-finance Development and
Equity Fund
2.47 The Micro-finance Development and Equity Fund
(MFDEF) is being utilised for promotion of various
micro-finance activities such as formation and linkage of
SHG through SHPI, training and capacity building of
stake holders, capital and soft loan assistance to MFI,
livelihood propagation, studies, documentation, etc.
During 2010-11, ` 47.38 crore was released, of which
` 29.95 crore was grant support for promotional
activities and ` 17.43 crore for CS/ RFA to MFI, as
against ` 20.49 crore and ` 60.42 crore, respectively,
in the previous year.
Table 2.4: Progress of the Micro-Finance Programme
(As on 31 March)
(` crore)
Sl. Particulars Self-Help Groups Micro-Finance Institutions (MFI)*
No. 2009 2010 2009 2010#
Number Amount Number Amount Number Amount Number Amount
1 Loans disbursed 16,09,586 12,253.51 15,86,822 14,453.30 581 3732.33 779 10728.49
during the year (2,64,653) (2,015.22) (2,67,403) (2,198.00) [88] [2665.75]
2 Loans Outstanding 42,24,338 22,679.84 48,51,356 28,038.28 1915 5009.09 1659 13955.74
(9,76,887) (5,861.73) (12,45,394) (6,251.08) [146] [3808.20]
3 Savings Accounts 61,21,147 5,545.62 69,53,250 6,198.71 – – – –
with Banks (15,05,581) (1,563.39) (16,93,910) (1,292.62)
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
31
Table 2.5: Grant Assistance Extended to various Partners in SHG-Bank Linkage Programme
(As on 31 March 2011)
(` lakh)
Sanctions during the year Cumulative Sanctions Cumulative Progress
Agency No. Amount No of No. Amount No. of Amount SHG SHG
SHG SHG released formed linked
DCCB 6 112.95 7850 108 793.31 66955 287.22 47203 31454
RRB 3 16.00 1350 120 445.44 49335 193.05 55548 36610
NGO 223 3601.03 69165 2847 12626.84 414338 4471.38 268791 175080
FC 47 12.62 1085 807 82.43 7628 73.68 17321 9642
IRV 3 43.92 2440 71 728.38 42923 80.97 12208 6749
Total 282 3786.52 81890 3953 14622.40 581179 5106.30 401071 259535
B. Support to Partner Agencies
2.48 NABARD continued to extend grant support to
NGO, RRB, DCCB, FC and Individual Rural Volunteers
(IRV) for promoting and nurturing quality SHG. New
SHPI were identified even while continuing support to
existing ones. During the year, grant assistance of
` 37.86 crore was sanctioned to various agencies for
promoting and credit linking 81,890 groups, taking the
cumulative assistance sanctioned to ` 146.22 crore for
5.81 lakh groups (Table 2.5). As on 31 March 2011, an
amount of ` 51.06 crore was released resulting in
formation of 4.01 lakh SHG. The Number of SHG
credit linked during the year was 2.60 lakh.
C. Capacity Building of Partner
Agencies
2.49 In order to fine tune the strategies for
up-scaling support to the micro-finance sector,
NABARD conducted awareness creation and
sensitisation programmes and arranged exposure visits
for SHG members, NGO, bankers, trainers, Panchayat
Raj Institution (PRI) representatives, NABARD officials,
Government Officials and micro-entrepreneurs,
throughout the year, entailing an expenditure of
` 10.08 crore during the year, as against ` 9.93 crore
in the previous year.
D. Support to Micro-Finance Institutions
(i) Support to banks and MFI for rating
2.50 NABARD continued to provide grant assistance
to CB and RRB for getting the MFI rated by accredited
rating agencies (CRISIL, M-CRIL, ICRA, CARE and
Planet Finance). During the year, rating support of
` 17.66 lakh was provided to 14 agencies as against
` 15.83 lakh to 13 agencies during the previous year.
(ii) Capital Support and Revolving Fund
Assistance to MFI
2.51 The RFA is provided to MFI, on a selective
basis, for on-lending to the unreached poor. During the
year, CS of ` 2.53 crore was sanctioned to nine agencies,
taking the cumulative support to ` 27.40 crore for 41
agencies. During the year, RFA amounting to ` 15.18
crore was sanctioned to 20 agencies; the cumulative RFA
sanctioned was ` 99.33 crore for 48 agencies.
E. Special Initiatives in Backward
Region
(i) Rajiv Gandhi Mahila Vikas Pariyojana
2.52 NABARD continued to support the Rajiv Gandhi
Mahila Vikas Pariyojana (RGMVP), a special initiative
of the Rajiv Gandhi Charitable Trust (RGCT), for
promotion, credit linkage and federating of SHG in
select districts of UP, in association with participating
banks and implementing NGO. As on 31 March 2011,
25,571 SHG have been promoted, of which 14,979
have been credit linked. In addition, 951 Cluster Level
Federations and 26 Block Level Federations have been
formed.
32
Box 2.6
Dalbandhus of Tripura
Dalbandhus are the backbone of the SHG movement in
Tripura. They are socially motivated community resource
persons, working for the betterment of the standard of
living of the poor. They are engaged by Block Panchayats
in consultation with District Rural Development Agency
(DRDA) under the Tripura State Support Project on SHG
(TSSPS) and Swarnjayanti Gram Swarozgar Yojana
(SGSY) to form and nurture SHG. A dalbandhu is
expected to form and nurture maximum 50 SHG in three
years. At present there are 275 dalbandhus covering four
districts of Tripura State. The tasks handled by
dalbandhus include formation of SHG, maintenance of
books of accounts, capacity building, grading of SHG and
maintenance of SHG data. They are provided a fixed
remuneration of ` 1,300 per month plus ` 500 towards
TA/DA. Under the TSSPS, dalbandhus are provided
incentives of ` 10 per SHG per month for a period of first
24 months for maintenance of books of accounts, ` 50 for
formation of new SHG and ` 50 for first time credit
linkage and ` 100 for repayment of first loan by SHG.
NABARD, as a project partner under TSSPS, has
undertaken the task of Capacity Building of Dalbandhus.
(ii) Priyadarshini Project
2.53 The Programme for 'Rural Women
Empowerment and Livelihood in Mid-Gangetic Plains'
called "Priyadarshini" envisages holistic empowerment
of 1,08,000 poor women and adolescent girls through
formation of 7,200 SHG. It covers four districts
(Sultanpur, Bahraich, Shravasti and Rae Bareily) of
Uttar Pradesh and two districts (Madhubani and
Sitamarhi) of Bihar. The eight-year programme, with a
project outlay of US $ 32.73 million is jointly funded
by the International Fund for Agriculture Development
(IFAD) and the GoI to the extent of US $ 30 million
and US $ 2.73 million, respectively. During the year,
the process of engagement of Resource NGO and Field
NGO and establishment of Programme Implementing
Units was completed.
F. Scaling-up of Micro-Finance
Programme: Special Initiatives
(i) Financing of Joint Liability Groups
2.54 Exposure visits for Joint Liability Groups (JLG)
for senior officers of the Bank were arranged during
the year, in the districts of Alappuzha (Kerala), Vellore,
Tiruvannamalai (Tamilnadu) and Mysore (Karnataka).
An amount of ` 24.74 crore was sanctioned as grant
for promotion of 1.25 lakh JLG across the country till
31 March 2011. During the year, banks disbursed a
loan of ` 659.70 crore to 85,766 JLG taking the
cumulative loan disbursed to ` 1,145.29 crore for
1,41,045 JLG.
(ii) Micro-Enterprise Development
Programme
2.55 NABARD had launched the Micro-Enterprise
Development Programme (MEDP) during 2005-06 for
skill upgradation and development of sustainable
livelihoods/venturing into micro-enterprises by
members of matured SHG. During the year, 1,606
MEDP were conducted for 37,138 members on
various location-specific farm, non-farm and service
sector activities. Cumulatively, 4,449 MEDP had been
conducted for 1,08,656 participants.
G. State Specific Support in North
East Region
2.56 NABARD continued to support the project
sanctioned to the Government of Arunachal Pradesh
for implementing 'Micro-Finance Vision 2011'.
The project involves promoting and credit linking of
1650 SHG at a cost of ` 39.15 lakh. An amount of
` 9.49 lakh has been released so far. Further, an
amount of ` 33.66 lakh was also sanctioned to the
Essomi Foundation Trust for setting-up a Resource
Centre at Itanagar for providing policy, operational
inputs, capability support and marketing linkages
among groups. NABARD has released ` 5.452 lakh to
the Trust up to 31 March 2011. NABARD also provided
technical support to Tripura State Support Project on SHG.
The project is being implemented by the Government of
Tripura through the 'Dalbandhus' also (Box 2.6). As on
31 March 2011, 34,588 SHG have been promoted,
which includes groups promoted by Dalbandhus.
33
H. Pilot Projects
2.57 In order to assess the suitability of various
innovative initiatives and also enhance the
sustainability of MF activities, NABARD continued to
extend support for various pilot projects.
I. SHG-Post Office Programme
2.58 The results of SHG-Post Office Linkage
Programme in Tamil Nadu have been very
encouraging. The project utilises the vast network of
Post Offices in rural areas for disbursement of credit to
the rural poor, on an agency basis. NABARD has
sanctioned an additional ` 200 lakh RFA to India Post
for onward lending to SHG. A total of 2,819 SHG
have opened zero interest savings accounts, of which
1,219 SHG have been credit linked by Post Offices,
with loans amounting to ` 3.36 crore, as on 31 March
2011. The project is also being implemented in
Meghalaya; RFA of ` 5 lakh for on-lending to 50 SHG
in East Khasi Hills was sanctioned to India Post.
J. Other Developments
(i) NABARD GIZ Study - Remittances
2.59 NABARD in association with GIZ conducted a
study on 'Remittance Needs in India', which confirmed
the magnitude and significance of the remittance issue
and identified important points for the way forward.
NABARD entered into an agreement on joint technical
cooperation within the framework of the ongoing Rural
Financial Institutions Programme (RFIP), with
Remittances and Payments System being an additional
component. The German Government had committed
• 5 million to this new component, subject to the
positive outcome of a joint appraisal for identifying the
concept, deliverables and important institutional
arrangements for the envisaged component. The
appraisal was launched in Odisha-Andhra Pradesh
Corridor, Uttar Pradesh-Mumbai Corridor, Maharashtra
Intra-state Corridor and Rajasthan-Gujarat Corridor.
The team also studied the payment system in West
Bengal. The Report of the Joint Appraisal is to be
presented to GoI and RBI.
(ii) NABARD Financial Services Ltd.
2.60 Karnataka Agriculture Development Finance
Company Ltd. (KADFC) was restructured into an MFI,
viz., NABARD Financial Services Ltd. (NABFINS),
during 2007, to further the promotion of Micro-finance
Sector. The major stakeholder is NABARD, with other
shareholders being, Government of Karnataka, Canara
Bank, Federal Bank and Dhanalakshmi Bank.
NABFINS started its lending operations in November
2009. During 2010-11, it mobilised share capital to
the extent of ` 9.70 crore, taking the total share capital
to ` 16.01 crore. Direct lending to SHG was started in
January 2010. During 2010-11, 2019 groups
disbursed an amount of ` 50.64 crore through 31 BC.
In addition, disbursements to the extent of
` 1.50 crore were made to MFI and Federations,
taking the aggregate disbursements during the year to
` 52.14 crore. The cumulative number of loanee SHG
was 2,044, as at end March 2011. All the processes,
viz., grading of groups, acceptance of loan
applications, disbursements, collection of repayments
are done at the doorsteps of the SHG. Further,
NABFINS follows a client friendly and low cost model
and the lending rate of SHG has been kept at an
annual rate of 12 per cent on reducing balance
method.Women members of SHG of Meghalaya engaged in candle making
34
(iii) Centre for Micro-finance Research
2.61 The Centre for Micro-finance Research (CMR)
established by NABARD in BIRD in 2008 and four
sub-centres in Guwahati, Patna, Chennai & Jaipur
continued to conduct research on various themes of
micro-finance across the country, for bringing out
policy initiatives that would improve the design and
delivery of various micro-finance products. The CMR
brought out two issues of its half-yearly journal
'The Micro-finance Review' during the year. Grant
assistance of ` 153.18 lakh was released by NABARD
during the year to CMR, taking the cumulative
assistance to ` 347.36 lakh. The sub-centres of CMR
in Guwahati, Patna, Chennai and Jaipur undertook
research on 27 prioritised themes, of which, six
research studies were completed and four reports
published/uploaded on BIRD's website for the benefit
of all stakeholders.
(iv) APRACA Centre of Excellence
2.62 The APRACA Centre of Excellence (ACE) in
Linkage Banking set up in CMR as a leading centre of
knowledge in Linkage Banking, prepared a training
manual on SHG-Bank Linkage Programme (SBLP), for
use in the training programmes of APRACA member-
countries. During the year, a proposal for Pilot-testing
of SHG-Bank Linkage in Cambodia was prepared and
submitted to APRACA.
NABARD Consultancy Services
2.63 NABARD Consultancy Services Pvt. Ltd.
(Nabcons), the wholly owned subsidiary of NABARD,
provides professional consultancy service in
agriculture, allied activities and rural development to
GoI, State Governments, CB, cooperative institutions,
corporates, NGO, international organisations and other
clients.
A. Financial Achievements
2.64 As against the target of contracting and
executing assignments of ` 25 crore and ` 20 crore,
respectively, during 2010-11, Nabcons achieved
` 24.13 crore and ` 16.65 crore, respectively. During
2010-11, the company earned ` 14.81 crore as
professional fees on assignments executed, ` 0.72 crore
as commission from mutual fund distribution and
` 1.76 crore as interest on investments. The Profit
before Tax was ` 8.74 crore as against ` 6.65 crore
during the previous year and net Profit after Tax was
` 5.80 crore as against ` 4.33 crore during the
previous year. The company has targeted to achieve a
business of ` 100 crore in the next three years.
Accordingly, the company has fixed a business target of
contracting and executing assignments of ` 40 crore
and ` 30 crore, respectively for the year 2011-12.
B. Business Highlights
2.65 During the current year, Nabcons has
significantlly diversified its business. It entered into
new areas of business, viz., development of web based
MIS for various State Government Programmes,
monitoring of various infrastructure projects in
different states adjoining the international borders of
the country under the Border Area Development
Programme (BADP). Nabcons also conducted an
evaluation study of the scheme "Monitoring of
Pesticide Residue at National Level" for MoA, GoI.
The company has emerged as a major partner of NER
States in third party monitoring of infrastructure
projects and preparation of Detailed Project Reports
(DPR) for various development initiatives of State
Governments. It prepared DPR for two clusters under
New Land Use Policy (NLUP) in Mizoram. The
company also submitted MPLADS reports of 55
districts to the Ministry of Statistics and Programme
Implementation (MoSPI), GoI.
35
2.66 The Research and Development (R&D) Fund,
set up in NABARD in 1982-83, provides grant support
to select agencies for promoting applied research
through projects/studies, training and upgrading skills
of personnel of client institutions and disseminating
research findings. The corpus of the Fund has been
pegged at ` 50 crore since 2004-05, with the
expenditure incurred being replenished every year
through appropriation of profits.
A. Utilisation
2.67 During the year, ` 17.68 crore was utilised from
the fund for supporting activities like research projects/
studies (` 0.80 crore), seminars (` 0.80 crore), training/
summer placement (` 15.77 crore), occasional papers
(` 0.02 crore), NABARD Chair Professor Scheme
(` 0.14 crore) and other activities (` 0.15 crore). The
cumulative disbursement since inception, stood at
` 136.19 crore.
B. Sanctions under the Fund
i. Research Projects/Studies
2.68 During 2010-11, ten research projects involving
a grant assistance of ` 1.09 crore were sanctioned.
Further, six projects/studies sanctioned earlier were
completed during the year.
2.69 The study on "Opportunities and Constraints of
Organic Agriculture in North-East Hilly Region of India"
brought out that although turmeric, ginger, pineapple,
cashew and oranges have been identified as potential
crops to be grown organically, other vegetable crops
with higher market surplus and lower production and
marketing risks could also be covered under organic
farming. There is, thus, a need to develop the organic
production technology for vegetable crops, which are
more susceptible to diseases and insect-pests under
inclement weather conditions.
2.70 The study on "Employment Diversification in an
Agriculturally Developed Region of India - A Case
Study of Punjab" upholds the rural non-farm sector as
the engine of growth and rural poverty amelioration.
Pull factors, however, were found to be more
important in comparison to push factors, with
agricultural development playing a catalytic role in the
growth of non-farm activities in the rural areas,
through production, market and input linkages.
2.71 The study on "Motorisation of Traditional Crafts
and its Economic Impact - A Study of Bank Sponsored
Units in Andhra Pradesh" gave insight into the role of
technology in ameliorating poverty while evaluating
the scheme. The value of catch was much higher for
the motorised crafts as compared to the traditional
crafts, reflecting the contribution of technology. The
motorisation scheme has pulled most of the
beneficiary households above poverty line. There is a
potential for motorisation in Andhra Pradesh, as
hardly 925 (7.91%) out of about 11,700 crafts have
been motorised under the motorisation scheme from
2003-04 to 2007-08.
2.72 The Study on "Organised Agri-food Retailing
and Supply Chain Management" brought out several
findings with policy implications. The organised retail
is poised to grow faster and reach ` 53,000 billion by
2020. Agri-retailing is around 18 per cent of the
organised retail as of now, and is likely to have a
lower share (12%) by 2020. The study has identified
some of the major impediments, especially structural,
for the growth of organised retail (Box 2.7).
ii. Seminars, Conferences and Workshops
2.73 During the year, grant assistance of ` 1.27 crore
was sanctioned to various universities, research institutes
and other agencies for organising 131 seminars,
conferences, symposia and workshops covering subjects/
areas related to agriculture and rural development,
including agricultural marketing, measurement of
productivity and efficiency, women empowerment
through SHG, food security, financial derivatives with
thrust on agri-commodity futures, poverty alleviation,
green technology in dairy and food processing, plant
physiology, physiological and molecular approaches,
agri-business and food processing, veterinary
parasitology, plant diversity, water partnership, future
strategies for sericulture, etc. The grant support extended
to the organisers enabled them to document the
Research and Development Activities
36
NABARD sponsored from its R&D Fund, a study on
organised agri-food retail in the country during 2009-10.
The major findings of the study and recommendations are
given below:
Organised food retailing: Size and growth
• In 2008-09, agri-food retailing (`150 billion) was 18%
of organised retailing (` 855 billion) accounting for 5%
of total retail.
• Retailing and organised food retailing are expected to
grow @11% & touch ` 53,000 billion and ` 620
billion (12 % of the former) by 2020.
• Impediments to growth are non-profitability of
organised food retailing, low consumer preference for
organised retailers.
Farmer Linkage
• Direct procurement from farmers beneficial for all
stakeholders – farmers, retailers and consumers.
• Very few retailers are engaged with farmers directly
due to ‘high involvement and relatively low margins’
and lack of scale
Bankers’ Perception & Practice
• Quantum of lending to both organised and
unorganised retail is low.
• Lending to unorganised is only against collateral.
Bankers perceive moderate-yet-manageable risk.
• Lending to organised retailers is largely based on
promoter’s credentials. No established template for
measuring and evaluating risks in an organised retailer.
Box 2.7
Findings of the Study on Organised Agri-food Retailing and Supply Chain Management
Opportunity For NABARD:
Direct role
Promote farmers’ clusters; Facilitate partnerships
between clusters, organised retailers and banks;
Facilitate training and awareness among producers;
Refinance rural infrastructure and Village level
structures; Recommend priority lending status to
lending to the organised retailers to the extent directly
procured from farmers.
Indirect role
A. Support to consolidator:
Help develop credit products to finance consolidators,
which could result in direct benefit to farmers. e.g. long
term finance for creation of storage and transport
infrastructure and short-term working capital loans to
the consolidators
B. Training:
Initiate special schemes to prepare farmers and
intermediaries in the agri-value chain
Recommendations for the Government
• Implement reforms in agricultural marketing as
proposed in the Model Act.
• Organised retail sector has direct employment potential
of about 1.88 lakh persons. Indirect employment in the
supply chain is additional. Further, 50 to 53 per cent of
the employment is for people with skill that can be
imparted with a short and focussed intervention.
Hence, facilitate its growth through lower transaction
costs, encouraging direct linkage with producers and
providing level playing field.
proceedings and publish background papers, thus,
facilitating wider dissemination of the recommendations/
action points and initiate suitable policy interventions by
concerned agencies.
iii. Occasional Papers
2.74 NABARD continued its endeavour of publishing
Occasional Papers (OP) to generate and disseminate
information on policy issues related to agricultural and
rural development. During the year, five OP on 'Kisan
Credit Card', 'Infrastructure for Agriculture and Rural
Development', 'Economics of Sugarcane Production and
Processing', 'Micro-finance for Micro-enterprises' and
'Promoting RNFS under multi-stakeholder environment-
DRIP' were published. Thus, a total of 56 OP were
published since its inception in 1994-95.
iv. NABARD Chair Professor Scheme
2.75 The NABARD Chair Unit Scheme was revived
during the year with the approval of the Board.
Unlike the earlier scheme where institutions were
identified first, candidates with proven track record
are selected in the present scheme. Accordingly, three
professors viz. Prof. B.C. Barah affiliated to Indian
Agricultural Research Institute (IARI), New Delhi,
Prof. A. Narayanamoorthy, affiliated to Alagappa
University, Karaikkudi and Prof. Amar Nayak,
affiliated to Xavier Institute of Management,
Bhubhaneswar were appointed as NABARD Chair
Professors for a period of three years, commencing
from 01 January 2011.
37
v. Summer Placement Scheme
2.76 The Summer Placement Scheme is being
implemented since 2005-06 to enable students
selected from reputed agriculture and management
institutes, to be associated with various projects/studies
taken up by NABARD in agriculture and rural sectors.
The students are assigned tasks/projects of relevance
to the Bank for generating new ideas, products and
services, which could be introduced for the benefit of
its constituents. During the year, 70 students were
assigned such projects and project reports were
received. An expenditure of ` 0.19 crore was incurred
under this Scheme, during the year.
vi. Training Activities
2.77 Apart from extending grant assistance for
various R&D activities, an amount of ` 15.58 crore
was utilised from the Fund during the year for capacity
building of the staff of RFI.
C. Training and Sensitisation
Programmes
2.78 NABARD continued to provide financial and
other support to training institutions like Bankers
Institute of Rural Development (BIRD), Lucknow,
Regional Training Colleges (RTC) at Mangalore and
Bolpur, National Institute of Rural Banking (NIRB),
Bengaluru, Manpower Development & Management
Institute (MDMI), Shillong, and Indian Institute of Bank
Management (IIBM), Guwahati.
D. Training of Personnel of RFI
2.79 NABARD provides advanced training to the RFI
personnel through its three Training Establishments (TE),
viz., the Regional Training Centres at Bolpur and
Mangalore and BIRD, Lucknow. It also supplements the
efforts of other training institutions by providing technical
support. During the year, 576 training programmes were
conducted by the TE for 14,667 participants (Table 2.6).
E. Other Developments
2.80 BIRD conducted a special on-location
programme on Credit Planning and Development
Finance for IAS probationers undergoing Phase I
course, at the Lal Bahadur Shastri National Academy
of Administration (LBSNAA) Mussorie and an in-house
programme on financial system and development
finance for probationers of the Indian Economic
Service (IES). A programme on credit aspects of rural
development was conducted for the officials of KVK/
Govt. Departments involved in rural development. A
Post-Graduate Diploma in Rural Banking (PGDRB)
course was also started in order to build a competent
cadre of professionals in the field of rural banking.
This is going to be an essential qualification for a
career in rural banking, in the days to come. A
Certificate course for BC/ BF was launched in
collaboration with Bank of Baroda
2.81 The first All-India Conference of Principals and
Directors of Co-operative Training Institutes (CTI) was
held at BIRD, Lucknow to deliberate on the emerging
training needs of co-operatives, the strategy for
upscaling the activities of Centre for Professional
Excellence in Co-operatives (C-PEC), development of
reading material in local languages and other relevant
issues.
2.82 Two studies, viz., 'Comparative study of
performance of Krishna Bhima Samruddhi Local Area
Table 2.6: Training of RFI Personnel
(Number)
Institute Programmes Conducted Personnel Trained
2008-09 2009-10 2010-11 2008-09 2009-10 2010-11
BIRD, Lucknow 257 261 377 6616 6139 9645
RTC, Mangalore 91 93 106 2065 2474 2649
RTC, Bolpur 86 113 93 2268 2894 2373
Total 434 467 576 10949 11507 14667
38
Bank and Andhra Pradesh Grameena Vikas Bank' and
'CBS implementation in Saurashtra Gramin Bank' were
undertaken. A Training Need Assessment study in West
Bengal State Co-operative Bank was completed.
2.83 RTC, Mangalore organised an International
Exposure Programme on Micro-Finance for a batch of
14 officers from SANASA Development Bank,
Sri Lanka. The College also conducted an on-location
induction training programme for the probationary
officers of South Indian Bank, Kerala. In view of the
need for trained officers in co-operatives in the post-
revival package era, the college prioritised capacity
building of senior officers and branch managers of
co-operative banks of select states and conducted 38
programmes during the year through a dedicated
channel. During the year, the college also conducted
new programmes, viz., Orientation programme for
senior officers and branch managers of co-operative
banks, Programme on Treasury Opportunities and
Investment Management for General Managers and
Senior officers of RRB, Awareness programme on Post-
Watershed approaches for Bankers, Programme on
Financial Inclusion, Trainers Training Programme on
Financial Inclusion, Exposure Programme for Financing
of JLG, and Rating of MFI. The College also organised
a Workshop for CEO and Senior Executives of SCB
and DCCB of Karnataka, Andhra Pradesh and Tamil
Nadu, to deliberate upon the operational problems/
issues in implementation of the recommendations of the
revival package and the Working Group on Human
Resources in Co-operative banks. An Orientation
Programme on Official Language for senior officers of
NABARD was organised by the College.
2.84 During the year, RTC Bolpur conducted 15
Orientation Training Programmes for Branch Managers
of SCB and DCCB and a new programme on Micro-
Finance, besides an exclusive programme for West
Bengal Minority Development and Finance Corporation.
In addition, the College adopted Sambalpur DCCB in
Odisha for providing comprehensive solutions to the
DCCB staff. The College also directed its efforts towards
women empowerment, in collaboration with Women
Study Centre, Visva Bharati University and five training
programmes were conducted during the year.
2.85 The C-PEC, set up at BIRD, Lucknow during the
year 2008-09 in collaboration with GTZ (now GIZ),
continued its efforts to make the training system of the
Co-operative Credit Structure professional. During the
year, 27 Co-operative Training Institutions, which
included eight Agriculture Co-operative Staff Training
Institutes (ACSTI), five Regional Institutes of
Co-operative Management (RICM) and 14 Institutes of
Co-operative Management (ICM) under the ambit of the
National Council for Co-operative Training (NCCT),
obtained Accreditation from C-PEC. Further, 29
Co-operative Training Institutes, 5 SCB and 7 DCCB
and 8 PACS were enrolled as Institutional Members of
C-PEC. The Centre also launched the first course of
Certified Trainer in Financial Co-operatives (CTFC)
during the year for 36 Trainers of CTI. BIRD conducted a
Training of Trainers programme on Standardised Banking
Programme for Co-operatives (SBPC), for the trainers of
CTI during the year, after which the first SBPC was
launched at APCOB-CTI, Hyderabad.
2.86 NABARD has been extending funding support
under the Scheme of Financial Assistance for Training
of Co-operative Banks Personnel (SOFTCOB) to Junior
Level Training Centres (JLTC) of SCARDB, ACSTI of
SCB and Integrated Training Institutes (ITI), out of the
Co-operative Development Fund (CDF). The scheme
was revised during the year and extended up to
31 March 2013. The ACSTI, JLTC and ITI are now
eligible for additional assistance from NABARD under
the revised scheme, for linking their activities with
C-PEC. During the year 2010-11, the bank provided
technical and financial support to 7 JLTC, 12 ACSTI
and 3 ITI to enable them to improve their training
system. An amount of ` 5.95 crore was disbursed out
of CDF, to these institutions for conducting 451
programmes, covering 9121 participants during 2010-11,
as against ` 3.90 crore for 1019 programmes and
12,088 participants during 2009-10.
2.87 During the year, NABARD released grant
assistance of ` 0.05 crore to NIRB, Bengaluru for
conducting 21 programmes for 220 participants.
39
III
Business Operations
The business operations of NABARD comprise
(a) providing refinance support to State Co-operative
Banks (SCB), commercial banks, Regional Rural
Banks (RRB), Scheduled Primary Urban Co-operative
Banks (PUCB) and Agriculture Development Finance
Companies (ADFC) to supplement their financial
resources for enhancing credit flow to agriculture and
rural sectors, (b) providing loans to State
Governments for their Rural Infrastructure Projects
under the Rural Infrastructure Development Fund
(RIDF) and (c) co-financing viable projects with
commercial banks, RRB, SCB & Non-Banking Finance
Companies (NBFC). This chapter details the business
operations and achievements of the Bank during
the year.
3.2 The total financial support extended by
NABARD during 2010-11 stood at ` 60,483 crore,
registering a growth of 5.98 per cent over 2009-10
(Chart 3.1).
A. Short-Term Refinance
3.3 The Short-Term Seasonal Agricultural Operations
(ST-SAO) for refinance in terms of credit limits
sanctioned and maximum outstanding, for the last five
years, registered an average annual growth rate of
22.73 per cent and 28.27 per cent respectively
(Table 3.1).
a. State Co-operative Banks
i. Support for Seasonal Agricultural
Operations
3.4 The refinance assistance to co-operative banks
for ST-SAO was linked to Net NPA and level of
utilisation of the sanctioned credit limit during the
previous year by the banks (Table 3.2).
Production Credit
Table 3.1: Short Term Refinance (Production Credit) for
the Last Five Years
(` crore)
Year Credit Limits SAO Average Maximum
sanctioned Outstanding outstanding
2006-07 16089 10480 14168 (88.06)
2007-08 18291 14433 16352 (89.40)
2008-09 19627 15951 17212 (87.70)
2009-10 25661 17577 24715 (96.31)
2010-11 34375 27247 34196 (99.47)
Figures in the parentheses refer to percentage share
Table 3.2: Sanction of ST(SAO) Credit Limits to SCB
for the year 2010-11
Region/ Net NPA Per cent Normal limit as
States level (%) utilisation % of RLP*
in 2009-10
NE/Hilly Region/ > 15 < 90 50
A & N Islands > 90 55
≤ 15 < 90 40
> 90 45
Eastern Region ≤ 10 < 90 45
> 90 50
> 10 < 90 40
> 90 45
Rest of India ≤ 10 < 90 40
> 90 45
> 10 < 90 35
> 90 40
NE: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,
Nagaland and Tripura.
Hilly Region: Jammu and Kashmir, Himachal Pradesh, Uttarakhand,
Sikkim.
Eastern Region: Bihar, West Bengal, Odisha, Jharkhand and
Chhattisgarh.
*: Realistic Lending Programme
40
3.5 During 2010-11, ST-SAO credit limits were
sanctioned to 21 SCB aggregating ` 23,759 crore as
against ` 18,109 crore sanctioned to 20 SCB during
2009-10. The credit limits included ` 2,249.90 crore
for the Oilseeds Production Programme (OPP),
` 210.97 crore for National Pulses Development
Programme (NPDP) and ` 752.76 crore for credit
requirements of tribals under the Development of
Tribal Population (DTP). The maximum outstanding
was ` 23,696.72 crore during 2010-11, with a
utilisation rate of 99.74 per cent.
3.6 SCB in the northern region (Haryana, Himachal
Pradesh, Punjab and Rajasthan) accounted for
36 per cent, SCB in the southern region (Andhra
Pradesh, Karnataka, Kerala, Puducherry and Tamil
Nadu), western (Gujarat and Maharashtra) and central
regions (Madhya Pradesh, Uttarakhand and Uttar
Pradesh) accounted for 22, 14 and 16 per cent,
respectively, of the aggregate credit limits sanctioned.
Eastern region (Bihar, Chhattisgarh, Odisha and West
Bengal) accounted for 12 per cent. The share of
refinance availed by the co-operative banks in the
North-Eastern Region (NER) continued to be low
despite relaxations. Meghalaya, Nagaland and Sikkim
SCB were sanctioned credit limits aggregating ` 7.00
crore, which was fully utilised.
ii. Support for Short Term (Others)
3.7 Refinance support is extended for Short-Term (ST)
agriculture/ allied activities/ marketing of crops/
pisciculture / industrial co-operative societies (other
than weavers)/ labour contract and forest labour
co-operative societies (including collection of minor
forest produce)/ rural artisans (including weaver
members of PACS/ LAMPS/ FSS)/procurement and
distribution of agricultural inputs and ST- Labour
Contract Co-operatives engaged in civil work in rural
areas under the ST (others). Those SCB with Net NPA
not exceeding 10 per cent, as on 31 March 2009, were
considered eligible for refinance. Relaxations in NPA
norms extended to the North Eastern regions in the
case of ST-SAO was made applicable for ST-Others
also. The assessment norms hitherto followed, for
different purposes continued. A consolidated ST
(Others) limit was sanctioned to SCB on behalf of
eligible DCCB.
iii. Support to Weavers
3.8 Refinance assistance for weavers credit limit
(short term) to co-operative banks for working capital
requirements of Primary/Apex/Regional Weavers was
linked to Net NPA level. Consolidated limits were
sanctioned to SCB on behalf of the eligible DCCB.
Relaxations in NPA norms as extended to the North
Eastern regions in the case of ST-SAO were made
applicable for weavers also. The refinance assistance
for weavers credit limit (short term) to commercial
banks for working capital requirements of co-operative
societies for production and marketing of handloom
products, individual weavers, handloom weaver groups
and master weavers was also linked to Net NPA level.
Scheduled commercial banks having Net NPA of less
than 3 per cent, as on 31 March 2010, without
accumulated losses, were considered eligible. Working
capital requirements of weaver members of defunct
weaver societies, mutually aided co-operative societies,
societies outside the co-operative fold and producer
group companies were also brought under the
umbrella of refinance through RRB and Commercial
banks. Short term credit was also available to SCB
and commercial banks for financing working capital
requirements of State Handloom Development
Corporations for production, procurement and
marketing of handloom products.
3.9 During 2010-11, ST (weavers) credit limits
aggregating ` 215.75 crore were sanctioned to four
SCB (Andhra Pradesh, Karnataka, Puducherry and
Tamil Nadu), as against ` 177.32 crore during
2009-10. Further, during the last three years, 4,607
Handloom Weavers’ Groups (HWG) were formed
by banks in various States, viz., Odisha (1,366),
41
Andhra Pradesh (1,220), Jharkhand (500),
Karnataka (498), Assam (272), Uttar Pradesh
(272), Madhya Pradesh (266), West Bengal (88),
Bihar (82) and other States (43). Of these, 1,989
HWG have been credit linked. The maximum
outstanding during 2010-11 was ` 198.14 crore, as
against ` 180.78 crore in the previous year.
b. State Co-operative Agriculture and
Rural Development Banks
3.10 The scheme of extending ST refinance to State
Co-operative Agriculture and Rural Development
Banks (SCARDB) for SAO was continued during the
year. Refinance of ` 140.01 crore was extended to
Kerala SCARDB (` 79.39 crore) and Rajasthan
SCARDB (` 60.62 crore) at 4.5 per cent interest rate
for lending to the ultimate borrowers at 7.0 per cent.
c. Regional Rural Banks
3.11 The quantum of refinance to RRB was linked to
Net NPA and utilisation of the sanctioned credit
limit during the previous year. The details are given in
Table 3.3.
3.12 During 2010-11, limits of ` 9,799.69 crore were
sanctioned to 80 RRB under ST-SAO as against
` 6,832.13 crore sanctioned to 74 RRB in 2009-10.
The limit included ` 820.31 crore for Oilseeds
Production Programme (OPP), ` 201.23 crore for
Development of Tribal Population (DTP) and
` 16.20 crore for National Pulses Development
Programme (NPDP). Uttar Pradesh with a limit of
` 1,773 crore under ST(SAO) for RRB, accounted for
the largest share of credit limit sanctioned, followed by
Andhra Pradesh (` 1,316 crore), Rajasthan
(` 1,174.59 crore), Kerala (` 904 crore) and
Karnataka (` 800 crore). The maximum outstanding
was ` 9,703.03 crore, forming 99 per cent of the limit
sanctioned during 2010-11. Five RRB in the North
Eastern Region were sanctioned credit limit of ` 37.72
crore, of which RRB in Assam, Meghalaya, Mizoram
and Nagaland utilised 100 per cent.
3.13 Consolidated limits were sanctioned to RRB for
Short Term-Other than Seasonal Agriculture
Operations (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/
tiny sector industries, financing persons belonging to
the weaker sections engaged in trade/business/service
activities including distribution of inputs for agriculture
and allied activities. RRB having Net NPA upto
5.0 per cent were eligible for refinance. The aggregate
limit for ST-OSAO sanctioned during 2010-11 was ` 600
crore, as against ` 542 crore in the previous year. The
maximum utilisation was ` 598 crore (99%).
Table 3.3: Sanction of ST(SAO) Credit Limits to RRB
for the year 2010-11
Region/ Net NPA Per cent Normal limit as
States level utilisation % of RLP*
in 2009-10
NE/Hilly Region/ > 10 < 90 30
A & N Islands > 90 35
≤ 10 < 90 35
> 90 40
Eastern Region ≤ 5 < 90 30
> 90 35
> 5 < 90 25
> 90 30
Rest of India ≤ 5 < 90 25
> 90 30
> 5 < 90 20
> 90 25
NE: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,
Nagaland and TripuraHilly Region: Jammu and Kashmir, Himachal Pradesh, Uttarakhand,Sikkim.
Eastern Region: Bihar, West Bengal, Odisha, Jharkhand andChhattisgarh
*: Realistic Lending Programme
42
B. Other Initiatives
a. Interest Subvention to Farmers
3.14 The continuance of the interest subvention
scheme was announced in the Union Budget 2010-11.
Interest subvention of 1.5 per cent per annum was
available to public sector banks, co-operative banks
and RRB for deploying their own funds for crop loans
upto ` 3 lakh per farmer, provided the ultimate
borrower got such loans at 7.0 per cent interest rate
per annum. Additional subvention of one per cent,
announced in the year 2009-10 to those farmers who
repaid crop loans promptly within one year of
disbursement, was enhanced to 2.0 per cent during
2010-11. Thus, the interest paid on crop loans by such
farmers was effectively 5.0 per cent. This was to
reward prompt payment by farmers, which in turn
helped lending institutions by declogging their line of
credit. Suitable interest subvention was given to
NABARD for providing concessional refinance to SCB
and RRB at 4.0 per cent and 4.5 per cent interest
rates, respectively. Aggregate interest subvention of
` 1,220.78 crore was provided by GoI to NABARD,
co-operative banks and RRB for the year 2008-09.
During the year, an amount of ` 1261.40 crore was
disbursed for 2009-10. Interest subvention for 2010-11
has been estimated at ` 2,000 crore.
b. GoI Package for Sugar Industry
3.15 NABARD continued to act as the nodal agency
for the GoI package for restructuring of term loans of
co-operative sugar mills. Out of ` 170.14 crore
received from the GoI towards interest subvention,
` 169.94 crore was disbursed to 77 co-operative sugar
mills in Maharashtra and Odisha. NABARD also acted
as the nodal agency for routing the interest
subvention to co-operative banks and RRB under
"Scheme for Extending Financial Assistance to Sugar
Undertakings - 2007". Out of ` 383.59 crore received
from GoI towards interest subvention, ` 249 crore
was released to 212 sugar mills operating in 11 states.
c. Interest Rates on Refinance
Assistance
3.16 The rates of interest on Short Term/ Medium
Term (ST/MT) refinance to Co-operative Banks, RRB
and Scheduled Commercial Banks and Long-term (LT)
loans to State Governments for contribution to the
share capital of co-operative credit institutions during
2010-11 are given in Table 3.4.
Table 3.4: Rates of Interest on Refinance
(per cent)
Sl. No. Purpose Agency Interest Rate
1 SAO SCB/RRB 4/4.5
2 SAO against pledge of securities SCB 8.0
3 ST (Others - other than weavers) SCB 8.5
4 ST (Weavers - Primary and Apex/ Regional Weavers’ Cooperative Societies) SCB 8.0
5 ST - Weavers - Financing of Primary Weavers Cooperative Societies Scheduled Commercial Banks 8.0
6 ST- OSAO RRB 8.5
7 ST - Working capital requirements of SHDC SCB & Scheduled Commercial Banks 8.0
8 MT (Conversion) loan SCB/RRB 6.0 *
9 LT loans to State Governments State Governments 8.5
* : 3.0 per cent below the rate fixed for ultimate borrower, with a minimum of 6.0 per cent
43
Investment Credit
A. Refinance Policy and Eligibility
Criteria
3.17 The policy of preferential treatment to North-
Eastern, Eastern, Hilly Regions, Sikkim and
Lakshadweep was also extended to Chhattisgarh
during 2010-11. Concessions included 100 per cent
refinance and relaxation in eligibility criteria. RRB,
SCB and SCARDB continued to be classified under
A/B/C/D categories based on the level of Net NPA as a
percentage to net loans and advances outstanding,
recovery performance and profitability for availing the
quantum of refinance. However, (i) SCB with Net NPA
of more than 20 per cent (ii) SCARDB with recovery
of less than 30 per cent, (iii) RRB with Net NPA above
15 per cent or deposit erosion of more than 20 per
cent were considered ineligible for availing refinance
during the year. Similarly, Commercial Banks / PUCB
and North Eastern Development Finance Corporation
Ltd. (NEDFi) with Net NPA of more than 3 per cent
were considered ineligible for availing refinance during
the year. SCARDB, SCB, RRB and ADFC are not
required to pay prepayment charges. Commercial
Banks and PUCB are required to pay prepayment
charges even if the recoveries are actual. Activities like
water harvesting and water conservation devices, seed
production, tissue culture based production, non-
conventional energy sources, small farm implements,
financing in watershed and tribal development
programmes areas were also included in ‘Thrust Area’.
Refinance was provided at 100 per cent of the eligible
bank loan for thrust areas in all regions.
B. Special Package for North Eastern
and Other Regions
3.18 With a view to enhancing the credit flow to the
NER and other specified regions, NABARD continued
to (i) apply uniform interest rate on refinance to all
client institutions operating in the NER and Sikkim,
(ii) relax the Net NPA norms by 5.0 and 3.0 per cent,
respectively, for the SCB and RRB in NER including
Sikkim, Hill States (Jammu & Kashmir, Uttarakhand,
Himachal Pradesh), Eastern region (Odisha, West
Bengal, Andaman & Nicobar Islands, Bihar &
Jharkhand) and Lakshadweep and refinance at 100
per cent of the eligible bank loan for all agencies and
for all purposes in these regions. As a special initiative,
these facilities were extended to Chhattisgarh state
during 2010-11.
C. Security Norms
3.19 The release of refinance to SCARDB as also to
SCB/ DCCB for farm and non-farm sector activities is
against government guarantee. However, the
requirement of Government guarantee was waived for
well performing SCB and DCCB on compliance of
certain conditions. Refinance to Section 11(1) of BR
Act, 1949, (AACS), non-compliant SCB/DCCB and to
non-scheduled SCB was against government guarantee
only. In the event of government guarantee not
forthcoming, alternatives like pledge of government
securities or fixed deposit receipts issued by scheduled
banks/ well performing SCB/ DCCB were considered.
D. Interest Rates on Refinance
3.20 Changing market conditions impacting the cost
of funds for NABARD necessitated the revision of
interest rates five times during the year. The interest
rates, with effect from 07 February 2011, was revised
to 9.75 per cent for Commercial Banks, 9.25 per cent
for RRB, 9.15 per cent for co-operative banks/ PUCB/
NEDFi, 8.15 per cent for ADFC/NABFINS and
10.5 per cent for NBFC. However, for NER, including
Sikkim, the rate of interest for all agencies (except
NBFC) was fixed at 9.15 per cent.
44
E. Refinance Support
3.21 During 2010-11, the refinance disbursed
(including ` 140.01 crore disbursed under ST-SAO to
SCARDB) was ` 13,485.87 crore as against the target
of ` 12,980.00 crore. The achievement against target
was 103.90 per cent. The growth in refinance
disbursed during the year was 12.30 per cent over the
previous year.
a) Agency-wise Disbursements of
Refinance
3.22 During 2010-11, commercial banks availed of
refinance to the extent of ` 7,348.49 crore, accounting
for 54.49 per cent of the total disbursement, as
compared to 50.44 per cent of the total disbursement
during the previous year (Table 3.5 / Chart 3.2).
b) Spatial Distribution of Refinance
3.23 Refinance disbursement across regions during
the year varied widely with the highest share being in
the south (43%), followed by north (21%), central
(14%) and other regions (22%) (Table 3.6 / Chart 3.3).
Agency-wise and state-wise disbursements indicated
that around 90 per cent of the refinance disbursed to the
SCB was in Andhra Pradesh, Gujarat, Punjab,
Karnataka, Himachal Pradesh, Odisha and Rajasthan.
Table 3.5: Agency-wise Disbursements
(` Crore)
Agency 2008-09 2009-10 2010-11
Target Disb % Share Target Disb % Share Target Disb % Share
SCARDB * 1987.00 1986.54 18.86 2290.00 2221.30 18.50 2160.00 2351.85 17.44
SCB 801.00 801.51 7.61 1040.50 1251.95 10.43 1340.00 1356.62 10.06
CB 5867.00 5867.19 55.69 6085.50 6057.19 50.44 7052.00 7348.49 54.49
RRB 1879.00 1879.04 17.83 1879.00 2457.46 20.46 2288.00 2287.84 16.96
PUCB 1.00 1.01 0.01 – 16.14 0.13 85.00 84.87 0.63
ADFC – – – 5.00 5.05 0.04 55.00 56.20 0.42
Total 10535.00 10535.29 100.00 11300.00 12009.08 100.00 12980.00 13485.87 100.00
*: Includes ST-SAO refinance released to SCARDB
45
Ninety six per cent of the refinance disbursed to
SCARDB was absorbed in the states of Uttar Pradesh,
Kerala, Haryana, Punjab, Rajasthan, West Bengal, and
Karnataka. The trends reflected the credit absorptive
capacity of different category of banks in different states.
c) Sector-wise Disbursements
3.24 During the year, the major share of refinance
was accounted for by NFS (25.6%), followed by SHG
(18.9%), Farm Mechanization (13.1%), Minor Irrigation
(6.8%) and Dairy Development (6.8%). Of the total
refinance disbursed, 43.80 per cent was for thrust
areas. The proportion of refinance to Minor Irrigation,
Plantation and Horticulture and Dairy Development
showed an increase, while there was decline in
refinance for Farm Mechanization and SHG
(Table 3.7).
Table 3.6: Region-wise Disbursements
(` crore)
Region 2008-09 2009-10 2010-11
Target Disb. %Share Target Disb. %Share Target Disb. %Share
Northern 2636.00 2636.45 25.00 2790.00 2419.87 20.20 2835.00 2810.70 20.80
North Eastern 174.00 174.18 1.70 210.00 139.85 1.20 266.00 265.82 2.00
Southern 1103.00 4298.91 40.80 1185.00 5967.89 49.70 1392.00 5821.73 43.20
Eastern 1526.00 1102.99 10.50 1680.00 891.07 7.40 1718.00 1405.35 10.40
Central 797.00 1526.02 14.50 935.00 1478.60 12.30 965.00 1928.63 14.30
Western 4299.00 796.74 7.60 4500.00 1111.79 9.30 5804.00 1253.64 9.30
Total 10535.00 10535.29* 100.00 11300.00 12009.08* 100.00 12980.00 13485.87* 100.00
*: Includes ST-SAO refinance released to SCARDB
Northern : Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab and Rajasthan
North Eastern : Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim
Southern: Andhra Pradesh, Karnataka, Kerala, Puducherry, Tamil Nadu and Lakshwadeep Islands
Eastern : A&N Islands, Bihar, Jharkhand, Odisha and West Bengal
Central : Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Uttarakhand
Western : Dadra & Nagar Haveli, Daman & Diu, Goa, Gujarat and Maharashtra
46
F. Co-financing
3.25 During the year, MoU for co-financing was
executed with 5 RRB in Andhra Pradesh and
a commercial bank. In all, MoU were executed with
27 banks. During the year, three new projects were
sanctioned, taking the cumulative number of sanctioned
projects to 51, with a total financial outlay of
` 840.64 crore. The disbursement during 2010-11 was
` 14.00 crore. The number of ongoing projects are 37.
Cumulative sanctions and disbursements were ` 240.35
crore and ` 153.64 crore, respectively.
G. Capital Investment Subsidy
Schemes
3.26 Since 1999-2000, NABARD is the nodal agency
for various Capital Investment Subsidy Schemes
(CISS) of the GoI, for routing subsidy, monitoring
progress and co-ordinating with bankers & the GoI in
respect of the following:
(i) Construction of cold storages and onion godowns;
(ii) Construction of rural godowns;
(iii) Development/strengthening of agriculture marketing
infrastructure, grading and standardization;
(iv) Establishment of Agri-clinic and Agri-business
Centres (ACABC);
(v) Bihar Ground Water Irrigation Scheme; and
(vi) Schemes on Animal Husbandry
a. Establishment/modernization of Rural Slaughter
Houses;
b. Integrated Development of Small Ruminants and
Rabbits;
c. Scheme for Poultry Estates and Mother Units for
Rural Backyard Poultry;
d. Male buffalo calf rearing;
e. Utilization of fallen animals; and
f. Scheme on Pig Development
Table 3.7: Sector-wise Disbursements
(` crore)
Purpose 2008-09 2009-10 2010-11
Target Disb Share % Target Disb Share % Target Disb Share %
Minor Irrigation 997.00 545.85 5.2 660.00 496.73 4.1 909.00 920.61 6.8
Land Development 326.00 949.94 9.0 976.00 303.67 2.5 1168.00 295.69 2.1
Farm Mechanisation 1173.00 1514.03 14.4 2194.00 1714.66 14.3 1817.00 1762.98 13.0
Plantation &
Horticulture 331.00 374.54 3.6 362.00 377.40 3.1 579.00 698.39 5.2
PF/ SGP/ AH-Others 301.00 298.70 2.8 230.00 349.79 2.9 266.00 402.37 3.0
Fisheries 63.00 77.15 0.7 132.00 54.62 0.5 149.00 47.45 0.4
Dairy Development 1066.00 489.41 4.6 570.00 725.35 6.0 649.00 918.11 6.8
Forestry 25.00 6.56 0.1 38.00 6.46 0.1 52.00 9.57 0.1
Storage Godown &
Market Yard 63.00 141.01 1.3 143.00 187.22 1.6 172.00 170.79 1.3
SGSY 288.00 201.12 1.9 274.00 151.50 1.3 322.00 228.84 1.7
Non-Farm Sector 3135.00 2706.79 25.7 2852.00 3465.99 28.9 3115.00 3446.40 25.6
SC/ ST- Action Plan 125.00 28.94 0.3 91.00 2.30 0 130.00 12.63 0.1
SHG 2466.00 2620.03 24.9 803.00 3173.56 26.4 795.00 2545.36 18.9
Others 176.00 581.22 5.5 1975.00 999.82 8.3 2857.00 2026.68 15.0
Total 10535.00 10535.29* 100.0 11300.00 12009.08* 100.0 12980.00 13485.87* 100.0
*: Includes ST-SAO refinance released to SCARDB
47
(vii) Scheme for installation of Solar Off Grid and
Decentralised Applications under Jawahar Lal
Nehru National Solar Mission (JNNSM)
(viii) National Project on Organic Farming
(i) Cold Storages and Onion Godowns
3.27 The scheme was launched in 1999-2000 to
promote creation of cold storage and scientific storage
facilities for horticultural produce. As advised by the
GoI, NABARD ceased to be associated with the
implementation of the scheme from 1 May 2010
onwards.
(ii) Rural Godowns
3.28 The Scheme was launched by the GoI in April
2001, to create scientific storage facility for farmers to
avoid wastage, product deterioration and distress sales.
NABARD continued to associate with the Scheme in
administering the subsidy. The number of projects
sanctioned under Cold Storages, Onion Godowns and
Rural Godowns are detailed in Table 3.8.
(iii) Agricultural Marketing Infrastructure,
Grading and Standardization
3.29 The Scheme, operationalised since October
2004, aims at establishing/strengthening infrastructure
for marketing, grading, standardization and quality
certification of produce for agriculture and allied
sectors. Being linked to the amendment of the
Agricultural Produce Market Committee (APMC) Act to
allow private participation, the scheme is implemented
in those States that have carried out market reforms.
During the year, 654 projects with Total Financial
Outlay (TFO) of ` 978.45 crore and bank loan of
` 639.84 crore were considered and subsidy of
` 83.15 crore was released to 14 states. Cumulatively,
4,492 units involving TFO and bank loan of ` 2,912
crore and ` 1,922.97 crore, respectively, were
considered and subsidy of ` 274.03 crore was released.
(iv) Agri-Clinics and Agri-Business Centres
3.30 The Scheme was started in 2006-07 to provide
fee based extension services to farmers and at the
same time provide gainful employment to unemployed
agriculture graduates in new emerging areas in
agriculture sector. The guidelines of the scheme were
revised during the year for widening the list of eligible
candidates, enhancing the capital subsidy to 36 per
cent of the TFO for general category agri-preneurs
(44% for SC/ST, NE and Hill States) and dispensing
with the interest subsidy. During 2010-11, a subsidy
of ` 1.49 crore was disbursed for 110 projects,
involving a TFO of ` 7.75 crore and bank loan
of ` 6.02 crore. Cumulatively, 390 projects were
sanctioned under the scheme involving TFO of ` 28.62
crore, bank loan of ` 22 crore and subsidy of ` 5.38
crore was released.
(v) Bihar Ground Water Irrigation Scheme
3.31 The Scheme, promoted by the Planning
Commission, GoI, commenced from 2009-10 to
Table 3.8: Details of Projects Sanctioned under Cold Storages and Rural Godowns
(` crore)
Sl. Facility 2010-11 Cumulative Cumulative
No. No. of TFO Bank Subsidy No. of TFO Bank Subsidy Capacity*
Projects Loan Projects Loan
1 Cold Storage 93 200.35 123.51 56.28 1944 3100.94 1758.17 499.86 83.02
2 Rural Godowns 2159 550.79 411.84 70.86 19715 4349.37 2915.91 649.83 244
*Capacity: Lakh Metric Tonnes TFO: Total Financial Outlay
48
provide irrigation facility to 9.28 lakh ha. of
agricultural land in Bihar by installing 4.64 lakh
private shallow tubewells / dugwells with pumpsets
over a period of three years. The scheme was to be
implemented in all the districts of Bihar through CB
and RRB, utilizing the balance amount of ` 231.67
crore, under Million Shallow Tubewell Programme
(MSTP) that was closed on 31 March 2007. The Minor
Water Resources Department, Govt. of Bihar is the
nodal implementing department with the active
support of NABARD, banks and other participating
agencies. The back ended subsidy at 45 per cent of
the project cost is to be released by NABARD through
the financing banks. As on 31 March 2011, an amount
of ` 48.30 crore was released to banks implementing
the scheme.
(vi) Schemes on Animal Husbandry
3.32 Three animal husbandry schemes, viz.,
(a) Establishment/Modernization of Rural Slaughter
Houses, (b) Integrated Development of Small
Ruminants and Rabbits and (c) Scheme for Poultry
Estates and Mother Units for Rural Backyard Poultry
launched by GoI during 2009-10 were implemented by
NABARD during 2010-11. In addition, three animal
husbandry schemes, viz., (a) Male buffalo calf rearing,
(b) Scheme for Pig Development and (c) Utilization of
fallen animals were launched by GoI during July-
August 2010. All these schemes will be implemented
during the remaining period of XI Five Year Plan
(2010-11 & 2011-12). The Department of Animal
Husbandry, Dairying and Fisheries (DAHDF), MoA,
GoI, is the nodal department for operating these
schemes. NABARD will be administering the interest
subsidy and capital subsidy and monitoring the
progress of the scheme, besides providing refinance
support to the eligible financing institutions for the term
loan. A State Level Sanctioning and Monitoring
Committee (SLSMC) was constituted by the State
Animal Husbandry Department in association with
NABARD in each State for sanctioning of the subsidy /
interest subsidy/ interest free loans under these schemes.
a. Scheme for Rural Slaughter Houses
3.33 The Scheme is being implemented on a pilot basis
in three states, viz., Uttar Pradesh, Andhra Pradesh and
Meghalaya for establishing/ modernizing slaughter
houses in rural areas, with emphasis on hygiene,
pollution control and value addition. Credit linked back
ended subsidy upto a maximum of ` 2.00 crore would
be available under the scheme. As on 31 March 2011,
an advance subsidy amount of ` 0.10 crore was
released for establishment of one poultry processing
unit under the scheme.
b. Scheme for Integrated Development of
Small Ruminants and Rabbits
3.34 The Scheme aims to improve the quality of the
existing breeds and to promote rearing and breeding
on commercial basis. Under this scheme, 25 per cent
of the outlay (33.33% in NE States including Sikkim
and Hill States) as back ended capital subsidy will be
provided by NABARD for rearing/ breeding of sheep
and goat and rearing of rabbit. Non-Governmental
Organisations, identified by the SLSMC act as
facilitators for organizing and training the beneficiaries,
coordinating with local Animal Husbandry Department
and banks and arranging for inputs and marketing of
the animals. As on 31 March 2011, subsidy amount of
` 1.59 crore was released for establishment of 304
Sheep/ Goat rearing units under the scheme.
c. Scheme for Establishment of Poultry
Estates and Mother Units for Rural
Backyard Poultry
3.35 The Scheme aims at establishing poultry estates
having upto 100 broiler/layer units on the lines of
industrial estates, where all common infrastructure
facilities, inputs supply and marketing arrangements
are provided. Two pilot projects are proposed under
the Scheme and preference is given to States that
provide land and infrastructure for this purpose. The
units will be eligible for interest free loans upto
49
50 per cent of TFO, to be routed through NABARD.
During the year, two poultry estates have been
sanctioned in Odisha and Sikkim.
3.36 Under the rural backyard poultry component of
the scheme, interest free loan upto 50 per cent of TFO
of the project is available for Mother Units (MU) where
day old chicks of low input birds are reared for
4 weeks for distribution to the beneficiaries. This
component of the scheme intends to promote rearing
of low input breeds that will survive in rural areas and
is intended for Below Poverty Line (BPL) beneficiaries.
As on 31 March 2011, GoI has sanctioned 622 MU in
Kerala, Bihar, Madhya Pradesh, Andhra Pradesh, West
Bengal and Nagaland.
d. Scheme for Salvaging and Rearing of
Male Buffalo Calves
3.37 During 2010-11, the Scheme was launched by
GoI to assist farmers, NGO, professionals and
corporate bodies to rear male buffalo calves for meat
production and recovery of hides. Under the Scheme,
100 per cent interest subsidy on short term loan will
be provided for rearing of male buffalo calves (1 to 9
calves). An indicative unit cost of ` 6,400 per calf
would be provided by banks as short term loan for
rearing the calf up to its marketable age (12 months).
Back-ended capital subsidy at 25 per cent of the
outlay (33.33 per cent in NE States, including Sikkim
and hilly areas) is made available for establishment of
commercial and industrial units.
e. Scheme for Pig Development
3.38 With a view to encouraging commercial pig
rearing by farmers to improve performance of native
breed through cross breeding, a scheme was
launched during the year 2010-11. Under the
scheme, 25 per cent (33.33% in NER, including
Sikkim and hilly areas) and 50 per cent of the outlay
as back ended capital subsidy will be provided for pig
breeding/ rearing/ fattening units and retail outlets/
facilities for live stock markets, respectively. As on 31
March 2011, subsidy of ` 1.49 crore was released for
establishing 239 pig rearing units under the scheme.
f. Scheme for Utilization of Fallen
Animals
3.39 The Scheme, launched during 2010-11, aims at
improving the quality of hides and skins from fallen
animals and to convert other by-products into value
added items. It also aims at reducing/checking
environmental pollution and bird hazard to aircrafts.
Under the Scheme for the establishment of Carcass
Utilization Centre (CUC) and Bone Crushing Unit,
90 per cent and 50 per cent respectively, will be
provided as back ended capital subsidy.
Implementation of the scheme will facilitate
compliance to the Infectious & Contagious Diseases
in Animal Act, 2009 wherein, proper disposal of
carcasses of animals is mandatory. The Department of
Animal Husbandry, Dairying and Fisheries (DAHDF),
MoA, GoI, is the nodal department for operating the
scheme. NABARD will be administering the capital
subsidy in respect of establishing bone crushing units,
in case bank loan component is involved.Solar System
50
(vii) Scheme for Installation of Solar Off-
grid & Decentralised Applications
under Jawahar Lal Nehru National
Solar Mission
3.40 The Ministry of New and Renewable Energy
(MNRE), GoI launched a subsidy linked credit scheme
on 1 November 2010, to promote commercial
marketing of solar energy systems and devices by
extending financial incentives in the form of capital
subsidy (30% of the project cost) and subsidised
interest (5%) on bank loans. The objective of the
scheme is to promote off-grid applications of solar
energy [both Photo-voltaics and Solar Thermal] to
encourage replacement of non-renewable energy
sources like fossil fuels, kerosene and diesel with solar
energy to meet energy requirements. The scheme
covers projects, specifically approved by MNRE, and
provides for routing capital subsidy and subsidised
interest on bank loans through NABARD. Banks are
eligible to avail of hundred per cent of the loan
outstanding as refinance from NABARD, on an automatic
basis, at an interest rate of 2 per cent per annum. As on
31 March 2011, a subsidy amount of ` 3.61 crore was
released for establishing 8,987 units.
(viii) National Project on Organic Farming
3.41 The Ministry of Agriculture, Govt. of India had
launched a subsidy based National Project on Organic
Farming (NPOF) in 2005 for commercial production of
organic inputs like bio-fertilisers, vermiculture
hatchery, fruit and vegetable waste compost units.
The project has been extended by the GoI for the year
2010-11. However, the vermi-hatchery component of
the scheme was discontinued with effect from
11 August 2010. The Project is being implemented by
NABARD and National Centre of Organic Farming
(NCOF). Workshops were organised to popularise the
scheme. A total of 676 units (vermi-hatchery units-
627, bio-fertilizers units-36 and fruit & vegetable waste
compost units-13) have been sanctioned with net subsidy
release of ` 12.45 crore (as on 31 March 2011), against
receipt of ` 12.51 crore from GoI.
H. Evaluation Studies
3.42 During the year, seven evaluation studies
covering four investments, viz., rural godowns,
agricultural market infrastructure, agri-clinics and
agri-business centres and solar home lighting system,
were conducted.
a. Rural Godowns
3.43 In Andhra Pradesh, the evaluation study report
observed that farmers using rural godowns to store
agriculture produce benefited by way of 10 to 14 per
cent incremental income due to reduction in losses
and realisation of better price. Regular repayment of
loan was reported in 29 out of 56 sample cases, while
the units sanctioned to State Warehousing Corporation
(SWC) had become NPA as SWC had not paid
installments of loan regularly under the scheme. The
report suggests that while scrutinising the proposals
under the subsidy scheme, preference may be given to
those farmers who have smaller sized godowns.
3.44 In Karnataka, the evaluation study on rural
godowns was conducted in Bellary and Gulbarga
districts. The findings of the study revealed that small
and medium sized godowns constructed in the paddy
growing tracts of Bellary and Gulbarga districts were
exclusively utilised by the owner farmers for storing
their own produce. Large godowns, especially those
near the Gulbarga city, were either rented out to
Karnataka SWC or to other farmers. Utilisation of
godown capacity was hundred per cent in both Bellary
and Gulbarga districts. Pulses dominated in storage
accounting for 65 per cent of the storage space
51
created, followed by paddy in Gulbarga district. The
monthly rent charged by farmers was ` 8 to ` 10 per
quintal. The rate of interest charged by banks ranged
from 9.5 per cent to 13.5 per cent. There is a huge
storage gap, with a potential to construct storage
godowns. The report specially recommends
continuation of the scheme.
b. Agricultural Marketing Infrastructure
3.45 An evaluation study of the Agricultural Marketing
Infrastructure (AMI) scheme was conducted in Andhra
Pradesh, covering major activities such as combine
harvesters, seed processing and cotton ginning and
pressing units. At farm level, the net gain to a farmer
due to use of hired combine harvester was estimated at
` 2,400 per acre, mainly on account of savings in labour
cost. The cash accruals were ` 726, ` 1,064 and ` 886
per tonne, respectively, for paddy processing units, maize
processing units and maize drying units. Gross income per
unit from cotton ginning units was ` 0.43 crore, while it
was ` 0.23 crore for processing units. The study suggested
the need to modernise old cotton ginning and processing
units in the State.
3.46 The evaluation study of AMI scheme in
Maharashtra covered investments such as combine
harvesters, seed units and APMC regulated markets.
The study reported positive Net Present Worth (NPW)
and Internal Rate of Return (IRR) of more than 50 per
cent for combine harvesters but negative NPW and
IRR of 7 per cent for seed units. Combine harvesters
played an important role in reducing the cost of
harvesting, particularly wheat and paddy. In general,
the infrastructure created under the AMI scheme has
helped the farmers in selling their produce in bigger
market areas, increasing the holding capacity of the
farmers and getting higher prices through storage.
3.47 The evaluation study of AMI scheme in Punjab
covered investments like units for cleaning and waxing
of ‘kinnows’, rice sortex plants and combine
harvesters. The study findings indicated that
infrastructure developed under the scheme benefitted
owners, who were either large farmers or established
entrepreneurs. Small and marginal farmers remained
out of the domain of such infrastructure and had to
depend on commission agents and midddlemen. The
waxing units had improved price realisation for
kinnows and enhanced shelf life of fruits. This has
attracted more number of farmers for cultivation of
kinnows. Rice sortex plants had enhanced the export
of basmati and long grain non-basmati rice from
Punjab. Combine harvesters have become essential for
harvesting crops in Punjab due to scarcity of labour
and short time available between two crop seasons for
harvesting. The study report recommends that
infrastructure for marketing of produce from allied
activities like dairy, poultry, fisheries, floriculture, etc.,
needs to be developed to augment the area under
integrated farming.
c. Agri-Clinic and Agri-Business Centers
3.48 An evaluation study on Agri-Clinic and Agri-
Business Centers (ACABC) was conducted in
Himachal Pradesh. All the sample agri-preneurs had
received 2 months training from Indian Society of
Agri-business Professionals (ISAP) under the scheme.
The units were sanctioned bank loan ranging between
` 5 lakh and ` 10 lakh. Their annual turnover ranged
from ` 12 lakh to ` 1 crore, with an average profit
margin of around 10 per cent. The agri-preneur units
were able to attract farmers by providing good quality
inputs, providing quality advice to the farmers
regarding proper use of inputs, especially fertilisers
and pesticides, and consultancy services. The agri-
business centres have been successful in imparting
52
knowledge to the farmers on the new and scientific
methods of farming, thus leading to an increase in the
production per hectare and farm incomes. Highest
employment generation of 10,950 person days per
year was estimated for inputs supply units. The study
suggests that in order to ensure long-term viability and
sustainability of agri-preneurs, banks may engage them
as Business Correspondents (BC) and Business
Facilitators (BF) and use their technical/advisory
services for identification of prospective borrowers and
for appraisal of loan applications. The agri-preneurs
may be given preference over other general candidates
for issuance of dealership licence for fertilizers,
pesticides, insecticides, etc.
d. Solar Home Lighting System
3.49 The evaluation study of solar home lighting
system (SHLS) in Barabanki district of Uttar Pradesh
reported that the system could replace four kerosene
lamps per household. Due to installation of SHLS, the
quality of life had improved for the sample
beneficiaries; many chores like cooking, washing
utensils, fodder cutting, seed preparation, etc., could
be carried out even during night. There were other
benefits like children being able to study during the
night, use of mobile rechargers using solar power, etc.
The only concern about the SHLS was the non-
availablity of after-sales-service.
I. Investment Specific and Special
Studies
3.50 NABARD has been conducting Investment
Specific Studies (ISS) to identify the problems at the
field level in the implementation of schemes, to
estimate the benefits accruing from the investment,
repayment performance, etc. Conduct of Special
Studies (SS) was introduced from 2010-11, and is
based on the potential for the activity, its importance
in the state/districts, the emerging areas and the need
for such studies. During 2010-11, 16 ISS and eight SS
covering farm and rural non-farm sectors were
conducted in association with financing banks and
nodal Departments of State Governments.
J. Physical Achievement
3.51 The refinance disbursement supporting varied
economic activities under various types of investments
during the year are presented in Table 3.9. Under
minor irrigation, 20,000 tubewells with pumpsets and
22,000 pumpsets on existing wells were financed
during the year. Tractor financing continued to be a
major item of investment under farm mechanisation
with 49,000 units financed during the year. During
2010-11, under land developement, an area of 38,000
ha., was developed. Under the animal husbandry
sector, dairy farming and sheep/goat rearing showed
an increase of 5.12 lakh animals. The poultry sector
showed good growth with 2.80 crore birds being
financed during 2010-11.
K. Relief Measures for Poultry Units
in West Bengal
3.52 The Government of India announced relief
measures to the poultry units affected by Avian Flu in
West Bengal by way of interest subvention @ 4 per
cent p.a on the outstanding non-overdue term loan
and working capital loans as on 01 January 2008 for
the period from 01 January 2008 to 31 March 2009.
During 2010-11, an amount of ` 1.46 crore was
released to 12 PCARDB, 7 DCCB and one RRB,
covering 17,532 units in the state as relief measures.
53
Table 3.9: Units Financed and Completed under Refinance Support
Sr. Investments Units Cumulative Units Financed Cumulative Units Completed
No. (upto 31 March) (upto 31 March)
2010 2011 2010 2011
1. Minor Irrigation
i. Tubewells with pumpsets @ ‘000 1,640 1660 1,621 1641
ii. Dugwells with pumpsets * ‘000 2,096 2109 2,083 2095
iii. Pumpsets on existing wells ‘000 2,500 2522 2,469 2491
iv. Others ** ‘000 1,919 1973 1,882 1936
2. Land Development*** ‘000 ha. 3,387 3425 3,319 3356
3. Farm Mechanisation
i. Tractors ‘000 1,476 1525 1,440 1489
ii. Power tillers ‘000 168 170 163 165
iii. Other farm equipments ‘000 766 795 758 787
4. Plantation & Horticulture ‘000 ha. 2,324 2388 2,274 2338
5. Forestry ‘000 ETPs 3,21,700 3,21,984 2,65,800 2,66,084
6. Storage ‘000 tonnes 18,898 18899 18,711 18712
7. Market Yards No. 3,559 3665 3,526 3932
8. Dairy Development ‘000 animals 16,261 16500 16,031 16270
9. Sheep/ Goat Rearing ‘000 animals 38,758 39031 38,299 38572
10. Piggery 000 animals 1,712 1728 1,703 1719
11. Poultry lakh birds 2,029 2309 1,997 2278
12. Fishery
i. Mechanised Boats No. 22,777 22780 22,094 22097
ii. Other Boats No. 75,025 75086 73,805 73866
iii. Brackish Water Aquaculture ha. 5,381 5389 5,318 5389
iv. Fresh Water Aquaculture ‘000 ha. 418 421 413 416
13. Non-Farm Sector ‘000 8,549 8721 8,368 8558
14. Miscellaneous$ ‘000 15,882 16255 15,224 15578
@ : Includes borewells with pumpsets. * : Includes dug-cum-borewells with pumpsets, ETP : Entire Trans-Planting.
** : Includes dugwells/ dugwells-cum-borewells, deep tubewells with pumpsets, dugwells with conventional lift, deepening/ renovation of wells, sprinkler,
pipeline, storage/water harvesting tank, lift irrigation, drip, pump house, shallow tubewells/ million shallow tubewell programme, etc.
*** : Includes soil conservation, saline/ alkaline soil, channels/ lining/ under ground pipeline, wasteland and farm development.
$ : Includes bullock pairs, bullock carts, camels, camel carts, SHG, other activities under AH, Kisan bikes, sericulture, ACABC, soil/water testing, compost/
manure plants, gobar gas plants, vermiculture, SRTO, contract farming, AEZ, SC/ ST Action Plan, bee- keeping, etc.
P: Provisional
Note: While estimating the completed units, appropriate adjustments have been made for units financed upto March 2011, but not likely to have been
completed. It is possible that some of the units have turned out to be infructuous or remained incomplete beyond their normal gestation period.
54
Rural Infrastructure Development Fund
3.53 Development of rural infrastructure is imperative
for agriculture and overall economic growth as also
improving the quality of life. Rural Infrastructure
Development Fund (RIDF) was instituted in NABARD
during 1995-96. The main objective of the Fund is to
provide loans to the State Governments and State-
owned Corporations to enable them to complete on-
going rural infrastructure projects.
A. Funding
3.54 Domestic commercial banks contribute to the
RIDF to the extent of their shortfall under priority
sector lending to agriculture, as stipulated by the RBI.
Started with ` 2,000 crore during 1995-96 (RIDF I),
the annual allocation to the Fund has now reached
` 16,000 crore during 2010-11 (RIDF XVI), taking the
cumulative allocation to ` 1,16,000 crore. Additionally,
a separate window was introduced in 2006-07 for the
funding rural roads component of the Bharat Nirman
Programme, with allocation of ` 18,500 crore, till
2009-10. The total allocation for RIDF, thus, stood at
` 1,34,500 crore, as on 31 March 2011.
B. Broad Sectors/ Activities
3.55 The broad categories of projects covered under
the RIDF are:
(i) Agriculture and Allied Sectors
3.56 These include irrigation projects, soil
conservation, flood protection, watershed, reclamation
of water logged areas; animal husbandry, plantation
and horticulture, seed, agriculture and horticulture
farms, forest development, fishing harbour/jetties,
riverine fisheries; market yards, godowns, marketing
infrastructure; cold storages; grading/certifying
mechanisms; testing laboratories; hydel projects (upto
10 MW); village knowledge centres; infrastructure for
Information Technology in rural areas; desalination
plants in coastal areas; and setting up of KVIC
industrial estates/centres. The loans are provided at 95
per cent of project cost for all states.
(ii) Social Sector
3.57 Social sector includes drinking water; public
health institutions; construction of toilet blocks in
existing schools, especially for girls and "Pay & Use"
toilets in rural areas, infrastructure for rural education;
and construction of ‘anganwadi’ centres. The loans for
the above sectors are provided at 90 per cent of
project cost for NE and Hill States and at 85 per cent
for all other states.
(iii) Rural Connectivity
3.58 Rural Connectivity includes rural roads and
rural bridges and loans for these sectors are provided
at 90 per cent of project cost for NER and Hill States
and at 80 per cent for all other states.
Rural Road under RIDF
55
C. RIDF Operations- Sanctions and
Disbursements
3.59 During 2010-11, a total of 41,779 projects
involving loan amount of ` 18,314.88 crore were
sanctioned under RIDF XVI, taking the cumulative
number of projects, as at end March 2011, to 4,44,162
and cumulative amount sanctioned to ` 1,21,888.40
crore. Tranche wise position of sanctions are given in
Chart 3.4. Of the total amount sanctioned during the
year 2010-11, rural road projects accounted for
33.5 per cent, followed by irrigation projects (20.1%),
social sector projects (19.7%), rural bridges (14.2%)
and others (12.6%) (Table 3.10). Cumulative sanction,
as on 31 March 2011, was highest for Rural roads
(32.7%), followed by Irrigation (30.3%). Sector-wise
cumulative sanctions are depicted in Chart 3.5.
3.60 The State governments had a total pool of
projects of ` 1,21,888.40 crore, as on 31 March 2011,
under various tranche (RIDF I to XVI). During the
year, disbursements were made to the tune of
` 12,060.04 crore, as at end-March 2011. As per the
phasing of projects under various tranche (RIDF I to
Table 3.10: Sector-wise Projects and Amounts Sanctioned
(As on 31 March 2011)
(` crore)
Sector RIDF XVI (2010-11) RIDF I to XVI (Cumulative)
No. of Share in Amount Share in No Share in Amount Share in
projects total total projects total total
projects (%) amount (%) projects (%) amount (%)
Irrigation 18,784 45.0 3,675.59 20.1 2,34,427 52.8 36,914.27 30.3
Rural Bridge 1,369 17.10 2,604.32 14.2 14,705 3.3 14,088.02 11.6
Rural Roads 7,152 29.5 6,138.34 33.5 80,160 18.0 39,876.99 32.7
Social Sector 12,304 29.5 3,600.22 19.7 85,387 19.2 17,213.76 14.1
Power 11 0.0 158.58 0.9 761 0.2 2,138.77 1.8
Agriculture related 2,156 5.2 2,137.80 11.7 28,722 6.5 11,656.38 9.6
Total 41,779 100.0 18,314.85 100.0 4,44,162 100.0 1,21,888.40 100.0
56
XVI), the total amount sanctioned (phased) was
` 1,00,064.36 crore, against which disbursements
aggregated ` 80,499.78 crore (Table 3.11/Chart 3.6).
Six States (Andhra Pradesh, Uttar Pradesh, Gujarat,
Tamil Nadu, Madhya Pradesh and Rajasthan) together
accounted for nearly 50 per cent of total
disbursements and 47 per cent of total sanctions. The
state-wise analysis of ratio of disbursements to the
approved phasing of sanctions revealed that Mizoram
topped with 120 per cent, followed by Uttarakhand,
Goa (above 99%), Meghalaya (90%), Tamil Nadu
(89%), Haryana and Maharashtra (88%), Punjab and
Gujarat (87%), UP and Jammu & Kashmir (86%)
(Table 3.12). Cumulative amount of loan sanctioned
and disbursed to States in the North Eastern region,
including Sikkim, aggregated ` 6,328.24 crore and
` 3,293.18 crore, respectively, as on 31 March 2011.
The slow pace of utilization of loans under RIDF was
due mainly to delay in administrative and technical
approval by the State Governments, land acquisition
problems, delay in obtaining statutory clearances and
tendering process, inadequate budgetary support at
State level, lack of co-ordination among implementing
departments, etc.
D. Deposits/Repayments
3.61 The cumulative deposits received under RIDF
stood at ` 95,784.63 crore, as on 31 March 2011.
During the year, an amount of ` 13,056.22 crore was
received as deposits from commercial banks. The
details of year-wise and tranche-wise disbursements
against deposits received are given in Table 3.13. An
amount of ` 5,047.23 crore was received from state
governments towards repayment of RIDF loans during
2010-11. The total RIDF loan outstanding, as on
31 March 2011, was ` 66,077.96 crore.
Table 3.11: Tranche-wise Sanctions and Disbursements - On-going tranches – RIDF XI to XVI
(As on 31 March 2011)
(` crore)
Amount
Tranche Corpus No. of Projects Sanctioned Phased Disbursed Percent*
i. Closed Tranches (I to X) 42000 169662 41921.84 41921.84 36906.42 88
ii. Ongoing Tranches
XI 8000 29763 8310.50 8310.50 7010.19 84
XII 10000 41774 10377.15 10377.15 8000.73 77
XIII 12000 36810 12614.46 12614.46 8969.09 71
XIV 14000 85428 14726.35 13310.52 9252.67 70
XV 14000 38946 15623.22 9420.78 6629.24 70
XVI 16000 41779 18314.85 4109.11 3731.44 91
Total 74,000 2,74,500 79,966.56 58,142.52 43,593.36 75
Grand Total 1,16,000 4,44,162 1,21,888.40 1,00,064.36 80,499.78 80
*: Disbursed as per cent to phased
57
E. Monitoring of RIDF Projects
a. In-house Monitoring
3.62 The primary responsibility of monitoring of
RIDF projects is of State Governments for ensuring
timely completion and quality of assets being created.
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
Table 3.12: Utilisation Percentage under RIDF (I TO XVI)
(As on 31 March 2011)
(` crore)
Sl.No. State Sanctions Phasing Drawn Utilisation (%)
1 Andhra Pradesh 13004.86 11300.24 8985.44 79.52
2 Karnataka 6416.23 5445.12 4241.45 77.89
3 Kerala 3498.88 2816.37 2302.41 81.75
4 Tamil Nadu 8228.53 7046.36 6298.07 89.38
5 Puducherry 239.08 134.85 78.26 58.03
South Zone 31387.58 26742.94 21905.62 81.91
6 Goa 385.12 298.98 297.59 99.53
7 Gujarat 9386.04 8279.71 7166.97 86.56
8 Maharashtra 7746.78 6090.11 5336.25 87.62
West Zone 17517.94 14668.81 12800.82 87.27
9 Haryana 3041.82 2287.98 2019.45 88.26
10 Himachal Pradesh 3114.90 2366.84 2014.95 85.27
11 Jammu & Kashmir 4058.98 2954.28 2537.14 85.88
12 Punjab 4527.16 3850.15 3362.48 87.33
13 Rajasthan 7574.76 6555.52 5197.41 79.28
14 Uttar Pradesh 10316.79 8916.48 7667.18 85.99
15 Uttarakhand 2440.18 1392.61 1389.58 99.78
North Zone 35074.59 28323.87 24188.19 85.41
16 Madhya Pradesh 1648.04 1509.02 1264.42 83.79
17 Chhattisgarh 8731.16 7541.46 5103.75 67.68
Central Zone 10379.20 9050.48 6368.17 70.36
18 Bihar 4906.83 3616.48 2424.52 67.04
19 Jharkhand 3103.51 2403.92 1740.95 72.42
20 Odisha 5770.87 4578.21 3331.35 72.77
21 West Bengal 7419.64 5674.46 4446.98 78.37
East Zone 21200.85 16273.08 11943.80 73.40
22 Arunachal Pradesh 736.23 674.58 509.94 75.59
23 Assam 2129.98 1925.71 1347.26 69.96
24 Manipur 329.38 326.73 54.58 16.70
25 Meghalaya 588.28 357.18 321.53 90.02
26 Mizoram 361.55 166.62 200.79 120.51
27 Nagaland 705.76 501.77 293.04 58.40
28 Tripura 1002.98 764.98 371.44 48.56
29 Sikkim 474.08 287.61 194.60 67.66
North-East & Sikkim 6328.24 5005.19 3293.18 65.80
RIDF Total 121888.40 100064.36 80499.78 80.45
Bharat Nirman 18500.00 18500.00 18500.00 100.00
GRAND TOTAL 140388.40 118564.36 98999.78 83.50
58
regular intervals. The High Power Committee (HPC)
chaired by the Chief/Finance Secretary of the State,
meets quarterly to review the pace of project
implementation. The HPC, has proven to be an
effective mechanism for monitoring and ensuring
speedy and timely completion of projects.
3.63 During the year, 5,553 projects were monitored
through field visits. Major observations/issues were
taken up with the implementing departments and the
Finance Department of State Governments for
improving the pace and quality of the project
execution.
b. Monitoring Studies - Feedback
3.64 The monitoring visit to poly-house projects in
Himachal Pradesh revealed that factors like, time
overrun, improper opening of the ventilators, heavy
rains and lack of awareness among farmers caused
damages. Standardization of cropping practices and
awareness creation among farmers on upkeep of
poly-houses were recommended. Monitoring of
social sector projects in Karnataka indicated that
there were problems of poor maintenance. Provision
Table 3.13: Year/Tranche-wise Disbursements and Deposits received under RIDF
(As on 31 March 2011)
(` crore)
Year Deposits Disbursements Tranche Deposits Disbursements
1995-96 350.00 387.34 I 1,586.56 1,760.87
1996-97 1,042.30 1,087.08 II 2,225.00 2,397.95
1997-98 1,007.04 1,009.03 III 2,308.02 2,453.50
1998-99 1,337.95 1,313.12 IV 1,412.53 2,482.00
1999-00 2,306.63 2,277.87 V 3,051.88 3,054.96
2000-01 2,653.64 3,176.85 VI 4,080.54 4,070.85
2001-02 3,590.72 3,790.37 VII 4,073.77 4,052.59
2002-03 3,857.09 4,103.42 VIII 5,215.00 5,148.50
2003-04 2,158.69 3,922.09 IX 4,913.64 4,916.48
2004-05 4,353.47 4,316.85 X 6,466.98 6,568.69
2005-06 6,092.37 5,953.32 XI 8,000.00 6,851.52
2006-07 6,966.43 6,222.58 XII 9,018.27 7,638.22
BNP 0.00 0.00 4,000.00 0.00
2007-08 7,369.46 8,033.64 XIII 9,837.65 8,445.71
BNP 4,438.42 4,500.00 3,544.06 4,500.00
2008-09 12,157.78 10,458.64 XIV 6,442.49 8,236.15
BNP 6,647.43 7,500.00 3,817.18 7,500.00
2009-10 12,677.01 12,387.54 XV 5,300.00 5,129.72
BNP 3,718.95 6,500.00 6,491.06 6,500.00
2010-11 13,056.22 12,060.04 XVI 4,000.00 3,731.44
Total 95,784.63 98,999.78 Total 95,784.63 98,999.78
BNP: Bharat Nirman Programme
Poly Houses under RIDF
59
for electrification, toilet and water supply was
missing in primary school projects. In Haryana, road
projects were not completed in time due to
non-availability of stone, because of a ban on
mining, land acquisition, non-availability of
adequate labour, forest clearance, etc.
F. Capacity Building Support
3.65 During 2010-11, five Regional Business Meets
were organized in five major regions to address
various constraints in implementing RIDF, which
involves several processes like, project identification,
area survey, project design, preparing Detailed Project
Reports (DPR) mid-term appraisal (both technical and
economic), monitoring and evaluation, quality testing,
etc., through training and capacity building of officials/
staff involved in implementing RIDF, especially for
those states that have comparatively lower off-take of
RIDF because of their weak implementing apparatus.
In addition, 45 regional awareness workshops have
been conducted by Regional Offices for State
Government officials of Finance and other
implementing Departments, agencies and user groups
agencies.
G. Economic/Social Benefits of RIDF
Projects
3.66 Completed projects under RIDF realise the
economic and social benefits in terms of: (i) creation of
additional irrigation potential, (ii) generation of
additional employment for the rural people,
(iii) contribution to the economic wealth of the country
(GDP), (iv) all weather connectivity/ improved
connectivity to villages and marketing centers and
(v) improvements in quality of life through better
facilities in education, health and drinking water supply.
Hanging Bridge under RIDF
Table 3.14: Cumulative Economic and Social Benefits of RIDF Projects
S.No. Particulars Additional benefits created
1 Irrigation potential (lakh ha.) 164.78
2 Rural Roads (km) 3,30,855.00
3 Rural Bridges (m) 6,67,306.00
4 Gross Domestic Product (` crore) 23,811.00
5 Recurring Employment (No.of jobs) 85,40,476.00
6 Non Recurring Employment:
A. Irrigation (lakh persondays) 26,396.78
B. Rural Roads and Rural Bridges (lakh persondays) 36,478.45
C. Others (lakh persondays) 18,768.94
7 Power Sector
A. Hydel Power Generation (MW) 200.11
B. System Improvement to minimise T & D losses (lakh units/ year) 22315
8 Social Sector (People /Students benefited)
A. Health Centres (lakh) 581.43
B. Primary & Secondary Schools (lakh) 94.83
C. Rural Drinking Water Supply (lakh) 1167.16
MW: Mega Watt T & D: Transmission and Distribution
60
Table 3.15: Statewise Benefits Estimated Under RIDF I to XVI
(As on 31 March 2011)
State Potential Value Recurring Non-recurring Employment
Irrigation Bridges Roads Prodn. Employment Irrigation Road+Bridges Others
(ha) (m) (km) (` crore) (Numbers) (lakh Persondays)
Andhra Pradesh 1786202 47286 31017 2662 1952853 5058 5450 3242
Arunachal Pradesh 0 2473 1010 0 0 0 233 62
Assam 317317 52323 795 348 102400 84 816 204
Bihar 556578 21598 4371 701 231693 311 1166 537
Goa 54080 1410 258 45 5284 81 158 8
Gujarat 1210934 4346 19873 1209 1321078 1492 954 1076
Haryana 868590 2969 2512 1835 167256 706 413 165
Himachal Pradesh 104992 18261 7771 398 414939 511 610 316
Jammu & Kashmir 129849 15000 11082 190 97738 214 1359 161
Karnataka 455365 38955 35074 1121 123605 1673 2700 874
Kerala 231338 29028 3915 501 79860 330 706 339
Madhya Pradesh 1313447 37881 13454 3610 1063265 3123 1454 344
Maharashtra 655034 54143 24506 1435 270236 3127 2354 191
Manipur 19550 0 0 29 8808 20 0 147
Meghalaya 7992 4250 1326 10 3621 61 268 64
Mizoram 2990 283 693 3 1976 12 65 22
Nagaland 7471 759 1622 8 3727 22 179 267
Orissa 836501 73632 5679 1777 441160 1880 2566 260
Punjab 496782 8543 6993 755 179077 654 828 783
Rajasthan 421644 2905 51070 738 98671 1268 2759 2560
Tamilnadu 270322 43971 31301 275 270786 534 3274 1246
Tripura 94893 32101 4389 50 11175 72 1085 472
Uttar Pradesh 4225908 41373 36371 3263 561833 1900 1538 706
West Bengal 1847915 25813 12944 1960 914068 1485 2668 3670
Sikkim 40516 3258 2533 29 26462 98 410 484
Jharkhand 73571 57500 7049 210 90742 303 1006 464
Chhattisgarh 341065 31603 4303 475 69618 828 448 10
Uttarakhand 105368 15315 8772 174 27439 224 975 49
UT of Puducherry 1836 327 172 1 1108 327 37 46
Total 16478050 667306 330855 23812 8540478 26398 36479 18769
61
An econometric analysis for estimating the effect of
infrastructure index (irrigation, connectivity, social sectors)
on agricultural production and productivity was carried out
for Chhattisgarh and Uttar Pradesh. Infrastructure index as
an independent variable explained 54-78 per cent variation
in agricultural productivity in the two states. Thus, the
results substantiated that infrastructure projects supported
under RIDF have positive impact on agricultural production
and productivity.
Major impact of Irrigation Projects was on increase in
cropping intensity (10-42%) and yield (10-50%). Other
benefits accrued from the sample irrigation projects were
recharge of ground water, availability of drinking water,
increase in allied activities like dairy, increase in land value,
increase in employment generation per year (non-recurring
employment in the range of 30 to 6,50,000 persondays
and recurring employment the range of 40 to 2,38,370
persondays).
Economic impact of Rural Roads & Bridges projects was
observed in terms of increase in land prices, price of
agriculture produce and cropping intensity, shift in acreage
towards cash crops, employment generation, allied
Box 3.1
Evaluation Studies on RIDF Projects : Feedback on Benefits Realised
activities, etc., increase in crop yield for paddy (4-10%),
wheat (3-8%) and sugarcane (10-20%). Wastage in
marketing of agricultural produce, especially perishables
was also reduced due to reduction in distance and time in
transportation. The Vehicle Operating Cost (VOC) came
down due to reduction in distance and improvement in the
quality of roads and bridges. Linkage by roads resulted in
convenient access to hospitals, banks, schools and
administration. Non-recurring employment generation was
in the range of 823 to 52,000 persondays per year and the
recurring employment was in the range of 653 to 41,659
persondays per year for the sample projects.
Economic benefits from Rural Water Supply Projects were
in terms of time saved (1.87 hours per family) and
adequate availability of safe drinking water in schools.
Water availability for animals and savings of time had
boosted dairy activity in the sample district. An average of
` 6.96 lakh was estimated to be the incremental income
from enhanced dairy activity. Other non-tangible benefits
like improvement in hygiene and environment were also
reported. As many as 35,000 persondays of non-recurring
employment and 930 persondays of recurring employment
per year were generated by the sample projects.
Source : NABARD (2010)- “Infrastructure for Agriculture Development” Occasional Paper-53
The benefits generated, as at end March 2011, are
presented in Table 3.14, Table 3.15 and Box 3.1.
H. RIDF: Looking Ahead
3.67 Despite funding lakhs of projects in irrigation,
rural connectivity, and other vital sectors under RIDF,
it is felt that the gigantic gap in rural infrastructure
cannot be bridged by the state governments due to
their limited budgetary resources and organisational
structure. In order to leverage private resources and its
implementing capacity, NABARD is exploring the
possibilities of allowing implementation of specific
projects under the public-private partnership (PPP)
model (Box 3.2). Accordingly, a quick study was
conducted by NABARD as well as State Governments
during 2008-09. Based on the study results/feedback
received and in consultation with GoI and RBI,
NABARD as part of its repositioning exercise, is in the
process of encouraging partnerships and network
relations to bring about private sector competence and
funds into the realm of rural infrastructure.
62
Box 3.2
NABARD Infrastructure Development Assistance (NIDA)
The first NABARD Infrastructure Development Assistance
(NIDA) loan has been sanctioned to the Karnataka State
Warehousing Corporation, for construction of 1.06 lakh
MT of storage space in 9 districts of the State, involving
loan support of ` 42.12 crore. Depending upon need,
Special Purpose Vehicles (SPV) set up under the PPP
model and private entrepreneurs will also be considered
on a case-to-case basis. Assistance will be provided based
upon viability of the borrowing entity and its financial
condition, including track record for execution of works
and delivery of services related to the specific investment
being financed. NIDA loan will typically be of long
tenure (7-15 years) and carry rates of interest which
appropriately reflect the borrower’s risk profile while
ensuring business viability. The loans will be guaranteed
against appropriate security and collateral. NABARD
will also build-in appropriate “Finance+” services like
monitoring, quality assurance, programme management,
capacity building, etc., to increase the sustainability of
the investments in the long run. A dedicated fund “Rural
Infrastructure Promotion Fund” has been created during
the year with an initial contribution of ` 25.00 crore.
63
IV
Capacity Building of Client Institutions
The Co-operative Banks and Regional Rural Banks
(RRB), which play a very crucial role in financial
intermediation in agriculture and rural development,
are vulnerable to disruptions created by economic
and that of DCCB increased by 3 per cent over the
previous year. Loans issued by SCB decreased by
17 per cent and that of DCCB increased by 26 per
cent during the year 2009-10, as compared to the
previous year. Loans outstanding of SCB increased
marginally by 2 per cent while that of DCCB increased
by 24 per cent in 2009-10 as compared to the
previous year.
4.4 In the Long Term Co-operative Credit Structure
(LTCCS), borrowings of State Co-operative Agriculture
and Rural Development Banks (SCARDB), as on
31 March 2010, marginally decreased by 0.5 per cent
over the previous year while that of Primary
Co-operative Agriculture Rural Development Banks
(PCARDB) marginally increased by 2 per cent during
the corresponding period. Loans issued by SCARDB
and PCARDB during the year 2009-10 increased by
19 per cent and 13 per cent, respectively, while the
shocks. NABARD endeavours to strengthen the
capacity of these institutions through various
developmental and supervisory initiatives to enable
them withstand such shocks effectively.
Institutional Development
A. Rural Co-operative Credit
Institutions - Overview
a. Performance
4.2 The total membership of Primary Agricultural
Credit Societies (PACS) during 2009-10 stood at
1,264 lakh, of which borrowing members were 598 lakh,
constituting 47.31 per cent of total membership. The
membership as well as borrowing members declined
during the year 2009-10. Both deposits mobilised and
loans issued by PACS (as on 31 March 2010)
registered an increase of 34.45 per cent and 27.47
per cent, respectively, over the previous year. The
borrowings of PACS also registered only an increase of
5.77 per cent over the previous year (Table 4.1).
4.3 An analysis of the financial position of the SCB
and DCCB (Table 4.2) indicated that their deposits as
on 31 March 2010, increased by about 15 per cent
each; the borrowings of SCB increased by 12 per cent
Table 4.1: Growth of PACS
(As on 31 March)
(` crore)
Particulars 2008 2009 2010
Number 94,950 95,633 94,647
Membership (lakh) 1,315 1,323 1,264
Borrowing Members (lakh) 794 765 598
Owned Funds 10,984 11,806 12,479
Deposits 25,449 26,245 35,286
Borrowings 47,848 48,938 51,764
Loans issued 57,642 58,787 74,938
Source : NAFSCOB
Table 4.2: Growth of Short-Term Co-operative Banks
(As on 31 March)
(` crore)
Particulars SCB DCCB
2009 2010 P* 2009 2010 P*
Number 31 31 370 370
Share Capital 1,570 1,635 6,452 7,226
Reserves 10,256 10,403 22,719 22,598
Deposits 71,272 82,311 1,28,434 1,47,109
Borrowings 20,971 23,430 27,588 28,334
Loans Issued 64,779 53,589 90,006 1,136,10
Loans Outstanding 48,382 49,199 99,462 1,23,221
P : Data provisional
* : Data for the year 2010 is repeated from: (i) 2008-09 for the
states of Puducherry and Sikkim; (ii) 2007-08 for Jharkhand,
Kerala (DCCB) and West Bengal; and (iii) 2006-07 for Bihar
64
loans outstanding increased by 4 per cent and one per
cent, respectively, over the previous year (Table 4.3).
b. Working Results
i. Profitability
4.5 During 2009-10, 28 out of 31 SCB were in profit
aggregating ` 463 crore while the remaining 3 SCB
were in loss (` 210 crore), resulting in aggregate profit
of ` 253 crore. While 323 out of 370 DCCB earned
profit of ` 1,545 crore, 47 DCCB incurred losses to
the extent of ` 524 crore, resulting in a overall profit
of ` 1,021 crore. Eleven SCARDB earned an
aggregate profit of ` 97 crore, while eight incurred an
aggregate loss of ` 155 crore, resulting in a loss of
` 58 crore. Out of 697 PCARDB, 307 earned an
aggregate profit of ` 154 crore, while 390 incurred an
aggregate loss of ` 518 crore during the year, resulting
in a loss of ` 364 crore (Table 4.4).
4.6 The aggregate accumulated losses of all the tiers
of co-operatives in the short-term and long-term
structures showed an increase as on 31 March 2010,
as compared to 2008-09 (Table 4.5).
4.7 An analysis at the regional level showed that
during 2009-10, the overall profits of SCB decreased by
22 per cent over the previous year (Table 4.6).
Profits of SCB in Eastern Region marginally improved
but in the North Eastern Region, it increased four fold
compared to the previous year. Gujarat SCB in
Table 4.3: Growth of Long-Term Co-operative Banks
(As on 31 March)
(` crore)
Particulars SCARDB*@ PCARDB*
2009 2010P 2009 2010P
Number 20 20 697 697
Share Capital 814 817 1515 1513
Reserves 3272 3369 3236 3269
Deposits 707 756 467 447
Borrowings 14773 14701 12403 12592
Loans Issued 2586 3076 2054 2324
Loans Outstanding 16279 16879 11231 11377
* : Data for 2009-10 repeated from 2008-09, for the states ofBihar, Kerala, Maharashtra (SCARDB), Odisha, Puducherry,Tamil Nadu and Tripura
@ : Manipur SCARDB is defunct P : Data provisional
Table 4.5: Accumulated Losses
(As on 31 March)
(` crore)
Year SCB# DCCB # SCARDB * PCARDB $
2008 428 6195 1263 3403
2009 404 5204 1054 3631
2010# 574 5270 1188 4087
Data for 2009-10 Provisional.
# Data for 2009-10 repeated in respect of SCB and DCCB from
2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and West
Bengal; from 2007-08 in Bihar, Jharkhand and Kerala (DCCB)
* Data for 2009-10 repeated from previous year in respect of
SCARDB and PCARDB in Bihar, Kerala, Maharashtra
(SCARDB), Odisha, Tamil Nadu, Puducherry and Tripura
Table 4.4: Working Results of Co-operative Banks
(` crore)
Agency SCB DCCB SCARDB $ PCARDB
Year 2008-09 2009-10*P 2008-09 2009-10*P 2008-09$ 2009-10$**P 2008-09# 2009-10#**P
Total (No.) 31 31 370 370 20 20 697 697
In Profit (No.) 26 28 321 323 12 11 343 307
Profit Amount 395 463 1603 1545 404 97 220 154
In Loss (No.) 5 3 49 47 7 8 353 390
Loss Amount 71 210 261 524 88 155 342 518
* : Data for SCB and DCCB repeated from : (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu, West Bengal; (ii) 2007-08 in Bihar,Jharkhand and Kerala(DCCB).
# : Data for 1 PCARDB and 4 PCARDB in West Bengal not available for 2008-09 and 2009-10, respectively$ : Manipur SCARDB is defunct.**: Data for year 2009-10 repeated from previous year for SCARDB and PCARDB in the states of Bihar, Kerala,, Maharashtra (SCARDB),
Odisha, Puducherry, Tamil Nadu and Tripura.
P : Data provisional
65
Western region and Assam, Nagaland and Tripura SCB
in North Eastern Region, which had incurred losses in
the previous year turned around, earning profits in
2009-10. Haryana SCB in Northern region incurred
loss during the year. While 10 SCB (Andaman &
Nicobar, Andhra Pradesh, Chhattisgarh, Uttarakhand,
Himachal Pradesh, Jammu and Kashmir, Goa,
Meghalaya, Mizoram and Odisha) improved their profit
as on 31 March 2010 over the previous year, 10 SCB
(Madhya Pradesh, Uttar Pradesh, Chandigarh, Delhi,
Punjab, Rajasthan, Maharashtra, Karnataka, Manipur
and Tamil Nadu) showed declining trend in profits
over the previous year. At the aggregate level, the non-
performing assets (NPA) in absolute terms as well as a
percentage to the loans outstanding, as on
31 March 2010 registered decrease, probably due to
an improvement in the recovery performance.
4.8 At the aggregate level, the number of profit
earning DCCB increased but were marked by a
decline in their profits during 2009-10. The number
of loss making DCCB decreased from 49 to 47 with
the losses doubling from ` 261.14 crore in 2008-09 to
` 523.87 crore in 2009-10. In the case of DCCB, the
overall profits of DCCB increased in Central and
Western Regions but decreased in Northern and
Table 4.6: Region-wise Working Results of SCB #
(As on 31 March)
(` crore)
Region Profit/Loss Gross NPA NPA as % to loans Recovery (%)
(+)/ (-) outstanding (As on 30 June)
2008-09 2009-10* 2008-09 2009-10* 2008-09 2009-10* 2008-09 2009-10*
Northern 105.39 71.30 347.02 365.44 3.12 3.16 97.29 97.93
North-Eastern 14.50 59.48 435.01 453.29 37.39 36.05 49.23 45.47
Southern 125.77 (-)30.76 1599.99 753.39 11.34 5.36 95.03 93.90
Eastern 43.29 44.01 505.64 498.92 10.32 9.18 86.82 86.83
Central 69.17 45.56 607.16 469.30 10.01 7.29 92.97 92.42
Western (-)33.99 64.06 2268.67 1928.82 20.58 18.42 83.26 81.59
All-India 324.13 253.65 5763.50 4469.16 11.91 9.08 91.78 91.22
# data for 2009-10 in respect of SCB in Bihar, Odisha, Puducherrry and Sikkimand West Bengal repeated from 2008-09
* Data for 2009-10 provisonal
Table 4.7: Region-wise Working Results of DCCB
(As on 31 March)
(` crore)
2008-09 2009-10*# Gross NPA NPA % to Recovery %
Loans (As on 30
Outstanding June)
Region DCCB Profit Loss DCCB Profit Loss 2009 2010 2009 2010 2009 2010
No. No. Amt. No. Amt. No. No. Amt. No. Amt.
No. Amt. No. Amt. No. Amt. No. Amt.
Northern 73 69 148.47 4 27.67 73 65 113.01 8 35.81 1806.63 1812.21 6.56 8.89 77.84 79.57
Southern 80 71 510.11 9 67.44 80 71 447.50 9 61.42 5125.53 4334.58 15.55 12.03 78.89 79.94
Eastern 64 50 76.36 14 67.12 64 50 76.36 14 67.12 1136.44 1136.44 17.70 5.06 62.66 68.41
Central 104 90 294.54 14 43.48 104 95 314.28 9 37.65 3357.10 3134.98 27.73 24.72 63.70 67.98
Western 49 41 573.29 8 55.43 49 42 593.38 7 321.87 6501.97 5597.24 22.33 17.68 66.80 71.80
All-India 370 321 1602.77 49 261.14 370 323 1544.53 47 523.87 17927.68 16015.45 18.02 13.00 72.17 74.94
* Data for 2009-10 provisional.
# Data for 2009-10 repeated from 2008-09, in respect of DCCB from Bihar, Jharkhand, Kerala and Odisha
66
Southern Regions during the year 2009-10. The
extent of profits of DCCB increased in Chhattisgarh,
Uttar Pradesh, Jammu and Kashmir, Gujarat,
Karnataka and Maharashtra. The percentage of NPA
to loans outstanding in all regions improved, except in
the Northern Region (Table 4.7).
4.9 At the aggregate level, SCARDB incurred loss of
` 57.91 crore (Table 4.8) and PCARDB incurred loss
of ` 518.06 crore (Table 4.9) during the year 2009-10.
The number of profit making PCARDB decreased to
303 in 2009-10 from 343 in 2008-09.
4.10 During 2009-10, profits of the SCARDB
increased in Eastern Region. SCARDB in Southern
and Western Regions slipped into loss making entities.
In the NE Region, the losses of SCARDB increased.
While profits of SCARDB in Chhattisgarh, Punjab and
West Bengal increased, profits of SCARDB in
Haryana, Himachal Pradesh and Uttar Pradesh
decreased.
4.11 During 2009-10, PCARDB in all regions
recorded a decrease in the level of their profits over
the previous year. While the loss making PCARDB in
Table 4.8: Region-wise Working Results of SCARDB *$
(As on 31 March)
(` crore)
Regions No. of Profit/Loss(-) Gross NPA NPA % Recovery %
Branches to demand
2010 2009 2010 2009 2010 2009 2010 2009 2010
Northern 85 69.00 50.02 759.77 898.64 13.86 15.60 64.92 58.00
North Eastern# 35 (-)2.56 (-)3.51 16.34 15.95 51.99 51.76 53.41 54.45
Southern 56 20.95 (-)61.65 696.12 709.11 18.97 19.15 51.65 56.85
Eastern 138 (-)1.03 7.06 368.93 313.99 40.26 31.39 34.73 36.47
Central 349 207.89 (-)49.82 1724.69 2265.76 39.21 49.04 35.31 37.48
Western 181 22.19 (-)0.03 1381.81 1424.11 77.57 80.71 20.06 19.54
All India Total 844 316.45 (-)57.91 4947.65 5627.56 30.39 33.34 40.73 40.88
* Data for 2009-10 is provisional
$ Data repeated for 2009-10 from 2008-09 in respect of SCARDB in Bihar, Kerala, Madhya Pradesh, Odisha, Puducherry, Tamil Nadu, Tripura and West Bengal
# Manipur SCARDB is defunct
Table 4.9: Region-wise Working Results of PCARDB@
(As on 31 March)
(` crore)
2008-09 2009-10# Gross NPA NPA % to Loans Recovery %Outstanding As on 30 June
Region No. Profit Loss No. Profit Loss
No. Amt. No. Amt. No. Amt. No. Amt. 2009 2010 2009 2010 2009 2010
Northern 145 99 72.27 46 75.81 145 105 51.37 40 203.04 1881.05 2287.87 35.32 34.73 39.14 41.19
Southern 403 167 71.21 236 60.61 403 144 66.78 259 78.39 1251.79 1300.80 36.57 36.14 50.15 48.18
Eastern 70 50 46.60 19 4.98 70 38 33.61 28 16.37 249.33 174.29 37.65 23.11 56.29 46.27
Central 50 23 24.06 27 69.02 50 16 2.25 34 35.81 745.75 623.47 63.20 56.69 37.64 37.48
Western 29 4 6.08 25 131.88 29 0 0.00 29 184.45 614.21 480.61 95.91 98.85 7.97 20.83
All-India 697 343 220.22 353 342.30 697 303 154.01 390 518.06 4742.13 4867.04 42.22 42.78 39.48 40.60
@: Data for 2009-10 provisional.
# : Data for 2009-10 repeated from 2008-09 in respect of PCARDB in Maharashtra, Odisha, Puducherry and Tamil Nadu
67
Central Region reported reduced lossess, PCARDB in
other regions reported increased losses during 2009-10
over the previous year (Table 4.9).
ii Costs and Margins
4.12 During 2009-10, SCB as a group earned an
overall return of 7.39 per cent while the cost of funds
worked out to 5.30 per cent, resulting in a financial
margin of 2.09 per cent (excluding miscellaneous
income of 0.82 per cent). The average transaction cost
and risk cost of SCB during the year worked out to
1.34 per cent and 0.55 per cent, respectively. SCB as a
group earned a positive net margin of 1.02 per cent
during 2009-10 compared to net margin of 0.57 per
cent during 2008-09.
4.13. In the case of DCCB, the overall return on
working funds was 7.52 per cent while the cost of
funds was 5.05 per cent, yielding a financial margin of
2.47 per cent (excluding miscellaneous income of 2.57
per cent). The average transaction cost and risk cost,
as a percentage to working funds were 1.89 per cent
and 1.35 per cent, respectively during 2009-10. The
DCCB, as a group, earned net margin of 1.80 per cent
during 2009-10.
4.14 During the year 2008-09, out of 19 SCARDB,
13 had positive net margin and the remaining 6 had
negative net margin. PCARDB in only 4 States had
positive net margin.
iii. Non-Performing Assets (Gross) and
Recovery Performance
4.15 At the aggregate level, the percentage of gross
NPA to total loans and advances outstanding in respect
of both SCB and DCCB, improved to 9.08 and 13.00
per cent, as on 31 March 2010, from 11.91 and 18.02
per cent as on 31 March 2009, respectively. (Table 4.6
and 4.7) In absolute terms, gross NPA was estimated at
` 4,469.16 crore for SCB and ` 16,015.45 crore for
DCCB, as on 31 March 2010, registering a decline of
22 and 11 per cent, respectively, over the previous
year. The percentage of gross NPA to total loans and
advances outstanding in the case of SCARDB,
as on 31 March 2010, increased to 33.34 per cent
from 30.39 per cent in the previous year, and
marginally increased to 42.78 per cent from 42.22 per
cent for PCARDB, during the corresponding period.
The gross NPA of SCARDB and PCARDB were
estimated at `5627.56 crore and `4867.04 crore,
showing an increase of 14 and 3 per cent, respectively.
The asset classification of NPA of SCB, DCCB,
SCARDB and PCARDB are given in Table 4.10.
4.16 The non-performing assets in SCB was the lowest
in the Northern Region (3.16%), followed by Southern
(5.36%) and Central (7.29%) Regions, and these regions
had a lower percentage of NPA as compared to the all-India
average of 9.08 per cent during 2009-10. In the Eastern
(9.18%), Western (18.42%) and and North-Eastern
(36.05%) regions, gross NPA was higher than the all-India
average. SCB in Arunachal Pradesh, Bihar, Assam,
Manipur, Tripura, Andaman and Nicobar, Chhattisgarh,
Uttar Pradesh, Meghalaya, Mizoram, Nagaland, Himachal
Pradesh, Jammu and Kashmir, Chandigarh, Kerala, Goa
and Maharashtra continued to have high levels of NPA. In
the case of DCCB, as compared to the all India average
(13.00%), NPA in Eastern (5.06%), Northern (8.89%)
and Southern (12.03%) regions were lower during
Table 4.10: Composition of NPA of Co-operative Banks
(As on 31 March 2010^)
(` crore)
Asset SCB* DCCB* SCARDB#$ PCARDB#
Classification
Sub-Standard 1412.35 7084.92 3460.93 2757.03
Doubtful 2257.82 6317.31 2146.54 2081.84
Loss Assets 798.99 2613.22 20.09 28.17
Total NPA 4469.16 16015.45 5627.56 4867.04
Provisions required 2861.47 10871.25 1188.28 1040.60
Provisions made 4438.25 12300.99 1445.56 1113.13
^ Data for 2009-10 Provisional
* data for the year 2009-10 in respect of SCB and DCCB
repeated from (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil
Nadu and West Bengal; (ii) 2007-08 in Bihar, Jharkhand and
Kerala (DCCB)
# Data for the states of Bihar, Kerala, Maharashtra (SCARDB),
Odisha, Tamil Nadu and Tripura repeated from previous year
$ Manipur SCARDB is defunct
68
2009-10. Haryana, Himachal Pradesh and Punjab had
low levels of NPA, while they were very high for DCCB in
Jharkhand, Uttar Pradesh, Chhattisgarh, Madhya
Pradesh, Jammu and Kashmir, Gujarat, Maharashtra,
Andhra Pradesh, Kerala, Tamil Nadu and West Bengal, as
on 31 March 2010.
4.17 The average loan recovery of SCB marginally
decreased to 91 per cent as on 30 June 2010, from
92 per cent as on 30 June 2009, while that of DCCB
increased to 75 per cent as on 30 June 2010, from 73 per
cent as on 30 June 2009 (Table 4.11). The loan recovery
of Chhattisgarh SCB increased considerably to 80 per
cent from 59 per cent, as on 30 June 2010. SCB in
Uttarakhand, Haryana, Jammu & Kashmir, Rajasthan,
Arunachal Pradesh and Tripura had improved their loan
recovery performance. However, SCB in Uttar Pradesh,
Chandigarh, Delhi, Himachal Pradesh, Andaman &
Nicobar, Maharashtra, Assam, Manipur, Meghalaya and
Nagaland showed decline in recovery of loans
during 2009-10.
4.18 The average loan recovery of SCARDB marginally
improved from 40.73% in 2008-09 to 40.88% in 2009-10.
In the case of PCARDB also, the recovery of loans during
2009-10 improved to 41 per cent compared to 39 per
cent during 2008-09. The PCARDB in the Southern
(48.18%) and Eastern (46.27%) regions registered higher
levels of recovery. The loan recovery of SCARDB in
Assam and Uttar Pradesh increased considerably to
36 per cent and 43 per cent, as on 30 June 2010, from 31
per cent and 38 per cent as on 30 June 2009. Low
recovery performance and its declining trend were
recorded by SCARDB in Chhattisgarh, Haryana, Madhya
Pradesh, Punjab and Rajasthan. The loan recovery in
respect of PCARDB in Chhattisgarh, Haryana, Himachal
Pradesh, Maharashtra and Punjab showed improvement,
as on 30 June 2010, over the previous year. The loan
recovery in respect of PCARDB had declined in
Karnataka, Madhya Pradesh, Rajasthan and West Bengal.
Table 4.11: Percentage of Recovery of loans to Demand
(As on 30 June)
Agency 2008 2009 2010*
SCB 84.59 91.78 91.22
DCCB # 55.61 72.17 74.94
SCARDB* $ 50.40 40.73 40.88
PCARDB* 40.90 39.48 40.60
* Data Provisional for the year 2009-10.
# Data for 2009-10 in respect of SCBs and DCCBs repeated
from 2008-09 in Kerala (DCCB), Odisha, Puducherry, Sikkim,
Tamil Nadu and West Bengal; from 2006-07 in Bihar; and
2007-08 in Jharkhand
$ Manipur SCARDB is defunct
Table 4.12: Frequency Distribution of Co-operative Banks According to Range of Loan Recovery Percentage
(As on 30 June)
(Number)
Recovery (%) SCB DCCB SCARDB PCARDB(No.) (No.) (No.) $ (No.)
2009 2010# 2009 2010#@ 2009 * 2010^* 2009 2010**
<40 4 4 102 47 9 10 382 337
>40 to <60 2 2 82 77 2 4 173 205
>60 to < 80 9 8 101 121 6 4 98 113
>80 16 17 85 124 2 1 43 42
Total 31 31 370 369 19 19 696 697
* : Data provisional for the year 2009# : Data for the year 2009-10 in respect of SCB and DCCB repeated from (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and West
Bengal; (ii) 2007-08 in Bihar,Jharkhand and Kerala (DCCB); @: data for one DCCB in MP not available^: Data for SCARDB and PCARDB in Bihar, WB, Kerala, Tamilnadu and SCARDB in Maharashtra repeated from previous year.
$ : Manipur SCARDB is defunct.
69
4.19 The frequency distribution of loan recovery of
banks in the co-operative structure are presented in
Tables 4.12 to 4.14.
c. Supersession of Elected Boards
4.20 NABARD, as a matter of policy, continues to
emphasise the need for co-operative banks to be
Bihar (5), Gujarat (3), Jharkhand (7), Karnataka (1), Madhya Pradesh (8),
Maharashtra (2), Odisha (4), Tamil Nadu (1), Uttar Pradesh (12), Uttarakhand (1),
West Bengal (3) (47)
Andhra Pradesh (2), Bihar (10), Chhattisgarh (1), Gujarat (1), Haryana (5), Jammu
and Kashmir (1), Jharkhand (1), Karnataka (4), Kerala (2), Madhya Pradesh (7),Maharashtra (10), Odisha (4), Rajasthan (4), Tamil Nadu (3), Uttar Pradesh (16),
Uttarakhand (1), West Bengal (5) (77)
Andhra Pradesh (8), Bihar (6), Chhattisgarh (4), Gujarat (5), Haryana (14), Himachal
Pradesh (1), Jammu & Kashmir (1), Karnataka (5), Kerala (3), Maharashtra (11),
Madhya Pradesh (14), Odisha (4), Punjab(1), Rajasthan (15), Tamil Nadu (5), Uttar
Pradesh (15), Uttarakhand (2), West Bengal (7) (121)
Andhra Pradesh (12), Bihar (1), Chhattisgarh (1), Gujarat (9), Himachal Pradesh (1),
Jammu and Kashmir (1), Karnataka (11), Kerala (9), Madhya Pradesh (8),
Maharashtra (8), Odisha (5), Punjab (19), Rajasthan (10), Tamil Nadu (14), Uttar
Pradesh (7), Uttarakhand (6), West Bengal (2) (124)
Arunachal Pradesh, Bihar,
Manipur and Meghalaya (4)
Andaman & Nicobar and Jammu
and Kashmir (2)
Assam, Chandigarh,
Maharashtra, Mizoram,
Nagaland, Sikkim, Tripura, Uttar
Pradesh, (8)
Andhra Pradesh, Chhattisgarh,
Delhi, Goa, Gujarat, Haryana,
Himachal Pradesh, Karnataka,
Kerala, Madhya Pradesh, Odisha,
Puducherry, Punjab, Rajasthan,Tamil Nadu, Uttarakhand, West
Bengal (17)
Total 31 369
Data for the year 2009-10 in respect of SCBs and DCCBs repeated from (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and WestBengal; (ii) 2007-08 in Bihar, Jharkhand and Kerala; @: data for one DCCB in MP not available
<40
>40 and
<60%
>60 and <80%
>80%
Table 4.13: Frequency Distribution of States/UT according to Level of Loan Recovery of SCB and DCCB
(As on 30 June 2010)
Recovery (%) SCB DCCB @
Assam, Bihar, Chhattisgarh,
Gujarat, Jammu & Kashmir,
Madhya Pradesh, Maharashtra,
Tamil Nadu (8)
Haryana, Himachal Pradesh,
Rajasthan, Odisha, West Bengal,
Uttar Pradesh, Karnataka (7)
Punjab, Tripura (2)
Kerala, Puducherry (2)
Chhattisgarh (2), Haryana (15), Karnataka (59), Kerala (3), Madhya Pradesh (29),
Maharashtra (29), Odisha (26), Punjab (8), Rajasthan (16), Tamil Nadu (170), West
Bengal (11) (368)
Chhattisgarh (7), Haryana(4), Karnataka (77), Kerala (15), Madhya Pradesh
(7), Odisha (11), Punjab (24), Rajasthan (15), Tamil Nadu (8), West Bengal
(9) (177)
Chhattisgarh (3), Himachal Pradesh (1), Karnataka (37), Kerala (20), Madhya
Pradesh (2), Odisha (5), Punjab (29), Rajasthan (4), Tamil Nadu (2), West Bengal (2)
(105)
Karnataka (4), Kerala (8), Odisha (4), Punjab (28), Rajasthan (1), West Bengal (2)
(47)
< 40 %
> 40 % and
< 60%
> 60% and
< 80%
> 80%
Total 19* 697
* Data in respect of Manipur SCARDB and Maharastra SCARDB not available ; Data in respect of SCARDB and PCARDB for the states inBihar, West Bengal, Punjab, Kerala, Gujarat, and Maharashtra repeated from previous year
Table 4.14: Frequency Distribution of States/UT according to Levels of Loan Recovery of SCARDB and PCARDB(As on 30 June 2010)
Recovery SCARDB PCARDB
70
managed by duly elected Boards of Management. One
of the covenants of the Memorandum of
Understanding (MoU) executed by State Governments
under the GoI revival package for STCCS stipulates
that co-operative banks should be managed by duly
elected Boards of Directors. Despite this, the practice
of superseding elected Boards continued in some
States. As on 31 March 2010, duly elected Boards
were superseded in 9 SCB and 86 DCCB in the ST
Structure, and in 6 SCARDB and in 265 PCARDB in
the LT Structure (Table 4.15).
d. Development Initiatives of NABARD
i. Development Action Plans / Memorandum
of Understanding
4.21 The process of preparing institution specific
Development Action Plans (DAP) and execution of
MoU began in 1994-95. Three phases have been
completed with PACS included during the third phase
(2004-05 to 2006-07). The revised fourth phase of
DAP/MoU (for both ST and LT structure), spanning
from April 2007 to March 2012, is more institution
specific and participative with close involvement of
the Board of Directors and repositions NABARD, RBI
and the Registrar of Co-operative Societies (RCS) as
external facilitators. As on 31 December 2010, 21
SCB and 10 SCARDB and state governments
concerned had executed DAP/MoU for 2007-12
(Phase IV) with NABARD. The DAP are regularly
monitored and reviewed in the State Level Task Force
(SLTF)/District Level Monitoring and Review Committee
(DLMRC) meetings.
ii. Co-operative Development Fund
4.22 The Co-operative Development Fund (CDF),
constituted in 1993 under Section 45 of NABARD
Act 1981, with an initial contribution of ` 10 crore,
is replenished every year through contributions from
NABARD's surplus. Assistance from the CDF is
available to co-operatives in the form of soft loans/
grants for resource mobilisation, human resource
development, capacity building and streamlining of
operations, building up quality MIS, etc., which in
turn contribute to their functional efficiency. During
2010-11, financial assistance of ` 6.43 crore was
sanctioned and ` 6.05 crore disbursed (including
disbursements against sanctions of previous years). As
on 31 March 2011, cumulative sanctions and
disbursements were ` 98.17 crore and ` 87.57 crore,
respectively. The balance in the Fund, as on 31 March
2011, stood at ` 125 crore.
iii. Organisation Development Initiatives
4.23 Organisation Development Initiatives (ODI)
being conducted by NABARD since 1994-95, is a
re-engineering process, which facilitates RRB and
Co-operative Banks in achieving sustainable
viability and financial inclusion. During 2010-11,
ODI have been conducted in 18 Co-operative
Banks (SCB and DCCB) and 2 RRB.
e. Other Developments
i. Core Banking Solution Project for
Cooperative Banks
4.24 NABARD has decided to offer support to
cooperative banks in Core Banking Solution (CBS),
under its repositioning initiatives. Cooperative Banks
have been advised to express willingness to opt for the
Application Service Provider (ASP) model of CBS.
Under the project, NABARD would play the role of an
advisor and facilitator and ensure that the interests of
the banks are protected throughout the implementation
process.
Table 4.15: Elected Boards under Supersession(As on 31 March 2010)
Particulars SCB* DCCB* SCARDB* PCARDB*
Total Institutions (No.) 31 370 20 697
Boards under 9 86 6 265
Supersession (No.)
Boards under 29 23 30 38
Supersession (%)
*: Data provisional
71
ii. Standard Audit Manual for PACS
4.25 NABARD-GIZ Rural Finance Institutions
Programme (RFIP) undertook the task of preparation
of Standard Audit Manual for PACS through study
visits to Gujarat and Orissa in May 2010. The
objectives were: (i) Revising audit framework for PACS
in consultation with the stakeholders; (ii) Developing a
Model/Standard Audit Manual for PACS based on the
revised audit framework; (iii) Developing audit rating
tool for PACS; and (iv) Developing a training
programme for PACS auditors on the revised audit
system. In order to have a better understanding of the
risk perceptions of PACS, a questionnaire was
circulated and requisite information obtained from 467
PACS of 49 DCCB in 9 States. Based on this
information, the draft audit manual for PACS is being
prepared.
f. Revival Package for Short-Term Rural
Co-operative Credit Structure
4.26 Twenty-five States (covering 96 per cent of the
STCCS in the country), have executed the MoU with
GoI and NABARD, for implementing the revival
package announced by the GoI in 2006. The
integrated package for units under the STCCS
envisages provision of liberal financial assistance
through Special Audits, introduction of legal/
institutional reforms and initiating measures to improve
the quality of management.
i. Special Audit and Release of Funds
4.27 Special audits of the units under STCCS, as
on 31 March 2004, were completed in 80,639 PACS
across 25 States to arrive at the precise amount of
losses after factoring in prudential provisioning norms
and the sharing pattern. The special audit of DCCB
has been completed in ten states and approval
pending from SLIC in respect of three States. Special
audits of SCB have been completed in 10 States.
While an amount of ` 8,661.45 crore has been
released by NABARD as GoI share for recapitalisation
of 53,380 PACS in sixteen states till 31 March 2011,
the State Governments have released ` 816.77 crore
as their share. During the year, ` 364.77 crore was
released to DCCB as GoI share in respect of 1,314
ineligible PACS in Gujarat and Maharashtra.
ii. Legal Reforms
4.28 The participating States are required to amend
their Co-operative Societies Acts (CSA) for securing
the democratic character and autonomy of
co-operatives and for their regulatory control by RBI.
So far, twenty one States have amended their CSA.
The draft amendments proposed by the remaining four
States have been vetted by NABARD, even as
previous amendments in two of these States are
awaiting Presidential assent. Based on the
amendments, the rules and bye-laws of the societies
are being revised by the States.
iii. Common Accounting System and
Management Information System, and
Computerisation in PACS
4.29 The process of adoption of Common
Accounting System (CAS) and Management
Information System (MIS) formulated for PACS is
underway in 16 States, while in the remaining States
where the MoU has been signed, the RCS concerned
have been advised to adopt CAS on the lines
suggested by NABARD. Training on CAS/ MIS has
also been initiated. Once operationalisation of CAS/
MIS is complete and development of capacities to
manually maintain the new system is achieved,
computerisation of CAS/MIS would start. The Core
Software has been finalised by NABARD and sent to
all 18 States that have opted for it. The revised
guidelines for rolling out of software, training of PACS
staff and hardware procurement were sent to all the
implementing states and the process of dry run is
being initiated in these States. Computerisation of
PACS is in progress in Andhra Pradesh, Haryana and
Tamil Nadu through software developed on their own.
Gujarat, Punjab, Jammu & Kashmir and Uttarakhand
are yet to decide on computerisation.
72
iv. HRD Initiatives
4.30 The package lays emphasis on training and
capacity building of Board Members and functionaries
of STCCS. Till date, training has been imparted to
330 master trainers from 23 States, who in turn have
trained 2,595 District Level Trainers (DLT). As on
31 March 2011, training has been imparted to 81,037
Secretaries of PACS from 18 States, 1,12,354 elected
Board Members of PACS from 14 States, 368 CEO of
DCCB from 16 States, CEO of SCB in six NER States
and 2,047 Directors of DCCB/ SCB from 14 States. In
addition, training on CAS/ MIS has been provided to
70,899 PACS functionaries and 4,173 bank
supervisors/ departmental auditors. During the year,
the following new modules were rolled out: (i) a five-
day in-campus orientation programme for Branch
Managers/ Senior Officers of DCCB/ SCB for business
development/ diversification. As on 31 March 2011,
1,582 Branch Managers/Senior Officers of DCCB/ SCB
have been trained; (ii) a new programme on Business
Development and Profitability for PACS Secretaries in
which 76 master trainers from 14 implementing States
were trained at Bankers Institute for Rural
Development (BIRD), Lucknow. These master trainers
have trained 556 DLT from six implementing states.
Further, 36,125 PACS staff in eight States have been
trained under this module.
v. Deposit Safety System for PACS
4.31 With a view to securing the deposits of PACS,
which would provide them a better standing among
members / clients and better access to finance, a draft
Institutional Protection and Deposit Safety Scheme
(IPDSS) for PACS was finalised and submitted to the
Govt of India for approval, which is awaited.
vi. Impact of the Revival Package
4.32 Reputed institutes like IIM, Bangalore and ISEC,
Bengaluru were entrusted with the task of conducting
A. Impact Studies
• Recap assistance has helped cleansing of Balance Sheet
and improved share capital of both PACS and DCCB.
• Govt. share holding reduced to less than 25% of the
total share capital in majority of the banks.
• Increase in volume of business and credit flow of DCCB
(Average Annual Growth Rate (AAGR) of 4% and 8%
in AP and Bihar, respectively) and of PACS (AAGR of
5% in MP, 37-106% in AP and 23% in Bihar).
• Reduction in NPAs of PACS and DCCB (AP, MP &
Bihar).
• PACS making conscious efforts to improve/diversify
business and earn profits.
• Increase in coverage of SF/MF by PACS.
• Elections conducted in all PACS and professionals
being co-opted on their Boards.
• CEO of DCCB being appointed as per "Fit & Proper
Criteria".
• CCS staff and Board Members imparted training under
eight modules.
• CAS introduced and training imparted.
B. World Bank Assessment
• CAS introduced and training imparted.
• Far reaching amendments to Co-operative Societies
Act.
• Elections to all three tiers of the CCS
• Introduction of Fit & Proper criteria to the Boards and
CEO of DCCB & SCB.
• Conduct of Statutory Audit by CA in DCCB & SCB.
• Training imparted country wide covering 2,40,000
(over 60,000 in World Bank funded states)
• Staff/Boards of DCCB trained in governance,
accounting and business planning.
• Ground level credit in the four states has increased by
120% in aggregate terms over March 2005.
• A 43% growth over March 2005 position has been
registered in the coverage of small and marginal
farmers.
• Recovery rates of the DCCB/SCB have improved.
Box 4.1
Impact of GoI Revival Package for STCCS
73
impact studies in six states, viz., Andhra Pradesh, Bihar,
Madhya Pradesh, Maharashtra, Rajasthan and Tamil
Nadu of the implementation of the revival package
during the last 3 years. Similarly, World Bank also
conducted monitoring studies in four states, viz.,
Gujarat, Haryana, UP and Odisha. The impact studies
by the IIM and ISEC and the World Bank assessment
have brought out a number of positive features
(Box 4.1).
g. Revival of Long-Term Rural
Co-operative Credit Structure
4.33 The Task Force, constituted by the GoI under
the Chairmanship of Shri G. C. Chaturvedi, to
review the need for a separate package for Revival
of Long Term Co-operative Credit Structure
(LTCCS), submitted its report to the GoI on
25 February 2010. Announcement of the Package
by the GoI is awaited.
B. Regional Rural Banks
a. Financial Performance
4.34 Post amalgamation, the number of RRB
operating in the country was 82, with a network of
15,938 branches (Table 4.16) spread over 618 districts
in twenty-six States and one UT (Puducherry). During
the year under review, the aggregate reserves,
deposits and investments of RRB increased by 20 per
cent each while loans and advances (outstanding)
increased by 22 per cent (Table 4.16).
4.35 Financial results of RRB for the year 2010-11
indicated that 79 out of 82 RRB had earned pre-tax
profit to the extent of ` 3470 crore, compared to
` 2515 crore in 2009-10. The viability of RRB, as on
31 March 2011, is expected to improve as compared
to the previous year. The estimated aggregate
reserves and net worth of all the RRB increased to
` 9,678 crore and ` 12,567 crore, respectively, in
2010-11. The accumulated losses of RRB decreased
by 23 per cent over the previous year. The
performance of RRB varied widely across the regions
in 2009-10. While all RRB in the Eastern, Northern
and Western regions were in profit, one RRB each in
Central, North-Eastern and Southern region incurred
losses (Table 4.17).
Table 4.16: Indicators of Performance of RRB(As on 31 March)
(` crore)
Particulars 2009 2010 2011 P
No. of RRBs (No.) 86* 82* 82
Branch Network (No.) 15181 15480 15938
Share Capital 197.00 197.00 197.00
Share Capital Deposit 3959.30 3984.90 3984.90
Reserves 6753.99 8065.26 9678.31
Deposits 120189.90 145034.95 174041.94
Borrowings 12734.65 18770.06 27216.59
Investments 65909.92 79379.16 95245.99
Loans & Advances 67802.10 82819.10 101039.30
(Outstanding)
Loans Issued 43367.13 56079.24 72903.01
RRB Earning Profit (No.) 80 79 79
Amount of Profit (A) $ 1823.55 2514.83 3470.47
RRB incurring Losses (No.) 6 3 3
Amount of Loss (B) 35.91 5.65 5.65
Net Profit (A -B) $ 1787.64 2509.18 3464.82
Accumulated Losses 2299.98 1775.06 1366.80
RRB with accumulated 31 27 26
losses (No.)
Recovery (%) 77.85 80.09 80.03
NPAs to loans outstanding (%) 4.14 3.72 3.50
Net worth 8610.31 10472.10 12566.52
* : Number reduced due to amalgamation
$ : Before Tax P : Provisional
74
b. Recovery Performance
4.36 The recovery performance of RRB was
estimated at 80.03 per cent, as on 30 June 2010,
compared to 80.09 per cent, as on 30 June 2009
(Table 4.17). RRB as a group in the Northern and
Southern region registered a recovery performance
above the national average. A recovery of above
80 per cent was achieved by 39 RRB in the country,
while 37 RRB had recovery levels ranging above 60
per cent but less than 80 per cent. Six RRB had
recovery more than 40 per cent but below 60 per cent
(Table 4.18).
c. Non-Performing Assets
4.37 The aggregate gross NPA of all RRB declined
from 4.14 per cent as on 31 March 2009 to 3.72 per
cent, as on 31 March 2010. Two regions, viz.,
Northern and Southern regions had NPA as
Table 4.17: Region-wise Working Results of RRB
(As on 31 March 2010)
(` crore)
Region RRB Profit Loss Net Accumu Loans & Gross NPA Recovery (%)No. Earning Incurring Profit lated Advances (As on
Losses O/S 30 June)
No. Amt. No. Amt. Amount % 2009 2010P
Northern 15 15 361.56 – – 361.56 208.00 13255.65 268.21 2.02 85.69 88.70
North-Eastern 8 7 96.35 1 2.98 93.37 163.52 3028.76 196.77 6.50 72.47 74.82
Southern 16 15 707.27 1 0.22 707.05 0.29 28472.27 600.17 2.11 82.83 81.40
Eastern 14 14 407.98 – – 407.98 1235.56 13310.90 933.70 7.01 74.58 73.10
Central 23 22 854.95 1 2.45 852.50 86.92 20790.35 905.93 4.36 75.45 75.01
Western 6 6 86.72 – – 86.72 80.77 3961.17 180.04 4.55 76.64 77.36
All India 82 79 2514.83 3 5.65 2509.18 1775.06 82819.10 3084.82 3.72 80.09 80.03
P : Provisional
< 40 0
> 40 and < 60 6
> 60 and < 80 37
>80 39
Nil
Bihar (1), Madhya Pradesh (1), Manipur (1), Odisha (1), Jharkhand (1), Karnataka (1)
Andhra Pradesh (3), Arunachal Pradesh (1), Assam (1), Bihar (2), Chhattisgarh (2), Gujarat (1), Jammu &
Kashmir (1), Jharkhand (1), Karnataka (2), Madhya Pradesh (5), Maharashtra (2), Meghalaya (1), Nagaland (1),
Odisha (3), Tripura (1), Uttar Pradesh (7), West Bengal (3)
Andhra Pradesh (2), Assam (1), Bihar (1), Chhattisgarh (1), Gujarat (2), Haryana (2), Himachal Pradesh (2),
Jammu & Kashmir (1), Karnataka (3), Kerala (2), Madhya Pradesh (2), Maharashtra (1), Mizoram (1), Odisha
(1), Puducherry (1), Punjab (3), Rajasthan (6), Tamil Nadu (2), Uttar Pradesh (3), Uttarakhand (2)
Table 4.18: Frequency Distribution of States According to Levels of Recovery of RRB(As on 30 June 2010)
Recovery (%) States
75
percentage to loans outstanding below the all-India
average. The gross NPA level is expected to be at 3.50
per cent, as on 31 March 2011.
d. Capital to Risk-Weighted Assets
Ratio
4.38 Consequent upon the release of (i)
recapitalisation assistance to RRB and (ii) funds under
ADWDR Scheme, 2008, the Capital to Risk-Weighted
Assets Ratio (CRAR) of RRB has improved. As on
31 March 2010, 53 out of 82 RRB had a CRAR of
9 per cent and above, while 6 RRB had CRAR between
7 and 9 per cent.
e. Capitalisation of RRB
4.39 After approving the major recommendations of
the Committee on Capitalisation of RRB for
maintaining CRAR (Chairman : Dr. K. C. Chakrabarty),
the GoI had made a provision of ` 350 crore for 2010-
11 in the Union Budget, for recapitalisation of RRB.
Against this, the GoI had released its share of
` 61.71 crore to four RRB as on 31 March 2011.
f. Performance Review by Govt. of India
4.40 In continuation of the mechanism for reviewing
the performance of RRB by GoI, introduced in
2007-08, a Review Meeting was held in July 2010,
under the Chairmanship of Hon'ble Union Finance
Minister. While appreciating the performance of RRB
in the areas of deposit growth, priority sector and
agricultural lending, reduction in NPA, etc., the
Hon'ble Union Finance Minister also advised RRB to
make earnest efforts to (i) achieve the goal of
opening 2000 new branches by 31 March 2011;
(ii) attain Gross NPA level of less than 5 per cent;
(iii) draw Action Plan for achieving 100 per cent
Financial Inclusion; (iv) bring all their branches under
CBS by September 2011; (v) prepare time-bound
plan for wiping out their accumulated losses and (vi)
make concerted efforts for improving CRAR.
g. Human Resource Development
4.41 Based on the recommendations of the
Amaresh Kumar Committee, the GoI issued the RRB
Service Regulations, 2010. GoI also notified the
RRB Appointment & Promotion Rules 2010, in
July 2010.
h. Development Initiatives
i. Branch Expansion Programme/Core
Banking Solution
4.42 RRB were given a target of opening 2000 new
branches by March 2011. In the current year, as on
31 March 2011, RRB had opened 463 new branches
taking the cumulative number of branches of all RRB
to 15938 spread over 618 districts, in 26 states and
one UT. It is now compulsory for all new branches to
be equipped with CBS. The sponsor banks are
required to extend all necessary help in this regard,
including financial assistance, training, back office
support, etc. RRB were directed by GoI to implement
CBS in all their branches by September 2011. As on
date, CBS has been fully implemented in 32 RRB and
is in progress in other RRB.
ii. Financial Inclusion
4.43 The RRB have emerged as a strong
intermediary for Financial Inclusion in rural areas
by opening large numbers of "No Frills' accounts
and financing under General Credit Card (GCC).
Total number of business accounts (deposit plus
loan accounts) with RRB stood at 1188.83 lakh, as
on 31 March 2010 (Table 4.19).
76
4.44 NABARD inspects SCB and DCCB in terms of
the powers vested under Section 35(6) of the Banking
Regulation Act, 1949 (As Applicable to Cooperative
Societies) and RRB under Section 35(6) of the
Banking Regulation Act, 1949. NABARD also
conducts voluntary inspections of SCARDB, Apex level
Co-operative Societies and Federations having
borrowings outstanding from it. Considering the
unique nature of all these institutions, the supervisory
role of NABARD, apart from ensuring conformity with
banking regulations and prudential norms, is very
comprehensive and holistic, encompassing inspections
(on-site and off-site), portfolio studies, monitoring,
guiding and facilitating functions. The periodicity of
statutory inspections of all SCB, DCCB and RRB not
complying with minimum capital requirements as
stipulated under the B.R. Act, 1949 (AACS)/ RBI Act
1934 and voluntary inspections of all SCARDB
continue to be annual. The statutory inspections of
those DCCB and RRB with positive net worth and
voluntary inspections of Apex Co-operative Societies/
Federations are conducted biennially.
A. Operational Matters
a. Inspection of Banks
4.45 During 2010-11, all the targeted statutory
inspections of 302 banks (31 SCB, 229 DCCB and
42 RRB) and voluntary inspections of 18 SCARDB and
3 Apex Societies had been conducted. The inspections
brought out supervisory concerns relating to these
institutions, which were communicated to the banks
concerned, RCS, State Governments (in respect of
co-operative banks) and Sponsor Banks (in respect of
RRB) for corrective action. NABARD also held
discussions with the Board of Directors of SCB/DCCB/
RRB apprising them of the deficiencies found in the
inspection and urging them to initiate immediate
remedial action. Besides, meetings were also held with
the CEO of the banks concerned, after 45 days of issue
of Inspection Reports, to secure satisfactory compliance
on core inspection findings. Supervisory ratings were
also conveyed confidentially to the Top Management of
the banks.
b. Board of Supervision
4.46 The Board of Supervision (BoS) constituted by
the Board of Directors of NABARD in 1999, met four
Table 4.19: Status of Financial Inclusion - RRB
(As on 31 March 2010)
(No. in lakh)
Of total Loan Accounts, major areas of
Financial Inclusion
Year No. of Of which, No. of SSI, artisans,
Deposit ‘No-Frills’ Loan SCC & retail
Accounts Accounts Accounts GCC SHG KCC Tenants trade
2007-08 758.02 81.17 171.20 2.35 7.20 69.84 1.03 20.78
2008-09 935.54 153.81 170.66 3.22 8.04 67.87 0.95 19.64
2009-10 1002.16 200.09 186.67 4.12 8.97 83.72 0.83 21.28
Supervision of Banks
77
times in 2010-11. It reviewed (i) the functioning of
SCB, DCCB and SCARDB as brought out in the
inspections; (ii) the functioning of co-operative credit
institutions in Andhra Pradesh, Punjab and Jharkhand;
(iii) the working of RRB sponsored by SBI, Union Bank
of India and Punjab National Bank; (iv) reports of
frauds in the supervised banks; (v) the functioning of
weak DCCB in Uttar Pradesh, Gujarat and Bihar;
(vi) the status of submission (including delay) of Banks'
compliance to inspection reports and delay in scrutiny
of compliance by NABARD RO; (vii) the Scheduling of
amalgamated RRB; (viii) the Exposure of SCB and
DCCB to Marketing Societies; and (ix) major
observations from the investment portfolio studies taken
up in some of the banks.
c. Health of Supervised Banks
i. Compliance with Minimum Share Capital
Requirements
4.47 During the year 2010-11, twenty DCCB
improved their financial position and recomplied with
the provisions of Section 11(1) of B.R. Act, 1949
(AACS). As on 31 March 2011, 68 banks
(5 SCB and 63 DCCB) were not complying with
the provisions of Section 11(1) of the B.R. Act, 1949
(AACS), i.e., minimum capital requirements.
Applications for grant of exemption in respect of
50 banks (1 SCB and 49 DCCB) were under the
consideration of the RBI/GoI.
ii. Grant of Licence/Scheduling of Banks
4.48 Pursuant to the recommendations of the
Committee on Financial Sector Assessment (CFSA)
[Chairman : Dr. Rakesh Mohan], the RBI had revised
the licensing norms for co-operative banks during
October 2009. As on 31 March 2010, the number of
licenced SCB and DCCB stood at 22 and 173,
respectively. During the year, RBI issued licences to 2
SCB and 49 DCCB, thus, increasing the number of
licensed banks to 246 (24 SCB and 222 DCCB), as on
31 March 2011. During the year, no SCB was included
in the Second Schedule to the RBI Act, 1934. Thus, the
number of scheduled SCB remained unchanged at 16.
4.49 From its very inception, all RRB were included
in the Second Schedule to the RBI Act 1934.
However, amalgamated RRB, being new entities could
become Scheduled Banks only with the approval of
the RBI, on the basis of recommendations given by
NABARD after conducting statutory inspection. Thirty-
nine amalgamated RRB were included by the RBI in
the Second Schedule to the RBI Act, 1934, after they
were found complying with Section 42(6)(a)(ii) of the
Act, ibid. With this, the number of Scheduled RRB
stood at 75 as on 31 March 2011. Inclusion of five
more RRB in the Second Schedule to RBI Act, 1934,
was recommended to RBI during 2010-11.
iii. Compliance with various Statutory
Provisions
4.50 As on 31 March 2011, five SCB and 63 DCCB
did not comply with Section 22(3)(a) of the B.R.Act,
1949 (AACS), as regards their capacity to pay their
depositors in full. Eight SCB and 186 DCCB did not
comply with Section 22(3)(b) of the Act, ibid., as the
affairs of these banks were conducted in a manner
detrimental to the interests of their depositors.
Similarly, out of the 16 Scheduled SCB, two were not
complying with Section 42(6)(a)(i) of the RBI Act,
1934 as regards minimum capital requirement of
` 5 lakh, and four were not complying with Section
42(6)(a)(ii) of the Act, ibid., as the affairs of these
banks were conducted in a manner detrimental to the
interests of their depositors. As on 31 March 2011, out
of 82 RRB, 75 complied with Section 42(6)(a)(i) of the
RBI Act, 1934 while 56 complied with Section
42(6)(a)(ii) of the Act, ibid.
B. Policy Decisions/Guidelines
a. Co-operative Banks
4.51 Keeping in view the relaxation in the licencing
norms for co-operative banks, the norms for
78
compliance with Section 22(3)(b) of B R Act, 1949
(AACS) were also relaxed. During the year, the
following important instructions/circulars were issued
to SCB and CCB: (i) instructions advising the
cooperative banks to issue engagement letters to
Statutory Auditors, specifying the areas to be covered;
(ii) a questionnaire/check list for the use of concurrent
auditors to ensure that all aspects are covered by the
auditors while reviewing the Investment Portfolio of
banks; (iii) circular on fraud prevention measures and
constituting Fraud Risk Management Group; (iv) a
Model Know Your Customer (KYC) / Anti-Money
Laundering (AML) Policy for adoption; (v) detailed
guidelines for inspection of DCCB, branches of SCB/
DCCB and affiliated societies; (vi) clarification on
calculation of Demand and Time Liabilities (DTL) for
maintenance of CRR/SLR; and (vii) guidelines to RCS
of all States and UT on opening of branches by DCCB,
consequent to the amendment of Co-operative Societies
Act as per GoI revival package for STCCS.
b. Regional Rural Banks
4.52 During the year, (i) RRB were permitted to
induct Nominee Director of NABARD in the Audit
Committee, with the approval of the Board; (ii) a
Model KYC/ AML Policy was circulated to all RRB
for adoption with suitable modifications; and
(iii) clarifications were issued to RRB on Disclosure
in Financial Statement in Half-Yearly Reviews.
C. Supervisory Interventions
4.53 Six Regional Supervision Seminars on internal
inspection and internal audit were conducted during
the year, for Co-operative banks and RRB. Training /
sensitisation programmes and workshops on
Investment Management, Asset Liability Management
(ALM), AML/ KYC, monitoring of frauds, prudential
norms and CMA were conducted for the auditors and
other personnel of SCB, DCCB and RRB. Two
training programmes were conducted in IDRBT,
Hyderabad, to acquaint the Bank's inspecting officers
with conducting of inspections in a Computerised
Environment. Four Regional Supervision Seminars
were conducted for the Bank's inspecting officers for
discussing various issues involved in inspection of
banks. A National Seminar on Audit was also
conducted in Bengaluru in May 2010, to sensitise the
auditors on issues relating to audit of co-operative
banks. A seminar was conducted for Inspecting
Officers of DoS, for a better understanding of the
deficiencies pointed out in the Inspection Reports
(IR), to ensure submitting proper compliance, by the
supervised banks, and to encourage issuing IR in
Hindi.
D. Advisory to Regional Offices
4.54 The Bank's Inspecting Officers were advised to
critically examine the management aspect of banks
(especially weak banks), incremental NPA, systemic risks,
KYC/ AML standards, etc., during the course of inspection,
and highlight them in the inspection reports so as to draw
the focussed attention of the management. With a view to
addressing the problem of reconciliation of inter-branch
and inter-bank accounts, Regional Offices were advised to
convene a meeting of all SCB and DCCB under their
jurisdiction, and prepare time bound action plan. Regional
Offices were also advised to monitor the receipt of
compliance reports and pursue with the supervised banks
for their timely submission.
E. Other Developments
4.55 For a holistic and more effective approach
towards supervision, especially in strengthening the
internal checks and control systems in the supervised
banks, NABARD continued to forge partnerships with
other agencies under the GIZ-RFIP programme and
with Institute of the Chartered Acccountants of India
(ICAI) for preparation of Audit Manual for
Co-operatives and RRB. NABARD also actively
supported the National Federation of State
Co-operative Banks (NAFSCOB) in revising the
operational manuals for Co-operative Banks.
79
V
Organisation, Corporate Governance and Management
In order to align itself with the changing financial and
credit markets, NABARD has initiated several steps to
reposition itself and face the challenges for becoming an
effective and sustainable development institution. Human
Resources are an integral part in the change process of an
organisation. Recognising this, the Bank continues its
emphasis on capacity building of the staff by upgrading
their skills and developing their expertise.
A. Board of Directors
5.2 The Board of Directors met six times during the
year, while the Executive Committee and the
Sanctioning Committee for Loans under RIDF met
thrice and seven times, respectively. The Audit
Committee of the Board (ACB) as well as the Risk
Management Committee of the Board (RMCB) met
thrice during the year.
5.3 The following changes took place in the
composition of the Board of Directors during the year:
(a) Shri. Rakesh Singh, Additional Secretary (FS),
Department of Financial Services, Ministry of
Finance, Government of India was appointed as
Chairman with effect from 03 December 2010
vice Shri. U. C. Sarangi, who demitted office on
02 December 2010 after completion of his term.
(b) Shri. Lakshmi Chand and Smt. Shashi Rekha
Rajagopalan were reappointed on the Board.
(c) Shri. K. Jayakumar, Additional Chief Secretary
(Home & Vigilance) and Agriculture Production
Commissioner, Government of Kerala was
appointed as Director vice Shri L. C. Goyal with
effect from 03 September 2010.
(d) Shri. J. C. Mohanty, Principal Secretary,
Department of Agriculture, Government of
Rajasthan was appointed as Director with effect
from 27 July 2010, vice Shri Roshan Lal.
Subsequently, Shri R. K. Meena, Principal
Secretary, Department of Agriculture, Government
of Rajasthan was appointed as Director with effect
from 20 January 2011 vice Shri. J. C. Mohanty.
(e) Shri. A. K. Sinha, Agriculture Production
Commissioner, Government of Bihar was
appointed as Director with effect from 27 July
2010, vice Shri. Letkhogin Haokip.
B. Senior Management
5.4 Four Executive Directors manage the operations
of the Bank. Dr. A. K. Bandyopadhyay was promoted as
Executive Director during the year. Shri P. L. Behera,
Executive Director retired on 31 January 2011 and
Dr. A. K. Bandyopadhyay, Executive Director retired on
31 March 2011.
C. Repositioning of NABARD
5.5 NABARD started the Project ‘Reposition’ in
March 2010, with a view to networking resources,
building capabilities and partnering institutions for
bringing about effective integrated rural development in
India. The project seeks to address the present day
challenges without conflicting with the long-term role
mandated to NABARD by GoI and RBI. During the
year, diagnostic and design phases were completed.
The pilot and implementation phases have commenced
(Box 5.1).
D. Inspection of NABARD
5.6 Reserve Bank of India conducted the 13th
Financial Inspection of NABARD (with reference to its
Management
80
financial position as on 31 March 2010) from
01 November 2010 to 13 December 2010.
E. Right to Information
5.7 The Bank has been complying with the statutory
requirements of the Right to Information (RTI) Act
2005. During the year, 737 applications were received
and requisite information provided within the
stipulated time. Ninety-four appeals were responded to
and 15 hearings on appeals made to Central
Information Commission were attended. Workshops
were conducted for four major Regional Offices, viz.,
Andhra Pradesh, Bihar, Gujarat and Uttar Pradesh.
Shri S K Mitra, Executive Director was designated as
the Transparency Officer for the Bank.
Human Resources Management
A. Training and Skill Upgradation
a. Staff Training
5.8 During 2010-11, officers (2,131) were imparted
training on various topics through 103 programmes
conducted by the National Bank Staff College (NBSC),
Lucknow. Customised training on Co-financing,
Software Development and System Analysis, Disaster
Management, etc., was imparted to 78 officers. Further,
18 on-location programmes were also conducted for
425 officers, covering topics like Tribal Development
Fund (TDF), Funds & Risk Management, Treasury &
Risk Management, Futures Trading, APRACA-
CENTRAB international programme on Financial
Inclusion, advanced training programme on SHG-Bank
Linkage, etc. Besides, 424 officers were deputed for
126 off-the-shelf programmes, workshops, seminars
and conferences organised by reputed institutions.
National Bank Training Centre (NBTC), Lucknow and
capital and farm asset maintenance needs of the individual
borrowers and affiliated PACS. This is being implemented on
a pilot basis. During the year, one proposal involving credit
limit of ` 100 crore was sanctioned.
• Adopting a comprehensive approach to financing and
supporting producer organisations: NABARD has taken
up a pilot initiative for supporting producer organisations,
adopting a flexible approach to suit the needs of the
producers. Two projects were taken up on a pilot basis and an
amount of ` 1.96 crore was sanctioned under UPNRM for
these. In order to give a special focus, the ‘Producer
Organisations Development Fund’ was set up during the year
with an initial corpus of ` 50 crore, for meeting the financial
requirements of this business vertical.
• Internal process redesign to enhance Human
Resource (HR) optimisation and improve turn-
around time: Simplification of the existing administrative
processes, doing away with redundant practices, enhancing
delegation of powers to reduce the reponse time and
complete migration to automation are the core areas of
intervention to improve the functional efficiency of the work
process in the Bank.
• Assisting the cooperative banks for setting up Core
Banking Solution (CBS): NABARD has decided to offer
support to cooperative banks by playing the role of an advisor
and facilitator. It will aggregate the demand across banks and
would assist them to identify a suitable product, negotiate
with vendors on behalf of the banks and extend project
management and advisory support during roll out of the
product. The CBS would be offered on an Application Service
Provider (ASP) model to co-operative banks. In this model,
the banks would be responsible for setting up infrastructure
facilities within the branch and HO. The CBS vendor will be
responsible for developing and customising CBS and other
application software, setting up and maintaining Data
Centres/ Disaster Recovery Centres and for providing network
connections. The vendor will also provide user training and
data migration support. The process of signing Memorandum
of Agreement (MoA) with the banks interested in joining CBS
initiative has started. As on 31 March 2011, 135 Banks (SCB
and DCCB) across 11 states and one UT have joined this
initiative.
• Direct Lending to District Central Cooperative Banks
(DCCB): A Short-term multi-purpose credit product has been
designed for direct lending to DCCB, for meeting working
Box 5.1
Repositioning of NABARD - Pilot interventions
81
Zonal Training Centre (ZTC), Hyderabad conducted 67
training programmes for 1075 Group ‘B’ and ‘C’ Staff
and pre-promotional training programmes for Group
‘B’ staff for promotion to the officer cadre.
b. Overseas Training/Visits by Top
Management
5.9 During the year, 145 officers from NABARD,
three from Client Institutions and 18 participants from
different Non-Governmental Organisations (NGO) were
deputed for various overseas training programmes,
exposure visits, seminars, meetings, etc. In addition, a
batch of 10 senior officers was deputed to a programme
on Risk Management and Performance in Brussels,
Belgium, organised by the World Savings Bank
Institute. Another batch of 10 senior officers was
deputed to RIPA International, London for
Programme on Implementing Sustainable Change and
Programme on Managing People through Change.
Dr. K. G. Karmakar, Managing Director, participated in
the London Business Forum organised by London
Business School, London and in the “Rehovot
Conference 2010 on Inclusive Sustainable
Development Initiatives” organised at Weitz Centre,
Israel, where he presented a paper on the topic
“Mainstreaming Financial Inclusion in India:
Sustainable Initiatives”. The Chairman, Shri Umesh
Chandra Sarangi attended the 58th EXCOM meeting
and 17th General Assembly of APRACA held in
Tashkent, Uzbekistan as well as the Alliance for
Financial Inclusion (AFI) Global Policy Forum 2010
held at Bali, Indonesia. He also attended the 59th
EXCOM meeting of APRACA held in Paris.
c. Support for Professional Studies
5.10 Under the modified Incentive Scheme, introduced
in April 2008, to encourage staff to pursue professional
studies through part time and distance learning
courses, 26 staff members availed of the facility during
the year. The major courses being pursued by the
employees are Chartered Financial Analyst (CFA),
Company Secretary (CS) and Master of Business
Administration (MBA) from reputed institutions.
d. E-learning
5.11 During the year, an E-learning programme for
235 officers was launched, in collaboration with the
Harvard Business School, USA. The course is of one-
year duration from 01 July 2010 to 30 June 2011 and
includes 16 compulsory and five optional topics, relevant
to developmental and promotional institutions.
B. Staff Matters
a. Recruitment and Promotion
5.12 During the year, 126 officers were appointed in
Grade ‘A’ in the Rural Development Banking Service of
the Bank. A total of 396 staff was promoted during the
year, of which 18, 27 and 57 officers were promoted to
Grade ’F’, ‘E’ and ‘D’, respectively. The details of the
number of staff promoted to other Grades are
presented in Table 5.1.
b. Staff Strength
5.13 The total staff strength of the Bank, as on
31 March 2011, was 4,607. Of these, 18 per cent
belonged to Scheduled Castes and 9 per cent to
Scheduled Tribes (Table 5.2). The strength of ex-
servicemen and physically handicapped employees
stood at 80 and 94, respectively, each constituting
about 2 per cent of the total staff strength.
Table 5.1: Promotions Effected During the Year
Particulars Total of which
SC ST
Officers from Grade ‘B’ to ‘C’ 103 18 12
Officers from Grade ‘A’ to ‘B’ 121 21 14
Group ‘B’ to officers' cadre (Grade A) 70 11 12
Total 294 50 38
Table 5.2: Total Staff Strength
Cadre Total of which
SC ST
Group ‘A’ 2758 407 209
Group ‘B’ 990 123 84
Group ‘C’ 859 306 106
Total 4607 836 399
82
A. Industrial Relations
5.14 Industrial relations in the Bank continued to be
harmonious during the year. Periodic discussions were
held between the Management and the All-India
National Bank Officers’ Association/All-India NABARD
Employees’ Association. The Memorandum of
Settlement on wage revision and service conditions of
the employees was signed between the Bank and the All
India NABARD Employees’ Association on
31 March 2011, on the basis of well-established
principles of negotiations. The Memorandum became
effective for a period of five years from 1 November
2007. The pay & allowances and service conditions of
the officers of the Bank were also revised after
discussions with the National Bank Officers’ Association.
B. Transparency / Consultative
Approach
i. Grievances Redressal System
5.15 Three meetings each of the Grievances Redressal
Committee and the Appellate Committee were held
during the year. Seventeen grievances and six appeals
were considered, of which 13 grievances and 4 appeals
were disposed.
ii. Joint Consultation Scheme for Officers
5.16 The Joint Consultative Committee [JCC]
comprising representatives from Bank Management and
National Bank Officers’ Association, met on 28 June
2010 for discussing issues of common interest in HR
areas.
C. Welfare Measures for SC/ST
Employees
5.17 The Bank continued to adhere to instructions
issued by GoI on reservation for SC/ST employees in
recruitment and promotion. Quarterly meetings of the
Senior Executives and Chief Liaison Officer with
representatives of the Welfare Association of SC/ST
employees were held at HO and RO. A team of
officials from Banking Division, Ministry of Finance,
GoI visited NABARD in May 2010 and reviewed the
Reservation Policy implemented by the Bank. The
team expressed satisfaction with the records maintained
in this regard and appreciated the Bank for its
favourable stance on reservation. Two pre-promotional
training programmes for 120 SC/ST staff were
conducted at the training centres. Other benefits
extended to SC/ST employees included granting
scholarship to 12 wards of the employees and
providing compassionate appointment to the
dependents of ten deceased employees.
D. Other Welfare Measures for the Staff
5.18 During the year, housing loans aggregating
` 39.65 crore were sanctioned to 343 employees. The
disbursements against sanctions, including sanctions of
previous year, amounted to ` 36.54 crore. The
fourteenth Annual Sports and Cultural Festival of the
Bank, NABOTSAV was held at Bhubaneswar between
21 and 25 November 2010.
E. Other Developments
5.19 The Communal Harmony Campaign Week and
Flag Day were observed from 19 to 25 November
2010, as directed by the Ministry of Finance,
Administration and Other Matters
83
Government of India. During the year, two Workshops
on ‘Human Resources Management and Disciplinary
Proceedings’ were conducted for 82 Senior Officers in
Bengaluru and Kolkata. The Central Complaints
Committee in HO and Committees in RO continued to
function effectively for prevention of sexual harassment
of women at workplace.
F. Library
5.20 The Central Library in HO at present houses
27,333 English and 5,762 Hindi books, 69 NABARD
publications, 66 RBI publications and 35 other
publications, besides 598 CD on various subjects.
G. Data Management
5.21 The revised and updated District Data Profile/
Banking Profile were included in the Potential Linked
Plan (PLP) for 2011-12. Two data products, (i) MIS for
Top Management giving the latest achievements in all
major business and development areas and (ii) Star
Performance Indicators indicating the comparative
position of achievements by RO in important functional
areas, were continued to be made available on
NABNET (intranet of the Bank) and updated every
month. Two new parameters, viz., achievements under
Financial Inclusion Fund (FIF) and Financial Inclusion
Technology Fund (FITF) vis-à-vis targets are to be
introduced in the Star Performance during 2011-12. An
innovative District Agricultural Development Indexation
(DADI) model called the “Clustering Method Model”
was successfully developed for comparing the status of
agricultural development in the Districts of
Maharashtra. One issue of “NABSTATS”, a bulletin of
Statistical Information incorporating the performance of
PACS, was also brought out during the year.
H. Information Technology
5.22 The Video Conferencing (VC) facility
inaugurated last year was used successfully during the
current year for interviewing candidates for
appointment and promotion. In addition, around 200
workshops/seminars/training programmes were
conducted through VC. The computer networking in
the Bank is being strengthened through installation of
latest switches. The existing Windows Operating System
(OS) would be replaced by Linux OS in a phased
manner, and initially, it will be installed in 10 per cent
of the newly purchased personal computers. The
Bank’s intranet portal “NABNET” became more user
friendly with an extensive search facility, during the
year. The mobile version of NABNET was also
launched in the year and can be accessed on
web-enabled mobile phones. Based on the report of
KPMG and the subsequent study undertaken by Boston
Consultancy Group (BCG), the repositioning
consultant, the Bank finalised its future IT architecture
and the IT road map to be implemented in phases,
which consists of the following: (a) Phase 1 – Human
Resources Management (b) Phase 2 – Centralised Loan
Management & Accounts (c) Phase 3 - Business
Processes (d) Phase 4 - Enterprise Data Warehouse.
Phases 1 and 2 were started during the year and
Project Management Groups were constituted for its
implementation. For the project in Phase 1, a contract
was awarded to the successful bidder and for the Phase
2 implementation, an Expression of Interest (EoI) was
invited. The Enterprise Resource Planning (ERP)
software on Human Resource Management (HRM)
would centralise, streamline and automate the entire
HR operations across the Bank, including payroll and
employee benefits. As a capacity building measure, the
IT personnel of the Bank were exposed to the latest
system/application software, database, viz. Oracle,
Windows Server 2008, Active Directory, etc.
84
I. Office Premises/Residential Quarters
5.23 Construction of office-cum-residence complex at
Port Blair was completed during the year. Construction
of Regional Office (RO)/Regional Training College
(RTC) Buildings continued to be in progress at
Bengaluru, Itanagar and Mangalore. The premises for
Jammu RO, Punjab RO & Haryana RO, RTC Bolpur
and Natural Resources Management Centre (NRMC),
Kolkata, and residential quarters at Chandigarh and
Lucknow are expected to enter construction phase
during 2011-12. Plots for construction of RO Buildings
at Raipur and Dehradun have been allotted by the
Chhattisgarh and Uttarakhand State Governments,
respectively. Further, purchase of plots for office
buildings/residential quarters is under process in
Agartala, Dimapur, Gangtok, Imphal and Patna.
Construction of residential flats is progressing in Raipur
and Ranchi.
5.24 The Bureau of Energy Efficiency (BEE) has
awarded a certificate with Four Star rating for the
Bank’s building at HO, determined on the basis of
energy efficiency norms fixed by them. A project of
converting solid waste into vermicompost was started in
the Bank’s Kandivli staff quarters complex in Mumbai.
Steps are on to replicate this in other staff quarters of
the Bank.
J. Vigilance
5.25 Four Preventive Vigilance Inspections of Regional
Offices were conducted by the Central Vigilance Cell
(CVC), HO, to ensure that the systems and procedures
were duly followed. In order to become more
transparent in its functioning and eliminating scope for
corruption, an interface has been created on NABARD
website (www.nabard.org) called ‘Application Status
Tracker System’, through which an applicant can track
the status of any application submitted to NABARD for
availing of services (grant/subsidy/soft loan, co-finance,
etc.) under various schemes. This system became
operational from 1 September 2010 and nine schemes
have been initially introduced. Central Vigilance Cell,
HO became a member of the ‘Vigilance Study Circle,
Mumbai’, for exchange of views among Public Sector
Undertakings on vigilance related matters. A ‘Vigilance
Awareness Week’ was observed in the Bank from
25 October to 1 November 2010.
K. Inspections and Concurrent Audits
5.26 During the year 2010-11, in accordance with
the Annual Inspection Programme approved by the
ACB, the Inspection Department of the Bank carried
out inspection of 16 HO Departments, 22 Regional
Offices and two Training Establishments, i.e., RTC
Mangalore and NBSC Lucknow. On conclusion of the
inspections and issue of Inspection Reports (IR), Flash
Reports (FR) incorporating positive features, major
areas of concern and SWOT analysis were submitted
to the Top Management. Memoranda and synopses
of IR issued together with compliance were placed
before the Management Committee (MC) and ACB for
deliberation and guidance. The Concurrent Audit of
Head Office Departments, continued to be out
sourced to external auditors, while the concurrent
audit of all RO/TE were undertaken by the Concurrent
Audit Cells (CAC) set up in the respective RO/TE. The
ACB reviewed the internal inspection/audit function in
the institution - the system, its quality and
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
85
Auditor’s report, inspection reports of RBI, etc., and
interacted with the external auditors before the
finalisation of the annual financial accounts and
report. The RMCB oversaw the functioning of the
Credit Risk Management, Asset and Liability
Management, Operational Risk Management and other
risks of the bank and guided in devising the policy
and strategy for integrated risk management for
containing various risk exposures of the Bank.
Inspection Department continued to monitor defaults
by client institutions and apprise the Top Management
of the status and follow up action initiated for
recovery of default, on a fortnightly basis.
L. Public Relations
5.27 NABARD continued to disseminate its
programmes and activities through the print and
electronic media. Guidance on matters of agriculture
and rural development was provided to a number of
visitors, students, researchers and agri-preneurs
throughout the year. The Bank also sponsored a
Coffee Table Book, ‘Harvest of Hope’, brought out by
the Ministry of Agriculture, Government of India, as a
tribute to the Indian farmers.
M. Visits of Parliamentary Committees
5.28 During the year, the following Parliamentary
Committees visited NABARD:
i. Parliamentary Standing Committee on Personnel,
Public Grievances, Law & Justice visited Mumbai,
Bengaluru & Chennai from 13-19 June 2010. The
Committee held discussions in Mumbai on 15 June
2010 regarding “Status of women employees,
service conditions, protection against exploitation,
incentives and other related issues”.
ii. Parliamentary Committee on Papers Laid on the
Table of the Rajya Sabha visited Mumbai,
Bengaluru, Chennai & Kolkata from 20-27 June
2010. The Committee held discussions in Mumbai
on 21 June 2010 regarding “Delayed laying of
Annual Reports and Audited Accounts of
NABARD” in Rajya Sabha.
iii. The Third Sub-Committee of the Committee of
Parliament on Official Languages inspected Central
Government offices located in Delhi, Coimbatore,
Salem, Bengaluru, Mumbai, Mehsana and
Ahmedabad from 21.10.2010 to 29.10.2010. It
held discussions in Mumbai on 26 October 2010
regarding “Progress of work related with Official
Language - Rajbhasha”
iv. The Committee on Subordinate Legislation, Rajya
Sabha visited Hyderabad and Chennai from 17-22
December 2010. It held discussions in Hyderabad
on 18 Dec 2010 and in Chennai on 21 December
2010 regarding: (i) the RRB (Appointment and
Promotion of Officers and Employees) Rules, 2010;
(ii) Priority Sector Lending Schemes with special
reference to micro-credit to farmers; and (iii)
Situation after the ADWDR Scheme, 2008.
v. The Committee on Government Assurances, Rajya
Sabha, held discussions in Port Blair, Chennai and
Kochi on 08, 10 and 11 February 2011,
respectively, regarding Assurance arising from:
(i) Unstarred Question (USQ) No. 2053 dated
08.12.2009 regarding appointment on
compassionate ground in RRB; and (ii) USQ
No. 3089 dated 23.04.2010 regarding time frame
for debt waiver scheme.
86
N. Promotion of Hindi
5.29 Hindi workshops were conducted during the
year, to facilitate increased usege of Hindi in office
work. Rajbhasha orientation programmes for senior
officers were also conducted at RTC, Mangalore and
NBSC, Lucknow. During the year, on-site inspections
of four RO were undertaken, with a view to ensuring
compliance with Rajbhasha Policy. Two RO, viz.,
Karnataka and Chhattisgarh were notified under
Section 10(4) of the Official Languages Act, 1963 by
GoI. Rajbhasha Shield for excellent work in Hindi
during 2009-10 was awarded to the best RO in
Regions ‘A’, ‘B’ & ‘C’, respectively and to one
Training Establishment and two HO Departments.
The Regional Implementation Office, Rajbhasha
Department, Ministry of Home Affairs, GoI also
awarded prizes to Andhra Pradesh RO, Maharashtra
RO and RTC, Mangalore. During the year, 109
Potential Linked Credit Plans and 69 IR were
prepared/issued in Hindi.
87
VI
Financial Performance & Management of Resources
NABARD, like any other financial organisation has put
in place a sound financial resources management
system. The management of funds by the Bank and its
financial performance during the year are detailed in
this Chapter.
6.2 The financial resources of NABARD (Table 6.1)
increased to ` 1,58,872 crore, as on 31 March 2011,
registering an increase of 16.57 per cent, over the
previous year. The funds deployed for investment
operations (including rural infrastructure development)
and for production and marketing activities (including
conversion) increased by ` 8,945 crore and
` 10,005 crore, respectively, as on 31 March 2011.
The total market borrowings stood at ` 34,747 crore,
as on 31 March 2011, constituting 21.87 per cent of
the total resources of the bank.
Sources of Funds
A. Capital, Reserves & Surplus
6.3 The paid up capital, as on 31 March 2011, was
` 2,000 crore against the authorised capital of
` 5,000 crore; with the share of GoI being
99 per cent and that of RBI at 1 per cent.
The amount of reserves and surplus increased by
` 1,188 crore, as on 31 March 2011.
B. National Rural Credit (Long Term
Operations) and the National
Rural Credit (Stabilisation) Funds
6.4 The National Rural Credit (Long Term
Operations) [NRC (LTO)] Fund and the National Rural
Credit (Stabilisation) [NRC (Stab.)] Fund are utilised
for investment operations and for conversion/
reschedulement of short-term credit, respectively.
These Funds are augmented by internal accruals and
contributions made by the RBI. During the year, an
amount of ` 62 crore was contributed to these Funds.
C. STCRC Fund
6.5 With a view to augmenting NABARD's resources
for short-term credit facilities to Co-operative
Institutions, the Short-Term Co-operative Rural Credit
(Refinance) [STCRC] Fund was set up in 2008-09 with
contributions by scheduled commercial banks not
achieving their priority sector obligations. From an
initial corpus of ` 4,622 crore, it was augmented with
an additional allocation of ` 5,000 crore each for
2009-10 and 2010-11. The outstanding under the
STCRC (Refinance) Fund, as on 31 March 2011,
stoodat ` 14,622 crore.
Table 6.1: Sources of Funds
(` crore)
Particulars 31.03.2010 31.03.2011
Amount Share Amount Share
(%) (%)
Capital, Reserves & Surplus 12,675 9.3 13,863 8.7
NRC (LTO) and (Stab.) Funds 15,983 11.7 16,045 10.1
STCRC Fund 9,622 7.1 14,622 9.2
Deposits 505 0.4 277 0.2
RIDF Deposits 59,869 43.9 67,878 42.7
Bonds & Debentures 20,004 14.7 26,788 16.9
Certificates of deposits 379 0.3 137 0.1
Term Money Borrowings 763 0.5 110 0.1
Commercial Paper 2,680 1.9 6,448 4.0
Borrowings from GoI 147 0.1 124 0.1
Borrowings from CB* 500 0.4 0 0.0
Foreign Currency Loan 494 0.4 503 0.3
Borrowing under CBLO 215 0.2 0 0.0
Borrowings against STD 0 0 360 0.2
Other Liabilities/Funds 12,456 9.1 11,717 7.4
Total 1,36,292 100.0 1,58,872 100.0
* CB : Commercial Banks
88
D. Deposits
i. Term Deposits
6.6 The amount of term deposits and deposits
received from the tea, coffee and rubber companies
aggregated ` 277 crore, as on 31 March 2011, as
against ` 505 crore at the end of the previous year,
reflecting a decrease of ` 228 crore during the current
year. This was mainly due to redemption of term
deposits of ` 344 crore during the year. However, tea,
coffee and rubber deposits rose from ` 124 crore, as on
31 March 2010, to ` 228 crore as on 31 March 2011.
ii. RIDF Deposits
6.7 During the year, RIDF Deposits from
commercial banks under RIDF VIII to XVI aggregated
` 13,056.22 crore, with repayments being ` 5,047.23
crore under RIDF VI to XVI. As on 31 March 2011,
aggregate outstanding RIDF deposits stood at
` 67,878 crore, as against ` 59,869 crore at the end of
the previous year, resulting in a net inflow of
` 8,009 crore, an increase of 13.4 per cent over the
deposits held as on 31 March, 2010.
E. Borrowings
i. Capital Gains Bonds
6.8 Capital Gains Bonds aggregating ` 354.11 crore
were redeemed during the year 2010-11 and the
outstanding, at the end of March 2011, under this
segment of borrowing was ` 7.53 crore.
ii. Corporate Bonds
6.9 Corporate Bonds amounting to ` 9,320 crore
were issued during the year while ` 2,513 crore were
redeemed. The amount outstanding, at the end of
March 2011, stood at ` 21,682 crore.
iii. Statutory Liquidity Ratio Bonds
6.10 Statutory Liquidity Ratio (SLR) Bonds worth
nearly ` 90 crore were redeemed and the outstanding
aggregated ` 99 crore, as on 31 March 2011.
iv. Bhavishya Nirman Bonds
6.11 During the year, additional funds to the tune of
` 421 crore were mobilised under Bhavishya Nirman
Bonds (BNB). The outstanding, as on 31 March 2011,
stood at ` 4,975 crore as against the outstanding as on
31 March 2010 at ` 4,554 crore.
v. NABARD Rural Bonds
6.12 No fresh bonds were issued during the year.
The outstanding at the end of March 2011 stood at
` 24 crore.
vi. Certificates of Deposits
6.13 Fresh borrowings through Certificates of
Deposits (CD) of ` 137 crore were mobilised and
` 379 crore were redeemed during the financial year.
The outstanding balance was ` 137 crore, as on
31 March 2011.
vii. Term Money Borrowings
6.14 Term Money Borrowings (TMB) of three to six
months tenor were resorted to, in order to meet
short-term requirements. TMB worth ` 557 crore were
raised and repayments to the tune of ` 1209 crore
were made, leaving an outstanding of ` 110 crore, as
on 31 March 2011, compared with the outstanding of
` 762 crore, as at the end of March 2010.
viii. GoI Borrowings
6.15 There were no borrowings from Government of
India during the year 2010-11 whereas repayments of
` 23 crore, on maturity of loans drawn under various
externally aided projects, were made. The outstanding
in respect of borrowings from GoI stood at
` 124 crore, as on 31 March 2011, as against
` 147 crore, outstanding as on 31 March 2010.
89
ix. Borrowings from Commercial Banks
6.16 There were no fresh borrowings during the year,
but ` 500 crore of past borrowings were repaid in full.
x. Borrowings in Foreign Currency
6.17 An amount of ` 48 crore was drawn under KfW
(UPNRM) which resulted in borrowings in foreign
currency from KfW, Germany, aggregating ` 503 crore,
as on 31 March 2011. The foreign exchange risk on this
loan as well as interest payments have been fully
hedged at an average annual cost of 1.54 per cent for
10 years.
xi. Borrowings against Short Term Deposits
6.18 The investment policy of the bank was amended
to allow borrowings against Short Term Deposits (STD)
placed by NABARD with other banks in order to meet
liquidity requirements. As interest rates moved up, this
option proved to be cheaper than raising resources
through CP and CD. The outstanding borrowings against
STD stood at ` 360 crore.
Uses of Funds
A. Short Term Loans, Medium Term
(Conversion) Loans and Liquidity
support
6.19 The ST (SAO) loans advanced to the SCB at
` 23,484 crore and RRB stood at ` 9,605 crore.
Together with ST (OSAO) loans to SCB at
` 198 crore and RRB at ` 598 crore, the total
outstanding ST loans increased to ` 33,885 crore at
the end of the year. There has been a growth of
40.8 per cent in availing of refinance by credit
institutions under this segment (Table 6.2).
Table 6.2: Uses of Funds
(` crore)
Particulars 31.03.2010 31.03.2011
Amount Share (%) Amount Share (%)
Cash and Bank Balance 9,628 7.1 10,537 6.6
Government Securities and other Investments 3,785 2.8 5,868 3.7
CBLO 0 0 228 0.1
Production and Marketing Credit 24,073 17.7 33,885 21.3
Conversion of Production Credit into MT Loans 0 0 193 0.1
Liquidity Support 20 0.1 0 0.00
MT & LT Project Loans * 35,742 26.2 38,896 24.5
LT Non Project Loans 199 0.1 167 0.1
Loans out of RIDF 60,255 44.2 66,078 41.7
Co Finance Loans(net of provision) 84 0.0 88 0.1
Other Loans (including Interim finance) 133 0.1 182 0.1
Fixed & Other Assets 2,373 1.7 2,750 1.7
Total 1,36,292 100.0 1,58,872 100.0
* : Including the amount subscribed to Special Development Debentures of SCARDB, which are in the nature of “Deemed
Advances”
90
B. Project Loans under RIDF
6.20 RIDF loans to State Governments stood at
` 66,078 crore, as on 31 March 2011, compared with
` 60,255 crore at the end of previous year, recording a net
outflow of ` 5,823 crore during the year (Table 6.2).
C. Non-Project Loans
6.21 The amount outstanding under the non-project
long-term (LT) loans granted to State Governments for
contributing to the share capital of co-operative credit
institutions, amounted to ` 167 crore on 31 March 2011.
There was a decrease of ` 32 crore as compared to the
position as on 31 March 2010 (Table 6.2).
D. Investment Credit
6.22 Refinance assistance extended to banks for
medium and long term investment credit reached a level
of ` 38,896 crore, as on 31 March 2011 as against
` 35,742 crore, at the end of previous year. During the
year, refinance provided for investment credit activities
grew by 8.83 per cent (Table 6.2).
E. Co-finance
6.23 The Bank entered into agreements with
commercial banks to co-finance various projects. The
outstanding (net of provision), as on 31 March 2011,
stood at ` 88 crore (Table 6.2).
F. Other Loans
6.24 Other loans extended out of different Funds
(CDF, MFDEF, WDF, TDF, KfW UPNRM, FIPF, and
NFS promotional activities) stood at ` 182 crore as on
31 March 2011 (Table 6.2).
G. Investment of Surplus Funds
6.25 The surplus funds were deployed in Government
Securities and other Financial Instruments to the extent
of ` 6,097 crore and amounts aggregating ` 9,002 crore
were kept in the form of Short Term Bank Deposits to
meet liquidity and contingency requirements, as on
31 March 2011.
Income and Expenditure
6.26 The total income of NABARD during the year
amounted to ` 9,202 crore as against ` 7,965 crore
for the year 2009-10. The profit before tax (PBT) and
profit after tax (PAT) were at ` 1,824 crore and
` 1,279 crore, respectively, during the year, as
compared to the PBT and PAT of ` 2,272 crore and
` 1,558 crore, respectively, in the previous year. The
average cost of borrowings (interest expenditure as a
per cent of average borrowings) decreased from 6.83
per cent per annum during 2009-10 to 6.64 per cent
per annum during 2010-11, due mainly to redemption
of high cost borrowings. An amount of ` 360 crore,
` 50 crore, ` 10 crore and ` 801 crore, respectively,
were transferred to Special Reserve u/s 36(1) (viii) of
IT Act 1961, NRC (LTO) Fund, NRC (Stabilisation)
Fund and Reserve Fund. Further, an aggregate amount
of ` 261 crore was transferred to various Funds, viz.,
Cooperative Development Fund, Research and
Development Fund, Investment Fluctuation Reserve,
FIF, FITF, FTTF and FIPF.
Capital Adequacy
6.27 The capital to risk-weighted assets ratio (CRAR)
was 21.76 per cent, as on 31 March 2011, as
compared to 24.95 per cent, as on 31 March 2010, as
against a minimum 9 per cent stipulated by RBI.
Asset-Liability Management
6.28 The Asset-Liability Management Committee
(ALCO) of the Bank oversees the monitoring and
management of market risk. ALCO also manages
liquidity/interest rate risks, as per the comprehensive
ALM/liquidity policies approved by the Board. The
role of ALCO includes, inter-alia, reviewing the Bank's
currency-wise structural liquidity and interest-rate
sensitivity positions vis-à-vis prudential limits
prescribed by the RBI/Board, monitoring results of
periodical stress testing of cash flows and identifying a
suitable ALM strategy.
92
P. Parikh & Associates
HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009,
Tel : 23443549, 23437853, Fax : 23415455,
Website : www.pparikh.com
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, 2011 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 12 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 03, 2011 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 17 Regional Offices and 2
Training Centers which have not been subjected to audit. These unaudited offices account for 19.29% of advances (includes
deemed advances as per Note B-14(c) of Schedule 18), 0.04% of deposits and term money borrowings, 17.97% of interest
income (includes interest on ‘deemed advances’ as per Note B-14(b) of Schedule 18) and 0.08% of interest expenses. These
financial statements are the responsibility of the Bank’s 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 Bank 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, 2011; 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 For and on behalf of
Date: May 30, 2011 P. Parikh & Associates
Chartered Accountants
Firm Registration No. 107564W
Ashok Rajagiri
Partner,
Membership No.: 046070
93
(` in '000)
Sr. FUNDS AND LIABILITIES SCHEDULE As on As on
No. 31.03.2011 31.03.2010
1. Capital 2000,00,00 2000,00,00
(Under Section 4 of the NABARD Act, 1981)
2. Reserve Fund and other Reserves 1 11862,72,33 10674,59,96
3. National Rural Credit Funds 2 16045,00,00 15983,00,00
4. Funds out of grants received from International Agencies 3 138,89,56 149,87,64
5. Gifts, Grants, Donations and Benefactions 4 2601,89,23 4706,76,57
6. Other Funds 5 3431,47,40 2735,06,36
7. Deposits 6 82776,67,53 69996,02,03
8. Bonds and Debentures 7 26788,21,49 20004,38,12
9. Borrowings 8 7681,29,10 5177,79,68
10. Current Liabilities and Provisions 9 5546,09,80 4864,62,84
Total 158872,26,44 136292,13,20
Forward Foreign Exchange Contracts 592,09,63 563,65,54
(Hedging) as per contra
(` in '000)
Sr. PROPERTY AND ASSETS SCHEDULE As on As on
No. 31.03.2011 31.03.2010
1 Cash and Bank Balances 10 107,65,26,79 9628,33,75
2 Investments 11 193,29,50,93 17199,09,54
3 Advances 12 126027,99,95 107092,24,68
4 Fixed Assets 13 229,48,63 234,71,82
5 Other Assets 14 2520,00,14 2137,73,41
Total 158872,26,44 136292,13,20
Forward Foreign Exchange Contracts (Hedging) as per contra 592,09,63 563,65,54
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 K. S. Padmanabhan
Partner : Chief General Manager
M. No. 046070 Accounts Department
Mumbai Mumbai : May 30, 2011
Date : May 30, 2011
Rakesh Singh Dr. K C Chakrabarty Alok Nigam K Jayakumar
Chairman Director Director Director
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
BALANCE SHEET AS ON 31 MARCH 2011
94
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2011 (` in '000)
Sr. No. INCOME SCHEDULE 2010-11 2009-10
1 Interest received on Loans and Advances 8169,13,99 6653,31,462 Income from Investment Operations/Deposits
(Refer Note B-4 of Schedule 18) 943,23,85 1255,68,933 Other Receipts (Refer Note B-6 & B-30 of Schedule 18) 89,63,23 55,79,62
Total "A" 9202,01,07 7964,80,01
Sr.No. EXPENDITURE SCHEDULE 2010-11 2009-10
1 Interest and Financial Charges(Refer Note B-5 of Schedule 18) 15 6193,86,85 4988,45,58
2 Establishment and Other Expenses 16 A 1126,09,88 547,97,743 Provisions 16 B 35,60,34 132,62,064 Depreciation 22,57,98 23,29,36
Total "B" 7378,15,05 5692,34,74
5 Profit before Tax (A - B) 1823,86,02 2272,45,276 a) Provision for Income Tax 460,00,00 647,00,00
b) Provision for Deferred Tax -( Asset)(Refer Note B-11 of Schedule 18) 84,65,00 67,19,00
7 Profit after Tax 1279,21,02 1558,26,27
Significant Accounting Policies and Notes on Accounts 18
Schedules referred to above form an integral part of accounts
PROFIT AND LOSS APPROPRIATION ACCOUNT(` in '000)
Sr.No. APPROPRIATIONS / WITHDRAWALS 2010-11 2009-10
1. Profit for the year brought down 1279,21,02 1558,26,272.1 Add: Withdrawals from funds against
expenditure debited to Profit & Loss A/ca) Co-operative Development Fund (Refer Schedule 1) 6,05,32 3,83,04b) Research and Development Fund (Refer Schedule 1) 17,67,49 9,82,99c) Watershed Development Fund (Refer Schedule 5) 1,01,14 44,70,44d) Micro Finance Development and Equity Fund (Refer Schedule 5) 11,40,75 10,01,05e) Investment Fluctuation Reserve (Refer Schedule 1) 2,07,65 0f) Farm Innovation & Promotion Fund 2,39,20 96,94g) Financial Inclusion Technology Fund 0 1,00,00
2.2 Withdrawals of funds which have been closedi) Foreign Currency Risk Fund (Refer Note B-18 of Schedule 18) 147,06,04 0ii) Soft Loan Assistance Fund for Margin Money (Refer Note B-18 of Schedule 18) 10,00,00 0iii) Agriculture & Rural Enterprise Incubation Fund (Refer Note B-18 of Schedule 18) 5,00,00 0
3. Profit available for Appropriation 1481,88,61 1628,60,73Less: Transferred to:a) Special Reserves u/s 36(1) (viii) of IT Act, 1961 360,00,00 350,00,00b) National Rural Credit (Long Term Operations) Fund 50,00,00 400,00,00c) National Rural Credit (Stabilisation) Fund 10,00,00 10,00,00d) Co-operative Development Fund 6,05,32 3,83,04e) Research and Development Fund 17,67,49 9,82,99f) Investment Fluctuation Reserve (Refer Schedule 1) 116,07,65 30,00,00g) Farmers Technology Transfer Fund 33,55,54 64,58,40h) Farm Innovation & Promotion Fund (Refer Schedule 1) 2,34,20 96,94i) Producers' Organization Development Fund (Refer Note B-17 of Schedule 18) 50,00,00 0j) Rural Infrastructure Promotion Fund (Refer Note B-17 of Schedule 18) 25,00,00 0k) Financial Inclusion Technology Fund 10,00,00 0l) MFDEF Reserve Fund 0 80,00,00m) Reserve Fund 801,18,41 679,39,36
Total 1481,88,61 1628,60,73
Refer Schedule 18 for Significant Accounting Policies and Notes on Accounts
As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN. 107564W
Ashok Rajagiri K. S. PadmanabhanPartner : Chief General ManagerM. No. 046070, Mumbai Accounts DepartmentDate : May 30, 2011 Mumbai : May 30, 2011
Rakesh Singh Dr. K C Chakrabarty Alok Nigam K JayakumarChairman Director Director Director
95
SCHEDULES TO BALANCE SHEET
Schedule 1 – Reserve Fund and Other Reserves(` in '000)
Sr. Particulars Opening Additions/ Transferred Transferred Balance as on
No. Balance adjustments From P&L to P&L 31.03.2011
as on 01.04.2010 during the year Appropriation Appropriation
1 Reserve Fund 5902,73,39 0 801,18,41 0 6703,91,80
2 Research and Development Fund 50,00,00 0 17,67,49 17,67,49 50,00,00
3 Capital Reserve 74,80,53 0 0 0 74,80,53
4 Investment Fluctuation Reserve 145,00,00 0 116,07,65 2,07,65 259,00,00
5 Co-operative Development Fund 125,00,00 0 6,05,32 6,05,32 125,00,00
6 Soft Loan Assistance Fund for Margin Money 10,00,00 0 0 10,00,00 0
7 Agriculture & Rural Enterprise Incubation Fund 5,00,00 0 0 5,00,00 0
8 Foreign Currency Risk Fund 147,06,04 0 0 147,06,04 0
9 Special Reserves Created & Maintained
u/s 36(1)(viii) of Income Tax Act, 1961 4085,00,00 0 360,00,00 0 4445,00,00
10 Producers' Organizations Development Fund 0 0 50,00,00 0 50,00,00
11 Rural Infrastructure Promotion Fund 0 0 25,00,00 0 25,00,00
12 MFDEF - Reserve Fund 80,00,00 0 0 0 80,00,00
13 Farm Innovation & Promotion Fund 50,00,00 5,00 2,34,20 2,39,20 50,00,00
Total 10674,59,96 5,00 1378,33,07 190,25,70 11862,72,33
Previous year 9535,20,60 0 1154,02,32 14,62,96 10674,59,96
Schedule 2 – National Rural Credit Funds
(` in '000)
Sr. Particulars Opening Balance Contribution by Transferred from Balance as on
No. as on 01.04.2010 RBI P&L 31.03.2011
Appropriation
1. National Rural Credit (Long Term Operations) Fund 14417,00,00 1,00,00 50,00,00 14468,00,00
2 National Rural Credit (Stabilisation) Fund 1566,00,00 1,00,00 10,00,00 1577,00,00
Total 15983,00,00 2,00,00 60,00,00 16045,00,00
Previous year 15571,00,00 2,00,00 410,00,00 15983,00,00
Schedule 3 – Funds out of Grants received from International Agencies
(` in '000)
Sr. Particulars Opening Grants received/ Interest Exp./Disb./adjusted Balance
No. Balance as on adjusted during credited to during the as on
01.04.2010 the year the Fund year 31.03.2011
1 National Bank - Swiss
Development Coop. Project 55,61,77 0 0 0 55,61,77
2 Rural Innovation Fund (RIF)
(Refer Note B-2 & 8 of Schedule 18) 83,30,56 0 4,14,13 14,28,31 73,16,38
3 Rural Promotion Fund
(Refer Note B-2 & 8 of Schedule 18) 8,05,29 79,06 1,17 (-)33,97 9,19,49
4 KfW - NABARD V Fund for Adivasi Programme 2,90,02 15,60,31 0 17,58,41 91,92
Total 149,87,64 16,39,37 4,15,30 31,52,75 138,89,56
Previous year 154,81,79 16,31,68 4,73,69 25,99,52 149,87,64
96
Schedule 4 – Gifts, Grants, Donations and Benefactions
(` in '000)
Sr. Particulars Opening Grant received Interest Adjusted Balance as on
No. Balance as on during Credited to against the 31.03.2011
01.04.2010 the year the Fund expenditure
A.
1 KfW - NB - IX Adivasi Development Programme -
Maharashtra (Refer Note B- 8 of Schedule 18) 6,69 16,85,25 18,84 16,32,36 78,42
2 KfW UPNRM - Accompanying Measures (-)7,30 2,86,84 1,07 2,63,73 16,88
3 KfW NB UPNRM - Financial Contribution 7,84 82,48 0 9,32 81,00
4 KfW UPNRM - Risk Mitigation Fund 11,74 52,94 0 52,94 11,74
5 International Fund for Agriculture Development
(IFAD) Priyadarshini (-)19,11 5,82,80 0 97,25 4,66,44
6 GTZ - Uttarakhand Regional Economic Development 86,39 0 0 0 86,39
7 KfW-NB-Indo German Watershed Development Programme -
Phase III - Maharashtra (Refer Note B- 8 of Schedule 18) 3,53,07 27,85,06 5,80 31,41,60 2,33
8 Indo German Watershed Development Programme -
Andhra Pradesh (Refer Note B- 8 of Schedule 18) 0 11,64,69 71 11,64,67 73
9 Indo German Watershed Development Programme -
Gujarat (Refer Note B- 8 of Schedule 18) 27,54 3,46,06 53 3,73,98 15
10 Indo German Watershed Development Programme -
Rajasthan (Refer Note B- 8 of Schedule 18) 0 1,93,75 1,78 1,95,53 0
11 KfW Umbrella Programme on Natural Resource
Management Fund (Refer Note B- 3 of Schedule 18) 9,18,96 1,55 0 0 9,20,51
12 NABARD Grant for Fixed Assets under NB-SDC HID Project 6,60 0 0 0 6,60
13 GTZ-NABARD RFP - Financial Component 0 0 0 (-)1,00 1,00
14 NE Council Fund for Miscellaneous Training Programme 1,98 50,00 0 50,19 1,79
15 KfW NB SEWA Bank Capitalisation of
Rural Financial Institutions (RFIs) 0 2,66,73 0 2,64,07 2,66
16 GTZ Rural Financial Institutions Program (RFIP) 42,18 74,24 0 58,42 58,00
B.
1 Capital Investment Subsidy for Cold Storage Projects - NHB 19,59,17 43,84,47 0 44,24,97 19,18,67
2 Capital Subsidy for Cold Storage NHM 9,66 0 0 0 9,66
3 Capital Subsidy for Cold Storage TM North East 4,31,44 11,12,24 0 11,05,72 4,37,96
4 Credit Linked Capital Subsidy for
Technology Upgradation of SSIs 12,00 11,11,11 0 11,16,88 6,23
5 Capital Investment Subsidy for Rural Godowns 14,21,96 96,03,00 0 70,86,02 39,38,94
6 On-farm Water Management for Crop Production 1,92 0 0 1,92 0
7 Million Shallow Tubewell Programme - Bihar 2,63,15 0 0 0 2,63,15
8 Bihar Ground Water Irrigation Scheme (BIGWIS) 199,65,41 0 0 16,76,38 182,89,03
9 Cattle Development Programme -
Uttar Pradesh (Refer Note B- 8 of Schedule 18) 3,84 1,90,10 8,98 1,76,31 26,61
10 Cattle Development Programme - Bihar
(Refer Note B- 8 of Schedule 18) 1,09,49 0 9,28 19,31 99,46
11 National Project on Organic Farming 2,24,74 0 0 2,18,52 6,22
12 Integrated Watershed Development Programme -
Rashtriya Sam Vikas Yojana 10,01,18 25,00,00 0 20,78,63 14,22,55
13 Centrally Sponsored Scheme on Integrated
Development of Small Ruminants and Rabbits 3,00,00 2,00,00 0 1,55,45 3,44,55
14 Rain Water Harvesting Scheme 83,11 0 0 (-) 6,82 89,93
97
Schedule 4 – Gifts, Grants, Donations and Benefactions
(` in '000)
Sr. Particulars Opening Grant received Interest Adjusted Balance as on
No. Balance as on during Credited to against the 31.03.2011
01.04.2010 the year the Fund expenditure
15 Kutch Drought Proofing Project 64,47 0 0 25,12 39,35
16 Dairy and Poultry Venture Capital Fund 16,34,61 12,00,00 0 16,06,96 12,27,65
17 Poultry Venture Capital Fund 7,58,50 (-)1,90,93 0 5,86 5,61,71
18 Scheme for providing Financial Assistance to
Sugar Undertakings - 2007 (SEFASU - 2007) 77,07,92 257,87,91 0 200,12,98 134,82,85
19 Capital Subsidy for Agriculture Marketing
Infrastructure, Grading and Standardisation 5,00,53 98,79,64 0 83,14,54 20,65,63
20 Centrally Sponsored Scheme for establishing Poultry Estate 2,21,27 3,75,76 0 0 5,97,03
21 Livelihood Advancement Business School -
Sultanpur, Uttar Pradesh (Refer Note B- 8 of Schedule 18) 41,98 0 2,08 41,90 2,16
22 Livelihood Advancement
Business School - Rae Bareli, Uttar Pradesh
(Refer Note B- 8 of Schedule 18) 81,53 0 5,62 32,68 54,47
23 Multi Activity Approach for Poverty Alleviation -
Sultanpur, Uttar Pradesh
(Refer Note B- 8 of Schedule 18) 47,00 0 4,14 0 51,14
24 Multi Activity Approach for Poverty
Alleviation - BAIF - Rae Bareli, Uttar Pradesh
(Refer Note B- 8 of Schedule 18) 1,25,93 0 11,08 0 1,37,01
25 GTZ UPNRM Technical Collaboration 0 92,52 0 53,31 39,21
26 CSS - on Pig Development 0 1,50,00 0 1,48,42 1,58
27 Dairy Entrepreneurship development Scheme 0 20,40,00 0 9,94,48 10,45,52
28 CSS - S & R Male Buffaloe calves 0 1,92,00 0 0 1,92,00
29 CSS - JNN Solar Mission 0 35,00,00 0 3,60,81 31,39,19
30 CSS - on Rural Slaughter Houses 0 20,33 0 10,41 9,92
31 Capital Subsidy Scheme -
Agri Clinics and Agri Business Centres 1,10,05 1,89,34 0 1,39,78 1,59,61
32 Artificial Recharge of Groundwater in Hard Rock Area 1256,16,00 0 0 11,96 1256,04,04
33 ISSPUAF (4% Interest Subvention scheme - Avian Flu) 0 1,68,00 0 1,68,00 0
34 United Nation Development Programme(UNDP) -
NABARD-Financial Inclusion Fund (-)11,32 1,62,37 0 2,60,79 (-)1,09,74
35 Agricultural Debt Waiver and Debt Relief Scheme (ADWDR)2008 2930,24,82 1240,12,00 0 3750,51,57 419,85,25
36 Interest Subvention (Sugar Term Loan) 7,31,37 31,60,00 0 38,71,73 19,64
C Revival Package of Short Term Cooperative
Credit Structure
1 Cost of Special Audit 160,047 (-)4,00,00 0 15,132 104,915
2 Recapitalisation Assistance to Credit Cooperative Societies 19,135 10,279,600 0 6,892,310 3,406,425
3 Technical Assistance 320,979 (-)160,000 0 21,906 139,073
4 Human Resources Development 525,539 (-)320,000 0 114,512 91,027
5 Implementation Cost 54,126 386,900 0 252,826 188,200
D Revival Package for Long Term
Co-operative Credit Structure (LTCCS) 200,000 0 0 0 200,000
Total 47,067,657 29,887,725 6,991 50,943,451 26,018,922
Previous year 51,103,245 122,313,252 5,854 126,352,694 47,067,657
98
Schedule 5 – Other Funds(` in '000)
Sr. Particulars Opening Additions/ Transferred Interest Expenditure/ Transferred Balance as on
No. Balance as on Adjustments from P & L Credited Disb.during to P&L 31.03.2011
01.04.2010 during the year Appropriation the year Appropriation
1 Watershed Development Fund 1102,83,73 865,86,01 0 81,25,55 151,25,40 1,01,14 1897,68,75
2 Micro Finance Development and
Equity Fund (Refer Note B- 8 of
Schedule 18) 138,53,41 20,00,00 0 11,29,46 19,30,15 11,40,75 139,11,97
3 Interest Differential Fund -
(Forex Risk) 145,23,57 12,46,16 0 0 0 0 157,69,73
4 Interest Differential Fund -
(Tawa) 11,55 0 0 0 1,55 0 10,00
5 Adivasi Development Fund 20,28 7,60,03 0 0 2,50,00 0 5,30,31
6 Tribal Development Fund 1150,82,67 51,89 0 0 96,83,63 0 1054,50,93
7 Financial Inclusion Fund
(Refer Note B- 8 of Schedule 18) 45,10,45 13,05,23 0 4,15,86 9,20,90 0 53,10,64
8 Financial Inclusion Technology Fund
(Refer Note B- 8 of Schedule 18) 52,20,70 10,40,36 10,00,00 4,34,39 54,00,37 0 22,95,08
9 Farmers Technology Transfer Fund 100,00,00 1,00,00 33,55,54 0 33,55,54 0 101,00,00
Total 2735,06,36 930,89,68 43,55,54 101,05,26 366,67,54 12,41,89 3431,47,41
Previous year 2101,80,69 691,61,39 64,58,41 72,76,77 139,99,41 55,71,50 2735,06,35
Schedule 6 – Deposits(` in '000)
Sr. Particulars As on As on
No. 31.03.2011 31.03.2010
1 From Central Government 0 0
2 From State Governments 0 0
3 From Others
a) Tea / Rubber / Coffee Deposits 228,29,61 123,73,69
b) Term Deposits 48,46,15 381,35,32
c) Commercial Banks (Deposits under RIDF) 67877,63,52 59868,64,77
d) Short Term Co-operative Rural Credit Fund 14622,28,25 9622,28,25
Total 82776,67,53 69996,02,03
Schedule 7 – Bonds and Debentures(` in '000)
Sr. Particulars As on As on
No. 31.03.2011 31.03.2010
1 SLR Bonds 98,99,70 188,63,09
2 Non Priority Sector Bonds 21682,50,00 14876,00,00
3 Capital Gains Bonds 7,52,70 361,64,40
4 Bhavishya Nirman Bonds 4975,19,52 4554,11,06
5 NABARD Rural Bonds 23,99,57 23,99,57
Total 26788,21,49 20004,38,12
99
Schedule 8 – Borrowings
(` in '000)
Sr. Particulars As on As onNo. 31.03.2011 31.03.2010
1 From Central Government 123,97,71 146,76,07
2 Reserve Bank of India 0 0
3 From Others :
(a) In India
(i) Certificate of Deposits 136,86,14 379,45,90
(ii) Commercial Paper 6447,64,81 2679,71,76
(iii) Borrowing under Collateralised Borrowing Lending Obligation 0 214,82,34
(iv) Term Money Borrowings 110,16,00 762,50,00
(v) Commercial Banks 0 500,00,00
(vi) Borrowing aginst STD 360,00,00 0
(b) Outside India
(i) From International Agencies 502,64,44 494,53,61
Total 7681,29,10 5177,79,68
Schedule 9 – Current Liabilities and Provisions(` in '000)
Sr. Particulars As on As on
No. 31.03.2011 31.03.2010
1 Interest / Discount Accrued 3527,97,31 2489,39,46
2 Sundry Creditors 401,73,28 972,40,01
3 Subsidy Reserve (Co-finance,Cold Storage) 93,89 40,15
4 Subsidy Reserve - CSAMI under RIDF 1,45,00 91,80
5 Provision for Gratuity (Refer Note B- 19 of Schedule 18) 17,44,81 1,62,25
6 Provision for Pension (Refer Note B- 19 of Schedule 18) 934,44,01 690,04,64
7 Provision for Encashment of Ordinary Leave (Refer Note B- 19 of Schedule 18) 5,07,12 -9,91,64
8 Unclaimed Interest on Bonds with RBI 0 6,54
9 Unclaimed Interest on Bonds 3,90,27 4,37,41
10 Unclaimed Interest on Term Deposits 41,96 8
11 Term Deposits Matured but not claimed 5,48,20 0
12 Bonds matured but not claimed 20,06,38 12,32,18
13 Application money received pending allotment of Bonds 50 15,64,32
14 Provisions and Contingencies
(a) Amortisation of G. Sec. - HTM 0 90,90,80
(b) For Standard Assets 594,57,00 594,57,00
(c) Depreciation in value of investments - equity 3,36,93 1,44,36
(d) Countercyclical Provisioning Buffer (Refer Note B- 27 of Schedule 18) 25,51,00 0
(e) Sacrifice in interest element of restructured loans 0 8,00
(f) Provision for Other Assets & Receivables 3,72,14 35,48
Total 5546,09,80 4864,62,84
Schedule 10 – Cash and Bank Balances(` in '000)
Sr. Particulars As on As onNo. 31.03.2011 31.03.2010
1 Cash in hand 7 12
2 Balances with :
a) Reserve Bank of India 38,85,26 25,45,41
b) Others
(I) In India
(i) Other Banks in India
a) On Current Account 801,32,40 533,94,82
b) Deposit with Banks 90,02,46,14 9000,00,00
(ii) Remittances in Transit 694,44,37 68,93,40
(iii) Collateralised Borrowing and Lending Obligations 228,18,56 0
(II) Outside India 0 0
Total 107,65,26,80 9628,33,75
100
Sr. Particulars as on as on(` in '000)
Sr. Particulars as on as on
No. 31.03.2011 31.03.2010
1 Government Securities
a) Securities of Central Government (Refer Note B-7 of Schedule 18) 2548,31,03 1991,50,09
[Face Value ` 2599,65,70 (` 1979,65,70)]
[Market Value ` 2563,67,09 (` 1971,99,04)]
b) Treasury Bills 0 0
2 Other Approved Securities 0 0
3 Equity Shares in :
(a) Agricultural Finance Corporation Ltd. 1,00,00 1,00,00
[1,000 (1,000) - Equity shares of ` 10,000 each]
(b) Small Industries Development Bank of India 48,00,00 48,00,00
[1,60,00,000 (1,60,00,000) - Equity shares of ` 10 each]
(c) Agriculture Insurance Company of India Ltd. 60,00,00 60,00,00
[6,00,00,000 (6,00,00,000) - Equity shares of ` 10 each]
(d) Multi Commodity Exchange of India Ltd. 1,25,00 1,25,00
[1562500 (12,50,000) - Equity shares of ` 10 each]
including 312500 Bonus shares allotted during the year
(e) National Commodity and Derivatives Exchange Ltd. 16,87,50 13,98,04
[56,25,000 (53,61,850) - Equity shares of ` 10 each]
(f) Other Equity Investments
(i) Coal India Ltd. ` 42,60
[17389 (NIL) - Equity shares of ` 10 each]
(ii) Power Grid Corporation of India Ltd. ` 25,73
[28592 (NIL) - Equity shares of ` 10 each]
(iii) Manganese Ore India Ltd. ` 43,95
[11719 (NIL) - Equity shares of ` 10 each]
(iv) Punjab & Sindh Bank ` 9,55
[7958 (NIL) - Equity shares of ` 10 each] 1,21,83 0
4 Debentures and Bonds
(a) Special development Debentures of SCARDBs (Refer Note B- 14 of Schedule 18) 13461,16,56 13413,59,90
(b) Non Convertible Bond 225,00,00 0
5 Shareholding in subsidiaries and Joint Venture
(i) NABARD Financial Services Ltd. - ` 8,40,00,000
[84,00,000 (52,00,000) - Equity shares of ` 10 each]
(ii) Agri-Business Finance [Andhra Pradesh] Ltd. - ` 5,20,00,000
[52,00,000 (52,00,000) - Equity shares of ` 10 each]
(iii) Agri Development Finance [Tamil Nadu] Ltd. - ` 5,20,00,000 18,80,00 15,60,00
[52,00,000 (52,00,000) - Equity shares of ` 10 each]
(iv) NABARD Consultancy Services Pvt. Ltd. 5,00,00 5,00,00
[50,00,000 (50,00,000) - Equity shares of ` 10 each]
6 Others
(a) Commercial Paper 1861,99,91 744,16,51
[Face Value `.1950,50,00 ( `.785,00,00)]
(b) Certificate of Deposit
[Face Value `.700,00,00 (NIL)] 6,80,42,26 0
(c) Units of Liquid Mutual Funds 390,11,34 900,00,00
(Refer Note B-22 of Schedule 18)
(d) SEAF - India Agri - Business Fund 37,50 0
(e) APIDC - Ventureast Life Fund III 4,98,00 0
(f) BVF (Bio-Tech Venture Fund) - APIDC-V Investment 5,00,00 5,00,00
Total 193,29,50,93 17199,09,54
Schedule 11 – Investments
101
Schedule 12 – Advances(` in '000)
Sr. Particulars as on as on
No. 31.03.2011 31.03.2010
1 Refinance Loans
a) Production & Marketing Credit 33884,82,33 24073,45,36
b) Conversion Loans for Production Credit 193,21,67 0
c) Medium Term Investment Credit- Non-Project loans 0 0
d) Liquidity Support 0 20,00,00
e) Other Investment Credit :
i) Medium Term and Long Term Project Loans (Refer Note B-14 of Schedule 18) 25435,26,23 22328,22,89
ii) Long Term Non-Project Loans 167,20,61 198,66,93
iii) Interim Finance 0 1,43,00
2 Direct Loans
a) Loans under Rural Infrastructure Development Fund 66077,96,22 60255,45,15
b) Other Loans:
i) Co-operative Development Fund 3,11,68 3,13,05
ii) Micro Finance Development Equity Fund 89,23,20 85,76,60
iii) Watershed Development Fund 32,09,56 29,35,54
iv) Tribal Development Fund 3,47,16 1,01,84
v) KfW UPNRM 53,11,82 11,74,20
vi) Farm Innovation & Promotion Fund 40,75 39,80
vii) NFS Promotional Activities 50,00 0
c) Co-Finance Loans (Net of provision) 87,58,72 83,60,32
Total 12,60,27,99,95 10,70,92,24,68
Schedule 13 – Fixed Assets(` in '000)
Sr. Particulars as on as on
No. 31.03.2011 31.03.2010
1 LAND : Freehold & Leasehold (Refer Note B-13 of Schedule 18) Opening Balance 146,12,13 144,51,36
Additions/adjustments during the year 1,96,16 1,60,77
Closing Balance (at cost) 148,08,29 146,12,13
Less: Amortisation of Lease Premia 40,59,65 38,60,33
Book Value 107,48,64 107,51,80
2 PREMISES (Refer Note B-13 of Schedule 18) Opening Balance 259,08,11 258,02,09
Additions/adjustments during the year 4,34,35 1,06,01
Closing Balance (at cost) 263,42,46 259,08,10
Less: Depreciation to date 156,33,58 144,81,04
Book Value 107,08,88 114,27,06
3 FURNITURE & FIXTURES Opening Balance 57,24,47 56,27,21
Additions/adjustments during the year 1,43,23 1,17,83
Sub-Total 58,67,70 57,45,04
Less: Cost of assets sold/written off 13,56 20,57
Closing Balance (at cost) 58,54,15 57,24,47
Less: Depreciation to date 55,77,96 54,29,23
Book Value 2,76,19 2,95,24
4 COMPUTER INSTALLATIONS & OFFICE EQUIPMENTS Opening Balance 68,22,68 66,14,02
Additions/adjustments during the year 8,85,36 6,64,48
Sub-Total 77,08,04 72,78,50
Less: Cost of assets sold/written off 4,08,59 4,55,83
Closing Balance (at cost) 72,99,45 68,22,67
Less: Depreciation to date 62,68,28 60,00,70
Book Value 10,31,17 8,21,97
5 VEHICLES Opening Balance 4,39,48 4,76,03
Additions/adjustments during the year 1,63,09 71,75
Sub-Total 6,02,57 5,47,78
Less: Cost of assets sold/written off 1,59,27 1,08,30
Closing Balance (at cost) 4,43,30 4,39,48
Less: Depreciation to date 2,59,55 2,63,72
Book Value 1,83,75 1,75,76
Total 229,48,63 234,71,83
102
Sr. Particulars 2010-11 (` in '000)
Sr. Particulars 2010-11 2009-10
No.
1 Interest Paid on
a) Loans from Central Government 10,21,19 24,32,78
b) Bonds (Refer Note B- 5 of Schedule 18) 1680,25,58 1623,91,44
c) Tea / Coffee / Rubber Deposits 10,86,63 5,74,19
d) Term Money Borrowings 21,06,65 8,24,28
e) Term Deposits 22,78,08 37,67,22
f) Financial Inclusion Fund 4,15,86 2,50,37
g) Financial Inclusion Technology Fund 4,34,39 3,01,03
h) Borrowings from International Agencies 22,58,86 23,28,39
i) Commercial Paper (Refer Note B- 5 of Schedule 18) 247,82,46 128,50,31
j) Borrowing aginst ST Deposit 31,11,00 0
k) KfW UPNRM - Accompanying measures 1,07 25
l) Short Term Cooperative Rural Credit Fund 259,76,37 76,52,83
m) Deposits under RIDF 3714,32,70 2872,36,36
n) Cattle Development Programme (UP & Bihar) 18,26 14,19
o) Watershed Development Fund 81,25,55 62,14,80
p) Micro Finance Development and Equity Fund 11,29,46 5,10,57
q) Indo German Watershed Development Programme - Andhra Pradesh 71 1,50
r) Indo German Watershed Development Programme - Rajasthan 1,78 68
s) KfW - NB Indo German Watershed Development Programme -
Phase III - Maharashtra 5,80 15,74
t) KfW - NB - IX Adivasi Development Programme 18,84 5,24
u) Indo German Watershed Development Programme - Gujarat 53 1,35
v) Corporate Borrowings from Banks and FIs in India 21,35,58 44,28,77
w) Rural Innovation Fund 4,14,13 4,71,54
x) Livelihood Advancement Business School RF Project -
Sultanpur, Uttar Pradesh 2,08 3,62
y) Multi Activity Approach for Poverty Alleviation BAIF Project -
Sultanpur, Uttar Pradesh 4,14 3,35
z) Livelihood Advancement Business School RF Project -
Rae Bareli, Uttar Pradesh 5,62 6,36
aa) Multi Activity Approach for Poverty Alleviation BAIF Project -
Rae Bareli, Uttar Pradesh 11,08 6,26
ab) Commitment Charges -KfW UPNRM Borrowings 20,74 0
ac) Deposits / Borrowings 3 7,48
ad) Discount Cost Paid on Certificate of Deposits 6,29,72 45,05,22
2 Discount on Collateralised Borrowing and Lending Obligations 26,59,91 9,50,04
3 Swap Charges 6,93,25 6,69,26
4 Discount, Brokerage, Commission & issue exp. on Bonds and Securities 5,78,80 4,20,16
Total 6193,86,85 4988,45,58
Sr. Particulars as on as on (` in '000)
Sr. Particulars as on as on
No. 31.03.2011 31.03.2010
1 Accrued Interest 1815,75,35 1496,44,47
2 Deposits with Landlords 1,48,04 1,25,46
3 Deposits with Government Departments and Other Institutions 2,97,86 2,82,21
4 Housing loan to staff 140,22,37 124,06,19
5 Other Advances to staff 65,08,79 61,30,39
6 Advances to Landlords 1,03 60
7 Capital Work in Progress [Purchase of Staff Quarters & Office Premises] 51,48,84 29,76,19
8 Sundry Advances 38,58,47 34,45,06
9 Advance Tax (Net of Provision for Income Tax) 130,80,93 51,56,47
10 Deferred Tax Assets [Refer Note B-11 of Schedule 18] 233,15,00 317,80,00
11 Expenditure recoverable from Government of India/International Agencies. 5,35,57 2,80,77
12 Discount Receivable 35,07,89 15,45,60
Total 2520,00,14 2137,73,41
Schedule 14 – Other Assets
Schedule 15 – Interest & Financial Charges
103
Schedule 16 A – Establishment and Other Expenses
Sr. Particulars As on As on(` in '000)
Sr. Particulars As on As on
No. 31.03.2011 31.03.2010
1 Commitments on account of capital contracts remaining to be executed 37,81,29 60,44,33
Sub Total "A" 37,81,29 60,44,33
2 Contingent Liabilities
(i) Claims against the Bank not acknowledged as debt.
(Refer Note B-21 of Schedule 18) 0 3,36,60
Sub Total "B" 0 3,36,60
Total (A + B) 37,81,29 63,80,93
Sr. Particulars 2010-11 2(` in '000)
Sr. Particulars 2010-11 2009-10No.
1 Salaries and Allowances (Refer Note B- 15 of Schedule 18) 5,86,57,40 2,50,33,22
2 Contribution to / Provision for Staff Superannuation Funds 3,27,61,90 84,86,65
3 Other Perquisites & Allowances 22,96,15 19,06,51
4 Travelling & Other allowances in connection with Directors' &
Committee Members' Meetings 13,35 19,77
5 Directors' & Committee Members' Fees 1,08 1,46
6 Rent, Rates, Insurance, Lighting, etc. 20,82,98 19,62,10
7 Travelling Expenses 24,49,56 23,38,96
8 Printing & Stationery 2,81,21 2,80,43
9 Postage, Telegrams & Telephones 8,48,85 6,06,28
10 Repairs 6,55,87 4,71,58
11 Auditors' Fees 8,06 7,67
12 Legal Charges 17,86 29,69
13 Miscellaneous Expenses 40,77,59 25,57,97
14 Expenditure on Miscellaneous Assets 44,37 41,63
15 Expenditure on Study & Training 33,46,06 24,80,27
[Including ` 7,58,70,397(` 5,97,79,097) pertaining to
establishment expenses of Regional Training Centers]
16 Expenditure on promotional activities under
(i) Cooperative Development Fund 6,05,32 3,83,04
(ii) Micro Finance Development and Equity Fund 11,40,75 10,01,05
(iii) Watershed Development Fund 1,01,14 44,70,44
(iv) Farm Innovation and Promotion Fund 2,39,20 96,94
(v) Exp. for NFS Promotional Measures/ Activities 27,52,58 23,40,86
17 Wealth Tax 2,28,60 2,81,22
Total 11,26,09,88 5,47,97,74
Sr. Particulars 2010-11 (` in '000)
Sr. Particulars 2010-11 2009-10No.
Provisions for :
1 Amortisation of G. Sec 0 18,18,16
2 Standard Assets (Refer Note B- 9 of Schedule 18) 0 1,01,50,00
3 Non Performing Assets 32,90,00 17,60,23
4 NB Gen Advices (-)53,24 0
5 Depreciation in Investments G.Sec 0 0
6 Depreciation in Value of Investment Account - Equity (-)5,08 (-)67,92
7 Sacrifice in interest element of restructured Accounts (-)8,00 (-)4,46,00
8 Other Assets / Receivable 3,36,66 47,59
Total 35,60,34 132,62,06
Schedule 16 B – Provisions
Schedule 17 – Commitments and Contingent Liabilities
104
A. SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Preparation
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 National
Bank for Agriculture and Rural Development (NABARD
/ the Bank) and are consistent with those used in the
previous year.
1.2 Preparation of financial statements as per
Generally Accepted Accounting Policies (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. 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 non–compliance
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.
2.2 Issue expenses relating to floatation of bonds
are recognised as expenditure in the year of issue of
Bonds.
2.3 Dividend on investments is accounted for, when
the right to receive the dividend is established.
3. Fixed Assets and Depreciation
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
instal lat ion of the respective assets. Subsequent
expenditure incurred on existing assets is capitalised only
when it increases the future benefit from the existing assets
beyond its previously assessed level of performance.
3.2 Expenditure incurred on assets purchased for
the value not exceeding ` 5,000 per unit is charged to
Profit and Loss Account.
3.3 Land includes free hold and leasehold land.
3.4 Premises include value of land, where
segregated values are not readily available.
3.5 Depreciation on premises situated on free hold
land is charged @ 10% p.a, on written down value
basis
3.6 Depreciation on leasehold land and premises
situated thereon is computed and charged @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.
3.7 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 Depreciation Rate
Furniture and Fixtures 20%
Computer Installations 32%
Office Equipments 20%
Vehicles 20%
Schedule 18
SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS FOR THE YEARENDED MARCH 31, 2011
105
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. Intangible Assets and Amortisation
Intangible assets are recognized/amortised, as
per the criteria specified in AS 26 “Intangible Assets”.
5. Investments
5.1 In accordance with the RBI guidel ines,
Investments are classified into “Held for Trading” (HFT),
“Available for Sale” (AFS) and “Held to Maturity”
(HTM) categories (hereinafter called “categories”).
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”.
5.3 Investments categorized under “HTM” are
car ried at cost and provision for depreciat ion/
diminution/amortisation, if any, in value of investments,
is included under Current Liabilities and Provisions.
5.4 Provision for diminution, other than temporary,
in the value of investments in subsidiaries under the
category “HTM” is made, wherever necessary.
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.
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 classif ied as “AFS”, depreciation /
appreciation is recognised in the category for
investments classified as “HFT”.
5.7 Treasury Bills are valued at carrying cost.
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.
5.9 Brokerage, commission, etc. paid at the time
of acquisition, are charged to revenue.
5.10 Broken period interest on debt investment is
treated as a revenue item.
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.
6. Advances and Provisions thereon
6.1 Advances are classified as per RBI guidelines.
Provision for standard assets and non–performing assets
is made in respect of identified advances, based on a
periodic review and in conformity with the provisioning
norms prescribed by RBI.
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, at the time of restructuring/
rescheduling.
6.3 Advances are stated net of provisions towards
Non-performing Advances.
7. Foreign Currency Transactions
7.1 Foreign currency borrowings, which are covered
by hedging agreements, 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.
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.
8. Retirement Benefits
8.1 The Bank has a Provident Fund Scheme
managed by RBI. Contribution to the Fund is made on
actual basis.
106
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.
8.3 Provision for Pension is made based on
actuarial valuation.
8.4 Employer’s contribution to Provident Fund
relating to the pension optees (part of Pension Fund) is
maintained with RBI.
8.5 Provision for Encashment of Ordinary Leave
is made on the basis of actuarial valuation.
9. 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.
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.
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.
9.5 Provision for Wealth Tax is made in accordance
with the provisions of Wealth Tax Act, 1956.
10. 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”.
10.3 Income, which relates to Bank as a whole and
not allocable to segments is included under “Other
unallocable bank income”.
10.4 Segment assets and liabilities include those
directly identifiable with the respective segments.
Unallocable assets and liabilities include those that relate
to the Bank as a whole and not allocable to any
segment.
11. Impairment of Assets
11.1 As at each Balance Sheet date, the carrying
amount of assets is tested for impairment so as to
determine:
a) the provision for impairment loss, if any,
required; or
b) the reversal, if any, required for impairment
loss recognized in the previous periods.
11.2 Impairment loss is recognized when the carrying
amount of an asset exceeds recoverable amount.
12 Provisions, Contingent Liabilities and
Contingent Assets
12.1 Provisions are recognised for liabilities that can
be measured only by using substantial degree of
estimation if:
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 Contingent liability is disclosed in the case of :
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,
107
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.
12.4 Contingent assets are neither recognized, nor
disclosed.
12.5 Provisions, contingent liabilities and contingent
assets are reviewed at each Balance Sheet date.
B. NOTES FORMING PART OF THEACCOUNTS
1. In terms of TAWA Command Area
Development Project Agreement, the “Interest
Differential Fund” is to be utilized for certain specified
purposes.
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).
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’, which was hitherto shown separately
in the Profit and Loss A/c.
5. Subvention received/receivable from GOI
amounting to ` 989.34 crore (` 794.67 crore), being
the difference between the cost of borrowing by
NABARD and the refinance rate, has been reduced from
interest and financial charges.
6. Other receipts includes ` 54.49 crore
(` 35.15 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. Investments in Government securities include
the fol lowing securit ies pledged with Clearing
Corporation of India Limited as collateral security for
Business segments:
(` in crore)
Particulars Face Value Book Value
Pledged for Business 55.00 54.81
Segment (Securities) (50.00) (49.76)
Pledged for Business Segment 2257.00 2208.63
(Collateralised Borrowing and (1922.00) (1933.87)
Lending Obligation)
8. Interest at the rate of 6.00% (6.00%) per
annum on unutilised balances of RIF, RPF, Watershed
Development Fund, KfW NB IGWDP–(Andhra Pradesh,
Gujarat, Maharashtra and Rajasthan) and KfW NB IX
Adivasi Development Programme has been credited to
respective fund based on respective agreements.
Further, interest at the rate of 8.80% (7.68%) per
annum on unutilised balances of Micro Finance
Development and Equity Fund, Cattle Development
Programme (Uttar Pradesh & Bihar), LAB’s Revolving
Fund (Sultanpur & Rae Bareli) and 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, which was hitherto calculated
on the closing balance of the respective funds.
9. Provision for Standard Assets which was
hitherto provided at 0.50% on Direct Loans to State
Governments and at 0.75% on Loans Guaranteed by
State Government is now being provided as per the
IRAC norms of RBI. The continuation of earlier
methodology would have been resulted in an additional
provision of ` 81.63 crore for the current year.
10. Pending receipt of confirmation of balance of
Provident Fund Account in respect of employer’s
contribution as on March 31, 2011 maintained with RBI,
provision for pension is made after considering the
balance of PF maintained with RBI as per the records
available with the Bank.
11. The Bank has, during the year, in accordance
with AS 22 “Accounting for taxes on Income”,
recognized in the Profit and Loss account the difference
of ` 84.65 crore between net deferred tax assets of
` 233.15 crore and ` 317.80 crore as at March 31,
2011 and March 31, 2010 respectively; as detailed
below:
108
(` in crore)
Sr. Deferred 31 March 31 March
No. Tax Assets 2011 2010
1 Provision for Retirement 181.18 274.85
Benefits made in the books but
allowable for tax purposes on
payment basis
2 Depreciation on Fixed Assets 21.77 22.35
3 Amortisation of G Sec 30.20 20.60
Total 233.15 317.80
12. 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.
13. ‘Land’ and ‘Premises’ include ` 29.88 crore
(` 33.82 crore) paid towards Office Premises and Staff
Quarters for which conveyance is yet to be completed.
14. 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. classified as Investments and shown in Schedule
– 11 under the head ‘Debenture and Bonds’, which
was hitherto shown as part of ‘Medium Term and Long
Term Project Loans’, in Schedule – 12
b. 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, Income recognition, 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 ` 238.15 crore (` 30.12 crore)
15. The salary and allowances of the employees
of the Bank has been revised with effect from 01
November 2007. Pursuant to the salary revision, an
amount of ` 277.09 crore is reckoned towards arrears
of salary of which ` 177.34 crore pertains to the period
November 2007 to March 2010 and an additional
amount of ` 216.09 crore has been reckoned towards
superannuation benefi ts of the employees, on
estimated basis.
16. The tax liability of the bank for the AY
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 appeal against the taxability
of NABARD for the AY 2002-03 with Income Tax
Appellate Tribunal.
17. The bank has created two new funds out of its
post tax profi t viz. ‘Producers’ Organizations
Development Fund’ and ‘Rural Infrastructure Promotion
Fund’ with a corpus of ` 50 crore and ` 25 crore
respectively during the year.
18. The Bank has transferred the outstanding
balances of the following funds to Reserve Fund:
a. Foreign Currency Risk Fund - ` 147.06 crore
b. Soft Loan Assistance Fund for - ` 10 crore
Margin Money
c. Agriculture and Rural Enterprise - ` 5 crore
Incubation Fund
19. Disclosure required under AS 15
(Revised) on “Employee Benefits” is
as under:
19.1 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 Cost 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.
109
a. Reconciliation of opening and closing balances of defined benefit obligations:
(` in crore)
Particulars Pension Gratuity Leave
Encashment
Present value of defined benefit obligation at 958.76(892.01) 221.20(250.53) 117.63(115.51)
the beginning of year
Current Service Cost 22.76(20.65) 16.90 (15.27) 6.54(3.73)
Interest Cost 79.10(66.90) 18.25 (18.79) 9.70(8.66)
Actuarial (gain)/ loss 207.42 (-10.01) 8.16(-25.60) 17.67(2.19)
Benefits paid -45.01(-10.79) -21.94(-37.79) -6.66(-12.47)
Present value of defined benefits 1223.03(958.76) 242.57(221.20) 144.88(117.63)
obligations at the year end
b. Amount recognized in the balance sheet as on 31 March 2011:
(` in crore)
Particulars Pension Gratuity Leave Encashment
(Partly Funded) (funded) (Funded)
Present value of defined benefits obligations 1223.03(958.76) 242.57(221.20) 144.88(117.63)
as at the year end
Fair value of plan assets as at the year end 288.11(268.77) @ 227.85(220.00) 143.66(127.55) $
Liability recognized in the Balance 934.92(689.99) 14.72(1.20) 1.22(-9.91)
Sheet as at the year end
@ Represents the Bank’s contribution towards PF for pension optees available with RBI.
$ Represents the amount invested with Insurance companies towards the Liability for Leave Encashment.
c. Expenses recognized in the Profit and Loss Account during the year:
(` in crore)
Particulars Pension Gratuity Leave
Encashment
Current Service Cost 22.76(20.65) 16.90(15.27) 6.54(3.73)
Interest Cost 79.10(66.90) 18.25(18.79) 9.70(8.66)
Actuarial (gain)/ loss 172.83(-10.01) 8.16(-25.60) 17.67(2.19)
Expected return on Plan Assets - -16.92(0.00) -12.26(-14.20)
Expense recognized in the statement of Profit & Loss 274.69(77.54) 26.39(8.46) 21.65(-0.38)
d. Actuarial assumptions:
Particulars Pension Gratuity Leave
Encashment
Mortality Table (LIC) 1994-96 1994-96 1994-96
(Ultimate) (Ultimate) (Ultimate)
Discount rate (per annum) 8.25% 8.25% 8.25%
Salary growth (per annum) 4% 7% 7%
Withdrawal rate 1% 1% 1%
110
19.2 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.
19.3 The aforesaid liabilities include liabilities of
employees deputed to subsidiaries.
19.4 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 Bank’s contribution to the Provident
Fund of pension optees.
19.5 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 ` 11.87 crore (` 11.69 crore)
20. In the opinion of the Bank’s management, there
is no impairment to assets to which AS 28 –
“Impairment of Assets” applies requiring any provision.
21. The movement in Contingent Liability as
required in AS 29 “Provisions, Contingent Liabilities
and Contingent Assets” is as under:
(` in crore)
Particulars 2010-11 2009–10
Opening Balance 3.37 3.37
Addition during the year 0.00 0.00
Deletion during the year 3.37 0.00
Closing Balance 0.00 3.37
22. Prior period items included in the Profit and
Loss account are as follows:
(` in crore)
Sr. Particulars 2010-11 2009–10
No.
1 Depreciation 2.895 4.038
Total 2.895 4.038
23. Capital adequacy ratio of the Bank as on 31 March
2011 is 21.76% (24.95%) as against a minimum of
9% as stipulated by RBI.
24. NPA on staff loans:
(` in crore)
Particulars 2010-11 2009-10
Opening Balance 0.08 0.07
Addition during the year 0.00 0.03
Written Back during the year 0.04 0.02
Closing Balance 0.04 0.08
25. Investments in Mutual Funds are as under:
(` in crore)
Sr. Name of the As at March 31, 2011 As at March 31, 2010
No. Mutual Fund No. of units Book Market No. of units Book MarketValue Value Value Value
1 Kotak Mahindra 31178095.5170 50.01 50.01 44148228.8210 50.00 50.012 ICICI Prudential 2069242.3680 30.01 30.01 2919994.9850 50.00 50.013 Canara Robeco 25172008.7263 30.01 30.01 71988360.6304 100.00 100.054 IDFC 25159975.5110 30.01 30.01 45799983.5330 50.00 50.015 UTI –Money Market 310661.2930 50.01 50.01 969829.4780 100.00 100.036 Tata 276239.8430 50.01 50.01 294404.7780 50.00 50.007 DWS 2356602.6900 30.01 30.01 0.0000 0.00 0.008 SBI 19254837.7780 30.01 30.01 0.0000 0.00 0.009 IDBI 285224.8670 30.01 30.01 0.0000 0.00 0.0010 Peerless 28065186.0720 30.01 30.01 0.0000 0.00 0.0011 Taurus 284381.6460 30.01 30.01 0.0000 0.00 0.0012 UTI- Treasury advantage 0.0000 0.00 0.00 809238.4970 100.00 100.0913 Birla Sun life 0.0000 0.00 0.00 28607635.3200 50.00 50.0114 Life Insurance Corporation 0.0000 0.00 0.00 80888127.7770 100.00 100.0115 Baroda Pioneer 0.0000 0.00 0.009 6420619.9960 100.00 100.0216 PRINCIPAL 0.0000 0.00 0.00 34310340.1970 50.00 50.0117 Deutsche 0.0000 0.00 0.00 46191646.2350 50.00 50.0118 L&T 0.0000 0.00 0.00 33727478.7790 50.00 50.01
Total 390.11 390.11 900.00 900.27
111
26. As per the information available with the Bank,
there are no dues payable under Micro, Small and
Medium Enterprises Development Act 2006.
27. In terms of RBI circular No. DBOD.No.BP.BC.87/
21.04.048/2010-11 dated 21 April 2011, the excess
amount of ` 25.51 crore of provision held for achieving
Provision Coverage Ratio as on 30 September 2010 has
been transferred to “Countercyclical Provisioning buffer”.
28. Figures in brackets pertain to previous year.
29. The following additional information is disclosed
in terms of RBI circulars No.RBI/2009–2010/49
(DBOD.FID.FIC.2/01.02.00/2010–11) dated 01 July 2010.
29.1 Capital
(a) Capital to Risk–weighted Assets Ratio
(CRAR)
(Per cent)
Particulars 31 March 31 March
2011 2010
CRAR 21.76 24.95
Core CRAR 20.43 23.47
Supplementary CRAR 1.33 1.48
(b) Subordinated Debt
(` in crore)
Particulars 31 March 31 March
2011 2010
Amount of subordinated
debt raised and outstanding Nil Nil
as Tier II Capital
(c) Risk weighted assets
(` in crore)
Particulars 31 March 31 March
2011 2010
On – Balance Sheet Items 63515.55 49921.32
Off – Balance Sheet Items 20.30 25.18
(d) Pattern of Capital contribution as on
the date of the balance sheet
(` in crore)
Contributor 31 March 2011 31 March 2010
Reserve Bank of India 20 1.00% 1,450 72.50%
Government of India 1,980 99.00% 550 27.50%
Total 2000 2000
Note : Pursuant to notification No.F.No 11/16/2005-BOA dt 16.09.2010, issued
by the Department of Financial Services, Ministry of Finance, Government of
India, 71.50% of Share Capital of NABARD held by RBI has been transferred
to Government of India.
29.2 Asset Quality and Credit
Concentration [Excluding Staff
Advances]
(a) Net NPA position
Particulars 31 March 31 March
2011 2010
Percentage of Net NPAs to 0.02136 0.01559
Net Loans & Advances
(b) Asset classification
(` in crore)
Classification 2010-11 2009-10
Amount (%) Amount (%)
Standard 139459.40 99.950 120487.10 99.958
Sub-standard 0.00 0.000 6.71 0.006
Doubtful 68.13 0.049 44.02 0.036
Loss 1.02 0.001 0.00 0.000
Total 139528.56 100.000 120537.13 100.000
(c) Provisions made during the year
(` in crore)
Provisions against 2010-11 2009-10
Standard Assets 0.00 101.50
Non Performing Assets 32.90 17.60
Investments (Net) 1.93 (-)0.68
Income Tax 460.00 647.00
Total 494.83 765.42
(d) Movement in Net NPAs
(` in crore)
Particulars 2010-11 2009-10
(A) Net NPAs as at 32.72 30.31
beginning of the year
(B) Add: Additions during the year 19.40 8.35
(C) Sub-total (A+B) 52.12 38.66
(D) Less: Reductions during the year 22.32 5.93
(E) Net NPAs as at the end of 29.80 32.72
the year (C-D)
112
(e) Credit exposure as percentage to Capital Funds and as percentage to Total Assets
Category 2010-11 2009-10
Credit Exposure as % to Credit Exposure as % to
Capital Funds Total Assets Capital Funds Total Assets
I Largest Single Borrower 128.67 11.08 145.41 13.57
II Largest Borrower Group Not Applicable Not Applicable
III Ten Largest Single Borrowers for the year 378.64 32.59 379.27 35.40
IV Ten Largest Borrower Groups Not Applicable Not Applicable
(f) Credit exposure to the five largest industrial sectors as percentage to total loan assets: Not Applicable
29.3 Liquidity
(a) Maturity pattern of Rupee Assets and Liabilities
(b) Maturity pattern of Foreign Currency Assets and Liabilities
(` in crore)
Sr. Item Less than or More than 1 More than More than More than Total #
No. equal to year upto 3 3 years upto 5 years upto 7 years
1 year years 5 years 7 years
1 Rupee Assets 68088.65 40360.96 31910.59 13478.17 4410.44 158248.82
(51280.08) (35053.14) (28992.26) (15363.61) (5007.03) (135696.12)
2 Foreign currency assets 0.00 0.00 0.00 0.00 0.00 0.00
(0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Total Assets 68088.65 40360.96 31910.59 13478.17 4410.44 158248.82
(51280.08) (35053.14) (28992.26) (15363.61) (5007.03) (135696.12)
3 Rupee Liabilities 36715.00 39438.72 29124.49 18524.70 33943.27 157746.17
(22607.89) (35939.57) (24755.17) (18416.73) (33482.22) (135201.58)
4 Foreign currency liabilities 39.92 79.75 79.74 64.82 238.42 502.65
(10.15) (64.71) (109.06) (109.07) (201.55) (494.54)
Total Liabilities 36754.92 39518.47 29204.23 18589.52 34181.69 158248.82
(22618.04) (36004.28) (24864.23) (18525.80) (33683.77) (135696.12)
# Net of provision made as per RBI directives on Standard Assets as well as for diminution in value of Investments aggregating
to ` 623.45 crore (` 596.01 crore)
29.4 Operating results
Particulars 2010-11 2009-10
(a) Interest income as a percentage to average working funds 6.22 6.19
(b) Non interest income as a percentage to average working funds 0.10 0.10
(c) Operating profit as a percentage to average working funds 1.25 1.80
(d) Return on average Assets (%) 0.88 1.23
(e) Net Profit per Employee (Rs. in crore) 0.27 0.33
29.5 Movement in the provisions
(a) Provision for Non Performing Assets (Loan Assets)
(` in crore)
Particulars 2010-11 2009-10
Opening balance as at the beginning of financial year 31.96 14.40
Add: Provision made during the year (Incl. provision for PCR) 23.73 18.64
Less: Write off, write back of excess provision 16.34 1.08
Closing balance at the close of financial year 39.35 31.96
113
(b) Provision for depreciation in investments
(` in crore)
Particulars 2010-11
A Opening balance as at 1.44
the beginning of the financial year (2.12)
B Add
(i) Provisions made during the year 2.08
(0.00)
(ii) Appropriation, if any, from 0.00
Investment Fluctuation (0.00)
Reserve Account during the year
C Sub Total [A+B(i)+B (ii)] 3.52
(2.12)
D Less
(i) Write off, Write Backs of 0.15
excess provision (0.68)
(ii) Transfer, if any, 0.00
to Investment Fluctuation (0.00)
Reserve Account
Sub Total [D] 0.15
(0.68)
E Closing balance as at 3.37
the close of financial year (C-D) (1.44)
29.6 Restructured accounts
During the current financial year five loan accounts
outstanding to the extent of ` 22.10 crore have been
rescheduled. All the said five loans are classified as
Standard Asset. There is no Interest sacrifice on these
reschedulements.
The interest sacrifice on loans restructured during FY
2005-06 amounted to ` 31.08 crore. Interest sacrifice
is reviewed at each balance sheet date and necessary
provision is made or reversed. Accordingly, ` 0.08 crore
(` 4.46 crore) was written back during the current
financial year.
29.7 Assets sold to securitisation company/
reconstruction company : NIL (NIL)
29.8 Forward Rate Agreements and Interest
Rate Swaps : NIL (NIL)
29.9 Interest Rate Derivatives : NIL NIL)
29.10 Investments in Non Government
Debt Securities : NIL (NIL)
29.11 Corporate Debt Restructuring (CDR)
There are no loan accounts subjected to
Corporate Debt Restructuring during the
current year.
29.12 Disclosure on risk exposure in
Derivatives
The Bank does not trade in derivatives. However, it has
hedged its liability towards borrowings 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.
The value of outstanding principal amount of hedge
contract at the year-end exchange rate stood at
` 592.10 crore and the value of outstanding principal
liability in the books of account stood at contracted
value i.e. ` 502.64 crore. The quantitative disclosure
in this regard is as under:
(` in crore)
Sr. Particulars Currency Interest Rate
No. Derivatives Derivatives
1 Derivatives
(Notional Principal amount)
A) For Hedging 592.10 NA
(563.66)
B) For Trading NA NA
2 Marked to Market Positions [1]
a) Asset (+) 89.45 NA
(69.12)
b) Liability (-) 0.00 NA
(0.00)
3 Credit Exposure [2] 121.25 NA
4 Likely impact of one percentage
change in interest rate (100*PV01)
a) on hedging derivatives 14.00@ NA
b) on trading derivatives NA NA
5 Maximum and Minimum of NA NA
100*PV01 observed during the year
a) on hedging NA NA
b) on trading NA NA
@ If MIBOR rate decrease by 100 bps across tenure MTM gain
would be reduced by ` 14 crore
114
(` in crore)
Name of the Party Nature of Nature of Amount of Outstanding
Relationship Transaction transaction
during the year
Shri U C Sarangi Key Management Remuneration 0.18 –
Personnel-Ex-Chairman including perquisites (0.26)
Dr. K G Karmakar Key Management Remuneration 0.24 –
Personnel-Managing Director including perquisites (0.30)
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. Issuer Amount Investment 'Below 'Unrated' 'Unlisted'
No. made investment Securities Securities
through grade' held
private Securities
placement held
(1) (2) (3) (4) (5) (6) (7)
1 PSUs 80.34 79.13 – 19.13 79.13
(60.00) (60.00) (16.23) (60.00)
2 FIs 123.00 123.00 – – 48.00
(48.00) (48.00) (48.00)
3 Banks – – – – –
4 Private Corporate 150.00 150.00 – – –
(0.00) (0.00)
5 Subsidiaries/Joint ventures 23.80 23.80 – 23.80 23.80
(20.60) (20.60) (20.60) (20.60)
6 Others (Net of Provision) 2262.47 10.35 – 10.35 2262.47
including Mutual Funds (1663.96) (21.23) (21.23) (1663.96)
7 Provision held 3.37 – – – 3.37
towards depreciation (1.44) (1.44)
Total 2636.24 386.28 0.00 53.28 2410.03
(1794.00) (149.83) (0.00) (41.83) (1794.00)
29.13 Exposures where the FI had exceeded
prudential exposure limits during the
year : NIL (NIL)
29.14 Related Party Transactions
As the Bank is state controlled enterprise within the
meaning of AS-18 "Related Party Transactions", the
details of the transactions with other state controlled
enterprises are not given.
List of Related Parties:
Key Management Personnel:
1. Shri Umesh Chandra Sarangi - Ex-Chairman
2. Dr. K G Karmakar - Managing Director
115
29.16 Non performing investments: NIL (NIL)
29.17 Disclosure on Repo transactions
(` in crore)
Particulars Minimum Maximum Daily average Outstanding
outstanding outstanding outstanding as on
during the year during the year during the year 31 March 2011
Securities sold under repo 0.00 0.00 0.00 0.00
(0.00) (0.00) (0.00) (0.00)
Securities purchased under 0.00 0.00 0.00 0.00
reverse repo (476.02) (476.02) (1.30) (0.00)
29.18 Concentration of Deposits, Advances,
Exposure and NPAs
(a) Concentration of Deposits
(` in crore)
Total Deposits of twenty 73671.25(57661.54)
largest depositors
Percentage of Deposits of 89.00%(82.38%)
twenty largest depositors to
Total Deposits of the Bank
(b) Concentration of Advances
(` in crore)
Total Advances to twenty 75077.75(67384.61)
largest borrowers
Percentage of Advances to twenty 53.81%(55.82%)
largest borrowers to
Total Advances of the Bank
(c) Concentration of Exposure
(` in crore)
Total Exposure to twenty largest 75077.75(67384.61)
borrowers/ customers
Percentage of Exposure to twenty 50.32%(51.94%)
largest borrowers/customers to
Total Exposure of the bank on
borrowers/customers
(d) Concentration of NPAs
(` in crore)
Total Exposure to Top four NPA accounts 50.71(32.02)
29.19 Sector-wise NPAs
Sr. Sector Percentage of NPAs
No to Total Advances
in that sector
1 Agriculture and 0.00(0.00)
allied activities
2 Industry (Micro & Small, 54.46(43.88)
Medium and Large)
3 Services 0.00(0.00)
4 Personal Loans 0.00(0.00)
29.20 Movement of Gross NPAs
Particulars Amount in
` crore
Gross NPAs as on 1st April of 50.73(44.71)
par ticular year (Opening Balance)
Additions (Fresh NPAs) during the year 25.66(8.87)
Sub-total (A) 76.39(53.58)
Less:-
(i) Upgradations 5.40(0.00)
(ii) Recoveries (excluding recoveries 1.84(2.85)
made from upgraded accounts)
(iii) Write-offs 0.00(0.00)
Sub-total (B) 7.24(2.85)
Gross NPAs as on 31st March of
following year (closing balance) (A-B) 69.15(50.73)
29.21 Overseas Assets, NPAs and
Revenue: NIL (NIL)
29.22 Off-balance sheet SPVs sponsored (which
are required to be consolidated as per
accounting norms) : NIL (NIL)
116
(b) Information on Primary Business Segment
(` in crore)
Direct Finance Refinance Treasury Unallocated Total
Segment Revenue 4,085.61 4,086.49 943.24 86.68 9,202.01
(3,295.94) (3,393.58) (1,255.69) (19.59) (7,964.80)
Segment Results 268.69 1,567.59 912.21 -924.63 1,823.86
(372.12) (1,198.23) (1,227.10) (-525.00) (2,272.45)
Total carrying amount of 66,409.32 74,643.27 15,316.71 2,502.96 1,58,872.26
Segment Assets (60,519.42) (61,222.81) (12,985.48) (1,564.42) (1,36,292.13)
Total carrying amount of 68,908.87 69,320.39 266.47 20,376.54 1,58,872.26
Segment Liabilities (60,642.12) (55,128.33) (239.82) (20,281.86) (1,36,292.13)
Other Items :
Cost to acquire Segment 0.00 0.00 0.00 18.22 18.22
Assets during the year (0.00) (0.00) (0.00) (11.21) (11.21)
Amor tization & Depreciation 0.00 0.00 0.00 22.58 22.58
(0.00) (0.00) (18.18) (23.29) (41.48)
Non Cash Expenses 32.90 (-)0.08 (-)0.05 100.21 132.98
(17.96) (96.37) (-0.68) (73.34) (186.99)
(c) Since the operations of the Bank are confined to India only there is no reportable
secondary segment.
30. Previous year's figures have been regrouped / rearranged wherever necessary.
As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN. 107564W
Ashok Rajagiri K. S. PadmanabhanPartner : Chief General ManagerM. No. 046070, Mumbai Accounts DepartmentDate : May 30, 2011 Mumbai : May 30, 2011
Rakesh Singh Dr. K C Chakrabarty Alok Nigam K Jayakumar
Chairman Director Director Director
29.23 Information on Business Segment
(a) Brief Background
The Bank has recognized Primary segments as under:
i) Direct Finance: Includes Loans given to state
governments for rural infrastructure development,
co-finance loans and loans given to voluntary
agencies/non-governmental organisations for
developmental activities.
ii) Refinance: Includes Loans and Advances given to
State Governments, Commercial Banks, Land
Development Banks, State Coop. Banks, Regional
Rural Banks etc. as refinance against the loans
disbursed by them to the ultimate borrowers.
iii) Treasury: Includes investment of funds in treasury
bills, short-term deposits, government securities,
etc.
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.
117
National Bank for Agriculture and Rural Development
Cash Flow for the year ended 31 March 2011(` in '000)
Particulars 2010-11 2009-10
(a) Cash flow from Operating activities
Net Profit as per Profit and Loss a/c before tax 1823,86,02 2272,45,27
Adjustment for:Depreciation 22,57,98 23,29,36
Provisions and Amortisations 2,78,34 17,97,83
Provision for Non performing Assets 32,90,00 17,60,24
Provision for Standard Assets 0 1,01,50,00
Provision for sacrifice in interest element of Restructured Loan (-)8,00 (-)4,46,00
Profit / Loss on sale of Fixed Assets 4,64 (-)20,91
Interest credited to various Funds
(including addition/ adjustment made to Interest Differential Fund) 118,36,63 91,59,97
Other Expenses 0 0
Income from Investment (including Discount Income) (-)938,79,85 (-)1255,68,93
Expenditure from various Funds (-)5492,54,83 (-)12801,23,53
Operating profit before changes in operating assets (-)4430,89,07 (-)11537,16,70
Adjustment for net change in:
Current Assets (-)373,55,50 4037,11,93
Current Liabilities 6,81,46,96 679,38,95
Increase in Loans and Advances
(Including Housing Loan & Other Advances to Staff (-)19035,55,28 (-)21785,29,44
Cash generated from operating activities (-)23158,52,89 (-)28605,95,26
Payment of Income Tax (-)539,24,46 (-)793,21,30
Net cash flow from operating activities (A) (-)23697,77,35 (-)29399,16,56
(b) Cash flow from Investing activities
Income from Investment (including Discount Income) 943,23,85 1255,68,93
Increase / Decrease in Fixed Asset (-)17,39,41 (-)10,63,15Increase / Decrease in Investment (-)2087,23,63 (-)808,31,58
Net cash used / generated from investing activities (B) (-)1161,39,19 436,74,20
(c) Cash flow from financing activities
Grants / contributions received 3925,65,16 12928,14,79
Proceeds of Bonds 6783,83,37 (-)3699,24,94
Increase / Decrease in Borrowings 2503,49,41 1584,85,53
Increase / Decrease in Deposits 12780,65,51 1786889,68
Net cash raised from financing activities (C) 25993,63,45 28682,65,06
Net increase in cash and cash equivalent (A)+(B)+(C ) 1134,46,91 (-)279,77,29
Cash and Cash equivalent at the beginning of the year 628,33,75 908,11,05
Cash and cash equivalent at the end of the year 17,62,80,66 6,28,33,75
1. Cash and cash equivalent at the end of the year includes : 2010-2011 2009-2010
Cash in hand 7 12
Balance with Reserve Bank of India 38,85,26 25,45,42
Balances with other Banks in India 8,01,32,40 5,33,94,81
Remittances in Transit 6,94,44,37 68,93,40
Inter fund transfer 0 0
Collateralised Borrowing and Lending Obligations 2,28,18,56 0
Total 17,62,80,66 6,28,33,75
Previous year's figures have been regrouped/ rearranged to conform to the current year's presentation, wherever necessary.
As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN. 107564W
Ashok Rajagiri K. S. PadmanabhanPartner : Chief General ManagerM. No. 046070, Mumbai Accounts DepartmentDate : May 30, 2011 Mumbai : May 30, 2011
Rakesh Singh Dr. K C Chakrabarty Alok Nigam K Jayakumar
Chairman Director Director Director
118
Consolidated Balance Sheet
Profit and Loss Account
&
Cash Flow
of
NABARD
&
its Subsidiaries(NABCONS, ADFT, ABFL, NABFINS)
2010-2011
119
P. Parikh & Associates
HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009,
Tel : 23443549, 23437853, Fax : 23415455,
Website : www.pparikh.com
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, 2011, 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 Bank’s 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 ` 192.23 crore and ` 23.51 crore respectively. The financial statements in respect of three
subsidiaries viz. Agri Development Finance (Tamil Nadu) Ltd., NABARD Consultancy Services Limited and Agri-Business
Finance (AP) 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, 2011;
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 For and on behalf of
Date: May 30, 2011 P. Parikh & Associates
Chartered Accountants
Firm Registration No. 107564W
Ashok Rajagiri
Partner,
Membership No.: 046070
120
National Bank for Agriculture and Rural Development
Consolidated Balance Sheet as on 31 March 2011
(` in '000)
Particulars As on 31.03.2011 As on 31.03.2010
FUNDS AND LIABILITIES
Capital 20,00,00,00 20,00,00,00
Reserve Fund and Other Reserves 1,18,88,71,64 1,06,95,52,59
National Rural Credit Funds 1,60,45,00,00 15983,00,00
Funds Out of Grants received from International Agencies 1,38,89,56 149,87,64
Gifts, Grants, Donations and Benefactions 26,01,94,77 47,08,08,54
Other Funds 34,31,47,40 27,35,11,98
Minority Interest 21,69,85 13,42,23
Deposits 8,27,76,67,53 6,99,96,02,03
Bonds and Debentures 2,67,87,24,84 2,00,04,38,12
Borrowings 76,81,29,09 51,76,83,03
Current Liabilities and Provisions 56,05,55,85 48,87,86,69
TOTAL FUNDS AND LIABILITIES 15,89,78,50,53 13,63,50,12,85
PROPERTY AND ASSETS
Cash and Bank Balances 1,08,81,89,37 96,94,91,33
Investments 1,93,05,80,92 37,64,99,64
Advances 12,60,31,30,66 12,05,12,26,31
Fixed Assets 2,29,99,83 2,34,98,90
Other Assets 25,29,49,75 21,42,96,67
TOTAL PROPERTY AND ASSETS 15,89,78,50,53 13,63,50,12,85
As per our attached report of even date
P. Parikh & Associates
Chartered Accountants
FRN. 107564W
Ashok Rajagiri K. S. Padmanabhan
Partner : Chief General Manager
M. No. 046070 Accounts Department
Mumbai Mumbai : May 30, 2011
Date : May 30, 2011
Rakesh Singh Dr. K C Chakrabarty Alok Nigam K Jayakumar
Chairman Director Director Director
121
National Bank for Agriculture and Rural Development
Consolidated Profit and Loss Account for the year ended 31 March 2011
(` in '000)
Particulars 2010-11 2009-10
Income:
Interest Received on Loans and Advances 8170,20,18 66,54,03,24
Income from Investment operations 946,91,62 1259,46,96
Other Receipts 107,08,08 66,84,46
TOTAL INCOME 92,24,19,88 79,80,34,66
Expenditure:
Interest and Financial Charges 6194,38,06 49,88,46,50
Establishment and other expenses 1135,57,54 5,54,72,01
Depreciation 22,67,16 23,33,50
Provisions 35,79,92 1,32,71,75
TOTAL EXPENDITURE 7388,42,68 5,69,92,376
Profit before Income Tax 1835,77,20 2281,10,90
Provision for Income Tax 463,67,98 649,54,88
Deferred Tax Asset Adjustment 84,93,30 67,17,34
Short / (Excess) provision for Income Tax in earlier years 0 0
Profit after Tax 1287,15,92 1564,38,68
Share of Profit / Loss in Subsidiaries attributable to Minority Interest 88,93 71,51
Profit available for Appropriation 1286,26,99 1563,67,17
Appropriations:
Profit as above 1286,26,99 1563,67,17
Add: Withdrawals from various funds against expenditure debited to
P/L A/c / transfer of funds which have been closed 202,67,59 70,34,45
Total Profit Available for Appropriation 1488,94,58 1634,01,62
Transferred to:
Special Reserve u/s 36(I)(viii) of the Income Tax Act, 1961 360,00,00 350,00,00
National Rural Credit (Long Term Operations) Fund 50,00,00 400,00,00
National Rural Credit (Stabilisation) Fund 10,00,00 10,00,00
Co-operative Development Fund 6,05,32 3,83,03
Research & Development Fund 17,67,49 9,82,99
Investment Fluctuation Reserve 116,07,65 30,00,00
Producers' Organisation Development Fund 50,00,00 0
Rural Infrastructure Promotion Fund 25,00,00 0
Financial Inclusion Technology Fund 10,00,00 0
Farmers Technology Transfer Fund 2,34,20 64,58,41
Farm Innovation and Promotion Fund 33,55,54 96,94
MFDEF Reserve Fund 0 80,00,00
Reserve Fund 808,24,38 684,80,26
Total 1488,94,58 1634,01,63
122
Additional Notes to Consolidated Accounts
1. Consolidation has been done pursuant to the listing agreement with stock exchange.
2. Financial statement in respect of Agri Development Finance (Tamilnadu) Ltd, NABARD Consultancy Services Limited and Agri Business
Finance (AP) Ltd. are unaudited.
3. 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 52.47
NABARD Consultancy Pvt. Ltd. India 100.00
*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
Ltd. and NABARD consultancy services (Private) Limited has provided depreciation on fixed assets by adopting Straight 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 ` 22.67 crore (23.34 crore) included in the Consolidated
Financial Statement, 0.14% (0.18%) 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 2010-11 Direct Refinance Treasury Unallocated Total
(Consolidated) Finance
Segment Revenue 4090.85(3298.75) 4086.49(3298.75) 943.24(1255.69) 103.63(32.32) 9224.20(7980.35)
Segment Results 271.38(374.13) 1567.59(1198.23) 912.21(1227.10) -915.41(-518.36) 1835.77(2281.11)
Total carrying amount of
Segment Assets 66434.55(60538.90) 74643.27(61222.81) 15316.71(12985.48) 2583.97(1602.94) 158978.51(136350.13)
Total carrying amount of
Segment Liabilities 68934.10(60661.60) 69320.39(55128.33) 266.47(239.82) 20457.56(20320.38) 158978.51 (136350.13)
Other Items : – – – – –
Cost to acquire Segment
Assets during the year – 0.00 (0.10) 18.54(11.27) 18.54(11.37)
Amortization & Depreciation 0.06(0.03) 0.00(0.00) 0.00(18.18) 22.61(23.30) 22.67(41.52)
Non Cash Expenses
(other than above) 33.10(18.06) -0.08(96.37) -0.05(-0.68) 100.21(73.34) 133.18(187.09)
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 K. S. Padmanabhan
Partner : Chief General Manager
M. No. 046070 Accounts Department
Mumbai Mumbai : May 30, 2011
Date : May 30, 2011
Rakesh Singh Dr. K C Chakrabarty Alok Nigam K Jayakumar
Chairman Director Director Director
123
National Bank for Agriculture and Rural Development
Consolidated Cash Flow Statement for the year ended 31 March 2011(` in '000)
Particulars During 2010-11 During 2009-10
(a) Cash flow from Operating Activities
Net profit as per P & L a/c before tax 1835,77,20 2281,10,90
Depreciation 22,67,16 23,33,50
Provisions and Amortisations 2,78,34 17,97,83
Provision for Non performing Assets 32,90,00 17,60,24
Provision for Standard Assets 0 101,50,00
Provision for Sacrifice in interest element of restructured loan (-)8,00 (-)4,46,00
Interest credited to various funds 118,36,63 91,59,97
Other expenses 0 (-)58
Income from Investment (-)938,79,85 (-)1255,68,93
Profit / Loss on sale of Fixed Asset 4,64 (-)20,90
Expenditure from various funds (-)5492,54,83 (-)12801,23,53
Operating profit before working capital changes (-)4418,88,71 (-)11528,47,50
Adjustment for net change in:
Current Assets (-)377,80,87 4033,86,71
Current liabilities 717,32,21 698,41,86
Increase/Decrease in Loans and Advances (-)19087,50,88 (-)21790,01,01
Cash generated from operating activities (-)23166,88,25 (-)28586,19,94
Payment towards Income tax (-)541,65,19 (-)795,74,81
Net cash flow from operating activities (A) (-)23708,53,44 (-)29381,94,75
(b) Cash flow from Investing Activities
Income from Investment 943,23,85 1255,68,93
Increase / Decrease of Fixed Assets (-)17,72,70 (-)10,80,04
Increase / Decrease in Investments (-)2087,33,45 (-)808,60,63
Net cash used in investing activities (B) (-)1161,82,30 436,28,26
(c) Cash flow from Financing Activities
Proceeds of Bonds 6793,53,37 (-)3699,24,94
Increase / Decrease in Borrowings 2555,88,70 1591,33,43
Increase / Decrease in Deposits 12762,20,26 17863,32,63
Grants / contributions received 3925,65,06 12928,20,41
Dividend paid (-)58,30 (-)58,50
Net cash raised from financing activities (C) 26036,69,09 28683,03,03
Net increase in cash and cash equivalent (A)+(B)+(C) 1166,33,35 (-)262,63,45
Cash and cash equivalent at the beginning of the period 649,24,34 911,87,80
Cash and cash equivalent at the end of the period 1815,57,69 649,24,34
Cash and cash equivalent at the end of the period includes : 2010-11 2009-10
Cash in hand 10 22
Balance with Reserve Bank of India 38,85,26 25,45,42
Balances with other Banks in India 854,09,40 554,85,30
Remittances in Transit 694,44,37 68,93,40
Collateralised Borrowing and Lending Obligations 228,18,56 0
Total 1815,57,69 649,24,34
As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN. 107564W
Ashok Rajagiri K. S. PadmanabhanPartner : Chief General ManagerM. No. 046070, Mumbai Accounts DepartmentDate : May 30, 2011 Mumbai : May 30, 2011
Rakesh Singh Dr. K C Chakrabarty Alok Nigam K Jayakumar
Chairman Director Director Director
124
E-mail Addresses of NABARD Head Office Departments at Mumbai
Chairman's Secretariat [email protected]
Executive Director (S.K.Mitra)'s Secretariat [email protected]
Executive Director(Amaresh Kumar)'s Secretariat [email protected]
Executive Director(B.S. Shekhawat)'s Secretariat [email protected]
Accounts Department [email protected]
Central Vigilance Cell [email protected]
Corporate Planning Department [email protected]
Central Statistical Information Dept. [email protected]
Department of Economic Analysis & Research [email protected]
Department of Co-operative Revival & Reforms [email protected]
Department of Information Technology [email protected]
Department of Supervision [email protected]
Development Policy Department-Farm Sector [email protected]
Development Policy Department-Non-Farm Sector [email protected]
Finance Department [email protected]
Financial Inclusion Department [email protected]
General Administration Department [email protected]
Rajbhasha Prabhag [email protected]
Human Resources Development Department [email protected]
Human Resources Management Department [email protected]
Inspection Department [email protected]
Institutional Development Department [email protected]
Investment Credit Department [email protected]
Law Department [email protected]
Micro Credit Innovations Department [email protected]
Premises Department [email protected]
Production Credit Department [email protected]
Secretary's Department [email protected]
Public Relations [email protected]
State Projects Department [email protected]
Technical Services Department [email protected]
Repositioning Department [email protected]
Nabcons [email protected]
Telephone Nos.
Reception : 022-26539895/96/99;
PRO : 022-26530071;
Protocol & Security : 022 - 26539046
125
Regional Offices / Cell / Training Establishments
REGIONAL OFFICES
ANDAMAN & NICOBAR
NABARD Complex
VIP Road
Port Blair - 744 103
Tel No. : (03192) 233308
Fax No. : (03192) 237696
E-mail : [email protected]
ANDHRA PRADESH
1-1-61, RTC Cross Roads
Musheerabad
Hyderabad - 500 020
Tel No. : (040) 27685555, 27612651
Fax No. : (040) 27611829
E-mail : [email protected]
ARUNACHAL PRADESH
Bank Tinali, VIP Road
Opposite State Bank of India
Itanagar - 791 111
Tel No. : (0360) 2215967
Fax No. : (0360) 2212675
E mail : [email protected]
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 : [email protected]
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 : [email protected]
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 : [email protected]
GOA
Third floor, Nizari Bhavan
Menezes Braganza Road
Panaji - 403 001
Tel No. : (0832) 2220490, 2430504
Fax No. : (0832) 2223429
E mail : [email protected]
GUJARAT
NABARD Tower
Opp. Municipal Garden
Usmanpura
Ahmedabad - 380 013
Tel No. : (079) 27552257-59
Fax No. : (079) 27551584
E mail : [email protected]
HARYANA
Plot No.3, Post Box No. 7
Sector - 34 'A'
Chandigarh - 160 022
Tel No. : (0172) 5046703, 5046728
Fax No. : (0172) 5046784
E mail : [email protected]
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 : [email protected]
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 : [email protected]
JHARKHAND
Opp. Adivasi College Hostel
Karamptoli Road
Ranchi - 834 001
Tel No. : (0651) 2361107
Fax No. : (0651) 2361108
E-mail : [email protected]
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 : [email protected]
KERALA
Punnen Road, Statue
P. B. No. 220
Thiruvananthapuram - 695 001
Tel No. : (0471) 2323529, 2323590
Fax No. : (0471) 2324358
E mail : [email protected]
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 : [email protected]
MAHARASHTRA
54, Wellesley Road
Post Box No. 5, Shivaji Nagar
Pune - 411 005
Tel No. : (020) 25541083
25542090
Fax No. : (020) 25542250
E-mail : [email protected]
MANIPUR
Leiren Mansion
Opposite Lamphel Supermarket
Lamphelpat, Imphal - 795 004
Tel No. : (0385) 2410706, 2416192
Fax No. : (0385) 2416191
E-mail : [email protected]
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 : [email protected]
MIZORAM
Ramhlun Road (North)
Bawngkawn
Aizawl - 796 014
Tel No. : (0389) 2343428, 2305290
Fax No. : (0389) 2340815
E mail : [email protected]
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 : [email protected]
NEW DELHI
NABARD Tower
24 Rajendra Place
New Delhi - 110 125
Tel No. : (011) 25818733
25721723
Fax No. : (011) 41539187
41539185
E mail : [email protected]
ORISSA
'Ankur', 2/1, Nayapalli Civic Centre
Bhubaneswar - 751 015
Tel No. : (0674) 2553884
Fax No. : (0674) 2552019
E mail : [email protected]
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 : [email protected]
RAJASTHAN
3, Nehru Place
Tonk Road, Post Bag No. 104
Jaipur - 302 015
Tel No. : (0141) 2740821, 2743416
Fax No. : (0141) 2742161
E mail : [email protected]
126
TRIPURA
Palace Compound (East)
Uzirbari Road, Post Box No.9
Agartala - 799 001
Tel No. : (0381) 2229644
2229633
Fax No. : (0381) 2224125
E mail : [email protected]
UTTAR PRADESH
11, Vipin Khand
Gomti Nagar
Lucknow - 226 010
Tel No. : (0522) 2304530
Fax No. : (0522) 2304531
E mail : [email protected]
CELL
SRINAGAR
Opp. Amar Singh College Gate
Gogji Bagh
Srinagar - 190 008
Tel No. : (0194) 2310280
Fax No. : (0194) 2310479
TRAINING ESTABLISHMENTS
BOLPUR
Regional Training College
NABARD, Bolpur Lodge
Bolpur – 731 204
Birbhum (West Bengal)
Tel No. : (03463) 252812, 252783
Fax No.: (03463) 252295
E-mail : [email protected]
MANGALORE
Regional Training College
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 : [email protected]
LUCKNOW
Bankers Institute of Rural Development
Section 'H', L.D.A. Colony
Kanpur Road
Lucknow - 226 012
Tel No. : (0522) 2421137/54, 2421055
Fax No.: (0522) 2421047, 2421176
E mail : [email protected]
LUCKNOW
National Bank Staff College
Sector 'H', LDA Colony
Kanpur Road
Lucknow - 226 012
Tel No. : (0522) 2421052
Fax No.: (0522) 2421035
E mail : [email protected]
LUCKNOW
National Bank Training Centre
Sector D/S, Sitapur Road
Opp. Mandi Samiti, Aliganj
Lucknow – 226 020
Tel No. : (0522) 2757564, 2757610
Fax No.: (0522) 2757566
E-mail : [email protected]
HYDERABAD
Zonal Training Centre
NABARD, 10-1-128/4
NABARD Officers’ Quarters
Masab Tank
Hyderabad - 500 028
Tel No. : (040) 23375006
Fax No.: (040) 23375007
E mail : [email protected]
SIKKIM
Om Nivas, Church Road
Post Box No. 46
Gangtok - 737 101
Tel No. : (03592) 203015, 220478
Fax No. : (03592) 204062
E mail : [email protected]
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 : [email protected]
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 : [email protected]
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 : [email protected]
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LIST OF ABBREVIATIONS
AS Accounting Standards
AAGR Average Annual Growth Rate
A & N Islands Andaman & Nicobar Islands
AACS As Applicable to Co-operative Societies
ACABC Agri Clinic and Agri Business Centres
ACB Audit Committee of the Board
ACE APRACA Centre of Excellence
ACSTI Agriculture Co-operative Staff TrainingInstitute
ADFC Agriculture Development FinanceCompany
ADWDRS Agricultural Debt Waiver and Debt ReliefScheme, 2008
AEZ Agricultural Export Zone
AFC Agricultural Finance Corporation Ltd.
AFI Alliance for Financial Inclusion
AFPRO Action for Food Production
AFS Available for Sale
AgDSM Agriculture Demand Side Management
AGMARKNET Agricultural Marketing InformationNetwork
AH Animal Husbandry
AIBP Accelerated Irrigation BenefitProgramme
AIDIS All India Debt and Investment Survey
ALCO Asset Liability Management Committee
ALM Asset Liability Management
AM Accompanying Measures
AMI Agriculture Marketing Infrastructure
AML Anti-Money Laundering
APCOB-CTI Andhra Pradesh State CooperativeBank-Cooperative Training Institute
APMC Agricultural Produce Market Committee
APRACA Asia-Pacific Rural and Agricultural CreditAssociation
ARWIND Assistance to Rural Women in Non-FarmDevelopment
ASP Application Service Provider
ATM Automated Teller Machine
BADP Border Area Development Programme
BAIF Bharatiya Agro Industries Foundation
BC Business Correspondents
BCG Boston Consultancy Group
BEE Bureau of Energy Efficiency
BESCOM Bangalore Electric Supply Company
BF Business Facilitators
BIRD Bankers Institute of Rural Development
BNB Bhavishya Nirman Bonds
BoS Board of Supervision
BPL Below Poverty Line
C-PEC Centre for Professional Excellence in Co-operatives
CA Chartered Accountant
CAC Concurrent Audit Cell
CAGR Compound Annual Growth Rate
CARE Credit Analysis & Research Limited
CAS Common Accounting System
CAT Capacity Building for Adoption ofTechnology
CB Commercial Banks
CBP Capacity Building Phase
CBS Core Banking Solution
CCS Co-operative Credit Structure
CD Certificate of Deposit
CDF Co-operative Development Fund
CDM Clean Development Mechanism
CDP Cattle Development Projects
CEO Chief Executive Officer
CER Certified Emission Reduction
CFA Chartered Financial Analyst
CFSA Committee on Financial SectorAssessment
CIBIL Credit Information Bureau (India)Limited
CISS Capital Investment Subsidy Scheme
CMA Credit Monitoring Arrangement
CMIE Centre for Monitoring of IndianEconomy
CMR Centre for Micro-finance Research
CP Commercial Paper
CPI Consumer Price Index
CPI-AL Consumer Price Index for AgriculturalLabour
CPI-RL Consumer Price Index for Rural Labour
CPIS Coconut Palm Insurance Scheme
CRAR Capital to Risk-Weighted Assets Ratio
CRIDA Central Research Institute for DrylandAgriculture
CRISIL Credit Rating Information Services ofIndia Limited
CRR Cash Reserve Ratio
CS Capital Support/Company Secretary
CSA Co-operative Societies Act
CSP Customer Service Provider
CTFC Certified Trainer in Financial Co-operatives
CTI Co-operative Training Institute
CUC Carcass Utilisation Centre
CVC Central Vigilance Cell
DADI District Agricultural Development Index
DAHDF Department of Animal Husbandry,Dairying and Fisheries
DAP Di-Ammonium Phosphate/Development Action Plan
DCCB District Central Co-operative Bank
DDM District Development Manager
DDSD Demand Driven Skill Development
128
DEDS Dairy Entrepreneurship DevelopmentScheme
DLMRC District Level Monitoring and ReviewCommittee
DLT District Level Trainers
DPR Detailed Project Reports
DRDA District Rural Development Agency
DRIP District Rural Industries Project
DTL Demand and Time Liabilities
DTP Development of Tribal Population
DVCF Dairy Venture Capital Fund
ENZEN Enzen Global Solutions Private Limited
EoI Expression of Interest
ERP Enterprise Resource Planning
EXCOM Executive Committee
FC Farmers’ Clubs/Financial Co-operation
FCI Food Corporation of India
FIF Financial Inclusion Fund
FIMMDA Fixed Income Money Market andDerivatives Association of India
FINO Financial Information Network &Operations Ltd.
FIP Full Implementation Phase
FIPF Farm Innovation and Promotion Fund
FITF Financial Inclusion Technology Fund
FLCC Financial Literacy and CreditCounselling Centres
FR Flash Reports
FRC Farmers’ Resource Centre
FSS Farmers’ Service Societies
FTRDC Farmers’ Training and RuralDevelopment Centres
FTTF Farmers’ Technology Transfer Fund
GAAP Generally Accepted Accounting Policies
GCC General Credit Card
GCF Gross Capital Formation
GDP Gross Domestic Product
GDS Gross Domestic Savings
GFCE Government Final ConsumptionExpenditure
GIZ Deutsche Gesellschaft fur InternationaleZusammenarbeit
GLC Ground Level Credit
GoI Govt. of India
GTZ Deutsche Gesellschaft fur TechnischeZusammenarbeit
HFT Held for Trading
HO Head Office
HPC High Power Committee
HR Human Resource
HRM Human Resource Management
HTM Held to Maturity
HWG Handloom Weavers’ Groups
IARI Indian Agricultural Research Institute
IAS Indian Administrative Service
ICAI Institute of Chartered Accountants ofIndia
ICM Institutes of Cooperative Management
ICRA Investment Information and CreditRating Agency of India
ICRISAT-WWF International Crops Research Institute forthe Semi-Arid Tropics - World WideFund for Nature
ICT Information and CommunicationsTechnology
IDRBT Institute for Development & Research inBanking Technology
IEC Information, Education, Communication
IES Indian Economic Service
IFAD International Fund for AgricultureDevelopment
IGWDP Indo-German Watershed DevelopmentProgramme
IIBM Indian Institute of Bank Management
IIM Indian Institute of Management
IIMPS Invest India Micro-Pension Services
IIT Indian Institute of Technology
IMF International Monetary Fund
IPDSS Institutional Protection and DepositSafety Scheme
IR Inspection Reports
IRR Internal Rate of Return
IRV Individual Rural Volunteers
ISAP Indian Society of Agri-businessProfessionals
ISEC Institute for Social and EconomicChange
ISMW Indian School of Micro-Finance forWomen
ISRO-VSAT Indian Space Research Organisation -Very Small Aperture Terminal
ISS Investment Specific Studies
IT Information Technology
ITI Integrated Training Institute
IWDP Integrated Watershed DevelopmentProgramme
JCC Joint Consultative Committee
JLG Joint Liability Groups
JLTC Junior Level Training Centres
JNNSM Jawaharlal Nehru National Solar Mission
KADFC Karnataka Agriculture DevelopmentFinance Company Ltd.
KCC Kisan Credit Card
KfW Kreditanstalt fur Wiederaufbau (GermanDevelopment Bank)
KVIC Khadi and Village Industries Commission
KVK Krishi Vigyan Kendras
KYC Know Your Customer
129
LABS Livelihood Advancement BusinessSchool
LAMPS Large-sized Adivasi Multipurpose Society
LBSNAA Lal Bahadur Shastri National Academyof Administration
LPA Long Period Average
LT Long Term
LTCCS Long Term Co-operative Credit Structure
M-CRIL Micro-Credit Ratings InternationalLimited
MAAPA Multi-activity Approach for PovertyAlleviation
MBA Master of Business Administration
MC Management Committee
MDMI Manpower Development & ManagementInstitute
MEDP Micro-Enterprise DevelopmentProgramme
MF Micro-Finance
MFDEF Micro-finance Development and EquityFund
MFI Micro Finance Institution
Mha million hectares
MIS Management Information System
MNAIS Modified National Agricultural InsuranceScheme
MNRE Ministry of New and Renewable Energy
MoA Ministry of Agriculture/Memorandum of Agreement
MOP Muriate of Potash
MoSPI Ministry of Statistics and ProgrammeImplementation
MoU Memorandum of Understanding
MPLADS Member of Parliament Local AreaDevelopment Scheme
MSME Micro, Small and Medium Enterprises
MSP Minimum Support Price
MSTP Million Shallow Tubewell Programme
MT Medium Term / Metric Tonne
MU Mother Units
Nabcons NABARD Consultancy Services Pvt. Ltd.
NABFINS NABARD Financial Services Ltd.
NAFSCOB National Federation of State CooperativeBanks
NAIS National Agricultural Insurance Scheme
NBFC Non-Banking Finance Company
NBSC National Bank Staff College
NBTC National Bank Training Centre
NCCT National Council for CooperativeTraining
NCOF National Centre of Organic Farming
NE North Eastern
NEDFi North Eastern Development FinanceCorporation Ltd.
NER North-Eastern Region
NFS Non-Farm Sector
NFSM National Food Security Mission
NGO Non-Governmental Organisation
NHEP New High Energy Efficiency Pumpset
NHM National Horticulture Mission
NIDA National Infrastructure DevelopmentAssistance
NIRB National Institute of Rural Banking
NLUP New Land Use Policy
NMCP National Manufacturing CompetitivenessProgramme
NMMI National Mission on Micro Irrigation
NPA Non Performing Asset
NPDP National Pulses DevelopmentProgramme
NPOF National Project on Organic Farming
NPRI National Programme on RuralIndustrialisation
NPS New Pension System
NPW Net Present Worth
NRC(LTO) National Rural Credit (Long TermOperations)
NRMC Natural Resources Management Centre
NRC(Stab.) National Rural Credit (Stabilisation)
ODI Organisational Development Initiative
OP Occasional Paper
OPP Oilseeds Production Programme
OS Operating System
PACS Primary Agricultural Credit Societies
PAT Profit After Tax
PBT Profit Before Tax
PCARDB Primary Co-operative Agriculture andRural Development Bank
PDAI Primary Dealers Association of India
PFCE Private Final Consumption Expenditure
PFRDA Pension Fund Regulatory &Development Authority
PGDRB Post Graduate Diploma in Rural Banking
PIA Project Implementing Agency
PLP Potential Linked Credit Plan
POS Point of Sale
PPID Pilot Project for Integrated Developmentof Backward Blocks
PPP Public Private Partnership
PRI Panchayat Raj Institution
PUCB Primary Urban Co-operative Bank
PVCF Poultry Venture Capital Fund
RBI Reserve Bank of India
RCMB Risk Management Committee of theBoard
RCS Registrar of Co-operative Societies
REDP Rural Entrepreneurship DevelopmentProgramme
130
RFA Revolving Fund Assistance
RFI Rural Financial Institutions
RFIP Rural Financial Institutions Programme
RGCT Rajiv Gandhi Charitable Trust
RGMVP Rajiv Gandhi Mahila Vikas Pariyojana
RICM Regional Institute of CooperativeManagement
RIDF Rural Infrastructure Development Fund
RIF Rural Innovation Fund
RLP Realistic Lending Programme
RML Reuters Market Light
RNFS Rural Non-Farm Sector
RO Regional Office
RRB Regional Rural Bank
RSVY Rashtriya Sam Vikas Yojana
RTC Regional Training College
RTI Right to Information
RUDSETI Rural Development and SelfEmployment Training Institute
R&D Research and Development
SAO Seasonal Agricultural Operations
SAS Situation Assessment Survey
SAU State Agricultural University
SBI State Bank of India
SBLP SHG-Bank Linkage Programme
SBPC Standardised Banking Programme forCo-operatives
SCARDB State Co-operative Agriculture and RuralDevelopment Bank
SCB State Co-operative Bank
SCC Swarojgar Credit Card
SC/ST Scheduled Caste/Scheduled Tribe
SDC Swiss Agency for Development and Co-operation
SDD Special Development Debentures
SDP Skill Development Programmes
SF/MF Small Farmers/Marginal Farmers
SGSY Swarnjayanti Gram Swarozgar Yojana
SHG Self Help Group
SHLS Solar Home Lighting System
SHPI Self Help Promoting Institution
SIDBI Small Industries Development Bankof India
SLIC State Level Implementation Committee
SLR Statutory Liquidity Ratio
SLSMC State Level Sanctioning and MonitoringCommittee
SLTF State Level Task Force
SMS Short Messaging Service
SOFTCOB Scheme of Financial Assistance forTraining of Co-operative BanksPersonnel
SPV Special Purpose Vehicles
SRI System of Rice Intensification
SRTO Small Road Transport Operators
SS Special Studies
SSI Sustainable Sugarcane Initiatives
ST Short Term
STCCS Short Term Co-operative CreditStructure
STCRC Fund Short Term Co-operative Rural Credit(Refinance) Fund
STD Short Term Deposit
ST(SAO) Short Term (Seasonal AgriculturalOperations)
ST(OSAO) Short Term (Other than SeasonalAgricultural Operations)
SWC State Warehousing Corporation
SWOT Strength, Weakness, Opportunities,Threats
TA/DA Travelling Allowance/Daily Allowance
TC Technical Component
TDF Tribal Development Fund
TE Training Establishment
TF Task Force
TFO Total Financial Outlay
TMB Term Money Borrowings
TPDS Targeted Public Distribution System
ToR Terms of Reference
TSSPS Tripura State Support Project on SHG
UNDP United Nations DevelopmentProgramme
UPNRM Umbrella Programme on NaturalResources Management
USAID US-Agency for InternationalDevelopment
USQ Unstarred Question
UT Union Territory
VA Voluntary Agency
VC Video Conferencing
VDP Village Development Programme
VOC Vehicle Operating Cost
VSAT Very Small Aperture Terminal
VWC Village Watershed Committee
WBCIS Weather Based Crop Insurance Scheme
WDC Women Development Cell
WDF Watershed Development Fund
WOTR Watershed Organisation Trust
WPI Wholesale Price Index
ZTC Zonal Training Centre