Government has set up a fund namely Short Term Cooperative Rural Credit (Refinance) Fund in National Bank for Agriculture & Rural Development (NABARD) for providing concessional short term refinance to Cooperative Banks. The said fund is made available to NABARD from out of the shortfall in priority sector lending targets by commercial banks. An amount of ₹ 45,000 crore has been allocated for Short Term Cooperative Rural Credit (Refinance) Fund during 2016-17. NABARD has reported that out of the allocation for the current financial year, an amount of ₹ 24,000 crore has already been disbursed by NABARD till 30 September 2016.

NABARD has further reported that it is authorized to disburse the balance loan of ₹ 21,000.00 crore in the form of concessional refinance to State Cooperative Banks on behalf of District Central Cooperative Banks (DCCBs) in order to enable them to meet the crop loan requirements of farmers.

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha.

Concessional refinance for cooperative banks mobilises NABARD funding to support crop credit through state and district cooperative channels. The government established the Short Term Cooperative Rural Credit (Refinance) Fund in NABARD to provide concessional short term refinance to cooperative banks using resources from shortfalls in priority sector lending, and NABARD is authorised to disburse funds to State Cooperative Banks on behalf of District Central Cooperative Banks to meet farmers' crop loan requirements.