Press Information Bureau

Government of India

Ministry of Finance

11-May-2012 17:58 IST

Agriculture Development Bank

National Bank for Agriculture and Rural Development (NABARD) was established on 12 July 1982 by an Act of the Parliament for providing and regulating credit and other facilities for the promotion and development of agriculture, small scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas, and for matters connected therewith or incidental thereto.

NABARD provides refinance assistance under Sec.21 (i) of NABARD Act, 1981 for Short Term Seasonal Agricultural Operations (STSAO) purposes for a period not exceeding 8 months to Cooperatives, Regional Rural Banks (RRBs) and any other financial institutions approved by Reserve Bank of India. Further, in terms of Govt. of India’s instruction the Short Term refinance to Cooperative Banks, RRBs is being provided by NABARD at concessional rate of interest in order to enable them to provide crop loans upto Rs. 3 lakh for a period of one year to farmers at 7% p.a.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in the Lok Sabha today.

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DSM/SS/SL

Refinance assistance under NABARD Act enables concessional short-term credit to cooperative and regional rural banks for crop loans. Statutory refinance assistance for short-term seasonal agricultural operations permits Cooperatives, Regional Rural Banks and RBI approved institutions to obtain refinance for up to eight months; government instruction provides concessional refinance to Cooperative Banks and Regional Rural Banks to enable them to on lend crop loans for one year at a subsidised interest rate.