Letter Of Transmittal

Letter of Transmittal

Preliminary.p65

1

7/14/2009, 5:45 PM

Board of Directors Umesh Chandra Sarangi Chairman

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

Dr. Ram S. Tarneja

Dr. Anup Kumar Sinha

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

Usha Thorat

Lakshmi Chand

Shashi Rekha Rajagopalan

T. Nandakumar

Dr. Rita Sharma

Amitabh Verma

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

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

Shakuntala Jakhu

O. Nabakishore Singh

Dr. S. Chellappa

Dr. K. G. Karmakar Managing Director

Preliminary.p65

3

7/14/2009, 5:45 PM

Amarendra Pratap Singh

Contents Page No. NABARD at a Glance Key References Principal Officers Highlights .................................................................................................................................................................................. 1 I.

II.

III.

IV.

V.

Rural Economic Environment ...................................................................................................................................... 16 

Global Economy ........................................................................................................................................................ 16



Indian Economy ......................................................................................................................................................... 17

Development Initiatives ................................................................................................................................................ 29 

Farm Sector ................................................................................................................................................................ 29



Rural Non-Farm Sector .............................................................................................................................................. 36



Financial Inclusion ..................................................................................................................................................... 39



micro-Finance ............................................................................................................................................................ 40



Research and Development Activities ........................................................................................................................ 46



Training Personnel of RFIs ......................................................................................................................................... 48

Business Operations ...................................................................................................................................................... 50 

Production Credit ....................................................................................................................................................... 50



Investment Credit ....................................................................................................................................................... 55



Loans under Rural Infrastructure Development Fund ................................................................................................ 64



NABARD Consultancy Services ................................................................................................................................. 72



Management of Resources ......................................................................................................................................... 73

Capacity Building of Client Institutions .................................................................................................................... 77 

Institutional Development .......................................................................................................................................... 77



Supervision over Banks ............................................................................................................................................. 91

Organisation and Management ................................................................................................................................... 95

Auditors’ Report .................................................................................................................................................................... 102 Balance Sheet ....................................................................................................................................................................... 103 Profit and Loss Account 2008-09 ...................................................................................................................................... 104 Consolidated Financial Statements 2008-09 .................................................................................................................. 127 Regional Offices/Sub-Office/Training Establishments .................................................................................................... 133 Abbreviations ....................................................................................................................................................................... 135

Boxes 1.1 National Mission on Sustainable Agriculture ............ 28

3.2 Cold Chain Infrastructure for Apples in HP ............. 60

2.1 Financial Inclusion Projects sanctioned during 2008-09 ..................................... 39

3.3 Accretion to Rural Infrastructure and Employment ............................................................. 67

2.2 Rating Support tp MFIs: Salient Features ................. 44

3.4 Public Private Partnership for Rural Infrastructure Projects ............................................. 68

2.3 Capital Support to Start-up MFIs: Salient Features .............................................. 45 3.1 Agricultural Debt Waiver and Debt Relief Scheme, 2008: Salient Features ............................................. 53

Preliminary.p65

4

4.1 Special Package for NER: Highlights ........................ 86 4.2 Asset-Liability Management ..................................... 92

7/14/2009, 5:45 PM

NABARD AT A GLANCE (Rs. crore)

Sources of Fund

2009

2008

Capital

2000

2000

Reserve & Surplus

9535

8603

NRC (LTO) Fund

14016

13615

Uses of Funds

2009

2008

Net Utilisation

0

Cash and Bank Balances

13842

9850

3992

932

Collateralised Borrowing and Lending Obligation

133

464

-331

1555

1422

133

16

16

0

c) AFC Equity

1

1

0

d) SIDBI Equity

48

48

0

e) AICI Ltd.

60

60

0

f) NCDEX Ltd. & MCX Ltd.

6

6

0

g) Nabcons

5

5

0

1005

764

241

i) Treasury Bills

157

260

-103

j) Commercial Paper

143

0

143

16896

17381

-485

20

118

-98

2591

1940

651

33335

32401

934

252

290

-38

f) Other Loans

48

27

21

g) RIDF Loans

45616

30649

14967

94

66

28

Fixed Assets

247

257

-10

Other Assets

2106

2681

-575

118176

98706

19470

Net Accretion

401

Investment in a) GOI Securities

NRC (Stabilisation) Fund

Deposits

Bonds and Debentures

Borrowings from GOI

1555

1544

11

482

106

376

23704

28700

-4996

354

370

-16

b) ADFC Equity

h) Mutual Fund/VCF Borrowings from Commercial Banks

500

2500

-2000

Foreign Currency Loan

498

508

-10

Loans and Advances

394

a) Production & Marketing Credit

181

b) Conversion of Production Credit into MT Loans

Certificate of Deposits

Commercial Paper

1816

181

1422

0

c) Liquidity Support Term Money Borrowings

244

0

244

d) MT & LT Project Loans e) LT Non Project Loans

RIDF Deposits

STCRC Fund

Other Liabilities

30593

16430

4622

0

4622

4279

Other Funds

Total

Preliminary.p65

47023

5

3089

h) Co-finance (Net of Provision)

1190

7367

5656

1711

118176

98706

19470

Total

7/14/2009, 5:45 PM

KEY DATA REFERENCES Page

Particulars

Unit

No. 17 17 18 21 21 21 21 20 20 24 25 29 33 31 30 31 32 36 36 36 38 38 39 40 46 46 50 51 52 52 51 56 58 58 58 59 65 65 69 72

Economic Indicators Overall GDP1 % Growth % Growth Agri GDP1+ Share of Agri GDP in total GDP % Foodgrains production million tonnes Oilseeds production million tonnes Sugarcane production million tonnes Cotton production million bales++ 2 % deviation from normal South-west Monsoon North-east Monsoon2 GLC % increase KCC Issued lakh Development Initiatives Watersheds No. NABARD-KfW Projects No. FIPF- projects No. Tribal development projects No. FTTF No. of projects Farmers’ Club No. of clubs RIF- promotional programmes No. of projects DRIP - Units set up lakh - Employment generated lakh persons REDP No. SCC Issued lakh FITF & FIF No. of projects SHG Credit Linked lakh R&D Fund- Sanction No. of projects - Disbursement Business Operations Financial Support by NABARD Refinance - ST Credit ST (SAO) - SCB No. - RRB No. ST (OSAO) - RRB Weavers’ - SCB No. Refinance - Investment Credit Farm Sector NFS SHG Co-financing projects No. RIDF Loans - Sanction No. of projects - Disbursement ERR on rural bridge projects under RIDF % Consultancy Assignments - Contracted No. of projects

72 74 74 78 & 79 78 & 79 78 & 80 78 & 80 79 79 80 80 89 89 & 90 91 91 91

- Completed Market Borrowings Total Working Funds Performance of RFI ST Co-operatives SCB in profit @ DCCB in profit @ LT Co-operatives SCARDB in profit @ PCARDB in profit @ ST Co-operatives - NPA Position SCB- NPA @ DCCB - NPA @ LT Co-operatives - NPA Position SCARDB - NPA@ PCARDB - NPA @ RRB RRB in profit RRB- NPA Position Inspection of banks^@@ Co-operative banks@@ RRB@@

Q : Quick Estimate BL : Bank Limit ‘@@: Statutory Inspections ‘-’ : indicates loss

Preliminary.p65

Numerical Value 2007-08

-

Amount (Rs. crore)

2008-09 Q

9.0 4.9 Q 18Q 231 30 348 26 5 -32 11 85 63 S 8 29 S 16 S 5,277 29 S 0.7 1.5 1,422 1.6 5.52 10 S 7C

RE

6.7 1.6 R E 17 R E 230 28 289 23 -2 -31 13 68 38 S 8 14 S 74 S 12 S 9,989 65 S 1 2 2,083 1.5 9 10.81 12 S 10 C

-

-

18 75 8

20 72 5

12 S 36,964 S -

12 S 85,527 S -

2007-08

2008-09

2,54,658 -

2,87,149 38,245 CL

28 D 242 D 2G 49 G 8S 1,178 GLC 275 RF 8G 679 CL 2,542 BL 2S 7D

58 D 32 D 2 203 G 2S 12 S 1,378 GLC 133 RF 13 G 628 CL 11,132 BL 0.87 S 9D

38,767

50,577

14,826 S 2,940 S 151 S 332 S 9,046 D 3,777 D 2,748 D 1,616 D 27 D 12,795 S 8,035 D

15,448 S 3,547 S 191 S 266 S 10,535 D 4,172 D 2,707 D 2,620 D 37 D 14,719 S 10,459 D

44 321

38 109

9

17

366

122

8

10

-

-

33,606 98,706

27,779 1,18,176

No. No.

27 271

26 p 261 P

548 $ -32 $

466 $P -28 $P

No. No.

9 371

9P 350 P

239 $ -69 $

99 $P -184 $P

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

14 18

12 P 18 P

6,704 16,374

6,169 P 18,741 P

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

30 36

33 P 44 P

5,643 4,316

6,125 P 5,140 P

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

82 * 6.0 385 292 74

81 * 5.6 P 343 273 51

1,384 $ 3,566 -

1,746 $P -

RE : Revised Estimate P : Provisional S : Sanction D : Disbursement RF : Refinance 1 : At Factor Cost at 1999-2000 prices + : Includes agriculture, forestry and fishing ‘++: Of 170 kgs each 2: During calendar year ^: Voluntary inspections CL : Credit Limit *: After amalgamation G: Grant assistance sanctioned @ : Data pertains to financial years 2006-07 & 2007-08 C: Completed $ : Net amount

6

7/14/2009, 5:45 PM

PRINCIPAL OFFICERS (31 March 2009) EXECUTIVE DIRECTORS

S. K. Mitra

Amaresh Kumar

P. L. Behera

Dr. Prakash Bakshi

CHIEF GENERAL MANAGERS (Rural Development Banking Service)

D. B. Gore (Karnataka)

K. V. Raghavulu (Tamil Nadu)

V. Ramakrishna Rao

Sukhbir Singh Maharashtra

Madan Mohan@

Bhawar Puri (Kerala)

J. R. Sarangal (Punjab & Haryana)

B.B.Mohanty

A. K. Mathur (Jammu & Kashmir)

C. R. Patnaik (Orissa)

B. S. Shekhawat

G. S. Menon

S. G. Rathod

R. Narayan (Rajasthan)

A. K. Jain (Assam)

S. Mohapatra (Madhya Pradesh)

C. K. Gopalakrishna

P. Satish

K. C. Shashidhar (Jharkhand)

Pankaj Pandit

Dr. Venkatesh Tagat

S. K. Chatterjee*

S.C.Kaushik

P. Mohanaiah (West Bengal)

P. Das (Uttarakhand)

B. K. Mahunta

Suraj Bhan

J. C. Mishra

J. K. Kanojia

D. P. Mishra (Uttar Pradesh)

V. Sreenarayanan (NBSC)

G. C. Panigrahi

S. G. Siddesh (Gujarat)

S. T. Raghuraman (Himachal Pradesh)

M. V. Ashok

@ Chief Executive Officer, Nabcons

* Preliminary.p65

Officer on Special Duty, Bankers Institute of Rural Development

7

7/14/2009, 5:45 PM

K. K. Gupta

T. Moharana (Chhattisgarh)

S. Akbar

A. K. Srivastava

B. B. Nayak (Andhra Pradesh)

CHIEF GENERAL MANAGERS (Economic / Legal / Technical Service)

Dr. A. K. Bandyopadhyay (Economic)

U. N. Srivastava (Legal)

Dr. K. Ravindra Rao (Technical)

R. B. Haranal (Technical)

Dr. Sandip Ghosh (Technical) (Bihar)

GENERAL MANAGERS IN-CHARGE OF REGIONAL OFFICES/ TRAINING INSTITUTIONS

Arvind Mohan (Meghalaya)

P. C. Mohanty (RTC, Mangalore)

S. Chakrabarty (RTC, Bolpur)

H. R. Dave (New Delhi)

A. P. Sandilya (Goa)

P. C. Sahoo (Mizoram)

K. Jindal (Tripura)

B. G. Mukhopadhyay (Arunachal Pradesh)

DEPUTY GENERAL MANAGERS IN-CHARGE OF REGIONAL OFFICES/SUB-OFFICE

Subrata Gupta (Sikkim)

K. C. Panda (Nagaland)

A. B. Das (Manipur)

R. Nithyanandan (Port Blair Sub-Office)

ASST. GENERAL MANAGER IN-CHARGE OF SRINAGAR CELL

P. L. Negi

Preliminary.p65

8

7/14/2009, 5:45 PM

Highlights Rural Economic Environment 1.

The international financial sector witnessed a

commodities during the year was Rs.6,27,303 crore,

major collapse during 2008-09, brought about by the

registering a decline of 33 per cent compared to the

sub-prime crisis in USA. The tremors of the global

previous

economic crisis were felt in India too, though with

permitted

lower intensity. The contribution of agriculture and

producers/processors and similar participants, within 50

allied sectors to the growth rate of the GDP during

km of the municipal limits of the delivery centres to

2008-09 was 1.6 per cent as compared to 4.9 per cent

enable such participants to deliver their goods on the

during 2007-08.

exchange platform.

Indian Economy

6.

2.

southwest monsoon 2008, the erratic temporal as

The Indian economy registered a GDP growth

year.

The

NCDEX

Forward

to

Market

accredit

the

Commission,

warehouses

of

In spite of the ‘near normal’ precipitation during

during

well as spatial distribution of rainfall affected the

2008-09 due to consistent high growth trend of the

farmer community. The cumulative rainfall recorded

services sector (9.7%).

during the entire southwest monsoon season (June-

of

6.7

per

cent

(at

1999-2000

prices)

September) was 2 per cent lower than the normal 3.

The share of the agriculture and the industry

Long Period Average rainfall. The northeast monsoon

sector in total GDP, however, declined to 17 and

was

26 per cent, respectively, while that of the services

being

sector increased to 57 per cent during 2008-09. The

36 meteorological sub-divisions, 30 received normal

savings and investments ratios during the Tenth Plan

rainfall, while 2 recorded excess and 4 deficient

stood substantially higher at 31.4 per cent each

rainfall.

compared to the Ninth Plan. Annual inflation (y-o-y), measured in terms of variation in wholesale price index (WPI) was 0.26 per cent, as at end-March 2009, owing to fall in commodity prices reflecting global trends.

subdued,

7.

31

The

resulting

per

crop

in

cent

the

below

coverage

cumulative normal.

during

kharif

rainfall Of

2008

the

at

101.5 million ha. showed a drop of 2.4 million ha. In spite of shortfall in northeast monsoon, sown area under rabi crops increased by 1.8 million ha. Overall

The relative share of private consumption and

foodgrains production during 2008-09 is estimated at

GFCF in GDP during the Tenth Plan stood at 61 and

230 million tonnes as against the target of 233 million

27 per cent, respectively. Gross domestic savings and

tonnes

investments, as proportion to GDP at 38 and 39 per

231 million tonnes. During the year, production of all

cent,

crops, except rice, is expected to be lower compared to

4.

respectively,

during

2008-09,

improved

by

and

the

previous

year’s

production

of

last year, the reduction being largest in the case of

2 percentage points over 2007-08.

sugarcane (17%). 5.

The share of agriculture in total exports of the

country improved from 10 per cent in 2006-07 to

8.

11 per cent in 2007-08. However, both total exports

9.81 lakh tonnes during 2008-09. To fund re-plantation

and imports registered a growth of 3.4 and 14.3 per

and

cent, respectively, during 2008-09 over the previous

productivity of plantation crops, GoI during 2008-09

year.

has set up Special Purpose Funds for tea, rubber,

Cumulative

value

of

trade

in

agricultural

Tea

production

rejuvenation

in

activities

the

country

aimed

at

rose

to

improving

1

Highlight.p65

1

7/15/2009, 10:36 AM

coffee and cardamom. The Funds shall be operational

Rs.36,762

till the end of the Eleventh Plan. The contribution of

around 115, 67 and 89 per cent of the targets,

the livestock and poultry sector to agriculture and total

respectively.

GDP

during

2006-07

was

32

and

5

per

cent,

respectively.

10.

crore

and

Rs.26,724

crore

achieving

The Kisan Credit Card (KCC) Scheme has

facilitated in augmenting the GLC flow for crop loans. In addition to ST credit and term loans for agriculture

9.

As

against

crore

and allied activities, a certain component of loan

of credit flow to agriculture for 2008-09, the banking

through KCC also covers consumption needs. During

system disbursed Rs.2,87,149 crore achieving 102 per

the year, 67.95 lakh cards were issued with a credit

cent of the target. Commercial banks, co-operative

limit of Rs.38,245 crore, taking the cumulative to

banks

828.70 lakh cards as on 31 March 2009.

and

the

RRB

target

of

disbursed

Rs.2,80,000

Rs.2,23,663

crore,

Development Initiatives Farm Sector 11.

The

aimed at enabling integrated development through

corpus

of

the

Watershed

Development

Fund (WDF) was augmented by Rs.561 crore during 2008-09,

taking

the

cumulative

amount

to

Rs.1,125 crore as on 31 March 2009. During the year, 38 watershed projects were sanctioned taking the cumulative number to 454, spread over 94 districts in 14 States. With a total commitment (loan and grant) of Rs.257 crore under these projects, an area of 4.54 lakh ha. is expected to be covered. Under the Prime Minister’s Relief Package for 31 districts in four States,

1.90

lakh

ha.

has

been

taken

up

for

implementation during the year, taking the cumulative area covered to 5.88 lakh ha., involving total financial commitment of Rs.706 crore. During 2008-09, an amount of Rs.49.83 crore and Rs.8.10 crore were disbursed as grant and loan, respectively. 12.

NABARD

is

implementing

the

credit and convergence of development programmes in these blocks. As on 31 March 2009, PPID was being implemented in 40 blocks across 6 states. Keeping in view the identical nature of interventions under PPID and Village Development Programme (VDP), it was decided to restrict the duration of PPID to three years only, except wherever it was felt necessary to merge with VDP. NABARD through ‘Capacity Building for Adoption of Technology’ (CAT) scheme undertakes sensitisation of farmers to facilitate them in adopting new/innovative methods of farming through exposure visits and training. During the year, 116 exposure visits involving 3,048 farmers were conducted under CAT on vermi-culture, organic farming, poly-house technology, cultivation of medicinal and aromatic crops, etc., in collaboration

with

research

institutes,

KVK

and

Agriculture Universities. participatory

watershed development programme under the Special

14.

Assistance under NABARD’s Tribal Development

Plan for Bihar component of Rashtriya Sam Vikas

Fund (TDF), created in 2004 with an initial corpus of

Yojana (RSVY) to develop 80,000 ha. of wasteland in

Rs.50 crore, is provided for developing the tribal

eight districts of south Bihar with an allocation of

dominated areas through the wadi concept. It also

Rs.60 crore. During 2008-09, 18 watershed projects

includes taking-up micro-enterprises by the landless,

with grant assistance of Rs.21.60 crore were sanctioned

women empowerment, community health, training and

and Rs.3.61 crore disbursed.

capacity building and building people’s organisations. As on 31 March 2009, the balance outstanding in the

The pilot project for integrated development

fund was Rs.575 crore. During 2008-09, assistance of

(PPID) of backward blocks launched in 2003 was

Rs.203 crore was sanctioned for 74 projects benefiting

expanded to 139 blocks across 16 states. The project

61,924 tribal families in 14 States.

13.

2

Highlight.p65

2

7/15/2009, 10:36 AM

15.

During the year, 14 projects involving grant

assistance

of

Rs.1.81

crore

in

six

States

were

During the year, 65 projects with financial support of Rs.12.37 crore were sanctioned.

sanctioned from the Farm Innovation and Promotion Fund (FIPF). Projects financed included commodity

19.

exchange, rainfed rabi cropping, ultra high density,

introduced as a pilot project during 1993-94, was

orcharding

development,

extended in phases to cover 106 districts by end-March

protected vegetable cultivation in villages and efficient

2007. During 2006-2009, the project was phased out

use of carbon and plant nutrients under dryland

in 43 districts. NABARD would however, continue to

agriculture.

support various deserving developmental interventions

in

guava,

village

farm

in 16.

The Farmers Technology Transfer Fund (FTTF)

was operationalised from 1 April 2008 with a corpus of Rs.25 crore with the aim of promoting technology transfer for enhancing production and productivity in

agriculture

and

farm

related

activities.

During

2008-09, 12 proposals involving a grant assistance of Rs.233 lakh in 6 states were sanctioned for activities like oil-production, turmeric processing, information and commodity trading center, technology transfer for seed production, establishment of Outreach Center for North and Middle Andamans districts, etc. Further, grant assistance

of

Rs.80.20

lakh

was

sanctioned

for

22 Farmers’ Training and Rural Development Centres. During the year 9,989 Farmers’ Clubs (FC) were

The District Rural Industries Project (DRIP),

these

districts.

During

2008-09,

GLC

flow

in

63 DRIP districts covered under various phases reached Rs.1,378 crore and refinance availed was Rs.133 crore. In

all,

1.05

lakh

units

were

set

up,

generating

employment for 2 lakh persons. 20.

The ‘Scheme for Strengthening of Rural Haats’

introduced in 1999 in DRIP districts, was extended to all district, Village Bazaar Boards, SHG, NGO and to PRI/PACS during the year. Under the scheme, the ceiling was raised from Rs.3 lakh to Rs.5 lakh and coverage extended to include permanent structures. During 2008-09, grant support of Rs.186 lakh was sanctioned for infrastructure in 46 haats in 14 states.

launched, taking the total number of clubs to 38,215 covering

87,724

villages

in

581

districts

as

on

21.

To promote rural industrialisation through the

31 March 2009. NABARD reviewed its policy for

cluster

supporting FC through various agencies and decided to

develop 55 clusters within a period of 3-5 years.

approach,

extend uniform support of Rs.10,000 for three years to

During 2008-09, 37 participatory, 1 intensive and 1

all commercial banks, RRB and co-operative banks

eco-tourism clusters were sanctioned involving grant

and grassroot level institutions like NGO, PRI, KVK,

assistance of Rs.311 lakh.

Post Offices, etc.

emphasis

on

NABARD

developing

had

decided

to

In view of GoI’s special the

handloom

sector,

NABARD decided to develop 50 handloom clusters in 17.

Under externally aided projects supported by

partnership with other developmental agencies. As on

KfW, which are at various stages of implementation,

31 March 2009, 59 handloom clusters in 16 states

an amount of Rs.32.01 crore was disbursed and

were approved.

Rs.37.25 crore was received as grant assistance during 22.

the year.

NABARD

has

been

supporting

the

Rural

Entrepreneurship Development Programme (REDP) and the Skill Development Programme (SDP) as a proven

Rural Non-Farm Sector

model for generating employment opportunities in rural (RIF)

areas. During 2008-09, grant support of Rs.1,304 lakh

constituted in 2005, support is provided for innovative

was provided for 2,083 REDP/SDP covering 50,264

projects in farm, non-farm and micro-Finance sectors

rural youth. Further, an amount of Rs.88 lakh was

with potential to generate employment opportunities.

sanctioned to RUDSETI for capital expenditure. During

18.

Under

the

Rural

Innovation

Fund

3

Highlight.p65

3

7/15/2009, 10:36 AM

the year, 1.50 lakh Swarozgar Credit Cards (SCC)

Financial Inclusion Technology Fund (FITF). While the

involving credit limits of Rs.628 crore were issued. As

FIF is responsible for supporting developmental and

on 31 March 2009, the banking sector had issued 9.84

promotional

lakh

inclusion, the FITF will focus on enhancing investment

SCC

involving

an

aggregate

credit

limit

of

Rs.4,007 crore.

activities

to

secure

greater

financial

in information and communication technology with the objective of promoting Financial Inclusion.

23.

NABARD

continued

to

support

gender

Both the

Funds have been set up with a corpus of Rs.500 crore

development programmes through its various schemes

each.

like

sanctioned under FIF and FITF, respectively.

Marketing

of

Non-Farm

Products

of

Rural

During 2008-09, four and five projects were

Women (MAHIMA) and Assistance to Rural Women in Non-Farm Development (ARWIND) programme. During the year, grant assistance of Rs.6 lakh and Rs.7 lakh were

released

under

MAHIMA

and

ARWIND,

respectively. During 2008-09, the scheme for setting-up Women Development Cells (WDC) was modified. As on 31 March 2009, 102 WDC in 56 RRB, 43 DCCB and 3 SCARDB were sanctioned. 24.

NABARD

supported

213

micro-Finance* 27.

During 2008-09, 10.81 lakh new SHG were

credit

linked

and

bank

loan

of

Rs.11,132

crore

disbursed. The programme has covered more than 7.01 crore poor households, making it the largest micro-Finance (mF) programme in the world. As on 31 March 2008, 50.09 lakh SHG maintained savings

marketing

events/

worth Rs.3,785 crore with the banking sector. During

exhibitions across the country involving grant assistance

2007-08,

of Rs.111 lakh. The pilot scheme for setting-up rural

Rs.1,970 crore was disbursed to 12.27 lakh SHG

marts launched by NABARD in 2005 was extended to

(including 2.46 lakh under SGSY) and 518 MFI,

all States. During the year, 73 rural marts were

respectively.

sanctioned involving grant support of Rs.73 lakh. The provision of ‘Product Gallery’ in Post Offices for displaying SHG products was extended to all states. 25.

NABARD

continued

to

provide

financial

support to BIRD - Lucknow, RTC at Mangalore and Bolpur,

NIRB - Bangalore,

MDMI - Shillong

and

IIBM-Guwahati for imparting training to participants in various aspects of rural credit. Further, 45 programmes covering 1,050 officers of client banks were conducted, involving expenditure of Rs.118 lakh.

28.

bank

During

credit

of

2008-09,

Rs.8,849

grant

crore

assistance

and

of

Rs.1,769 lakh was sanctioned to various agencies for promoting assistance

59,359

groups,

sanctioned

to

taking

the

Rs.7,888

cumulative lakh

for

4.36 lakh groups. 29.

Under NABARD’s capacity building programmes

for its partner institutions, 25 exposure/field visits for

bank/NGO

officials

to

SHG

and

pioneering

institutions, 324 awareness-cum-refresher programmes for participants from banks and NGO, 45 sensitisation programmes were arranged during the year. NABARD

Financial Inclusion

also extended support for conducting 3,122 awareness 26.

The Committee on Financial Inclusion, headed

by Dr. C. Rangarajan, suggested measures to bring the

creation and capacity building programmes covering 1,41,984 SHG members.

excluded population into the ambit of the financial system. Based on the Committee’s recommendations,

30.

GoI entrusted NABARD with the setting-up of two

SHG to take up income generating activities on a

funds,

sustainable

viz.,

Financial

Inclusion

Fund

(FIF)

and

To motivate and assist members of matured basis,

NABARD

* Due to change in data and MIS, the reporting is for the position as on 31 March 2008.

4

Highlight.p65

4

7/15/2009, 10:36 AM

continued

to

promote

micro-enterprise development by SHG members. Under

Rs.33.66

the Micro-Enterprise Development Programme (MEDP),

setting-up Resource Centre at Itanagar. The ‘State

564 such programmes covering 41,030 SHG members

Support Project on SHG’ in Tripura aims to promote

were conducted during the year. The pilot project

livelihood activities, credit link 11,500 existing SHG

launched during 2005-06 for promotion of micro-

and form and credit link 35,000 new SHG.

lakh

to

Essomi

Foundation

Trust

for

enterprises among members of matured SHG, is being implemented involving

in

14

nine NGO

districts

across

acting

as

nine

States,

‘Micro-Enterprise

34.

NABARD introduced a scheme for supporting

small-scale Activity Based Groups (ABG) with the

6,107

objective of capacity building, production/investment

micro-enterprises were established under the project,

credit and market related support. Groups engaged in

involving

homogenous economic activities would be formed to

Promotion

Agency bank

(MEPA)’.

credit

of

Cumulatively

Rs.535

lakh,

as

on

improve

31 March 2009.

production

efficiency

and

achieve

better

returns through economies of scale. It has both grant 31.

NABARD selectively extends Revolving Fund

Assistance

(RFA)

to

MFI

for

experimenting

and loan components.

with of

35.

Recognising the growing role of SHG federations

Rs.6.35 crore was sanctioned to four agencies taking

and

their

the aggregate support to Rs.43 crore. In addition,

NABARD, during the year, decided to support such

NABARD provides financial assistance to commercial

federations on a ‘model neutral’ basis. Broad norms

banks and RRB to avail the services of credit rating

for

agencies for the purpose of rating of MFI and

formulated. Support would be extended to federations

empowering them to intermediate between the lending

by way of grant assistance for training, capacity

banks and the clients. During the year, support

building, exposure visits of SHG members, etc. During

of Rs.3.40 lakh was extended to four agencies for

the

availing credit rating services. The Scheme to provide

sanctioned to one federation.

various

mF

capital/equity

models.

support

During

to

MFI

the

was

year,

RFA

introduced

value

deciding

year,

addition

grant

grant

of

to

SHG

financial

assistance

of

functioning,

assistance

Rs.11.54

were

lakh

was

by

NABARD to enable them to leverage capital/equity for

36.

During the year, Rs.35 crore was utilised from

accessing funds from banks, providing financial services

the

at an affordable cost to the poor, and achieve

(MFDEF) for mF related activities. The North-Eastern

sustainability in their credit operations over a period of

Council (NEC), Shillong parked a fund of Rs.80 lakh

3-5 years. During 2008-09, capital/equity support of

with

Rs.11.75 crore was sanctioned to 13 agencies.

miscellaneous

Micro-Finance

NABARD

Development

during

training

the

and

year

interventions

Equity

for of

Fund

facilitating government/

bank officials, NGO, SHG from States in NER and 32.

NABARD in collaboration with the Rajiv Gandhi

Charitable Gandhi

Trust Mahila

(RGCT) Vikas

has

designed

Pariyojana

the

(RGMVP),

Rajiv

Sikkim. As on 31 March 2009, the Fund was utilised to the extent of Rs.72 lakh.

to

promote, credit link and form SHG Federations in

37.

Under

the

‘NABARD-GTZ

select districts of Uttar Pradesh. Till date 7,808 SHG

Programme’,

were promoted and 3,972 credit linked in 3 districts of

sensitise bank branch managers and SHG members

Uttar Pradesh as at end-March 2009.

for minimising risks in lending through early warning

training

modules

were

Rural

Finance

developed

to

system and circulated to training institutions involved 33.

NABARD

sanctioned

Rs.39.15

lakh

for

in

mF.

A

‘High

Level

Policy

Conference

on

implementing the project ‘micro-Finance Vision 2011’

micro-Finance in India’ was conducted with GTZ

to

support for mF practitioners from India and abroad to

Government

of

Arunachal

Pradesh

and

5

Highlight.p65

5

7/15/2009, 10:36 AM

share their best practices. A study was undertaken to

on agriculture and rural development, allied sector,

assess the transaction cost of various agencies and MFI

agri-business and social development, were received

in purveying mF through SHG or other types of groups.

from

The NABARD-KfW programme, ‘Financial Cooperation

Rs.10.48.

with India-Capitalization Program SEWA Bank’ aims at sustainable improvement in access of poor women

34

students,

involving

financial

outlay

of

Other Development Initiatives

to micro-credit, both in rural and urban areas. During

40.

the year, KfW released grant assistance of Rs.3 crore to

training programmes through its training establishments

SEWA bank under the project.

for the benefit of 10,949 personnel of RFI and

During

the

year,

NABARD

conducted

434

supplemented the efforts of other training institutions in

Research and Development Activities

this area by providing technical and financial support.

38.

During the year, an amount of Rs.876 lakh was

A Centre for Micro-Finance Research (CMR) was set up

utilised from the R&D Fund as grant assistance for

at BIRD, Lucknow and four sub-centres of CMR were

research projects/studies, training and other activities

set up in Guwahati, Chennai, Patna and Jaipur to

like conduct of seminars, preparation of occasional

provide

papers, etc., taking the cumulative disbursement to

Financial support of Rs.331 lakh from CDF was

Rs.109 crore. During 2008-09, 12 research projects/

extended to JLTC, ACSTI and ITI for conducting 303

studies involving grant assistance of Rs.87 lakh were

programmes

sanctioned while 10 projects/studies sanctioned earlier

Institute of Rural Banking (NIRB), Bangalore was

were completed.

provided Rs.5.82 lakh for conducting 25 training

focused

covering

programmes. 39.

attention

BIRD

on

6,146

mF

related

participants.

conducted

specially

issues.

National

designed

Grant assistance of Rs.78 lakh was sanctioned

training programmes for the newly constituted RRB on

during the year to various universities and research

subjects like Core Banking Solutions (CBS), CRAR

institutes for conducting 103 conferences, seminars and

norms, prevention of frauds and leakages and winning

workshops. Two Occasional Papers were brought out

trust.

during the year. In addition, Rs.727 lakh was utilised

‘National Training Certification Centre for CCS’ to

from the Fund during the year for capacity building of

address the training requirements of the staff of

the staff of Rural Financial Institutions (RFI) in the

co-operative credit institutions after implementation of

NER. Under the Summer Placement Scheme, reports

the Revival Package.

BIRD

has

been

identified

for

setting-up

a

Business Operations 41.

NABARD through its refinance operations has

been facilitating the banking sector to augment credit support for production and investment purposes in the rural

and

agriculture

sectors,

in

addition

to

its

continued involvement in developing rural infrastructure by providing loans under RIDF to State Governments for such projects. The total financial support extended by NABARD increased by 30 per cent and stood at

Production Credit 42.

Short-term (ST) refinance support for SCARDB

was continued during 2008-09 and made available at 4.5 per cent for lending to ultimate borrowers at 7 per cent p.a. During the year, Rs.64 crore was disbursed to Kerala and Rajasthan SCARDB for STSAO purposes.

Rs.50,577 crore during 2008-09 as against Rs.38,767

43.

crore during 2007-08.

co-operative banks for ST-SAO continued to be linked

The

quantum

of

6

Highlight.p65

6

7/15/2009, 10:36 AM

refinance

support

for

to their net NPA levels for profit-making SCB with no

credit

accumulated losses and with gross NPA for others. The

31

ST

29 February 2008 and (ii) before 31 March 1997 but

credit

limits

sanctioned

during

2008-09

institutions December

which

2007

were

and

overdue

remained

as

on

unpaid

till

(April-March) for SCB and RRB were Rs.15,448 crore

were

and Rs.3,547 crore, against which they have reached

through GoI’s special package/s and in the normal

the maximum outstanding levels of Rs.13,935 crore

course upto 31 March 1997, as per RBI guidelines on

and Rs.2,869 crore, respectively. A consolidated ST

account of natural calamity. NABARD is the nodal

(others) limit was sanctioned to SCB on behalf of

implementing agency for co-operative banks/RRB. As

eligible DCCB for lending to agriculture/allied and

against claims for Rs.29,724 crore, an amount of

marketing activities. During 2008-09, Rs.176 crore was

Rs.16,615

crore

sanctioned under this line of credit against which

SCARDB

(14%)

utilisation was Rs.64 crore.

co-operative banks and RRB tide over the temporary

44.

During the year, ST (Weavers’) credit limits

aggregating Rs.266 crore were sanctioned to Andhra Pradesh, Orissa, Puducherry, Tamil Nadu and West Bengal SCB for financing production/procurement and marketing activities of Weavers’ Co-operative Societies and maximum utilisation was Rs.167 crore. With a view to reviving the handloom sector, NABARD has

rescheduled/restructured

liquidity

was

disbursed

and

crunch

in

RRB

owing

to

2004

to

(23%).

the

and

2006

SCB

(63%),

To

enable

ADWDR

Scheme,

NABARD provided liquidity support of Rs.1,551 crore and Rs.302 crore to SCB and RRB, respectively, at 9 per cent p.a. during kharif 2008. During rabi 2008-09, liquidity support of Rs.2,993 crore was sanctioned at 4.5 and 5.5 per cent to SCB and RRB, respectively, against which Rs.2,415 crore was utilised.

attempted to finance weavers’ outside the co-operative fold by forming Handloom Weavers’ Groups (HWG)

47.

The Union Budget 2008-09 announced the

and financing Master Weavers. As at end-March 2009,

continuance of interest subvention to enable banks to

of the 2,968 HWG formed 1,781 were credit linked.

provide crop loans upto Rs.3 lakh to farmers at an interest of 7 per cent p.a., envisaging suitable interest

45.

NABARD continued to provide long-term loans

subvention to NABARD and 3 per cent interest

to State Governments for contributing to the share

subvention

capital of co-operative credit institutions. However,

banks and RRB. As on 31 March 2009, against the

as per revised policy, loans will be provided on a reimbursement basis.

During 2008-09, profit earning

SCB/DCCB with no accumulated losses or net NPA not > 10 per cent as on 31 March 2007 or 2008

aggregate

on

own

receipt

involvement

of

Rs.3,109

of crore

co-operative from

GoI,

aggregate utilisation stood at Rs.2,539 crore. Interest subvention

payable

for

2008-09

is

estimated

at

Rs.2,565 crore.

(whichever was lower) were considered eligible. No loan was sanctioned during the year, though an amount of Rs.18 crore was drawn by governments of Haryana,

48.

NABARD is the nodal agency for implementing

Kerala and Orissa against previous year’s sanctions.

the ‘Package for Restructuring of Term Loans of Co-operative Sugar Mills’ for co-operative banks. As

46.

The Union Budget 2008-09 had announced the

against Rs.139 crore received from GoI under the

Agricultural Debt Waiver and Debt Relief (ADWDR)

package, interest subvention of Rs.116 crore was

Scheme, 2008, to address the indebtedness of farmers,

released

especially small and marginal farmers. The Scheme

75 co-operative sugar mills. NABARD is also the nodal

covered all direct agricultural loans disbursed, (i) to

agency for routing claims of co-operative banks under

farmers

the scheme for ‘Providing Financial Assistance to Sugar

between

31

March

1997

and

2007

by

Scheduled Commercial Banks, RRB and co-operative

to

co-operative

banks

in

respect

of

Undertakings–2007’. 7

Highlight.p65

7

7/15/2009, 10:36 AM

Investment Credit 49. of

This requirement was waived off for category ‘A’ and

Consequent to the Government’s announcement ADWDR

reschedule

Scheme,

2008,

instalments

of

NABARD

principal

agreed

amount

to

from

profit making SCB/DCCB. 51.

During

commercial

2008-09, banks,

refinance

SCB,

disbursement

SCARDB

and

to RRB

SCARDB falling due during June-December 2008 to

aggregated Rs.10,535 crore as against Rs.9,046 crore

31 January 2009 or any other earlier date preferred

during the previous year. Commercial banks continued

by the SCARDB, subject to certain conditionalities.

to be the single largest group availing refinance (56%),

During the year, NABARD rescheduled an amount of

while

Rs.1,061 crore. Further, to enable SCARDB tide over

co-operative banks (26%) declined considerably during

the liquidity crunch in the wake of the scheme, the

the year.

the

share

of

RRB

(18%)

and

that

of

Bank decided to extend interim finance, subject to conditionalities,

even

if

they

had

defaulted

to

52.

The flow of refinance varied widely across

NABARD. During the year, Rs.70 crore was sanctioned

regions.

to Madhya Pradesh SCARDB.

accounted for 41, 25 and 14 per cent, respectively, of

Southern,

northern

and

central

regions

the total refinance disbursed during the year. The share 50.

During 2008-09, (i) restrictions on ceilings for

of southern and northern regions increased while that

total

financial

under

of central region declined by around 5 percentage

Automatic Refinance Facility (ARF) for commercial

points during 2008-09. The share of NER declined

banks,

completely

further. Sector-wise, non-farm sector, including rural

removed, (ii) ceiling on TFO for SCARDB was raised

housing, accounted for 26 per cent followed by

to Rs.50 lakh; cent per cent refinance was made

SHG (25%). While the share of farm mechanisation

available for thrust areas and for all purposes in hilly

(14%)

States, NER & Sikkim and Andaman & Nicobar

and minor irrigation (5%) registered increase during the

Islands, and (iii) refinance extended to Section 11

year.

RRB,

outlay SCB

(TFO) and

and

PUCB

refinance were

non-compliant SCB/DCCB in States that executed MoU for implementing the recommendations of the Task Force on Revival of STCCS. The relaxations in eligibility criteria in respect of recovery, gross/net NPA, hitherto available to NER, were extended to other hilly States. SCB, SCARDB and RRB continued to be

53.

declined,

that

of

land

development

(9%)

Under the scheme for financing purchase of land

for agriculture purposes, bank loan of Rs.20 crore and refinance support of Rs.17 crore was made available to 607 and 548 borrowers, respectively, in eight states during the year.

classified under A/B/C/D categories based on their

54.

gross/net

during the year, Rs.268 crore was towards rural

NPA,

recovery

position,

net

worth

and

Of the total refinance disbursed under NFS

profitability. However, (i) SCB with gross NPA > 20

housing

per cent, (ii) SCARDB with recovery < 30 per cent,

accounted for the major share (57%), followed by

(iii) commercial banks/PUCB/ADFC/NEDFi with net

co-operative banks (33%) and RRB (10%). As on

NPA > 3 per cent, and (iv) RRB with deposit erosion

31 March 2009, the cumulative refinance support

> 30 per cent were considered ineligible for availing

under NFS stood at Rs.24,061 crore.

(10%).

Agency-wise,

commercial

banks

refinance during the year. Release of refinance to SCARDB/SCB, eligible Section 11 non-compliant SCB/

55.

DCCB and non-scheduled SCB (for farm sector) was

Rs.2,620

During 2008-09, NABARD extended refinance of

only against government guarantee (if not forthcoming,

programme. As on 31 March 2008, 36.26 lakh SHG

alternative security like pledge of government securities

accounts had loans outstanding worth Rs.17,000 crore

or fixed deposit receipts issued by scheduled banks).

from all agencies. The recovery position of banks

crore

under

8

Highlight.p65

8

7/15/2009, 10:36 AM

the

SHG-bank

linkage

with respect to SHG portfolios revealed that (out of

local

governments

for

filling

329 reporting banks) 68 per cent banks reported high

programmes.

recovery (> 80%) and only 9 per cent reported very

Planning

low recovery (< 50%).

Guidelines and conducted regional workshops to orient

NABARD,

Commission,

in

gaps

in

association

prepared

the

flagship with

the

Manual

of

state/district level officials for preparing IDP. The Bank 56.

During the year, interest rates on refinance for

is also involved as a Technical Support Institution

investment credit were revised six times depending on

(TSI)

the money market conditions and cost of incremental

Andhra Pradesh, Jharkhand, Maharashtra, Tripura and

market borrowings of NABARD. The rate of interest

Uttar Pradesh.

on

refinance

for

commercial

banks

and

in

IDP

preparation

in

17

districts

from

for

co-operative banks/RRB/PUCB/ADFC/NEDFi was fixed

60.

NABARD

continued

its

policy

of

facilitating

at 9 and 8.5 per cent p.a., respectively, for all eligible

larger credit flow to the NER and Sikkim by granting

activities and at 8.5 per cent for all activities and

relaxations to co-operative banks and RRB operating in

agencies in the NER & Sikkim, hilly states and

these areas in respect of eligibility criteria for refinance,

Andaman & Nicobar Islands. The rate of interest on

rate of refinance, etc. The interest rate on refinance

interim finance provided to SCARDB was enhanced to

for commercial banks and RRB on loans to MFI

9.75 per cent p.a. from 22 September 2008.

was 3 percentage points lesser than that charged by banks subject to a minimum of 8.5 per cent.

57.

NABARD sanctioned 12 projects involving TFO

of Rs.95 crore, bank loan of Rs.64 crore and the

Rural Infrastructure Development

Bank’s share of Rs.31 crore under the co-financing

61.

arrangement and Rs.37 crore was disbursed during

raised

the year. As a nodal agency, NABARD continued

Rs.4,000 crore allocated under a separate window for

to oversee implementation of the various Capital

funding rural roads component of Bharat Nirman

Investment Subsidy (CIS) schemes of GoI.

Programme. During the year 85,527 projects involving

The allocation under XIV tranche of RIDF was to

Rs.14,000

crore

for

2008-09

and

a loan amount of Rs.14,719 crore were sanctioned 58.

During the year, 37 investment and 5 scheme

under RIDF XIV, taking the cumulative number of

specific studies under farm sector, rural housing and

projects

cold storage projects were conducted in association

Rs.88,359 crore. An amount of Rs.7,500 crore, was

with

State

disbursed under the Bharat Nirman Component during

Governments to identify factors adversely affecting

2008-09. Of the total amount sanctioned during the

schemes and ensuring prompt corrective measures.

year, rural roads and bridges accounted for 46 per

Major findings and recommendations of 28 investment

cent, irrigation projects 28 per cent, social sector

specific studies were published as a booklet for wider

projects 18 per cent and others 8 per cent. The share

dissemination.

of irrigation sector in the amount sanctioned during the

banks

and

nodal

departments

of

to

3,65,003

and

amount

sanctioned

to

year as also the cumulative sanction (RIDF I to XIII) 59.

NABARD continued to review and refine its

district level Potential Linked Credit Plans (PLP). A

declined, while that of rural roads and bridges and social sector projects improved.

new chapter on ‘Financial Inclusion’ was included to make

it

more

contemporary.

The

Government

62.

As per the phasing of projects, the total amount

introduced Integrated Development Plan (IDP) process

phased (RIDF I-XIV) was Rs.73,734 crore against

for the 250 poorer districts under the Backward

which disbursements aggregated Rs.56,052 crore (76%

Regions

achievement).

Grants

Fund

(BRGF),

to

embed

the

participative planning process and provide funds to

However,

the

slow

pace

of

actual

utilisation of loans under RIDF in some states was due 9

Highlight.p65

9

7/15/2009, 10:36 AM

technical

new Directors inducted vice two, who superannuated.

approval by the State Governments, land acquisition

The total number of Directors remained unchanged.

problems, inadequate budgetary support, etc.

During the year, Nabcons acquired ISO 9001:2008

mainly

to

delay

in

administrative

and

certification and also earned foreign exchange valued 63. 30

During the year, disbursements increased by per

cent

to

Rs.10,459

crore.

Deposits

of

at $1.10 lakh. During 2008-09, Nabcons contracted 109

assignments

involving

a

consultancy

fee

of

Rs.18,805 crore (including Rs.6,647 crore under Bharat

Rs.17 crore and completed 122 assignments for a fee

Nirman) were received from commercial banks and

of Rs.10 crore. The income and profits earned by the

repayment amounting to Rs.2,998 crore was received

company

from the State Governments.

respectively, during 2008-09.

64.

Management of Resources

During the year 5,290 projects were monitored

stood

at

Rs.11

crore

and

Rs.4

crore,

through field visits. Major observations/issues were taken up with the implementing department/s and Finance

Department

of

the

concerned

State

Governments for improving the pace and quality of

increase of Rs.17,486 crore during 2007-08. The Bonds (Rs.1,464 crore), Bhavishya Nirman Bonds

To strengthen the implementing apparatus of

infrastructure

The financial resources of NABARD increased

by Rs.19,470 crore during 2008-09 as against an resources were augmented by the issue of Corporate

project execution. 65.

68.

deficient

state,

NABARD

organised

(Rs.2,767 crore), NABARD Rural Bonds (Rs.21 crore), RIDF

Deposits

(Rs.18,805)

crore,

Term

Deposits

address

(Rs.422 crore), Certificate of Deposits (Rs.1,816 crore),

mutual concerns. Further, to leverage private resources

Commercial Paper (Rs.181 crore) and Term Money

and

Borrowings (Rs.244 crore). The total working funds

awareness

workshops

implementing

for

stakeholders

capacity

for

rural

to

infrastructure

development, NABARD entered into a Memorandum

increased

of Agreement with IL&FS to develop products/services

as on 31 March 2009, from Rs.98,706 crore as on

and

31 March 2008. The outstanding market borrowings of

fine-tune

the

design

of

innovative

delivery

by

20

per

cent

to

Rs.1,18,176

crore,

the Bank constituted 23 per cent of working funds as

mechanism/s.

on 31 March 2009.

Impact Evaluation of Investments 66.

NABARD

continued

its

efforts

to

69. obtain

The

schematic

funds

raised

lending,

have

been

ST/MT/MT

utilised

for

(Conversion)

loan

feedback on the performance of various investment

assistance and loans to State Governments under

activities through evaluation studies. These studies were

RIDF

and

undertaken to assess the impact of investments on

under

schematic

income, employment generation and their viability.

financing

During 2008-09, one ex-post evaluation study on

NABARD line of credit/other ST loans and loans

projects

to

supported

under

micro-entrepreneurship

RIDF,

among

two

SHG

studies

members

on and

three commodity specific studies on groundnut, mango

non-project lending,

ST-SAO

State

loans. ST

together

Governments

The

outstandings

loan

advanced

with

loans

under

RIDF

for

under

were

at

Rs.33,335 crore, Rs.16,896 crore and Rs.45,616 crore, respectively, as on 31 March 2009.

and sugarcane were completed. 70.

The total income of the Bank during the

NABARD Consultancy Services

year was Rs.7,051 crore (Rs.5,509 crore during the

67.

The Board of NABARD Consultancy Services

previous year). After making provision for Income

Pvt. Ltd (Nabcons), a wholly owned subsidiary of

Tax (Rs.597 crore), contribution to Special Reserves

NABARD, was reconstituted during the year with two

(Rs.340

crore),

transferring

10

Highlight.p65

10

7/15/2009, 10:36 AM

to

NRC

(LTO)

Fund

(Rs.400

crore)

and

NRC

(Stabilisation)

Fund

(includes

withdrawals

of

Rs.48

crore

from

funds

(Rs.10 crore), the balance income left over was

against expenditure debited to P&L Account) which

Rs.5,703

was

crore.

After

meeting

an

expenditure

of

Rs.5,063 crore, the surplus amounted to Rs.640 crore

transferred

to

various

funds

maintained

by

the Bank.

Capacity Building of Client Institutions 71.

The financial health and growth of Co-operative

74.

As on 31 March 2008, of the reporting banks,

Banks and Regional Rural Banks (RRB) continue to be

5 SCB, 108 DCCB, 9 SCARDB and 347 PCARDB

an area of concern to NABARD. In view of their role

incurred

in credit dispensation and the changing economic

Rs.1,617 crore. The poor recovery of loans/high NPA

environment,

to loans and advances outstanding ratio in co-operative

NABARD

has

been

striving

towards

improving these institutions.

losses,

which

together

amounted

to

banks continued to be an area of concern. NPA level of all co-operative banks (ST and LT) registered an increase during 2007-08 over the previous year.

Institutional Development 72.

During 2007-08, loans issued by SCB and

75.

In view of the persisting weakness in the

DCCB increased by 9 and 10 per cent, respectively,

co-operative

credit

while those issued by SCARDB and PCARDB declined

Phase IV of preparing institution specific DAP by

by 9 and 8 per cent, respectively, over the previous

co-operative banks and entering into MoU for ST and

year. The overall profit earned by 31 SCB was

LT

Rs.466 crore. The profit earned by 26 SCB, which

2007-2012. Further, to enable effective monitoring of

were in profit during 2007-08, was Rs.515 crore. Out

performance of co-operative banks, it was decided to

of 370 DCCB, 261 earned profit of Rs.874 crore.

set up ‘State Level Task Force’ from 1 April 2008. As

However, at the aggregate level, DCCB incurred a net

on 31 March 2009, 22 RO have formed SLTF in their

loss of Rs.28 crore during 2007-08, an increase of

States. Accounting for the changes in the environment

12 per cent over the previous year. SCARDB generated

of RRB and co-operative banks, ODI for co-operative

a net profit of Rs.99 crore, while PCARDB as a whole

banks is now known as ‘Business Revitalisation and

continued to incur losses, aggregating Rs.184 crore

Managing

during 2007-08.

2008-09, 10 ODI for RRB and 5 BRAMHA for

structures

is

Human

structure,

the

operational

revised/modified

during

Aspirations’

the

period

(BRAMHA).

During

co-operative banks were conducted. 73.

There were wide variations across the regions in

the performance of co-operative credit institutions. During 2007-08, profits of SCB declined in all regions, except the eastern and southern regions. Losses of SCB in the NER increased substantially during 2007-08 over

the

previous

year.

In

the

case

of

DCCB,

profit improved across all regions during 2007-08. The DCCB as a group, however, incurred a net loss. During 2007-08, SCARDB across all regions, except central

76.

Financial

support

through

the

Co-operative

Development Fund (CDF) is provided for supporting developmental institutions.

initiatives

During

of

2008-09,

co-operative Rs.5.95

crore

credit was

sanctioned and Rs.3.81 crore was disbursed, including earlier

sanctions,

taking

the

cumulative

sanctions

and disbursements under CDF to Rs.88 crore and Rs.78 crore, respectively, as on 31 March 2009.

and northern, incurred losses. During 2007-08, in

77.

the case of PCARDB, aggregate losses increased by

Co-operative Credit Structure (STCCS) with an outlay

167 per cent.

of Rs.13,596 crore, aims to redevelop the STCCS

The

Revival

Package

for

Short-Term

Rural

11

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11

7/15/2009, 10:36 AM

into a well managed and vibrant channel of credit

81.

delivery

Force

through

integrated

measures

of

financial

The revival package proposed by the Task (Chairman:

Prof.

A.

Vaidyanathan)

management, legal/institutional reforms and capacity

Long-Term

building. During 2008-09, seven States executed MoU

has been approved by the Union Cabinet.

Co-operative

Credit

Structure

on

(LTCCS)

with GoI and NABARD, taking the total number of states to 25, covering 96 per cent of the units under

82.

STCCS as at end-March 2009.

for Co-operative Banks (Chairman: Shri S. K. Mitra, ED,

78.

The

special

audit

of

the

STCCS

as

on

31 March 2004 was completed in 78,391 (out of

of

A Working Group on Human Resource Policy NABARD)

was

constituted

to

study

norms

recruitment/promotion/training/computerisation

in

co-operative banks and suggest a rationalised policy.

84,726) PACS across 25 States, and for DCCB in 8 states as at end-March 2009. During 2008-09, four States

(Bihar,

Maharashtra,

Meghalaya

and

Tamil

Nadu) have passed bills to amend their Co-operative Societies Acts (CSA), proposed amendments of nine states is under scrutiny by NABARD and amendments are being drafted in the case of the remaining six

83.

Following

amalgamation

(2005-06

onwards),

the number of RRB was reduced from 196 to 86 (15,235 branches) as on 31 March 2009. In all, 81 RRB improved their performance and reported gross profit of Rs.1,746 crore during 2008-09, an increase of 26 per cent over 2007-08.

The net worth of RRB

increased to Rs.6,750 crore (10%) and accumulated

states.

losses declined by 3 per cent during 2008-09 over the 79.

Emphasising

on

training

of

PACS’

functionaries, training modules, trainers’ manual and guide,

etc.,

have

been

developed.

Training

was

imparted to 227 Master Trainers from 16 States who in turn trained 1,687 district level trainers. As at endMarch

2009,

training

was

imparted

to

63,789

secretaries/staff from 13 states and 89,242 elected members

of

PACS

from

10

States.

In

addition,

training was provided on CAS/MIS to 47,302 PACS functionaries from 14 states.

previous year. The performance of RRB varied widely across regions. While all RRB were in profit in the southern and western regions, 28 in central, 14 in northern, 11 in eastern and 5 in north-eastern regions were in profit. 84.

The recovery performance of 87 RRB as on

30 June 2008 declined to 78 per cent though RRB in four states, viz., Tamil Nadu, Punjab, Mizoram and Kerala had very high recovery (above 80%). Out of 87 RRB, 36 had recovery of above 80 per cent and 2 below 40 per cent.

80.

During

2008-09,

NABARD

released

Rs.3,567 crore as GoI’s share towards recapitalisation

85.

of eligible PACS in Andhra Pradesh, Chhattisgarh

all RRB as a percentage of loans and advances

Gujarat,

Haryana,

outstanding from 6.05 as at end-March 2008 to 5.58

Orissa,

Uttar

Pradesh

enabling

full

recapitalisation

Madhya

Pradesh,

West

Bengal

as at end-March 2009. However, 56 RRB had NPA

33,411

PACS.

levels below the national average of 5.58 per cent

The total support released, as at end-March 2009,

and only 3 RRB had NPA levels above 20 per cent

stood

as at end-March 2009. Lowest level of NPA was

at

Rs.6,166

Government view and

the

share health

Sikkim,

of of

their

and

Maharashtra,

There was a decline in gross NPA position of

crore, Rs.474 the

present

of

including crore.

STCCS business,

State

Keeping in

the

training,

in

NER

observed in the case of RRB in southern (2%) and northern (3%) regions.

etc.

GoI announced a special package for the STCCS

86.

in NER.

crore

As on 31 March 2009, an amount of Rs.898 was

released

12

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12

7/15/2009, 10:36 AM

as

GoI

share

towards

recapitalisation support announced for 27 RRB. Till

voluntary inspections of 17 SCARDB and 2 apex

date, 26 and 1 RRB have been fully and partially

co-operative societies were conducted. Some of the

recapitalised,

and

supervisory concerns relating to these banks brought

sponsor banks have contributed Rs.266 crore and

respectively.

State

Governments

out by the inspections were, improper application of

Rs.620 crore, respectively, as their share.

IRAC norms resulting in inflated profit/reduced losses, high level of NPA/erosion of assets, inadequate risk

87.

In accordance with the announcement in the

management strategies, deficiencies in sanction and

Union Budget 2007-08, RRB opened 474 branches

disbursement of loans, ineffective funds management,

and 758 licenses were issued by RBI during 2008-09.

weak internal checks and control systems, violation of

RBI relaxed the branch licensing norms for opening

CMA norms, etc.

branches subject to certain stipulations. As part of financial inclusion as at end-March 2008, RRB had

90.

opened

929

DCCB and RRB) met thrice during the year. The

Further,

as

lakh

accounts

SCB and SCARDB, (ii) functioning of co-operative

in

credit institutions and RRB of Kerala, Bihar and

excluded

Committee

The Board of Supervision [BoS] (for SCB,

issues reviewed by BoS included, (i) functioning of

financially

the

loans).

Financial Inclusion, 15 RRB from 14 states operating most

by

and

on

the

recommended

(deposits

districts

in

the

country were identified for a R&D project with ICT

Rajasthan,

based solutions under the PPP model.

DCCB

As part of

(iii)

and

functioning

RRB,

(iv)

of

impact

insolvent of

weak

supervision

on

the Village Adoption and Debt Swap Programme,

banks’ performance, (v) scheduling of amalgamated

RRB have adopted 20,981 villages as on 31 March

RRB,

2009, of which 7,811 have been freed from debt to

of banks, (vii) banks compliance to various important

money lenders.

statutory

(vi)

supervisory provisions,

trends (viii)

pertaining

to

appropriate

rating

guidelines

to banks detailing the methodology for valuation

Supervision over Banks 88.

of

NABARD inspects SCB and DCCB in terms

properties

and

ensuring

accountability

of

values, etc.

of the powers vested under Section 35(6) of the B.R.

Act,

1949

(AACS),

and

of

RRB

under

Section 35(6) of the B.R. Act, 1949. Keeping in view the need for effective supervision over a sizeable number of weak banks, NABARD’s inspections are focussed

on

ensuring

conformity

with

banking

regulations and facilitating internalisation of prudential norms. Accordingly, statutory inspections of all SCB,

91.

As on 31 March 2008, 5 SCB and 108 DCCB

were not complying with

Section 11(1) of the B.R.

Act, 1949 (AACS). The total erosion in the value of assets

of

aggregated

these

non-compliant

Rs.15,107

crore,

co-operative which

had

banks affected

deposits to the extent of Rs.4,937 crore in addition to their entire share capital.

DCCB and RRB not complying with minimum capital requirements

and

voluntary

inspections

of

all

92.

NABARD issued revised inspection guidelines

SCARDB continued to be conducted annually. The

for all banks keeping in view the latest development

statutory

and

inspections

of

DCCB

and

RRB

having

policy

environment.

The

revised

guidelines

positive net worth and voluntary inspections of Apex

stressed on - Asset Liability Management, Codes of

Co-operative Societies/Federations are conducted once

Standards

in two years.

Discipline, CRAR norms, etc. To improve the quality

and

Fair

Practices,

Lenders

Financial

and effectiveness of inspection, NABARD conducted 89.

During the year, statutory inspections of 324

banks (30 SCB, 243 DCCB and 51 RRB) and

three

Regional

Supervision

seminars

for

engaged in supervision, convened the 7

th

officers National 13

Highlight.p65

13

7/15/2009, 10:36 AM

Seminar

on

Audit,

conducted

workshops

on

93.

NABARD

initiated

measures

towards

implementing the ALM system/anti-money laundering

re-engineering of the supervisory tasks. Licences for

and

for

use of an IT-based product, Regulator Plus were

strengthening the audit mechanism of co-operative

KYC,

initiated

dialogue

with

ICAI

obtained for strengthening knowledge management of

banks.

inspecting officers.

Organisation and Management 94.

During the year, the Board of Directors of

the

study

visit

programme

on

Deposit

in

Germany

NABARD met five times. The Executive Committee,

Protection

and the Audit Committee met four times each while

and Hungary.

the Sanctioning Committee for loans under RIDF and

of APRACA held in Moscow. In addition, 62 training

the Risk Management Committee of the Board met

programmes covering 771 employees were conducted

six and three times, respectively, during the year. As

at

on

Pre-promotional

31

March

2009,

the

Board

of

NABARD

Mechanism

for

PACS

He also attended the Excom Meeting

NBTC,

Lucknow

and

training

ZTC,

programmes

Hyderabad. were

also

comprised six new directors under Sections 6(1)(d)

conducted for 11 Group B staff for promotion to

and 6(1)(e) of the NABARD Act, 1981.

Grade ‘A’ in Secretarial Service.

95.

Reserve Bank of India conducted the financial

inspection of NABARD with reference to the financial position as on 31 March 2008 between 6 January and 19 February 2009.

97.

During

the

year,

33

employees

availed

of

facilities under the modified incentive scheme, for professional studies in part-time and distance learning courses.

Study leave was granted to one officer

under the Staff Scheme for higher studies to pursue

Training and Skill Enhancement

Post Graduate Diploma in Management at Institute of 96.

During

the

year,

91

training

programmes

Management Technology (IMT), Ghaziabad.

covering 1,816 officers were conducted at NBSC, Lucknow

in

functional,

behavioural

and

technical

areas and 9 programmes for 232 officers of client

Other Matters

banks

98.

on

various

programmes financial

on

finance

related

bio-diesel,

inclusion,

etc.,

issues.

bamboo

were

New

cultivation,

process

of

recruiting

officers

in

Grade ‘B’ of Legal Service was completed during the

the year.

Besides, 40 officers were deputed for

year and the process of recruiting 120 officers in

tailor-made

programmes

Grade

software

development,

‘A’

in

RBDS

during

2009-10

has

been

outdoor management, etc. As many as 218 officers

initiated. Further, 269 promotions were effected in

were

various

deputed

for

118

off-the-shelf

programmes,

grades

of

the

officers’

cadre.

As

at

workshops/seminars/conferences at reputed institutions.

end-March 2009, NABARD has total staff strength of

Further, 223 officers were deputed abroad for various

4,886 employees.

overseas

training

programmes,

exposure

visits,

seminars, etc. During the year, 18 exposure visits were

99.

organised with funding support from GTZ to study

and one Chief Technical Examiner type inspection of

mF co-operatives and MFI regulation in Indonesia,

civil/electrical work was undertaken during the year.

Bangladesh,

The Bank observed Vigilance Awareness Week from

Sri

Lanka,

Philippines,

Malaysia,

Germany and South Africa. Chairman also attended

Preventive Vigilance Inspection of six RO/TE

3-7 November 2008.

14

Highlight.p65

102

during

on

introduced

The

Grade ‘A’ of RDBS and Rajbasha Services and

14

7/15/2009, 10:36 AM

100.

During the year, LAN was set up in 34 units

102.

The

Central

Complaints

Committee

at

HO

(HO/RO/SO/TE) of the Bank and limited accessibility

and Committees in RO are functioning for prevention

to

of

the

Bank’s

network

was

extended

to

ex-staff

members. The services of M/s. KPMG were engaged during

the

year

to

study

the

activities,

sexual

harassment

of

women

the

work

systems,

processes and IT applications currently in vogue in

103.

the bank and also to suggest a suitable IT Road

Hindi in its day-to-day working.

Map.

56

It has also been decided to set up a video

conferencing system in the Bank.

The Bank continued to promote the use of customised

workshops,

a

In addition to

three-day

orientation

programme to sensitise senior officers was conducted during

101.

at

place.

Inspection of 21 RO, 2 TE and 14 HO

Departments were undertaken during the year.

the

year.

Sub-Committee

of

The the

Drafting

and

Parliamentary

Evidence Committee

In

on Official Language reviewed the use of Hindi

order to improve the efficiency and effectiveness of

in Sikkim and Kerala RO and NBSC, Lucknow,

the staff posted in Concurrent Audit Cell at RO/TE,

while

two

Committees

workshops

directions

Board

to

at

HO/RO/TE

undertook

quarterly

offices. The Committees found the performance of

assigned a study on Risk Management System in

these offices satisfactory.

NABARD and their recommendations were submitted

Bank Srijana’ bagged three National Level Awards.

to

Many RO brought out PLP and inspection reports

The

NABARD,

the

Implementation

Management Consulting Services Ltd (iMACS) was

management.

of

Pursuant

Language

reviews on the use of Hindi in their respective

top

the

organised.

Official

ICRA

the

of

were

the

Operational

Risk

Management Committee met twice during the year.

During the year ‘Rashtriya

in Hindi.

15

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15

7/15/2009, 10:36 AM

Rural Economic Environment

I

The year 2008-09 witnessed major international financial collapse starting off with the sub-prime crisis in US. The tremors of the global economic crisis have been felt in India too though with a lesser intensity. The Government of India and the Reserve Bank of India announced a series of stimulus packages, including fiscal and monetary measures, for arresting slow down. The rural economy, nevertheless, has been impacted to a certain extent and in the near future also is likely to operate in an environ of the global crisis.

enabled per capita income (at 1999-2000 prices) to increase from Rs.15,881 during 1999-2000 to Rs.25,494 during 2008-09. Inflation concerns have abated in the light of the global commodity prices, specifically crude, coming down. Inflation declined and was at 0.26 per cent as on 28 March 2009. Revenue and fiscal deficits, are expected to be 4.6 and 6.2 per cent of GDP during 2008-09 as against 1.1 and 2.7 per cent, respectively, during 2007-08.

1.2 The Indian economy recorded 6.7 per cent growth in GDP, powered by higher growth rates in the services sector than in the industry sector. Consistent with the trend, growth rates of 9.7 and 3.9 per cent in the services and industry sectors, respectively, have contributed to the GDP growth of 6.7 per cent during 2008-09. The impressive sectoral growth rates have

1.3 Agriculture growth at 1.6 per cent during 2008-09 was lower than 4.9 per cent during 2007-08 in spite of anticipated growth rates of 6.0 per cent in horticultural crops, 5.5 per cent in livestock products and 6.0 per cent in fisheries. The ensuing sections review the trends in agriculture and rural sectors in the Global and Indian economies.

Global Economy 1.4 Growth in the global economy witnessed deceleration from 3.8 per cent in 2007 to 2.1 per cent 2008, on account of the global melt down in the advanced economies and is expected to dip to -2.5 per cent in 2009. The growth rate of emerging and developing economies also declined to 6.1 per cent in 2008 as against 8.3 per cent in 2007 and is expected to further decline to 1.6 per cent in 2009 (Table 1.1). Due to the global financial crisis, there was a significant impact on the economic growth of developing economies like China (9.0%) and India (7.3%) in 2008 and this is expected to decline further to 6.5 per cent and 4.5 per cent, respectively, in the year 2009. 1.5 The world production of cereals and pulses, as per FAO estimates, increased by about 5.1 and 3.4 per cent, respectively, during 2007 in comparison to 2006. India’s share, on a two-year average basis, was 11 and 23 per cent, respectively, in global cereal and pulse production. India contributed to almost one-fifth of world primary fibre production (Table 1.2). Low income food deficit countries accounted for nearly half of World cereals production and 70 per cent of fibre production.

Table 1.1: Overview of Global Economy (Annual per cent change) Growth 2007 2008 2009* A. GDP (Real) a. World Output 3.8 2.1 -2.5 b. Advanced Economies 2.7 0.9 -3.8 i. United States 2.0 1.1 -2.8 ii. Euro Area 2.7 0.9 -4.2 iii. Japan 2.4 -0.6 -6.2 iv. Newly Industrialised Asian Economies 5.7 1.5 -5.6 c. Other Emerging and Developing Economies 8.3 6.1 1.6 i. Developing Asia 10.6 7.7 4.8 ii. China 13.0 9.0 6.5 iii. India 9.3 7.3 4.5 d. ASEAN – 5@ 6.3 5.8 B. Consumer Prices a. Advanced Economies 2.2 3.4 -0.2 b. Other Emerging and Developing Economies 6.4 9.3 5.7 C. World Trade Volume (goods & services) 7.2 3.3 -11.0 a. Imports by Emerging and Developing Economies 14.0 10.9 -8.8 b. Exports by Emerging and Developing Economies 9.5 6.0 -6.4 D. Commodity Prices a. Fuel (energy) 10.5 40.1 -94.4 b. Non-Fuel primary commodities 14.0 7.5 -27.9 * : Projections.@ : Includes Indonesia, Malaysia, Philippines, Singapore and Thailand. Source : (i) World Economic Outlook, IMF, April 2009. (ii) RBI Bulletin, May 2009.

16

Ch-Eng-1 Pantone.p65

16

7/14/2009, 2:42 PM

Table 1.2

Production of Major Crops in the World, 2007 (Million Tonnes)

Cereals Production@

Country/Group/

India Net Food Importing Developing Countries Low Income Food Deficit Countries Least Developed Countries European Union Africa Asia World

Pulses Production

Fibre crops Production

2006

2007

% share in World #

2006

2007

% share in World#

2006

2007

% share in World#

243

252

11

13

15

23

6

5

19

249

248

11

12

13

21

5

5

16

1052 163 270 150 1110 2228

1078 167 266 146 1141 2342

47 7 12 6 49 100

33 9 4 11 28 59

36 10 3 12 30 61

57 16 6 19 48 100

20 2 1 2 20 28

21 2 0 2 20 29

70 7 2 6 69 100

@ : Rice is measured in terms of paddy (unhusked) # : Share based on average of 2006 & 2007 Source : FAOSTAT ; © FAO Statistics Division 2009 ; 08 May 2009

Indian Economy A.

Economic Scenario

a.

Gross Domestic Product

1.6

Indian economy registered an average annual

economy declined from 63.2 per cent during 200708 to 59.9 per cent during 2008-09. However, a higher

growth

in

Gross

Fixed

Capital

Formation

(GFCF) is expected to improve its relative share in

growth of 7.8 per cent during the Tenth Plan (2002-07) which was the highest for any Plan Period though marginally

less

than

the

targeted

8

per

cent.

However, the growth in GDP is estimated at 6.7 per cent (at 1999-2000 prices) during 2008-09, as against 9 per cent during 2007-08. The shortfall could be attributed partly to the low growth in agriculture and allied sectors (1.6%) and in the industry sector (3.9%). Select economic indicators of the Indian Economy

2006-07 2007-08 2008-09

Growth in (%) Overall GDP ^

9.7

9.0Q

6.7RE

GDP from Agriculture & Allied Activities^

4.0

4.9Q

1.6 RE

Food-grains Production

4.2

4.6#

-

10.6

8.5P

2.4P

5.9

7.7

0.3B

27.3 25.3

20.4RE 14.7RE

29.0P 16.0P

Industrial Production* Inflation as measured by WPI

are presented in Table 1.3. 1.7

Table 1.3: Economic Indicators Particulars

Sectoral analysis of growth rates revealed that

Imports^^ Exports ^^ Gross Domestic Savings

deceleration in growth in agriculture and allied sectors

(as % of GDP)^

35.7 P

37.7Q

35.3

brought down its share in overall GDP further by

Gross Domestic Investment (as % of GDP)^

36.9 P

39.1 Q

37.5

3.4

2.7

6.2 P

-6.8

-7.8

-12.0@

17.9

NA

26.2@

0.8 percentage points to 17.0 per cent during 2008-09. While the share of services sector increased to 57.2 per cent, that of industry sector declined to 25.8 per cent

Fiscal Deficit (as % of GDP)^^ Trade Balance (as % of GDP)^^

during the year (Table 1.4).

External Debt (as % of GDP)

b.

1.8

Q : Quick Estimate. P : Provisional

Consumption, Savings and Investments Private

final

consumption

expenditure,

^^

in

1999-2000 prices, as a proportion to GDP in the

RE : Revised Estimate. NA : Not Available

# : 3rd Advance Estimate 2007-08. * : At 1993-94 prices. B : As at end-March 2009. ^^ : In current market price ^: At factor cost - 1999-2000 prices. @ : April-Dec., 2008 Source: (i) Economic Survey 2007-08. (ii) RBI Bulletin, May 2009.

17

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17

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Table 1.4: Sectoral Growth Rates of Real GDP* (Per cent) Sector Agriculture & Allied Industry

#

Services Total GDP at factor cost Q

: Quick Estimate.

- (20.8)

5.8 (19.9)

4.0 (18.5)

4.9 (17.8)

1.6 (17.0)

9.8 (26.0)

9.6 (26.1)

10.6 (26.7)

8.1 (26.5)

3.9(25.8)

9.6 (53.2)

9.8 (54.0)

11.2 (54.8)

10.8 (55.7)

9.7(57.2)

7.5 (100.0)

9.4(100.0)

9.6 (100.0)

9.0 (100.0)

6.7 (100)

*

:

2008-09

RE

2005-06

: Revised Estimate

2007-08

Q

2004-05

RE

2006-07

Q

At 1999-2000 prices.

# : Includes mining & quarrying, manufacturing, electricity, gas and water supply and construction (ES 2003-04). Figures in parentheses indicate percentage share in GDP Source: 1. Economic Survey 2007-08. 2. Central Statistical Organisation, GoI.

GDP (at market prices) to 32.2 per cent during 2008-09 as against 31.6 per cent during 2007-08. The relative shares of private consumption and GFCF in GDP during the Tenth Plan stood at 60.9 and 27.0 per cent, respectively. Indian economy achieved higher saving and investment levels during the Tenth Plan compared to the Ninth Plan. The savings ratio during the Tenth Plan at 31.4 was substantially higher than that of Ninth Plan at 23.6. The investment ratio during the Tenth Plan averaged 31.4 per cent as compared to 24.3 per cent during the previous Plan period. During the year 2007-08, the upward trend continued as gross domestic savings and the investment as a proportion to GDP (at current market prices) improved by at least 2 percentage points over the previous year to reach from 37.7 and 39.1 per cent, respectively (Table 1.3). However, these ratios declined to 35.3 and 37.5 per cent, respectively, during 2008-09.

c.

Inflation

B.

Trade

1.10

The economy showed progress in integrating

with the world economy as evident from the improved trade to GDP ratio at 34.8 during 2006-07 as compared to 22.5 during 2000-01. The openness indicator, by including services trade, showed further improvement to 48 per cent as against 29.2 per cent during the corresponding period. During 2008-09, both exports and imports in US$ terms registered growth of 3.4 and 14.3 per cent, respectively. The exports reached US $ 167.02 billion during April 2008 March 2009. Imports reached a volume of US $ 284.30 billion during the year. Share of agriculture in total exports ranged between 10 and 11 per cent during recent

years (Table 1.5).

C.

Agricultural Marketing and Commodity Futures

1.11

Several states amended their APMC Acts to

ensure market reforms. GoI took initiatives to promote

1.9 Headline inflation, as measured by year-on-year variations in the Wholesale Price Index (WPI) fell from its intra-year peak of 12.91 per cent on August 2, 2008 to 0.26 per cent by 28 March 2009. The fall in commodity prices, reflecting global trends, has been the key driver of the sharp fall in WPI inflation although effective management of domestic demand too contributed. On the other hand, inflation measured through various Consumer Price Indices

modern terminal markets for fruits, vegetables and

(CPI) was higher due to the firm trend in prices of

1.12

food articles.

commodities during the financial year 2008-09 was

other perishables in urban centres in ‘Hub-and-Spoke’ format.

Andhra

Pradesh,

18

Madhya

Pradesh,

West Bengal, Nagaland and the Union Territory of Chandigarh have identified land for setting up terminal markets.

Cumulative

value

18

Ch-Eng-1.p65

Bihar,

Maharashtra, Orissa, Punjab, Rajasthan, Tamil Nadu,

7/15/2009, 10:42 AM

of

trade

in

agricultural

Table 1.5: Trends in Exports and Imports (US$ billion) Year

Total Exports

Share of Agri.

Total Imports

Share of Food & Allied

in Total Exports (%)

Products in Total Imports (%)

2003-04

63.84 (21.1)

11.8

78.15 (27.3)

2004-05

83.54 (30.8)

10.2

111.52 (42.7)

3.5

2005-06

103.10 (23.4)

9.91

149.15 (33.8)

2.5

2006-07

126.28 (22.6)

10.04

185.08 (24.5)

2.9

2007-08 R

162.99 (29.1)

11.3

251.57 (35.5)

3.1

284.30 (14.3)

—

2008-09

P

167.02

R : Revised.

(3.4)

10.5

*

P : Provisional

* : Pertains to April-December

Figures in the parentheses refer to percentage change over the previous year. Source: 1. DGCI &S, Kolkata. 2. Ministry of Commerce and Industry

Rs.6,27,303 crore registering a

4.7

decline of

33.36 per

3. Economic Survey 2007-08

1.14

Food

security

4. RBI Bulletin, May 2009.

has

been

assigned

prime

cent compared to the previous year. Total trade in

importance as reflected in buffer stock and public

futures increased by about 29.01 per cent over last

distribution policies.

year. Thus, share of agricultural commodities in total

issue came to the fore once again in the wake of

trade declined from 23.1 per cent in 2007-08 to

diversion of food grains, especially corn to biofuel

12.0 per cent in 2008-09. An important development

production, stoking global food prices up and due to

during

Market

threat perception of adverse effects of climate change.

NCDEX

While food and fuel prices eased during last quarter of

to accredit the warehouses of producers/processors and

the year at the macro level, sticky retail food prices still

similar participants, within 50 km of the municipal

threaten weaker sections, including small and marginal

limits

farmers, who are net buyers of food.

the

year

was

that

the

Forward

Commission, on 16 March 2009, permitted

of

the

delivery

centers,

to

enable

such

participants to deliver their goods on the exchange platform.

D. 1.13

Support Prices, Procurement and Stock of Foodgrains

During the year, food security

E.

Agriculture and Rural Economy

a.

Rainfall Situation

1.15

In spite of ‘near normal’ precipitation during

southwest monsoon season 2008, erratic temporal as

Minimum Support Prices (MSP) announced for

major crops before the sowing season, during 2008-09, showed significant upward revision by 8.0, 31.8, 48.2, 48.2 and 29.3 per cent, respectively, for wheat, paddy, moong, urad and arhar.

Procurement of wheat in the

marketing year (April-March) 2009-10 would be around 24 million tonnes as against 22.6 million tonnes during the previous year.

As Government has increased the

MSP to Rs.1,080 per quintal (by 8%), the procurement is expected to be easy. Procurement of rice is expected to be higher by 1.8 million tonnes than last year at 24.4 million tonnes.

Paddy field

19

Ch-Eng-1.p65

19

7/15/2009, 10:42 AM

well as spatial distribution of rainfall has impacted

1.6).

Total live water storage, as on 26 March 2009,

the farmer community to some extent. While the

was 26 per cent of the FRL compared to 33 per cent

central and south peninsular India witnessed scanty

last year.

rains and drought like situation, regions like Bihar and eastern

Uttar

Pradesh

experienced

massive

floods

b.

Crop Acreage

month, i.e., July, fall in water storage levels in the

1.18

The crop coverage during kharif 2008 at 101.5

major reservoirs and inadequate supply of fertilisers

million ha showed a decline of 2.4 million ha, due to

slowed down the pace of sowing operations. The

decline in area under pulses and other cereals even as

North-East monsoon rainfall was subdued to make

area under rice and oilseeds increased (Table 1.7). In

the cumulative rainfall about 31 per cent below

spite of shortfall in North-East monsoon, area sown

during the season. Insufficient showers in peak-sowing

normal (Table 1.6).

under rabi crops increased by 1.8 million ha. While area under crops, except rice and oilseeds, declined

1.16

The cumulative rainfall recorded during the

during kharif season, it generally improved during the

entire southwest monsoon season (June-September)

rabi season. This trend has reversed the pattern

2008 was 2 per cent lower than the normal Long

observed during 2007-08.

Period Average (LPA) rainfall. Though the season started 5 days in advance it was marred by two prominent dry spells, one in July and another in

c.

Agricultural Production

September 2008 causing

i.

Foodgrains and Non-Foodgrains

deficiency in some parts of

the country.

1.19 is

1.17

Overall foodgrains production during 2008-09

estimated

at

229.9

million

tonnes

as

against

In terms of spatial distribution, 30 out of 36

the target of 233.0 million tonnes and the previous

meteorological sub-divisions received normal rainfall.

year’s production of 230.8 million tonnes. During

Only 2 (Punjab and Orissa) sub-divisions recorded

the year, production of all crops, except rice, is

excess rainfall and 4 (Nagaland, Manipur, Mizoram &

lower compared to last year; the reduction being

Tripura,

larger

West

Madhya

Pradesh,

Vidharbha

and

at

16.9

per

cent

in

case

of

sugarcane

(Table 1.8).

Kerala) sub-divisions witnessed deficient rainfall (Table

Table 1.6: Trends in the Rainfall and Water Storage Particulars

South - West Monsoon

A. Cumulative rainfall (% variation from normal)

North - East Monsoon

2006

2007

2008

2006

2007

2008

-1

5

-2.0

-21

-32

-31

20 6 10

17 13 6

30 2 4

6 3 27

7 2 27

4 2 30

87

79

76 @

33

33

26 #

B. Number of Sub-divisions with • Normal • Excess • Deficient/Scanty/No Rain C. Reservoir status (% of FRL)*

Normal : ± 19 % ; Excess : + 20% or more; Deficient : -20 to - 59%; Scanty : - 60 % or less & No Rain : - 100% * : Full Reservoir Level in 81 major reservoirs (accounting for 63% of total reservoir capacity in the country) as at the end of season. @: As on 30 Sept 08 #: As on 26 March 2009 Source: Indian Meteorological Department

20

Ch-Eng-1.p65

20

7/15/2009, 10:42 AM

Table 1.7: Area Sown under Major Crops (Million ha.) Crop

Kharif (a)

Rice

Rabi (b)

Total (a+b)

2007

2008

2008

2009

2007-08

2008-09

37.3

38.5

0.8

4.6

38.1

43.1

-

-

27.4

27.8

27.4

27.8

Wheat Other Cereals

21.1

20.0

6.5

6.9

28.5

26.9

Pulses

12.3

10.4

12.9

14.5

25.5

24.9

Oilseeds

17.5

18.3

8.5

10

26.2

28.3

Cotton

9.2

9.1

-

-

9.3

9.1

Sugarcane

5.3

4.4

-

-

5.1

4.4

All Crops

103.9

101.5

62.0

63.8

160.2

165.3

Source : Ministry of Agriculture, GoI

- : Nil

ii.

Plantation Crops

1.20

Tea production in the country is expected to

These Funds will be operational till the end of

rise to 9.81 lakh tonnes during 2008-09. production

shortfall

in

Kenya,

the

With

increase

in

production helped to increase exports (Table 1.9).

Eleventh

Plan.

consumption

Over

and

time,

exports

coffee

production,

improved.

Rubber

production and consumption showed steady growth, while exports fluctuated from year to year.

Exports are likely to pick up in 2009 also as tea

iii.

Horticulture

funding re-plantation and rejuvenation activities aimed

1.21

Horticulture

at improving productivity, GoI has set up Special

proportion of GDP in agriculture. The area and

Purpose Funds for tea, rubber, coffee and cardamom.

production grew in 2007-08 compared to the previous

production in Kenya is expected to remain low. For

sector

contributes

a

significant

Table 1.8: Production of Major Crops (Million tonnes) Crop

2004-05

2005-06

2006-07

2007-08

2008-09 Target

Achievement $

Rice

83.1

91.8

93.4

96.7

97.0

99.4

Wheat

68.6

69.4

75.8

78.6

78.5

77.6

Coarse Cereals

33.5

34.1

33.9

40.8

42.0

38.7

Pulses

13.1

13.4

14.2

14.8

15.5

14.2

198.4

208.6

217.3

230.8

233.0

229.9

103.3

109.9

110.6

121.0

121.5

118.8

Foodgrains Kharif Rabi

95.1

98.7

106.7

109.8

111.5

111.1

Oilseeds

24.4

28.0

24.3

29.8

31.8

28.1

237.1

281.2

355.5

348.2

340.0

289.2

16.4

18.5

22.6

25.9

26.0

23.3

10.3

10.8

11.3

11.2

11.0

10.3

Sugarcane Cotton@ Jute & Mesta

#

$ : Third advance estimates

@ : million bales of 170 kg each

# : million bales of 180 kg each

Source : Ministry of Agriculture, GoI

21

Ch-Eng-1.p65

21

7/15/2009, 10:42 AM

Table 1.9: Production and Consumption of Major Plantation Crops (lakh tonnes) Year

Tea

Coffee

Production Consumption Exports

Rubber

Production Consumption Exports

Production Consumption Exports

2003-04

8.79

7.14

1.83

2.71

0.70

2.33

7.12

7.20

0.76

2004-05

9.07

7.35

2.06

2.76

0.75

2.12

7.50

7.55

0.46

2005-06

9.49

7.57

1.97

2.74

0.80

2.15

8.03

8.01

0.74

2006-07

9.73

7.71

2.18

2.88

0.85

2.49

8.53

8.20

0.57

2007-08

89.45

7.86

1.85

2.62

0.90

2.19

8.25

8.61

0.6

2008-09 P

9.81

8.02

1.84

2.77

0.94

2.04

8.64

8.65

0.45

P : Provisional

Source: Ministry of Commerce and Industry, GoI. Coffe Board, Tea Board and Rubber Board.

year and reached a level of 20.1 Mha and 207 MT,

respectively. The value of output from the livestock

respectively (Table 1.10). The growth saga continued

sector at current prices was about Rs.2,10,629 crore

in 2008-09 and GDP from horticuture recorded a

during 2006-07.

6 per cent growth. Under the National Horticulture Mission (NHM) launched in 2005, during 2005-06 and

2006-07,

a

sum

of

Rs.1,575.30

crore

was

released. In 2008-09, an amount of Rs.1,010.49 crore was released further while the expenditure reported has been Rs.1,148.50 crore.

Agriculture and Allied Sector

i.

Livestock and Poultry

1.22

As

the

Fisheries

1.23

Fisheries

sector

accounted

as

a

livelihood

option for over 14 million persons during 2005-06. Total fish production in the country during 2007-08, increased by 4.4 per cent and reached 7.1 million

d.

per

ii.

tonnes (2.9 million tonnes marine and 4.2 million tonnes inland). Export earning from the sector was also on the increase with the value of marine products

Livestock

Census,

2003,

the

livestock and poultry population in the country is

export amounting to Rs.7,620 crore during 2007-08.

e.

Agro and Food Processing Sector

contribution of the sector to agriculture and total

1.24

Food processing sector is a promising sector

GDP

in

485

million during

and

489

2006-07

million was

respectively.

31.7%

and

The

5.26%,

the

country

due

to

changing

consumer

Table 1.10: Area and Production of Major Horticultural Crops (Area in million ha; Production in million tonnes) Year

Area

Production Total

Fruits

Vege-tables

Flowers

Horticulture

Total Fruits

Vege-tables

Flowers

Horticulture 152.0

2002-03

4.8

5.9

0.1

16.4

49.2

84.8

0.2

2003-04

5.1

6.7

0.2

20.6

49.8

101.4

0.6

165.5

2004-05

5.1

6.7

0.1

17.8

50.9

101.2

0.7

167.0

2005-06

5.3

7.1

0.1

18.7

55.4

110.1

0.7

181.8

2006-07

5.6

7.6

0.1

19.4

59.6

115.0

0.9*

191.8

5.8

7.8

0.2

20.1

63.5

125.9

0.9*

207.0

2007-08

P

P: Provisional *: Excluding 37158 lakh and 43421 lakh cut flowers in 2006-07 and 2007-08, respectively. Source: 1. National Horticulture Board. 2. Horticulture Division., Dept of Agriculture & Co-operation, GoI

22

Ch-Eng-1.p65

22

7/15/2009, 10:42 AM

preferences and growth of organised agri-food retailing sector.

The Eleventh Plan, targets to utilise over

20 per cent of agricultural products for processing/ value

addition.

The

Food

Industry,

presently

ii.

Fertilizers

1.26

During 2007-08, fertilizer consumption (nutrient

terms) increased at 4.2 per cent to reach 225.7 lakh tonnes and 117.1 Kg/ha, respectively. Current pricing

employing 1.6 million workers directly, is projected to

mechanism

grow to 37 million workers (direct and indirect job

chemical fertilizers has resulted in nutrient imbalance

workers) by 2025.

with

coupled

excessive

use

with of

the

urea

unscientific and

a

bias

use

of

against

micronutrients. As against the desirable proportion of

f.

Agricultural Inputs

4:2:1 of NPK, the average use is 5.5:2.1:1, thus,

i.

Seeds

adversely affecting soil profile, micronutrient use and

1.25

The share of private sector in production and

crop productivity.

distribution of seeds in the country was 46 per cent of

the

seeds

sold

commercially.

Breeder

seed

production by National Agricultural Research System, reached 0.92 lakh quintals during 2007-08 registering a 24.6 per cent growth over previous year. Certified/ quality seed distribution during 2007-08 at 190 lakh quintals was 15.5 per cent higher than the previous year.

iii.

Irrigation

1.27

Total irrigation potential created under all types

of irrigation structures was 102.8 million ha upto the end of Tenth Plan.

The utilisation was to the extent

of 85 per cent, leaving a gap of 15 per cent. There have been several Central Sector schemes launched in recent years to create irrigation potential with social responsibilty like Rainwater Harvesting Scheme for SC/ ST

farmers

and

Artificial

Groundwater

Recharge

through Dugwells. The rainwater harvesting scheme, implemented in all States and Union Territories during 2004-05 to 2006-07, installed 18,016 water harvesting structures with a total subsidy utilization of Rs.24.04 crore. This is expected to benefit around 8807 ha. of land of SC/ST farmers.

1.28

The scheme for artificial recharge seeks to

benefit the groundwater stressed areas in the country that account for 28 per cent of the total assessment units. Seven states, viz., Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu account for 75 per cent of such problem units.

GoI is implementing a large scale

Groundwater recharge programme through Dug wells in these States through a subsidy based scheme, viz., Scheme on Artificial Recharge of Ground water through Dugwells.

Ministry of Water Resources is

the Nodal Ministry at the Central Government level Rubber sap collection

and the Fund is routed through NABARD. 23

Ch-Eng-1.p65

23

7/15/2009, 10:42 AM

system

has

disbursed

Rs.2,87,149

crore

as

on

31 March 2009, achieving nearly three per cent more than the target. Commercial banks, co-operative banks and RRB disbursed Rs.2,23,663 crore, Rs.36,762 crore and

Rs.26,724

crore,

respectively,

thus,

achieving

around 115, 67 and 89 per cent of the targets, respectively (Table 1.11 ).

1.31

During the period 2004-09, the GLC flow for

agriculture and allied activities registered a compound Oyster mushroom cultivation

annual growth rate (CAGR) of 23 per cent. During 2007-08,

1.29

while

GLC

flow

for

crop

loans

(31%)

improved, it declined in for term loans (19%) over

The programme is being implemented in 1180

2006-07. Sub sector-wise, hi-tech agriculture witnessed

Blocks/Talukas of 146 districts in these seven States.

the highest growth of 55 per cent in GLC flow during

The phasing is proposed over a period of 3 years,

2007-08 (Table 1.12)

i.e., 2007-2010. An estimated 44.5 lakh dugwells are envisaged to be fitted with recharge structures under the

scheme.

Total

outlay

of

the

programme

Kisan Credit Card Scheme

is

Rs.1,798.71 crore, of which Rs.1,536.75 crore has

1.32

been released to NABARD towards subsidy, capacity building and service charges.

in August 1998 has facilitated in augmenting the GLC

NABARD is a member

flow for crop loans by providing adequate, timely, cost

on the State Level Steering Committe (SLSC) and District

Level

Implementation

and

The Kisan Credit Card (KCC) scheme introduced

effective and hassle free short-term (ST) loans for

Monitoring

Seasonal Agricultural Operation (SAO) to farmers. The

Committee (DLIMC).

Scheme is implemented across the country by all public sector commercial banks, RRB and co-operative

iv.

Agricultural Credit

1.30

As against the target of Rs.2,80,000 crore of

to cater to various term credit needs under a single

credit flow to agriculture for 2008-09, the banking

window. In addition to ST credit and term loans for

banks. The scope of KCC was broadened by NABARD

Table 1.11: Agency-wise Ground level Credit Flow (Rs. crore) Agency

2004-05

2005-06

2006-07

2007-08

2008-09P

Growth Rate (%) 2004-09 #

2007-08 *

2008-09 *

Co-operative Banks

31,231

39,404

42,480

48,258

36,762

4

14

-24

RRBs

12,404

15,223

20,435

25,312

26,724

21

24

6

Commercial Banks

81,481

1,25,477

166,485

181,088

2,23,663

29

9

23

Other agencies Total

193

382

NA

NA

NA

-

-

1,25,309

1,80,486

2,29,400

2,54,658

2,87,149

23

11

#: Compound Annual Growth Rate *: Percentage change over previous year.

P: Provisional Source: NABARD

NA: Not Available

24

Ch-Eng-1.p65

24

7/15/2009, 10:42 AM

13

Table 1.12: Sub-sector-wise Ground Level Credit Flow for Agriculture and Allied Activities (Rs. crore) Sr.

Sector/Sub-

2004-05

2005-06

2006-07

2007-08

Growth Rate (%)

No. Sector I

Crop Loan

2004-08 ^

2007-08 *

76,062

1,05,350

1,38,455

181,393

34

31

49,247

75,136

90,945

73,265

14

-19 -67

(ST-Production Credit) II Term Loans (MT & LT Investment Credit) i.

Minor Irrigation

ii.

Land Development

4,186

8,663

8,566

2,840

-12

840

1,749

2,285

2,553

45

iii.

12

Farm Mechanisation

4,555

9,695

10,113

8,303

22

-18

iv.

Plantation & Horticulture

1,720

4,481

5,266

5,910

51

12

3,097

7,341

8,045

9,034

43

12

1,301

1,019

1,424

1,248

-1

-12

v.

Animal Husbandry

vi.

Fisheries

vii.

Hi-tech agriculture

#

viii. Others$ Total (I+II)

6,648

9,737

21,498

33,325

71

55

26,900

32,451

33,748

10,052

-28

-70

1,25,309

1,80,486

2,29,400

2, 54,658

27

11

^ : Compound Annual Growth Rate

* : Percentage change over previous year.

# : Animal Husbandry includes Dairy Development, Poultry Farming and Sheep/Goat/ Piggery $ : ‘Others’ include storage/market yards, forestry/waste land development, RIDF, bullock and bullock carts, bio-gas and credit flow through private sector commercial banks.

agriculture and allied activities, a certain component of

1.35

Keeping in view the Government’s emphasis on

loan through KCC also covers consumption needs.

increasing credit flow to agriculture sector, NABARD advised

1.33 banks

During 2008-09, 67.95 lakh KCC were issued by with

sanction

of

credit

limit

of

Rs.38,245 crore. Of the total cards issued during the year 40.37 lakh KCC were issued by commercial

banks

to

identify

and

cover

all

farmers

including defaulters, oral lessees, tenant farmers, sharecroppers, etc., so that all farmers are covered under the scheme by 31 March 2009.

Further, banks were

advised to extend crop loans only through KCC and

banks, 13.44 lakh KCC by co-operative banks and 14.14 lakh KCC by RRB. Since inception of the

Table 1.13: Agency-wise, Year-wise Kisan Credit Cards Issued

scheme, 828.70 lakh cards were issued till end-March 2009 by the banking system. Co-operative banks accounted for the largest share (44%), followed by commercial banks (42%) and RRB (14%) (Table 1.13).

1.34

(lakh) Year

Co-operative Bank

RRB

Commercial Banks

Total

2004-05

35.56

17.29

43.95

96.80

2005-06

25.98

12.49

41.65

80.12

State-wise analysis of KCC issued as at end-

2006-07

22.97

14.06

48.08

85.11

March 2009, revealed that Uttar Pradesh accounted for

2007-08

20.91

17.73

46.06

84.70

18 percent of the total cards issued followed by

2008-09

13.44

14.14

40.37*

67.95

361.45

114.71

Andhra Pradesh (17%), Maharashtra (10%), Tamil Nadu (7%), and Karnataka, Madhya Pradesh, Orissa and Rajasthan (6% each).

Cumulative

352.54 828.70

*: Upto 31 December 2008

25

Ch-Eng-1.p65

25

7/15/2009, 10:42 AM

renew them in time to ensure ‘quality in operations’. Banks

were

also

advised

to

ensure

coverage

Table 1.14: Gross Capital Formation in Agriculture

of

(At 1999-2000 prices)

all KCC-holders under Personal Accident Insurance

(Rs. crore)

Scheme (PAIS). Year

Agricultural

Debt

Waiver

and

Debt

The Union Budget 2008-09 had announced

Ratio of GCF in Agriculture to (%) GDCF

Agri. GDP

Total GDP

1999-00

43,473

8.6

10.6

2.2

2000-01

39,027

8.0

9.6

1.9

2001-02

48,215

10.2

11.1

2.2

Relief

Scheme 1.36

GCF in Agri

Agricultural Debt Waiver and Debt Relief Scheme,

2002-03

46,823

8.4

11.8

2.1

2008 to ameliorate the indebtedness of farmers and

2003-04

44,833

6.7

10.2

1.9

difficulties faced by farming communities, especially

2004-05

49,198

6.2

11.1

2.1

2005-06

56,459

6.0

12.1

2.2

P

62,663

5.9

12.9

2.2

2007-08 Q

67,864

5.5

12.3

2.2

small and marginal farmers. NABARD implemented the Scheme as nodal agency for co-operative banks

2006-07

and RRB. About 193 lakh farmer-borrowers of cooperative banks and RRB are estimated to have

P : Provisional.

Q : Quick Estimate

Source : Central Statistical Organisation, GoI

benefitted under the Scheme. The proportion of small/ marginal farmers benefitting is 83 per cent. (end-31

F.

Capital Formation

1.37

Capital formation is very crucial in determining

2008).

The

weather

based

crop

insurance scheme (WBCIS) to protect farmers against

the production capacity in the future.

Hence, there is

a need to step up capital formation in agriculture to be able to reach the targetted growth of 4 per cent. Gross capital formation (GCF) in agriculture increased from Rs.43,473 crore in 1999-2000 to Rs.67,864 crore in 2007-08. GCF as percentage of GDP in agriculture improved from 10.6 to 12.3 per cent during this period (Table 1.14). The past trends showed decline in public sector

March

formation, which in turn crowded out private

sector investment, the apparent revival in recent years, notwithstanding.

adverse conditions of weather parameters like rainfall, temperature,

frost,

humidity,

etc.,

was

first

implemented during kharif 2007 in Karnataka and then extended to 12 states during rabi 2007-08. The scheme was

continued

during

2008-09.

The

WBCIS

has

covered about 6.71 lakh farmers. The total claims under the scheme for kharif 2007 and rabi 2007-08 amounted to Rs.106 crore. Insurance cover is now also available

to farmers growing horticultural crops.

H.

Land Reforms and Land Records

1.39

Land reforms have formed the core of the

institutional reforms in agriculture.

Of late, entry of

corporates in agriculture, forces of globalisation and

G.

Agricultural Insurance

1.38

The

liberalisation, etc., have necessitated a rethink on land Scheme

reforms. At the same time, inclusive growth can be

(NAIS) continued to provide insurance coverage against

ensured only by providing the poor access to land,

crop failure due to natural calamities, pests and

credit, technology, markets and other productive assets.

diseases. Since inception (1999-2000) of the Scheme,

Realising the importance of land reforms to achieve

about 11.55 crore farmers have been covered. During

this, GOI appointed the “Committee on State Agrarian

this period, claims to the tune of Rs.11,607 crore have

Relations and the Unfinished Task in Land Reforms”

been settled benefiting a total of 302 lakh farmers

under the chairmanship of the Union Minister for Rural

National

Agricultural

Insurance

26

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26

7/15/2009, 10:42 AM

Development in 2008. The broad terms of reference

1.42

Sustainability

has

been

a

major

issue

in

relate to land ceilings, their implementation, tenancy

agricultural sector. GoI launched a National Mission for

rights, besides suggesting better access of women to

Agriculture as part of the effort to address climate

land and productive assets.

change. It has suggested wide ranging action points (Box 1.1).

1.40

Non-availability

always

been

particularly,

a to

of

proper

hindrance

to

development

land land

records reforms

through

has and,

credit.

A

J.

Outlook for 2009-10

1.43

The

sponsored scheme on computerisation of land records was started in 1988-89 with 100% financial assistance as a pilot project to address this problem. The Scheme is being implemented since 1994-95 in collaboration with the National Informatics Centre (NIC). At present, the scheme is being implemented in 544 districts of the country. Of the 5261 tehsils where work is being implemented, data entry was completed in 3537 tehsils (67.2%) and computerised copy of Record of Rights (RoR) are available in 2923 tehsils (55.6%).

Annual

Monetary

Policy

Statement

for

2009-10 by RBI has many implications for rural credit. Among others, introduction of CRAR norm for RRB in a phased manner, assistance to RRB for adoption

of

ICT

solutions

for

financial

inclusion,

technology upgradation of RRB, liberalised branch licensing, reckoning shortfall under weaker sections subtarget

(10%)

for

allocating

amounts

to

RIDF,

continuation of interest subvention scheme, etc., will have implications for RFI and rural credit. The plan of action will be finalised by the RBI in consultation

I.

Climate Change

1.41

Global warming due to large-scale emmission of

with NABARD.

Green House Gases (GHG) raises several concerns. Climate change being one of them has ocupied the centre stage of academic and policy discussion round the world. Government of India launched the National Action Plan on Climate Change during June 2008 to mitigate the impact of climate change on livelihoods of people,

sustainability

and

inter-generational

equity

issues in sharing natural resources. As part of the national action plan, GoI constituted National Solar Mission,

National

Mission

for

Enhanced

Energy

Efficiency, National Mission on Sustainable Habitat, National

Water

Mission,

National

Mission

for

Sustaining the Himalayan Ecosystem, National Mission for a Green India, National Mission for Sustainable Agriculture

and

National

Mission

Knowledge for Climate Change.

on

Strategic

1.44

The outlook for the coming financial year is of

interest as the impact of global melt down is expected to roll over. While India is said to be less impacted compared to other parts of the world, the truth is that no

country

can

escape

the

downturn

as

demonstrated by the decline in industrial output.

amply The

year ahead is likely to have a lower growth of GDP

inspite

of

favourable

rainfall

expectations.

Arrangement may have to be made with certain degree of preparedness to provide a safety net to already distressed farmers. Also, a number of initiatives may have to be planned for the agriculture and other rural sectors for building long term capabilities while ensuring sustainability. Operating margins may have to be enhanced in favour of all farmers, especially the small and marginal farmers, who are more vulnerable to market forces.

27

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27

7/15/2009, 10:42 AM

Box 1.1 National Mission for Sustainable Agriculture Agriculture is vital to India’s economy and the livelihoods of its

weather based insurance, (iv) development of GIS and remote-

people. The National Mission for Sustainable Agriculture, forming

sensing methodologies for detailed soil resource mapping and

part of the GOI’s National Action Plan on Climate Change,

land use planning at the level of a watershed or a river basin, (v)

suggested a multi-pronged strategy to make it more resilient to

mapping vulnerable eco-regions and pest and disease hotspots

climate change. The Mission seeks to identify and develop new

and (vi) developing and implementing region-specific contingency

varieties of crops, especially thermal resistant crops, and

plans based on vulnerability and risk scenarios.

alternative cropping patterns capable of withstanding extremes of weather, long dry spells, flooding and variable moisture availability. Agriculture needs to progressively adapt to anticipated climate change. It needs to be supported by the convergence and integration of traditional knowledge and practice systems, information technology, geospatial technologies and biotechnology. The focus would be on improving productivity of rainfed agriculture. The proposed National Mission will focus on four areas crucial to agriculture in adapting to climate change, namely dryland agriculture, risk management, access to information and use of biotechnology.

Access to Information: (i) Development of regional databases of soil, weather, genotypes, land-sue patterns and water resources, (ii) monitoring of glacier and ice-mass, impacts on water resources, soil erosion and associated impacts on agricultural production in mountainous regions, (iii) providing information on off-season crops, aromatic and medicinal plants, greenhouse crops, pasture development, agro forestry, livestock and agro processing, (iv) collation and dissemination of blocklevel data on agro-climatic variables, land-uws and socieconomic features and preparation of state-level agro-climatic atlases.

Priority action on dryland agriculture: (i) development of drought and pest-resistant crop varieties, (ii) improving methods to conserve soil and water, (iii) training farming community, stake holders for agro-climatic information sharing and dissemination and (iv) financial support to enable farmers to invest in and adopt relevant technologies to overcome climatic

Use of Biotechnology: (i) Use of genetic engineering to convert C-3 crops to the more carbon responsive C-4 crops to achieve greater photosynthetic efficiency for obtaining increased productivity at higher levels of carbondioxide in the atmosphere or to sustain thermal stresses, (ii) development of crops with better water and nitrogen use efficiency which may result in

related stresses.

reduced emissions of green house gases or greater tolerance to Risk Management: (i) Strengthening of current agricultural

drought or submergence or salinity, (iiii) development of

and weather insurance mechanisms, (ii) development and

nutritional strategies for managing heat stress in dairy animals to

validation for weather derivative models, (iii) creation of web-

prevent nutrient deficiencies leading to low milk yield and

enabled, regional language based services for facilitation of

productivity.

28

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28

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Development Initiatives

II

NABARD continued to support various development and

club programme, etc. This Chapter discusses the various

innovative programmes/ initiatives related to farm and

initiatives and programmes of the Bank, efforts made

non-farm

Micro-Finance

towards capacity building in the client institutions,

Institutions (MFI), Self-Help Groups (SHG), etc., in

sectors,

research and development activities funded during the

addition

year.

to

financial

the

Bank’s

inclusion, on-going

activities,

viz.,

watershed development, village development, farmers’

An

account

of

the

various

developmental

programmes of GoI and State Governments are given.

Farm Sector A.

Watershed Development

2.2

The Watershed Development Fund (WDF) was

Phase (CBP) and Full Implementation Phase (FIP).

created with a corpus of Rs.200 crore during 1999-2000 to replicate

watershed

development

models

through

participatory approach. The corpus was augmented during the year through interest accrued on unutilised portion of the Fund (Rs.33.83 crore) and RIDF differential interest (Rs.527.52

crore)

taking

the

total

amount

to

Rs.1,125.21 crore as on 31 March 2009. During 2008-09, 38 watershed projects were sanctioned, taking the cumulative number of projects to 454 spread over 94 districts in 14 states. With a total commitment (loan and grant) of Rs.257.20 crore under these projects, an area of 4.54 lakh ha. is expected to be covered. The projects are implemented in two phases, viz., Capacity Building

During the year, 8 projects graduated to FIP, taking the total of such projects to 169. 2.3

Under the Prime Minister’s Relief Package for 31

distress districts in four States, 1.90 lakh ha. has been taken up for implementation during the year, taking the cumulative area to 5.88 lakh ha. with total commitment of Rs.706 crore. These watersheds are expected to significantly mitigate farmers’ distress. While projects are entirely grant based in distressed districts, combination of grant and loan is provided in non-distress districts. During the year, Rs.49.83 crore and Rs.8.10 crore were disbursed as grants and loans taking the cumulative disbursements

to

Rs.107.83

and

Rs.15.10

crore,

respectively. 2.4

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,

Jamuai, Munger, Nawada and Rohtas districts of Bihar with

an

2008-09,

allocation 18

of

watershed

Rs.60 projects

crore. were

During

sanctioned

involving financial commitment of Rs.21.60 crore, thus, taking the cumulative number of watershed projects to 77 (covering 80,000 ha). During the year, 13 projects DRIP Irrigation in Strawberry Garden.

graduated

to

FIP

taking

the

total

to

15. 29

Ch-Eng-2.p65

29

7/15/2009, 10:47 AM

A sum of Rs.3.61 crore was disbursed during the year

farmers to adopt new/innovative methods of farming.

and

Farmers, preferably marginal and small, are taken on

the

cumulative

disbursement

stood

at

Rs.5.62 crore as on 31 March 2009.

exposure-cum-training

visits

to

innovative

projects.

Financial support is extended under the Farmers’ Technology Transfer Fund (FTTF). During 2008-09,

B.

Village Development Programme

2.5

Introduced in 2007, the Village Development

116 exposure visits involving 3,048 farmers were Programme (VDP) envisages developing one village in each DDM district and five villages in each of the PPID blocks. A Village Development Committee comprising mainly of progressive villagers will take care of plan preparation, implementation, monitoring, etc. As on 31

arranged

in

collaboration

with

select

research

institutes, KVK, and Agriculture Universities on bioglobules, vermi-culture, bio-manures, organic farming, poly-house technology, medicinal and aromatic plant cultivation, etc.

March 2009, the programme is being implemented in 916 villages spread over 421 districts across 25 States.

C.

E.

Tribal Development

2.9

The

Tribal

Development

Fund

(TDF)

was

Integrated Development of Backward Blocks

created by NABARD in 2004 with a corpus of Rs.50

The Pilot Project for Integrated Development

with wadi as the core component. As on 31 March

(PPID) was launched in 2003 with the objective of

2009, balance outstanding in the Fund was Rs.574.98

bringing about integrated development of backward

crore after marking out disbursement (Rs.28.05 crore)

blocks through credit and convergence of development

during

programmes of various agencies. The programme is

available for integrated tribal development programme

implemented primarily by RO through DDM.

and the projects are expected to ensure sustainable

2.6

crore to support integrated tribal development projects

2008-09.

Assistance

under

the

Fund

is

livelihood opportunities for tribal families, increased 2.7

The project was expanded over the years to cover

139 blocks across 16 States. Based on the feed back received

from

RO

about

the

identical

nature

of

interventions under PPID and VDP, it was decided that the duration of PPID would be restricted to three years

agriculture/horticulture

productivity

and

ecological

sustainability. During the year, policy changes were effected wherein assistance was extended to socioeconomic weaker non-tribal families in the project area as well, subject to their constituting maximum of

only, except wherever it was felt necessary to merge

10 per cent of total participating families. Sustainable

them with VDP. Following this, PPID has been closed

livelihood

down in 29 blocks where it had completed three years

assistance directly to the people’s organisations (being

and merged with VDP in 70 blocks. As on 31 March

piloted) and stipulating an entry point activity like

2009, PPID was being implemented in 40 blocks across

shramadan, were also attempted. During 2008-09,

6 states.

grant of Rs.202.87 crore was sanctioned for 74

options

other

than

wadi,

routing

the

projects benefiting 61,924 tribal families in Andhra

D.

Capacity Building for Adoption of Technology

Pradesh,

Assam,

Jharkhand, Maharashtra,

Bihar,

Karnataka, Nagaland,

Gujarat,

Madhya

Pradesh,

Orissa,

Rajasthan,

Uttar

NABARD has been implementing the ‘Scheme

Pradesh and West Bengal. The cumulative sanction

for Capacity Building for Adoption of Technology’

was Rs.307.39 crore covering 93,217 families in 19

(CAT) through exposure visits and training to facilitate

states and one UT.

2.8

30

Ch-Eng-2.p65

Chhattisgarh,

30

7/15/2009, 10:47 AM

G.

Farmers’ Technology Transfer Fund

2.12

The ‘Farmers’ Technology Transfer Fund’ (FTTF)

was set up and operationalised by NABARD with a corpus of Rs.25 crore from 1 April 2008 with the objective

of

promoting

transfer

of

technology

for

enhancing production and productivity in agriculture and farm related activities. Operational guidelines on FTTF were issued to major commercial banks, co-operative banks and RRB in June 2008. These interventions are expected to result in perceptible impact at the ground

Tomato cultivation.

level.

A

Project

Advisory

Committee

has

been

constituted at HO level to recommend the proposals received under FTTF.

F. 2.10

Farm Innovation and Promotion Fund

2.13

The Farm Innovation and Promotion Fund (FIPF)

with a corpus of Rs.5 crore was set up in NABARD in 2005 to promote innovative and feasible concepts/ projects in agriculture and allied activities, development of

marketable

prototypes,

technology

patenting,

extension support, marketing, etc. During 2008-09, 14 proposals were sanctioned in 6 States involving financial assistance of Rs.180.97 lakh

(Rs.99.33 lakh was grant

and Rs.81.64 lakh as soft loan)

During 2008-09, 12 proposals were sanctioned

in 6 states involving financial assistance of Rs.233.31 lakh (Rs.161.31 lakh as grant and Rs.72 lakh as soft loan) for implementation of technology transfer and capacity building programmes in areas like value chain of Vettiver Oil Production; turmeric processing involving National Research Development Corporation (NRDC) and Mizorganic as a Special Purpose Vehicle (SPV) by Producer Group Company of farmers in Mizoram;establishment of Outreach Centre by Central

covering areas like

Agricultural Research Institute (CARI) at Diglipur for

village farm development, rainfed rabi cropping, efficent

North & Middle Andaman District, etc. In addition, 22

management of carbon and plant nutrients under dry

Farmers’ Training and Rural Development Centres were

land agriculture, etc.

sanctioned assistance of Rs.80.20 lakh during the year.

2009, 61 projects

Cumulatively, as on 31 March were sanctioned in 18 States

involving financial support of Rs.462.16 lakh, comprising

2.14

grant and soft loan assistance of Rs.323.79 lakh and

Chhattisgarh, Jharkhand, Madhya Pradesh, Rajasthan,

Rs.138.37 lakh, respectively.

Orissa and Uttar Pradesh, the respective ROs were

Further, to ensure specific strategies for Bihar,

advised to identify appropriate projects for funding support under FTTF highlighting, (i) identification of one 2.11

Of the 61 projects sanctioned, 16 projects have

been successfully completed. Disbursement for the completed

projects

amounted

to

Rs.39.87

lakh

compact block in each state, (ii) synergy with PPID/VDP programmes, (iii) centre staging of Farmers’ Clubs under the programme and (iv) prioritisation of technological

(Rs.34.68 lakh as grant and Rs.5.19 lakh as soft loan).

interventions to 3 or 4 areas

Of the completed projects, four were in Maharashtra,

conservation, improved productivity measures, organic

three each in Jharkhand and Uttarakhand, two in

farming, System of Rice Intensification (SRI) technique,

Chhattisgarh and one each in Delhi, Gujarat, Meghalaya

energy

and West Bengal.

varieties, etc.

solar technology,

like soil and water

production of hybrid seed

31

Ch-Eng-2.p65

31

7/15/2009, 10:47 AM

H.

Farmers’ Club Program

2.15

The Farmers’ Club (FC) programme aims to

the Bank along with FMC organised eight such

organise farmers around a common agenda to facilitate

programmes.

access to credit, technology, markets and extension

J.

Government Projects

services. During the year, NABARD reviewed its policy

2.18

NABARD

for supporting FCs through various agencies. It was

functions of implementing/project coordinating agency

decided to extend uniform support of Rs.10,000 for

for various area specific projects of GoI.

also

continued

to

discharge

the

three years to commercial banks, RRBs, co-operative banks and grassroot level organisations (NGOs, PRIs,

i.

Kutch Drought Proofing Project

KVKs, Post Offices, etc.) for promoting and nurturing of

2.19

NABARD has been implementing the Kutch

FCs. The promoting agency will take steps to make the

Drought Proofing Project since 2005 through community

clubs self-sustaining over a period of 3-5 years, when

based organisations and NGOs. Till date, of the ten on-

funding

going projects, implementation in the case of six projects

support

by

institutional

agencies

will

be

withdrawn. The sponsoring banks/agencies have to

is

provide a consent letter for maintaining the clubs beyond

disbursed. As on 31 March 2009, NABARD received

the agreed period of 3 years of NABARD support. The

Rs.3.54 crore from GoI of which Rs.2.90 crore was

requirements of clubs have been segregated into ‘routine’

disbursed.

complete.

During

2008-09,

Rs.4.43

lakh

was

and ‘non-routine’ activities, and the latter shall be supported on merit. The revised policy emphasises on

ii. Cattle Development Projects

formation

2.20

of

federations

of

FCs/producers’

groups/

The Projects are implemented by BAIF, Pune,

companies at district level with a view to promoting

in 13 districts of Bihar and 17 districts of Uttar

increased access to credit, productivity and income

Pradesh since 2004-05. The duration of both projects,

through collective efforts.

which expired in February 2009, has been extended upto 30 June 2010 by GoI without any additional

2.16

During the year 9,989 clubs were launched,

financial

assistance.

NABARD

is

the

co-ordinating

taking the total number of clubs to 38,215 covering

agency and facilitator for channelising funds, ensuring

87,724 villages in 581 districts as on 31 March 2009.

its utilisation, project supervision and monitoring. Out

Agency-wise, RRBs promoted maximum number of

of Rs.13.61 crore allocated to each, an amount of

clubs (16,925), followed by commercial banks (10,058),

Rs.10.89 crore each has been released by GoI under

co-operative banks (7,230) and other agencies (4,002).

the Projects as at end-March 2009. During 2008-09,

The region-wise distribution of clubs indicates, that the

Rs.161.47 lakh and Rs.142.33 lakh were released for

southern region has the major share (28%), followed by

Uttar

central (27%) eastern (17%), western (14%) and the

disbursement to Rs.887.97 lakh and Rs.845.23 lakh,

northern (11%) regions while NER accounts for only 3

respectively, as on 31 March 2009.

Pradesh

and

Bihar

taking

the

cumulative

per cent.

iii.

Special Project on Livelihood Based Development

I.

Commodity Futures Trading

2.17

In order to enable the farming community to reap

and Rae Bareli districts of Uttar Pradesh the project is

the benefits of commodity futures trading, NABARD in

under implementation since 2006-07. The project aims

collaboration with the Forward Market Commission

to cover 11,500 BPL families in each district at an

(FMC) has undertaken the responsibility of organising

approved cost of Rs.14.97 crore for Sultanpur and

exposure workshops for skill upgradation of farmers to

Rs.14.90 crore for Rae Bareli. NABARD is the project

ensure their participation in the market. During 2008-09,

holder on behalf of MoRD while BAIF and Dr. Reddy

2.21

Sanctioned under SGSY by GoI in Sultanpur

32

Ch-Eng-2.p65

32

7/15/2009, 10:47 AM

Foundation

(DRF)

are

implementing

it.

As

on

for 51 poultry). The cumulative sanctions stood at

31 March 2009, of the grant of Rs.5.16 crore and

Rs.109.32 crore for 10,848 units (Rs.99.76 crore for

Rs.5.13 crore received from GoI for Sultanpur and Rae

10,656 dairy and Rs.9.56 crore for 192 poultry) as on

Bareli districts, disbursements of Rs.4.85 crore

31 March 2009.

and

Rs.4.37 crore, respectively, were made.

iv.

Dairy and Poultry Venture Capital Fund

L.

Externally Aided Projects

2.22

The programme is under implementation since

2.23

NABARD received Rs.37.25 crore and disbursed

2005-06. Assistance is extended as interest free loan

an amount of Rs.32.01 crore as grant assistance during

upto 50 per cent of the outlay for identified components

the year under the KfW supported externally aided

under dairy and poultry sectors. NABARD is the nodal

projects, which are in various stages of implementation

agency

(Table 2.1)

for

administering

operationalising the

Fund.

the

The

scheme

cumulative

and

amount

a.

On-going Projects

an amount of Rs.43.59 crore was sanctioned for 4,840

2.24

The

units (Rs.39.71 crore for 4,789 dairy and Rs.3.88 crore

Programme

received from GoI was Rs.112.99 crore. During 2008-09,

KFW-NABARD-V-Adivasi in

Gujarat

with

Development

an

outlay

of

Table 2.1: Support Extended under KfW-NABARD Externally Aided Projects (Rs. lakh) Sr. Name of the Project No.

Effective From

Closing Date

External Assistance (• million)

1. i.

KfW-NABARD V-Adivasi Development Programme in Gujarat

ii.

Disbursements made by NABARD During Cumm. upto

Amount received by NABARD During Cumm. upto

2008-09

31.03.2009

2008-09

31.03.2009

13.29 287.67 (+ 1.5 Suppl. Grant)

5,797.64

509.08

6,065.27

23 Dec 1994

30 Dec 2010

IX-Adivasi Development Programme in Maharashtra

2 June 2000

30 Dec 2010

14.32

623.98

4,664.58

647.96

4,669.08

iii.

Indo-German Watershed Development Programme in Andhra Pradesh

15 July 2002

31 Dec 2011

8.69

365.16

667.13

342.22

691.52

iv.

Indo-German Watershed Development Programme in Maharashtra (Phase III)

27 Aug 2005

30 Dec 2009

19.94

1,438.03

2,468.62

1,777.16

2,645.25

v.

Indo-German Watershed Development Programme in Gujarat

7 Feb 2006

31 Dec 2012

9.20

123.18

180.48

100.80

230.34

vi.

Indo-German Watershed Development Programme in Rajasthan

7 Dec 2006

30 Dec 2014

11.00

73.92

123.43

70.40

160.62

vii.

Adivasi Development Programme in Gujarat (Phase II)

28 March 2006

31 Dec 2014

7.00

-

-

-

-

28 June 2002

31 Dec 2009

4.09

292.95

392.95

296.40

396.92

20 Oct 2006 20 Oct 2006

31 Dec 2008 31 Dec 2008

1.20 40.00

-

22,165.88

-

22,165.88

viii. KfW-Sewa Bank Project 2. i. ii.

NABARD- X- Credit Line Grant Loans

33

Ch-Eng-2.p65

33

7/15/2009, 10:47 AM

Rs.62.89 crore has been under implementation since

check dams, 31 permanent dams, 3,149 jalkunds,

1994-95 in Valsad and Dangs districts through BAIF

development of 1,049 spring sites and deepening/

Development Research Foundation, Pune. The in-built

desilting of 99 old wells were completed as at end-March

credit programme is being implemented through Gram

2009.

Vikas

Mandals

(GVM)

since

1998-99.

As

on

31 March 2009, a total of 488 SHGs formed in 130 project

villages

achieved

cumulative

savings

and

2.26

The

Indo-German

Watershed

Development

Programme (IGWDP) in Maharashtra, introduced in

disbursements of Rs.39.51 lakh and Rs.55.57 lakh,

early

respectively.

also

regeneration of natural resources, implemented by

registered to facilitate self-sufficiency in processing and

Village Watershed Committees (VWCs) in association

programme management. These co-operatives collected

with

288 tonnes of raw cashew (205 tonnes were processed)

completed two phases ( Phase I : 1990 - 2000 and

and processed 4.30 tonnes of karvanda and 24.90

Phase

tonnes of mango for making pickles through GVMs. As

watersheds aggregating 1.13 lakh ha. spread across

on 31 March 2009, the loan disbursed and overall

25 districts. Under Phase III of the programme, which

recovery was to the tune of Rs.5.13 crore and Rs.4.24

commenced in January 2005, with an additional

crore, respectivey. KfW has also sanctioned Phase II

commitment of • 19.94 million (approx. Rs.110 crore),

(2006-2014)

grant

109 projects were sanctioned. Of these, 41 projects

assistance of • 7 million (approx. Rs.42.47 crore) to

are under CBP, 28 under feasibility report/interim

cover 4,700 families from these districts, of which

phase (FR/IP), 30 under FIP, 9 projects completed

2,159 families were identified and 864 ha. of wadi

and 1 project discontinued.

Eleven

of

tribal

the

co-operatives

programme

were

involving

established as at end-September 2008. A total of 102 wadi tukadis (SHGs formed by group of 8-10 wadi owners)

have

been

formed

and

savings

worth

Rs.55,088 mobilised.

2.27

nineties

NGOs. II:

an

The

2001

–

integrated

programme

programme 2007)

has

and

for

successfully

has

covered

95

KfW, Germany committed grant assistance of

• 8.69 million (approx. Rs.48.66 crore)

under Indo-

German Watershed Development Programme in Andhra Pradesh for rehabilitation of watersheds in four districts (Adilabad,

2.25

is

Under the KfW-NABARD-IX-Adivasi Development

Programme in Maharashtra, the successful wadi model of Gujarat is being replicated in Nasik and Thane districts through Maharashtra Institute of Technology Transfer for Rural Areas (MITTRA), Nasik. The programme with a project period of 10 years (2000-2010) aims to support 13,000 tribal families by developing wadis on their marginally productive lands. The total families covered

Karimnagar,

Medak

and

Warangal).

A

Programme Support Unit (PSU) has been set up in Andhra Pradesh RO for overseeing implementation of the project. A total of 38 projects are being implemented of which, 8 are under FIP, 3 under FR/IP, 27 under CBP. KfW has approved an additional amount of million

(approx

Measures

Rs.11

Programme

crore) for

for

•2

Complementary

capacity

building

of

stakeholders.

by the project are 13,848 from 258 villages and wadi area of 4,977.12 ha. (as against the target of 4,048.58

2.28

ha.) About 1,530 tribal participant families have taken

Programme

up vegetable cultivation on 98.8 ha. of land. As at end-

watersheds in four districts (Dahod, Panchmahals,

March 2009, 872 wadi tukadis were formed and all had

Sabarkantha and Vadodara) with a commitment of

bank accounts with

• 9.2 million (approx. Rs.51.52 crore) for the purpose. A

and

internal

total savings worth Rs.50.15 lakh

lending

of

Rs.22.97

lakh.

As

on

total

The

of

Indo-German in

35

Gujarat

envisages

Development

rehabilitation

projects

are

in

various

under

the

programme.

stages

of

of

31 March 2009, an area of 278.54 ha. was brought

implementation

under block plantation and 4,917 ha. under soil

measures under CBP are in progress in 21 projects, 4 are

conservation

resources

under FR/IP and 10 under pre-CBP. A Programme

development activities, construction of 2,230 temporary

Management Unit (PMU), headed by a senior NABARD

work.

Under

the

water

34

Ch-Eng-2.p65

Watershed

34

7/15/2009, 10:47 AM

Treatment

official

and

assisted

by

subject

matter

specialists/

through GTZ has already been executed, the project

consultants has been set up in Dahod to oversee the

agreement

implementation.

co-operation are in the final stage of execution.

and

separate

agreement

for

financial

During the year, four community managed NRM 2.29

KfW, Germany had committed grant assistance

based livelihood projects were sanctioned in Bihar,

of • 11 million (approx. Rs.61.60 crore) under the Indo-

Gujarat,

German

assistance

of

Rajasthan for watershed development in five districts

loan

Rs.35.70

(Banswara, Chittorgarh, Dungarpur, Pratapgarh and

financial assistance of Rs.557.39 lakh (Rs.516.34 lakh

Udaipur). In all, 21 projects are being implemented

as loan and Rs.41.05 lakh as grant) were sanctioned

under the programme, of which, 13 are under CBP and

for six projects in Bihar, Gujarat, Maharshtra, Orissa

8 under pre-CBP. A PMU, headed by a NABARD

and Tamil Nadu, as on 31 March 2009, to be

official, has been set up in Udaipur. The specialists/

implemented

consultants of Dahod PMU assist the Udaipur PMU and

During the year, Rs.259.99 lakh (Rs.250.49 lakh as

also co-orindate the operational aspects related to

loan and Rs.9.50 lakh as grant) was disbursed, taking

project implementation.

the

Watershed

Development

Programme

in

Maharashtra

and

and

Rs.521.40

by

lakh

NGO

cumulative

Tamil

lakh as

and

Nadu

involving

(Rs.485.70 grant).

to

as

Cumulatively,

Producers’

disbursement

lakh

Companies.

Rs.278.99

lakh

(Rs.265.64 lakh as loan and Rs.13.35 lakh as grant) as

b.

Umbrella Programme on Natural Resource Management

at end-March 2009.

2.30

The Umbrella Programme on Natural Resource

2.31

During the year, loan product development

Management (UPNRM) is the new loan-cum-grant

exercise with technical assistance from GTZ was also

based programme being piloted by NABARD from

completed wherein various prototypes of loan products

2007-08

were developed to facilitate marketing of UPNRM to

under

Indo-German

collaboration.

It

envisages a shift from (i) project-based to programme-

potential

based funding and (ii) grant-based to loan-based

efforts

funding in the NRM sector. Pending execution of the

marketing flyers and one-to-one contact among NGO,

project

corporates, State Governments and MFI were taken

and financial agreement for financial and

channel through

partners.

In

workshops,

addition, meetings,

marketing publishing

being

up. During the year, NABARD in collaboration with

supported by utilising funds currently available under

GTZ-New Delhi conducted sensitisation and training

various Indo-German projects. The bilateral dialogues

programme for its staff, bankers and NGO on climate

were carried forward during the year. While the

change and Clean Development Mechanism (CDM).

technical

collaboration,

the

projects

are

implementation agreement on technical co-operation 2.32 NABARD is in the process of establishing a BioCarbon Fund (BCF) in close collaboration with GTZ for

taking

up

green

projects

for

climate

change

mitigation and adaptations. A feasibility study on setting-up BCF was assigned to Zenith Energy and First Climate with financial support from GTZ under UPNRM. The first phase of the study has already been completed wherein the feasiblity of the BCF has been established. The study report recommended that the Fund should cater to Land Use, Land Use Change

and

agribusiness Organic cultivation of Jowar.

and

Forestry rural

(LULUCF),

infrastructure

agriculture, sectors

under

CDM as well as voluntary carbon credits market. 35

Ch-Eng-2.p65

35

7/15/2009, 10:47 AM

Rural Non-Farm Sector A. 2.33

NABARD-SDC Rural Innovation Fund

School of Rural Enterprise Management (CSREM) for conducting

Innovative, risk mitigating experiments in farm,

non-farm and micro-Finance sectors as also projects with potential to generate employment opportunities in

a

diagnostic

study

on

collection

and

marketing of minor forest produce by tribals in Andhra Pradesh. For capacity building of staff engaged in RIF work, a regional workshop on identification and funding

Rural

of innovative projects was organised at Puri. Three

Innovation Fund (RIF). During 2008-09, 65 innovative

publications - Understanding Innovations, Outcome-

projects

based Monitoring and Brochure on RIF (bilingual) were

rural

areas

are

were

number of

supported

sanctioned

through

taking

the

the

cumulative

projects sanctioned to 97, spread across

also brought out.

22 states. An amount of Rs.12.48 crore (including supplementary

assistance

to

projects

sanctioned

2.36

A T.

Mid-Term Haque

Review

constituted

by

review

the

cumulative sanctions made till end-March 2009 to

performance

Rs.20.67 crore (up from Rs.8.19 crore as on 31

corrections, if any. The Steering Committee on RIF

March 2008).

based on the Team’s report decided that (i) for

RIF

and

to

headed

earlier) was sanctioned during the year, taking the

of

was

Team

Dr.

suggest

mid-course

scrutiny of funding proposals, commercialisation and 2.34

As on 31 March 2009, 29 projects were in

advanced

The

projects

(ii) 80 per cent of RIF budget to be dedicated for

and

process

funding innovative projects, and (iii) RO staff and

innovations. During the year, two projects were jointly

DDM to be sensitised for scouting large number of

funded by NABARD and Department of Science and

innovative projects.

supported

stages

of

involve

implementation.

innovation shall be viewed as complementary features,

both

product

Technology (DST) for (i) developing IT based advisory services to farmers in Maharashtra and (ii) utilisation

B.

District Rural Industries Project

production of lignin (an import substitute) having

2.37

The District Rural Industries Project (DRIP),

industrial uses. Some of the other projects sanctioned

introduced as a pilot project during 1993-94, had

include setting-up of (a) Skill Training and Placement

covered 106 districts by end-March 2007. On its

Cell for rural migrant labour in south Rajasthan, (b)

successful implementation, the project was phased out

ready-to-eat

Food

in 43 districts during 2006-2009. NABARD will continue

Resource Laboratory technology in Kerala and (c)

to extend promotional support in these districts for

developing the dying art of Manjusha in Bihar. An

developmental interventions.

of dry pine needles for use as cooler pads and for

fruit

slices

unit

using

Defence

additional commitment of Rs.5 crore was also made to Aavishkaar Micro Venture Capital Fund during the

2.38

During 2008-09, GLC flow in 63 districts covered

year, taking the total commitment to Aavishkaar to

under various phases reached Rs.1,378.17 crore and

Rs.10 crore. The total commitment under RIF, as on

refinance availed was Rs.132.65 crore. A total of

31 March 2009, stood at Rs.60 crore. Further, as at

1.05 lakh units were set up generating employment for

end-March 2009, equity investments in 20 projects

1.98 lakh persons. Since inception of the project, GLC

amounting to Rs.8 crore from the Fund have already

flow

been committed.

establishment of 19.04 lakh units and generating

aggregated

Rs.23,619.12

crore,

facilitating

employment opportunities for 43.06 lakh persons. The 2.35 Under Component III of RIF (Action Research), an

cumulative refinance availed amounted to Rs.3,647.35

amount of Rs.3.72 lakh was sanctioned to Centurion

crore, as on 31 March 2009.

36

Ch-Eng-2.p65

36

7/15/2009, 10:47 AM

C.

Strengthening of Rural Haats

2.39

The

‘Scheme

for

Strengthening

Under the partnership mode, grant support of upto

of

Rural

Haats’, introduced in 1999 in DRIP districts, was extended to all districts, village bazaar boards, SHG, NGO and to PRI/PACS during the year. The ceiling under the scheme was increased from Rs.3 lakh to Rs.5

lakh

permanent

and

coverage

structure/s

as

extended per

local

to

include

requirements.

Rs.15 lakh/cluster over 3 years is made available, while under the intensive mode, grant not exceeding Rs.1 crore/cluster for a maximum of 5 years is provided. The broad sectors identified for development on priority basis under

the

programme

are

agriculture

and

allied

activities, food processing, rural SME, handicrafts and handlooms, etc.

During 2008-09, grant support of Rs.185.90 lakh was sanctioned to 46 haats, 10 each in Andhra Pradesh

2.41

and Manipur, 5 in Tamil Nadu, 4 in Uttar Pradesh,

developing agri/rural tourism, especially home-based

3 each in Bihar, Maharashtra and Orissa, 2 in

rural tourism and agri-tourism in association with State

Nagaland and 1 each in Arunachal Pradesh, Assam,

Tourism

Meghalaya, Mizoram, Rajasthan and West Bengal.

tourist operators and rural community. As on 31 March

Cumulative grant assistance of Rs.330.81 lakh has

2009, 101 clusters (90 participatory, 6 intensive, 3 rural/

been sanctioned for strengthening infrastructure in

agri

101 rural haats across 22 States.

handicrafts) across 81 districts in 25 States have been

NABARD extended the cluster approach for

Department/Tourism

tourism,

1

NPRI

and

Corporations,

1

rural

private

toursim-cum-

approved. During 2008-09, 37 participatory, 1 intensive and 1 eco-tourism clusters were sanctioned involving

D.

Cluster Development

2.40

Recognising the potential of cluster approach in

grant of Rs.310.92 lakh. promoting rural industrialisation, raising income levels and living standards of artisans through various planned

2.42

interventions, NABARD has been actively involved in

developing the handloom sector, NABARD decided to

development

develop 50 handloom weavers’ clusters in partnership

of

56

clusters

under

the

National

In accordance with GoI’s special emphasis on

Programme on Rural Industrialisation (NPRI). Beginning

with

other

developmental

agencies.

As

on

2005-06, NABARD decided to develop 55 clusters (50

31 March 2009, 59 handloom clusters (22 in Jharkhand;

participatory clusters partnering with other agencies and

8 each in Assam and Maharashtra; 4 in West Bengal; 2

5 intensively on its own) within a period of 3-5 years.

each in Karnataka, Orissa, Rajasthan, Uttarakhand and Uttar Pradesh; and 1 each in Bihar, Chhattisgarh, Manipur,

Meghalaya,

Mizoram,

Punjab

and

Tamil

Nadu) were approved.

2.43

With view to ensuring smooth implementation

and monitoring of the cluster development initiative, capacity building programmes were organised through Entrepreneurship Development Institute of India, IIBM, BIRD and RTC-Mangalore for imparting training on various aspects of cluster development, viz., conducting diagnostic studies, preparing action plan and monitoring methodology. The participants were officials from banks, government Rural Mart supported by NABARD.

departments,

NGO/VA

and

NABARD.

During 2008-09, 8 on-location cluster workshops were 37

Ch-Eng-2.p65

37

7/15/2009, 10:47 AM

conducted, taking the total number of such programmes

2.48

to 17.

piloted by NABARD in 2005 and extended to all States in

The scheme for setting-up of rural marts was

2007, to enable rural artisans/craftmen realise optimum

E.

Rural Entrepreneurship Development and Skill Development Programme

prices and to establish marketing linkages. During 200809, 73 rural marts in 12 States were sanctioned with grant assistance of Rs.72.99 lakh. Cumulative grant

2.44

NABARD,

since

early

nineties,

has

been

supporting both Rural Entrepreneurship Development

support of Rs.198.61 lakh has been provided to 202 rural marts across 17 States.

Programme (REDP) and Skill Development Programme (SDP) as a proven tool for generating self-employment opportunities in rural areas. During the year 2,083 REDP/SDP involving a total amount of Rs.1,303.60 lakh were

sanctioned,

benefiting

50,264

rural

youth.

Cumulatively 11,905 REDP/SDP involving grant support of Rs.6,039.54 lakh covering 3 lakh persons were

2.49

The provision of ‘Product Gallery’ in Post Offices

for displaying SHG products, initially introduced in Meghalaya, was extended to all States. During the year, two such units were sanctioned in Tiruvarur and Sivaganga districts of Tamil Nadu.

supported as on 31 March 2009. Besides, an amount of Rs.88.03 lakh was sanctioned to RUDSETI for capital

H.

Swarojgar Credit Card Scheme

2.50

The Swarojgar Credit Card (SCC) Scheme was

expenditure. introduced in 2003 for facilitating hassle-free availability of

F.

Women Empowerment Programme

credit

2.45

The scheme for supporting Women Development

requirements of small/micro-entreprenerus. During the year,

Cells (WDC) in RRB and co-operative banks, in

1.50 lakh cards with credit limit of Rs.627.98 crore were

operation since 1995-96, was modified and made

issued. As on 31 March 2009, 9.84 lakh SCC involving an

performance linked with effect from 1 April 2007. During

aggregate credit limit of Rs.4,007.33 crore were issued by

2008-09, 33 WDC were set up in 19 RRB, 12 DCCB

various banks.

for

meeting

investment

and

working

capital

and 2 SCARDB. As on 31 March 2009, 102 WDC in 56 RRB, 43 DCCB and 3 SCARDB were sanctioned under the modified scheme. 2.46

Under

schemes

for

Marketing

of

Non-Farm

Products of Rural Women (MAHIMA) and Assistance to Rural Women in Non-Farm Development (ARWIND), grant

support

of

Rs.6.02

lakh

and

Rs.6.82

lakh,

respectively, was released till 31 March 2009.

I.

Training and Sensitisation Programme

2.51

NABARD continued to provide financial support

to institutions like BIRD - Lucknow, RTCs at Mangalore and Bolpur, NIRB-Bangalore, MDMI-Shillong and IIBMGuwahati for imparting training to participants in various subjects in rural credit.

During the year,

NABARD released Rs.19.46 lakh towards its share

G.

Marketing / Other Initiatives

2.47

During

(15%) of recurring expenditure of IIBM, Guwahati. The events/

Bank also released Rs.5.82 lakh to NIRB, Bangalore for

exhibitions were supported with grant assistance of

conducting 25 programmes and Rs.3.40 crore (including

Rs.111.06 lakh. The Bank also co-sponsored SARAS

grant of Rs.1.24 crore) to BIRD, Lucknow for supporting

Mahalaxmi Fair-2008 at Mumbai wherein 95 artisans

activities of the Centre for Micro-Finance Research.

from

day-long

Further, 45 training programmes covering 1,050 officers

exhibition. These events helped the artisans to realise

of client banks, involving expenditure of Rs.118.37 lakh,

sales of over Rs.11 crore.

were conducted during the year.

25

2008-09,

States

213

participated

marketing

in

the

12

38

Ch-Eng-2.p65

38

7/15/2009, 10:47 AM

Financial Inclusion 2.52

The Committee on Financial Inclusion, headed

enhancing

investment

in

Information

and

by Dr. C. Rangarajan, was set up by GoI to look into

Communication Technology (ICT) aimed at promoting

the issues involved

and suggest measures for bringing

financial inclusion, stimulate transfer of research and

the excluded population into the ambit of the financial

technology, increase technology absorption capacity of

system. Measures suggested by the Committee are

financial service providers/users and encourage an

expected to provide access to comprehensive financial

environment of innovation and co-operation among

services to at least 50 per cent (55.8 million) of the

stakeholders. Both Funds have been set up with corpus

excluded rural households by 2012 and the remaining by

of Rs.500 crore each (Table 2.2). During the year, four

2015. The Committee broadly defines financial inclusion

and five projects were sanctioned under FIF and FITF,

as the process of ensuring access to financial services

respectively (Box 2.1).

and timely/adequate credit, wherever needed at an affordable cost to the weaker sections and low income Table 2.2: Funding Sources for FIF and FITF (As on 31 March 2009)

groups.

(Rs. crore)

2.53

Based on the Committee’s recommendations,

Particulars

GoI entrusted NABARD with setting-up of two funds, viz., Financial Inclusion Fund (FIF) and Financial

Contribution (%)

Initial Corpus Received

FIF

FITF

FIF

FITF

Inclusion Technology Fund (FITF). The FIF aims to

GoI

40

40

10

10

support developmental and promotional activities to

RBI

40

40

-*

-*

NABARD

secure greater financial inclusion particularly among

Total

weaker sections / low income groups and in backward

20

20

5

5

100

100

15

15

*: Matching contribution of 40% to be received with disbursements.

regions/hitherto unbanked areas. The FITF will focus on

Box 2.1 Financial Inclusion: Projects sanctioned during 2008-09 Projects under FIF • Trainers’ training programme on financial literacy in Kolkata. • Pilot project to establish farmers’ service, village knowledge, mobile credit counselling centres, promote financial literacy and farmer education through mass media in South Malabar district of Kerala through South Malabar Gramin Bank. •

•

Pilot project for capacity building of 25 FC of West Tripura, South Tripura and North Tripura districts to function as business facilitators, generating new accounts and business for Tripura Gramin Bank. R&D project for ICT solution in 15 select RRB with support from World Bank and Technology provider.

Projects under FITF • Smart card based pilot project in Tirunelveli district of Tamil Nadu, covering 500 SHG (6,000 customers) to help Pandyan Grama Bank and NGO in registering, lending and micro-financing SHG.

•

Project on smart cards in Medak, Mahbubnagar and Warangal districts of Andhra Pradesh to facilitate payments to the beneficiaries of NREGS and Social Security Pensioners, opening of ‘No Frill Accounts’ of other rural households by Andhra Pradesh Grameen Vikas Bank (APGVB). Services are being extended through Business Correspondent Model with the help of a biometric card and mobile device. This will cover 13 lakh beneficiaries in 1,115 villages.

•

Pilot project to establish Financial Inclusion Hubs aiming a ‘e-branch’ facility offering multiple financial products & services in 10 PACS in Andhra Pradesh.

•

Pilot for installing four ATMs, one in each district of Tripura by the Tripura Gramin Bank for technology upgradation to reach out to the excluded population.

•

Impact study of 100% achievement under Financial Inclusion in Kanyakumari district.

39

Ch-Eng-2.p65

39

7/15/2009, 10:47 AM

2.54 Two Advisory Boards, one for each Fund, was constituted by GoI for guiding and tendering policy advice on various aspects. A Sub-Committee of Advisory Board for FITF has also been constituted to look into the ICT based interventions for extending the financial services. Each of the Advisory Boards met thrice during the year and based on their directives, following actions were initiated. •

State level seminars and district level workshops for sensitising the various stakeholders were conducted by NABARD and other organisations.

•

NABARD designed and conducted a five-day training module for capacity building of its field level officers.

Arecanut leaf plate making.

•

•

RBI appointed a Special Working Group on deepening of financial inclusion in Goa under the Chairmanship of OIC, NABARD RO, Goa. The

‘A Handbook on Financial Inclusion’ was prepared and distributed to various stakeholders.

report has since been submitted.

micro-Finance* 2.55

SHG-Bank Linkage Programme, since its pilot in

2.56

During the year 10,81,474 SHG were credit

1992, has emerged as the leading micro-Finance (mF)

linked with banks and bank loan of Rs.11,131.74 crore

programme in the country. It is recognised as an

(including repeat loans) disbursed taking the number of

effective tool for extending

SHG

access to formal financial

credit

linked

to

Rs.47,07,415

SHG

as

on

services to the unbanked rural poor. Encouraged by the

31 March 2009. As on 31 March 2008, 50.09 lakh SHG

success, the programme has been adopted by State

maintained savings bank accounts and had savings

Governments as a major poverty alleviation strategy. It

worth Rs.3,785.39 crore. The programme has covered

has also led to the emergence of Micro-Finance

more than 7 crore poor households, making it the largest

Institutions (MFI) as a bridge between the banking sector

mF programme in the world. The overall progress of the

and the rural poor.

mF programme is given in Table 2.3. Table 2.3: Progress of the Micro-Finance Programme (As on 31 March) (Rs. crore)

Particulars

Self-Help Groups 2007

*

Micro-Finance Institutions # 2008

2007

2008

No.

Amount

No.

Amount

No.

Amount

No.

Amount

11,05,749 (1,88,962)

6,570.39 (1,411.02)

12,27,770 (2,46,649)

8,849.26 (1,857.74)

334

1,151.56

518

1,970.15

Loans outstanding

28,94,505 (6,87,312)

12,366.49 (3,273.04)

36,25,941 (9,16,978)

16,999.90 (4,816.87)

550

1,584.48

1,109

2,748.84

Savings accounts with banks

41,60,584 (9,56,317)

3,512.71 (757.50)

50,09,794 (12,03,070)

3,785.39 (809.51)

-

-

-

-

Loans disbursed

@

* : Figures in parentheses indicate the share of SHG covered under SGSY. @ : During the year # : Actual number of MFI provided with bank loans would be lower as several MFI have availed loans from more than one bank. * Due to change in data and MIS, the reporting is for the position as on 31 March 2008.

40

Ch-Eng-2.p65

40

7/15/2009, 10:47 AM

A.

Support to Partner Agencies

2.57

NABARD continued to extend grant to support

members to inculcate skills for managing thrift and credit;

NGO, RRB, DCCB, FC and Individual Rural Volunteers

•

324 awareness-cum-refresher programmes for CEOs

(IRV) for promoting and nurturing quality SHGs. Efforts

and

continued towards roping in new Self-Help Promoting

participants;

Institutions (SHPIs) and supporting the existing ones.

•

During 2008-09, grant assistance of Rs.1,768.53 lakh groups,

taking

the

cumulative

staff

of

NGOs,

covering

18,594

591 training programmes for officers of commercial banks, co-operative banks and RRBs covering

was sanctioned to various agencies for promoting 59,359

field

24,018 participants;

assistance •

sanctioned to Rs.7,887.90 lakh for 4.36 lakh groups

Four Trainers Training programmes covering 90 participants;

(Table 2.4/Chart 2.1). As on 31 March 2009, 2.06 lakh SHG have been credit linked to banks and Rs.3,275.62

•

lakh released.

25

exposure

visits

to

banks

and

institutions

pioneering in MF initiatives for 630 bank/NGO

B.

Capacity Building of Partner Agencies

2.58

Capacity building of stakeholders is crucial for up

officials; •

193 field visits to nearby SHGs for 4,507 Block Level Bankers’ Committee Members;

scaling the SHG movement and maintaining quality and •

sustainability of SHGs. With this in view, an expenditure

54 programme for the elected Members of PRIs

of Rs.18.73 crore was incurred during 2008-09 on

covering 2,014 participants to create awareness

various promotional activities as against Rs.13.32 crore

among them about the mF initiatives;

in the previous year. Further, three zonal workshops for the

Bank’s

staff

were

conducted

at

•

Hyderabad,

a training-cum-exposure visit for new DDMs/ DDOs and an exposure programme on mF and SHGs for

Lucknow and Patna.

senior IAS officers through Lal Bahadur Shastri National Academy of Administration, Mussoorie;

2.59

During the year, NABARD supported conduct •

of:

45

sensitisation

programmes

for

government

officials covering 1,610 participants; and •

3,122 awareness creation and capacity building •

programmes for SHG members in association with

839

other

programmes

covering

41,542

participants.

identified resource NGOs, covering 1,41,984 SHG

Table 2.4: Grant Assistance Extended to various Partners in SHG-Bank Linkage Programme (Rs. lakh) Agency

Sanctions during the Year

Co-operative Banks RRB NGO

Cumulative Sanctions

No.

Amount

No. of SHG

No.

Amount

No. of SHG

12

136.92

9,465

95

563.13

53,875

2

20.70

800

113

389.30

44,590

311

1,564.29

46,504

2,318

6,405.71

2,91,780

Farmers’ Clubs

-

-

-

-

61.06

14,544

IRV

6

46.62

2,590

66

529.76

31,233

331

1,768.53

59,359

2,592

7,887.96

4,36,022

Total

41

Ch-Eng-2.p65

41

7/15/2009, 10:47 AM

2.62

The project envisages promoting and credit

linking

22,000

SHGs,

1,100

Cluster

Level

Associations (CLA) and 44 Block Level Associations (BLA) in collaboration with participating banks and implementing NGO. With an implementation period of eight years (2007-2014), the project will cover 15 and 29 blocks in Phase I and II, respectively, in Sultanpur,

Raebareli,

Lucknow,

Unnao,

Barabanki,

Fatehpur,

Pratapgarh,

Jhansi,

Lalitpur,

Bahraich, Shravasti and Banda districts. 2.63

The project is being designed by NABARD and

RGCT

with

strategy

C.

technical

involves

assistance

using

from

Professional

SERP. and

The

Trained

Documentation and Dissemination

Resource Persons (PRP) from Andhra Pradesh to

During the year, 175 meets/seminars on mF were

provide continuous handholding, training, extending

organised with financial support of Rs.21.29 lakh for

support to SHGs and their federations at cluster and

dissemination of the programme. The SHG programme

block levels. Demonstration effect of the external

has had far-reaching impact on the lives of its poor

Community Resource Persons (CRP) on the rural

clientele. In order to assess in detail the socio-economic-

population of Uttar Pradesh is an important part of

political impact as well as the challenges, issues and

the project. External CRP are SHG members from

bottlenecks facing the programme in enhancing credit

Andhra Pradesh, who have come out of poverty and

flow to the poor, six state specific study proposals on

are willing to share their experiences with rural women

‘Quality and Sustainability of SHGs’ were sanctioned

in Uttar Pradesh and mobilise them into SHG. Till

during the year to independent agencies in Karnataka,

date 7,808 SHGs were promoted under RGMVP in

Kerala, Maharashtra, Rajasthan, Tamil Nadu, and West

Sultanpur, Raebareli and Barabanki districts, of which

Bengal.

3,972 SHGs were credit linked as at end-March

2.60

2009. In addition, 273 village level and 14 block

D.

level federations were formed. Phase II of the project

Scaling-up of Micro-Finance Programme: Special Initiatives

a.

Rajiv Gandhi Mahila Vikas Pariyojana in Uttar Pradesh

2.61

The

Rajiv

Gandhi

Mahila

was launched on 1 January 2009 and 8,467 SHGs were promoted, of which 3,378 SHGs were credit linked.

Vikas

Pariyojana

b.

micro-Finance Vision 2011

(RGMVP) is a special initiative of the Rajiv Gandhi

2.64

Charitable Trust (RGCT) for promotion, credit linkage

was sanctioned by NABARD for implementing the

and formation of SHG federations in select districts of

project ‘micro-Finance Vision 2011’ by Government of

Uttar Pradesh. The project aims to replicate the SHG

Arunachal

institutional model implemented under UNDP-South

Rs.33.66

Asian

Foundation Trust for setting-up a Resource Centre at

Poverty

Alleviation

Programme

(SAPAP)

in

During 2008-09, an amount of Rs.39.15 lakh

Pradesh. lakh

was

Andhra Pradesh in collaboration with Society for

Itanagar

for

Elimination of Rural Poverty (SERP), Government of

capacity

building

Andhra Pradesh.

among the groups.

Further, sanctioned

providing

support

42

Ch-Eng-2.p65

42

policy,

7/15/2009, 10:47 AM

and

an to

amount the

of

Essomi

operational

inputs,

marketing

linkages

c.

State Support Project on SHG

2.65

The ‘State Support Project on SHGs’ designed by

bank loans would cover investment activities and

the Government of Tripura and supported by NABARD was launched in December 2008. The project aims to

working capital needs of the groups. Banks shall be eligible to draw refinance for the loans provided to ABG on the same terms as applicable for SHG

credit link 11,500 existing SHG, forming and credit

financing. In select cases, NABARD may also provide

linking 35,000 new SHG and promoting livelihood

loans directly to registered groups or through the

activities among its 3 lakh members upto 31 March

agencies promoting groups to establish few initial

2012. NABARD is to provide technical and capacity

projects where none exist.

building support, besides helping in designing systems and procedures for smooth implementation of the

b.

Micro-Enterprise Development Programme

2.67

NABARD had launched the Micro-Enterprise

project.

E.

Micro-Enterprise Promotion by SHGs

a.

Support to activity based groups

2.66

During

2008-09,

product/scheme

for

NABARD

supporting

introduced

small-scale

skill upgradation, development of sustainable livelihoods a

Activity-

Based Groups (ABG) in which capacity building, production/investment

credit

and

market

related

support would be extended. The scheme will focus on forming and nurturing groups engaged in similar economic

activities

weavers,

craftsmen,

such

as

fishermen,

farmers, etc.,

handloom to

Development Programme (MEDP) during 2005-06 for

improve

and venturing into micro-enterprises by matured SHG members. During the year, 564 MEDP were conducted covering 14,030 SHG members on location-specific farm, non-farm and service sector activities, viz., beekeeping,

soybean

horticulture,

cultivation,

floriculture,

organic

tailoring,

etc.

farming,

Cumulatively

1,313 MEDP had been conducted covering 33,205 participants as at end-March 2009.

efficiency of their production and realise better terms from the market through economies of aggregation and

scale.

The

scheme

draws

upon

existing modes of support and has both grant and loan components. While grant support would cover expenditure

on

group

formation

and

c.

Pilot Project for Promotion of MicroEnterprises

2.68

Launched in 2005-06, the pilot project for

NABARD’s

training,

extension services, establishing market linkages, etc.,

promotion of micro-enterprises among members of matured

SHG

(micro-credit,

is

based

on

micro-market,

the

3M

approach

micro-planning).

It

is

being implemented by 14 NGO acting as ‘MicroEnterprise districts,

Promotion viz.,

Agency’

Ajmer

(MEPA)

(Rajasthan),

in

nine

Chandrapur

(Maharashtra), Kangra (Himachal Pradesh), Madurai (Tamil

Nadu),

Mysore

(Karnataka),

Panchmahals

(Gujarat), North 24 Parganas (West Bengal), Puri (Orissa) and Raebareli (Uttar Pradesh). Under the project 11,000 SHG members have been identified to take

up

micro-enterprise

through

credit

support.

Cumulatively 6,107 micro-enterprises were established involving credit support of Rs.535.44 lakh, as on 31 Farmers’ Club Meeting in progress.

March 2009. 43

Ch-Eng-2.p65

43

7/15/2009, 10:47 AM

F.

Support to Micro-Finance Institutions

2.69

available

efforts of the formal banking network in providing credit support to unreached clients for inclusive growth, NABARD supports them through grant and loan based assistance from the Micro-Finance Development and Equity Fund (MFDEF).

(Rs.160 crore contributed by different partners till and

promoting linkage

maintained mF

first

by

through

programme,

of

MFI

with

loan

lakh. During the year, rating support amounting to Rs.3.40 lakh was extended to banks in respect of four agencies. 2.73

During 2008-09, the Bank introduced a new

scheme to provide grant assistance directly to MFI for

NABARD,

scaling-up

extending

is

the

used

for

SHG-bank

Revolving

Fund

rating. The scheme is operational across the country for one year (Box 2.2).

c.

Capital/ Equity Support

2.74

The scheme seeks to enable MFI to leverage

Assistance (RFA) and capital support to MFIs and

capital/equity

supporting

funds from banks for providing financial services at

various

promotional

initiatives/activities.

for

accessing

commercial

and

other

During the year, a sum of Rs.34.66 crore was utilised

an

from the Fund towards mF related activities. The

sustainability in credit operations over 3 to 5 years.

Advisory

During 2008-09, capital/equity support amounting to

Board

representatives

of from

MFDEF, RBI,

comprising

commercial

of

banks,

professionals with domain knowledge and NABARD, provides guidance in formulation and refinement of policy initiatives.

a.

affordable

cost

to

the

poor,

and

achieve

Rs.11.75 crore was sanctioned to 13 agencies taking the cumulative support to Rs.21 crore covering 24 agencies

as

on

31

March

2009.

NABARD

also

Revolving Fund Assistance

2.71 for

Box 2.2

NABARD has been selectively supporting MFI on-lending

to

the

unreached

poor

as

also

experimenting with various mF models to innovate alternative, sustainable and replicable credit delivery

Rating Support to MFI: Salient Features • The scheme is operational through out the country for a period of one year.

systems. During the year, RFA amounting to Rs.6.35

• MFI (i) with a minimum loan outstanding of Rs.50 lakh,

crore was sanctioned to four agencies taking the

(ii) seeking capital/equity support and/or RFA from

cumulative credit sanctioned to Rs.42.73 crore and

MFDEF and (iii) not possessing a current rating/grading report from any of the approved credit rating agencies,

covering 37 agencies.

b.

are eligible for support. • MFI not eligible for rating under the present scheme if

Support for rating of MFIs

2.72

rated earlier under ‘scheme for financial assistance to

NABARD has been providing grant assistance

to commercial banks and RRB to enable them to avail the services of acredited rating agencies (CRISIL, M-CRIL, ICRA, CARE and Planet Finance) for rating of MFI. Under the scheme, NABARD meets the cost of rating to the full extent of professional fees, subject to

a

maximum

of

Rs.1

lakh.

The

assistance

is

banks for rating of MFI’. • Grant assistance for rating/grading available only once for any MFI. • NABARD will reimburse 100% of the total professional fees paid by the MFI subject to a ceiling of Rs.3 lakh. • Any other incidental expenses will not be supported.

44

Ch-Eng-2.p65

rating

availing the services of credit rating agencies for their

The MFDEF, with a corpus of Rs.200 crore

date)

the

outstanding exceeding Rs.50 lakh but less than Rs.500

Recognising the role of MFI in supplementing the

2.70

for

44

7/15/2009, 10:47 AM

introduced a new scheme for capital support to start-up MFI with potential to scale-up their activities

G.

Other Developments

2.76

The North-Eastern Council (NEC), under the

but lacking in capital, infrastructural facilities and

Ministry of Development of North Eastern Region

managerial skills. Micro-Finance Organisations (MFO)

(DONER), Shillong parked a fund of Rs.80 lakh with

and MFI-NBFC, identified as ‘start-ups’ on the basis

NABARD during the year (Rs.60 lakh released upto

of area of operation, client outreach, lending model,

31 March 2009). Miscellaneous training interventions

borrowing history, etc., are eligible for support under

involving government/bank officials, NGO, SHG from

the scheme (Box 2.3).

States in the NER and Sikkim shall be facilitated under the

d.

Support to SHG Federations

2.75

Recognising the emerging role of the SHG

Federations

in

nurturing

of

SHG,

enhancing

fund.

Accordingly,

an

Advisory

Group

was

constituted to guide and review the progress under the

the

Fund. As on 31 March 2009, an amount of Rs.72.35 lakh was utilised from the Fund.

bargaining powers of group members and livelihood promotion, NABARD introduced a flexible scheme to

2.77

support such federations on a model neutral basis during

Research (NCAER) conducted a study on ‘Impact and

2007-08. The broad norms identified for supporting

Sustainability of SHG-Bank Linkage Programme’ under

SHG federations stipulate that the federations should be

NABARD-GTZ Rural Finance Programme to assess the

need

socio-economic conditions of

based,

member

owned/driven,

democratically

The National Council of Applied Economic

members and their

managed with members at liberty to join/ become

households in pre and post SHG scenario. The study

self-managed over three years, etc. Support to the

coverd

Federation is extended by way of grant for training,

Karnataka, Maharashtra, Orissa and Uttar Pradesh.

capacity building, exposure visits of SHG members, etc.,

The study findings reveal that the SHG-bank linkage

and also under all existing promotional schemes of

programme

NABARD. During the year, grant of Rs.11.54 lakh was

to

sanctioned to one Federation taking the cumulative

(ii) positively impacted socio-economic conditions thus

grant assistance to Rs.22.02 lakh to 3 Federations as at

reducing poverty of members and their households, (iii)

end-March 2009.

empowered

six

States,

has

financial

viz.,

(i)

Andhra

Pradesh,

significantly

services

women

of

improved

the

members

Assam,

access

rural

poor,

substantially

and

(iv) contributed to increased confidence and positive behavioral changes in the post-SHG period. Box 2.3 Capital Support to Start-Up MFI: Salient Feature •

Financial support as unsecured sub-ordinate debt, which shall be sub-ordinated to the claims of all other creditors.

•

2.78

•

to

the

study,

other

activities

Programme which ended on 31 December 2008 were : •

Training modules developed and circulated to the

Quantum of support will be commensurate with the

leading mF training institutions to sensitise bank

business plan of the MFO/ MFI-NBFC but not exceeding

branch managers and SHG members for monitoring groups through early warning system so that the

Interest rate fixed at 3.5 per cent for MFO and the

risks in lending can be minimised.

prevailing bank rate for MFI-NBFC. •

addition

undertaken under the NABARD-GTZ Rural Finance

Rs.50 lakh. •

In

Repayment in 7 years including moratorium of 2 years. No option of pre-payment.

•

‘High Level Policy Conference on micro-Finance in India’ was conducted with the support of GTZ with the active participation of mF practitioners from 45

Ch-Eng-2.p65

45

7/15/2009, 10:47 AM

India and abroad to share their best practices,

•

The study on ‘Transaction cost of banks and MFI in delivering small loans’ was undertaken to assess

experiences in mF.

the transaction cost of commercial banks, RRB, •

•

A desk study on ‘Comparative Assessment on SHG

co-operative banks and MFI in purveying mF

portfolio vis-à-vis other portfolio of banks’ was

through SHG or other types of groups.

taken up. Data from various banks were compiled

2.79

to analyse the SHG loan portfolio as compared to

Cooperation with India-Capitalization Program SEWA

other loan portfolio of the banks.

Bank’

The study ‘Portfolio Quality Study on NPA of

The NABARD-KfW programme titled ‘Financial under

sustainably

implementation

improving

access

in

Gujarat,

aims

at

of

poor

women

to

micro-credit, both in rural and urban areas. KfW has

Banks in Tamil Nadu’ analysed NPA levels of bank

released a grant assistance of Rs.2.93 crore to SEWA

loan to SHG and suggested that measures be taken

Bank during 2008-09, taking the cumulative release to

to mitigate overdue loans of SHG.

Rs.3.93 crore.

Research and Development Activities 2.80

The Research and Development (R&D) Fund

the critical areas, viz., education, science/technology,

was set up in 1982-83 in the Bank to extend

contract farming, etc., where the corporate sector

financial support to select agencies for promoting

could participate. The study recommended that (a) IT

applied

and engineering industries facing acute shortage of

research

projects/studies,

training

and

skill

upgradation of personnel of client institutions and

skilled

human

dissemination of research findings. The corpus of the

institutions

Fund is Rs.50 crore.

trained human capital, (b) corporates in retail, food processing,

in

capital rural

light

should

areas

to

engineering,

support augment

educational supply

agri-business

of may

diversify their activities by forming producer companies

A.

Utiliszon of the Fund

2.81

During the year, an amount of Rs.876.11 lakh

in rural areas which may be suitably incentivised by was utilised from the Fund for supporting activities like research

projects/studies

(Rs.81.09

lakh),

training/

the

government,

(c)

co-operative

lakh) and other activities (Rs.8.46 lakh). As on 31 March 2009, the cumulative disbursement under R&D Fund stood at Rs.108.68 crore.

Research Projects

2.82

During the year, 12 research projects/studies

were

sanctioned

involving

grant

assistance

of

Rs.87.01 lakh. Further, 10 projects/studies sanctioned earlier were completed during the year.

2.83

The study on ‘Corporate Initiatives in Rural

and Agricultural Transformation’ examined some of

Bio-gas Plant.

46

Ch-Eng-2.p65

46

commercial

their profit on social development projects, and (d)

summer placement (Rs.737.83 lakh), seminars (Rs.48.73

B.

and

(public and private) banks may spend a per cent of

7/15/2009, 10:47 AM

the

Insurance

Regulatory

Development

Authority

symposia

and

workshops

covering

subjects/areas

(IRDA) can implement similar scheme for insurance

related to agriculture and rural development including

providers.

farm

business

economics,

agri-extension,

agri-

marketing, rural infrastructure, commodities futures, 2.84

The project, ‘NABARD Resource Centre for

Precision

Farming

implemented

for

in

Poverty

Alleviation’

Kendrapara,

was

Orissa

by

M. S. Swaminathan Research Foundation, Chennai. With

a

view

to

bringing

about

sustainable

development, the project had undertaken interventions related to integrated intensive farming system (IIFS), backyard center,

kitchen

garden,

income

generating

SRI,

village

activities

knowledge

for

micro-credit,

seminar

on

NREGA,

bio-technology,

fisheries, plantation and horticulture, etc. The grant support extended enabled the organisers of such programmes to document the proceedings and publish background

papers,

thus

facilitating

wider

dissemination of the recommendations/action points as also

to

initiate

suitable

policy

interventions

by

concerned agencies.

SHG/FC

through participation of all stakeholders (government/

D.

Occasional Papers

imparting training on ‘precision farming’. The project

2.86

Publication of occasional papers was another

had

crop

channel to seek increased dissemination of research

cultivation enabling them to act as resource persons;

findings on policy issues in the realm of rural and

(b) conducted a training-cum-interactive meet for 520

agricultural development. As on 31 March 2009, the

participants

departments,

Bank has published 49 occasional papers with a

banks and research institutes; (c) provided quality

cumulative disbursement of Rs.13.43 lakh. During the

seeds to 372 households for backyard cultivation, (d)

year, two occasional papers on ‘Hi-Tech Floriculture in

periodic

Karnataka’ and ‘Financial Inclusion – An overview’ were

bank

officials, (a)

NGO,

trained

590

from

field

integrated

SHG farmers

various

training

nutrient

farmers,

and

on

and

modern

government

on

etc.)

nursery-management,

pest

management,

seed

brought out.

production and post harvest preservation; (e) credit linked

and

engaged

598

members

of

41

SHG

functioning in the project site in different income generating activities; (f) trained farmers (through SHG participation), intensive

bank

farming

and system

government and

officials

precision

in

farming

practices; (g) experimented with SRI in certain pockets in the project site; and (h) introduced sunflower cultivation, which resulted in increasing the per acre yield by 16 per cent.

E.

Training Activities

2.87

Apart from extending grant assistance for various

R&D activities, an amount of Rs.727.35 lakh was utilised from the Fund during the year for capacity building of the staff of RFI in the NER.

F.

Summer Placement Scheme

2.88

Under the scheme, in implementation since 2005-

06, students are assigned tasks/projects of relevance to

C.

Seminars, Conferences and Workshops

the Bank with a view to generating new product and ideas

that

could

be

introduced.

During

2008-09,

of

assignments/reports on agriculture/rural development,

Rs.77.60 lakh was sanctioned to various universities,

allied sector, agri-business and social development were

research institutes and other agencies spread across

received from 34 students from 14 RO involving

the country for organising 103 seminars, conferences,

expenditure of Rs.10.48 lakh.

2.85

During

the

year,

grant

assistance

47

Ch-Eng-2.p65

47

7/15/2009, 10:47 AM

Training of Personnel of RFI 2.89

The Training Establishments (TE) of NABARD-

RTC at Bolpur, Mangalore and on

BIRD, Lucknow focus

improving the effectiveness of the RFI through

in association with FEDAI were conducted. Further, induction training programme for the newly recruited officers

of

Cauvery

Kalpatharu

Gramin

Bank,

training and also supplement the efforts of other training

revitalisation of co-operatives: programme for inspecting

institutions by providing technical and financial support.

officers of co-operative banks, asset-liability, etc., were

During

were

also conducted during the year. The seminar on ‘Agri

10,949

Produce Enrichment’ at RTC, Mangalore organised by

participants (Table 2.5). The Centre for Micro-Finance

NABARD in October 2008 was attended by 37 delegates

Research (CMR) was formally set up in BIRD on

from the banking sector and 16 papers presented.

2008-09,

conducted

by

434

RTC

training and

BIRD

programmes covering

1 January 2008 to provide focused attention on mF related

issues.

Further,

CMR-BIRD,

Lucknow

in

2.91

BIRD

celebrated

its

Silver

Jubilee

on

association with Institute for Financial Management &

19 September 2008 and a commemorative postal cover

Research

of

was released on the occasion. During 2008-09, BIRD

Management (CIM)-Patna, Institute of Development (IDS)-

conducted specially designed training programmes for the

Jaipur, established sub-centres in addition to the one already

newly reconstituted RRB, introduced new programmes on

established at IIBM, Guwahati. NABARD sanctioned

core banking solutions for Chairmen and General

grant assistance of Rs.3.75 crore out of MFDEF and

Managers of RRB, CRAR norms, prevention of frauds/

released Rs.120.15 lakh during 2008-09 for activities of

leakages and winning trust.

(IFMR)-Chennai,

Chandragupta

Institute

CMR and its sub-centres. A total of 11 studies on mF have been programmed for the main centre and sub-

2.92

centres.

fees of personnel from client institutions.

NABARD continued to subsidise the participation National

Institute of Rural Banking (NIRB), Bangalore was

A.

Programme Diversification

released

Keeping in mind the shift in business strategies of

programmes covering 273 bank officials during the year.

its clients, findings of specific studies conducted and

Under the Scheme of Financial Assistance for Training

feedback received from the trainees/institutional clients,

of Co-operative Bank personnel (SOFTCOB), the Bank

TE constantly endeavour to update their programmes

provides technical and financial support to 10 Junior

and design new ones in consultation with the client

Level Training Centres (JLTC), 11 Agricultural Co-

banks. During the year, programme/s for nominee

operative

Directors of RRB on fisheries, business opportunities for

Integrated Training Institutes (ITI) set up by SCARDB

RRB in the emerging environment, forex business for RRs

and SCB, respectively, to enable them to improve their

2.90

Rs.5.82

Staff

lakh

for

Training

conducting

Institutes

25

(ACSTI)

training

and

Table 2.5: Personnel Training of RFI (Number) Training

Programmes Conducted

Personnel of RFIs Training

Establishment

2006-07

2007-08

2008-09

2006-07

2008-09

BIRD, Lucknow

207

192

257

4,969

4,311

6,616

RTC, Mangalore

86

103

91

1,946

2,399

2,065

RTC, Bolpur

60

73

86

1,207

1,778

2,268

353

368

434

8,122

8,488

10,949

Total

48

Ch-Eng-2.p65

2007-08

48

7/15/2009, 10:47 AM

3

training system.

During 2008-09, Rs.330.74 lakh was

•

Collect

information

and

review

existing

disbursed to JLTC, ACSTI and ITIs out of the Co-

experiences in the establishment of Training

operative Development Fund (CDF) for conducting 303

Certification

programmes (6,146 trainees) as against Rs.278.29 lakh

discussions

disbursed

training certification organisations, viz., IGNOU,

during

2007-08

for

conducting

330

programmes (5,544 trainees). 2.93

System with

through

national

and

visits

and

international

AICTE, CERTIF-Indonesia, etc.

The Working Group constituted by NABARD

•

Conduct regional workshops with participation of

under the Chairmanship of Shri Amaresh Kumar,

major

Executive Director on capacity building requirements of

generate ownership and commitment for required

RRB personnel has since submitted its report to the

support.

stakeholders

(national

and

state)

to

Department of Economic Affairs, Ministry of Finance, GoI, and NABARD. Measures are being taken to

•

Determine functions and responsibilities of the

implement the recommendation through all TE of

certification

unit,

internal

institutional

set

up,

NABARD and training institutes of sponsored banks. In

staffing, organisational procedures, linkages, etc.,

order to address the medium and long-term training

identify needs/initiate activities for HRD, review

requirements of the co-operative credit structure (CCS)

financing/source of funding for the certification unit

after implementation of the revival package, the need for

and system.

a national level single Training Certification Centre to ensure

overall

Accordingly,

quality

under

the

and

efficiency

on-going

was

felt.

•

Carry out an existing inventory/situation analysis on training institutes/training environment, relevant

GTZ-NABARD

technical co-operation, BIRD was identified for setting-

framework

up a ‘National Training Certification Centre for CCS’.

(institutional/non-institutional) related to the CCS

The proposal was approved by the Governing Council,

in select States

conditions

and

training

capacities

BIRD and accordingly a Certification Cell with two officers was set up during the year. The Cell is proposed

•

Review quality standards/benchmarks applicable

to be called as Centre for Professional Excellence in

for

Co-operatives (C-PEC).

system.

2.94

The initial key activities related to training

certification system to be implemented are:

•

different

of

the

certification

Carry out training need assessment for secretaries and members of Boards of PACS, develop basic competence

•

components

and

skills,

initiate

design

of

Prepare an operational plan for establishing

standardised basic competency training programme

Training Certification System.

for new entrants as Secretary at PACS level

49

Ch-Eng-2.p65

49

7/15/2009, 10:47 AM

Business Operations

III

NABARD through its refinance operations and financial

3.3

support schemes, including RIDF, has been facilitating

2008-09

augmented credit flow for production and investment

growth of 30 per cent over 2007-08 and CAGR

purposes in the rural and agriculture sectors. The Bank

of

continued its efforts to boost credit flow in the

(Chart 3.1).

The total financial support by NABARD during

23

stood per

at

cent

Rs.50,577 during

crore,

the

registering

period

a

2004-2009

northeastern and hilly regions, the hitherto unreached areas,

by

providing

additional

relaxations

and

incentives to the banking sector. The Bank introduced special

liquidity

support

scheme/s,

to

enable

co-operative banks meet their commitments in the wake of the Agriculture Debt Waiver and Debt Relief Scheme.

3.2

Nabcons has established itself as a committed

and

professional

leveraging

on

disciplinary

consultancy

the

core

expertise

of

service

provider

by

competence

and

its

organisation,

parent

multi-

NABARD.

Production Credit A.

Short-Term Refinance

a.

State Co-operative Agriculture and Rural Development Banks

3.4

The

scheme

extending

profit-making

State

Banks

(SCB) with no accumulated losses while it continued to be linked to gross NPA level for other banks. Consolidated

ST-SAO

limits

were

sanctioned

to

eligible SCB to the extent of 75 per cent of crop loan disbursed during kharif 2008 (taking into account

Development

Seasonal

the acute liquidity problem faced by banks with the

Agricultural Operations (SAO) was continued during

for

operationalisation of ADWDR Scheme) and between

2008-09 also. During the year, refinance of Rs.64.32

25 and 35 per cent of crop loans to be issued during

crore was extended to Kerala (Rs.45.52 crore) and

rabi 2008-09, depending on their gross/net NPA levels.

Rajasthan (Rs.18.80 crore) SCARDB, at 4.5 per cent

The gross/net NPA norms for availing refinance by

for lending to the ultimate borrowers at 7 per cent.

co-operative banks and quantum of refinance were relaxed with a view to boosting credit flow in NER,

b.

State Co-operative Banks

i.

Support for Seasonal Agricultural Operations

Islands. Relaxations were also granted to co-operative

3.5

The quantum of refinance assistance for ST-

banks not complying with Section 11(1) of B. R. Act,

SAO to co-operative banks was linked to net NPA

Jammu & Kashmir, Sikkim and Andaman & Nicobar

1949

(AACS),

in

States

50

Ch-Eng-3.p65

Co-operative

refinance to State Co-operative Agriculture and Rural (SCARDB)

short-term

for

(ST)

Banks

of

level

50

7/14/2009, 3:03 PM

that

accepted/executed

MoU

to

implement

the

Vaidyanathan

Committee

forest

produce)/

recommendations relating to short-term co-operative

members

credit structure. The minimum coverage of small and

distribution

marginal farmers (SF/MF) continued to be at 30 per

norms

cent.

continued

mutatis

Rs.175.96

crore

3.6 limits

During 2008-09 (April-March), ST-SAO credit were

sanctioned

to

20

SCB

aggregating

of

rural

artisans

(including

PACS/LAMPS/FSS)/ of

agricultural

hitherto

procurement

inputs.

followed

for

mutandis. was

weaver

The

and

assessment

different

purposes

During

2008-09,

sanctioned

against

which

Rs.64 crore was utilised under this line of credit. Punjab

SCB

had

availed

maximum

amount

of

Rs.15,448 crore against Rs.14,826 crore sanctioned

Rs.63.82 crore for agriculture, allied and marketing

during

activities

2007-08.

The

Rs.1,281.20

crore

Programme

(OPP),

Pulses

credit

for

the

Rs.134.56

Development

limits

included

Oilseeds crore

Programme

Production for

National

(NPDP)

Rs.441.20 crore for credit requirements of

and tribals

under the Development of Tribal Population (DTP). It also included ST-SAO limit of Rs.115.88 crore sanctioned against pledge of government securities (July-June) against which the drawal was Rs.35 crore upto

31

March

2009.

The

SCB

reached

a

maximum outstanding of Rs.13,934.71 crore during

ii.

Support to Weavers

3.9

The eligibility norm for sanction of working

capital

credit

limits

to

SCB/DCCB

for

financing

production/marketing activities of Primary Weavers’ Co-operative

Societies

(PWCS),

procurement

and

marketing operations and trading-in-yarn by regional/ apex weavers’ co-operative societies were linked to gross/net NPAs depending on the financial position of

2008-09 constituting 90 per cent utilisation during

the SCB. Relaxations continued to be granted to

the year.

PWCS in NER, Sikkim, Jammu & Kashmir and Andaman & Nicobar Islands.

3.7

While the SCB in northern (Haryana, Himachal

Pradesh, Punjab and Rajasthan) and southern regions

3.10

(Andhra Pradesh, Karnataka, Kerala, Puducherry and

aggregating

Rs.265.63

Tamil Nadu) accounted for 40 and 23 per cent,

five

(Andhra

respectively,

Tamil

of

aggregate

credit

limits

sanctioned,

During 2008-09, ST (Weavers’) credit limits SCB

Nadu

and

crore

were

Pradesh, West

sanctioned

Orissa,

Bengal)

to

Puducherry, for

financing

those in the central (Chhattisgarh, Madhya Pradesh,

production/procurement/marketing activities as against

Uttarakhand and Uttar Pradesh), western (Gujarat

Rs.332.13

and Maharashtra) and eastern (Bihar, Orissa and

outstanding reached during the year was Rs.166.66

West Bengal) regions accounted for 18, 12 and 7 per

crore as against Rs.184.78 crore during the previous

cent,

year.

respectively.

Refinance

availed

by

the

co-

crore

during

2007-08.

The

maximum

operative banks in NER (< 1%) continued to be low despite relaxations. During the year, Meghalaya and

3.11

Sikkim SCB were sanctioned credit limit aggregating

under

The High Level Committee appointed by GoI,

Rs.2.50 crore while the utilisation was Rs.2.44 crore.

NABARD

the

Chairmanship to

suggest

of

Managing

measures

for

Director,

revival

of

Handloom Sector had proposed a financial package Consolidated ST (Others) limit was sanctioned

of Rs.2,600 crore for revival and revitalisation of the

to SCB on behalf of eligible DCCB for financing ST-

apex and primary level co-operative societies. The

agriculture/

allied

pisciculture/

industrial

3.8

than

weavers)/

activities/

labour

of

crops/

Package is under consideration of GoI. NABARD has

societies

(other

introduced a scheme for financing weavers outside the

labour

co-operative

marketing

co-operative contract

and

forest

co-operative societies (including collection of minor

fold

by

forming

Handloom

Weavers’

Groups (HWG) and financing of Master Weavers. 51

Ch-Eng-3.p65

51

7/14/2009, 3:03 PM

Cumulatively 2,968 HWG were formed in ten States,

Rajasthan

viz., Andhra Pradesh (1,023), Orissa (1,366), Assam

(Rs.335.10 crore). The maximum outstandings stood

(272), Madhya Pradesh (103), West Bengal (88),

at Rs.2,868.56 crore, constituting 81 per cent of

Bihar (82) and other states (34), and 1,781 HWG

sanctions during 2008-09. Further, one RRB each in

were credit linked.

Arunachal

(Rs.385.56

Pradesh,

crore)

Assam

and

and

Kerala

Meghalaya

were

sanctioned Rs.12.25 crore against which utilisation

b.

Regional Rural Banks

3.12

During the year, quantum of refinance to RRB

was Rs.11.36 crore (93%).

was linked to net NPA. Based on net NPA levels ranging between <10 and >15 per cent, refinance was

sanctioned

at

15,

10

and

7.5

per

cent,

respectively, of the expected credit flow for crop loans during 2008-09. NPA norms were relaxed to increase credit flow in NER and Jammu & Kashmir and enhanced quantum of refinance was provided to RRB in these regions. RRB were advised to increase lending to tenant farmers and oral lessees through JLG or otherwise. 3.13

During

2008-09,

72

RRB

were

sanctioned

limits of Rs.3,546.81 crore under

ST-SAO

against

Rs.2,940.18

75

during

2007-08.

crore

The

sanctioned

reduction

in

to the

RRB

number

of

RRB

3.14

Consolidated credit limits were sanctioned to

RRB for financing ST(Others) purposes upto 60 per cent of their realistic lending programme for eligible purposes. RRB with net NPA upto 10 per cent were eligible

for

was

Rs.190.80

during

crore

for

credit

limit

The

as

against

maximum

Rs.151.42 utilisation

crore during

of the limit sanctioned.

B.

Long-Term Loans to State Governments

3.15

NABARD

continued

to

support

State

Governments under Section 27 of the NABARD Act, co-operative

Rs.271.37

aggregate

2008-09 was Rs.178.30 crore, constituting 93 per cent

banks.

included

crore,

2007-08.

1981,

limits

The

sanctioned for ST (Others) to RRB during 2008-09

sanctioned limits was due to amalgamation of the These

refinance.

for

contributing credit

to

the

institutions.

share The

capital policy

of was

OPP, Rs.77.45 crore for DTP and Rs.1.35 crore

reviewed and it was decided to provide loans to State

for

Governments

NPDP.

Rs.738.35 limits

Uttar crore

Pradesh,

had

sanctioned,

(Rs.614.40

the

with

sanction

largest

share

by

Andhra

followed

crore),

a

Karnataka

on

reimbursement

basis

instead

of

credit

upfront loans as hitherto, with certain modifications in

Pradesh

the eligibility criteria. During 2008-09, profit earning

crore),

SCB/DCCB with no accumulated losses or with net

of

(Rs.389.85

of

NPA not exceeding 10 per cent, as on 31 March 2007 or 2008 (whichever was lower), were considered eligible for assistance. Similarly, SCB/DCCB earning profits during 2006-07 but with accumulated losses and SCB/DCCB incurring losses during 2006-07 with or without accumulated losses, with gross NPA not exceeding 15 per cent, as on 31 March 2007 or 2008 (whichever was lower), were considered eligible for assistance.

No

loan

was

sanctioned

to

State

Governments during 2008-09. An aggregate amount of Rs.17.73 crore was drawn during 2008-09 by State Governments of Haryana, Kerala and Orissa against Handloom weaving

sanctions of 2007-08.

52

Ch-Eng-3.p65

52

7/14/2009, 3:03 PM

C.

Other Initiatives

(SF/MF. The Scheme covered all direct agricultural

a.

NABARD - GTZ Rural Finance Programme

loans disbursed to farmers between 31 March 1997

3.16

The Gramin Tatkal Scheme (GTS) formulated in

co-ordination with GTZ, working on ‘family as a unit’ concept, to provide financial assistance for multiple activities of rural families, is being implemented since 2006-07

on

implementing involving

a

pilot

banks

loan

basis have

amount

in

eight

covered of

States.

The

7,127

families

Rs.40.17

crore.

The implementation and impact of the scheme are under review, following closure of the pilot project on 31 December 2008.

and

2007

and

co-operative

by

scheduled credit

commercial

banks,

RRB

institutions,

which

were

overdue as on 31 December 2007 and remained unpaid till 29 February 2008 (Box 3.1). The Scheme also covered loans disbursed before 31 March 1997 but

rescheduled/restructured

package/s

on

account

through

of

natural

GoI’s calamity.

special It

is

expected that the Scheme would benefit 192.59 lakh farmers

(SF

&

farmers - 31.82 amounting

MF - 160.77

lakh)

who

Rs.35,368.31

lakh

had

crore

and

other

availed

loans

from

co-operative

banks and RRB, of which, GoI would reimburse

Agricultural Debt Waiver and Debt Relief Scheme, 2008

Rs.30,999.14 crore.

The Union Budget 2008-09 had announced the

scheme for co-operative banks and RRB. As against

Agricultural Debt Waiver and Debt Relief (ADWDR)

the claims of Rs.29,724 crore received from SCB,

Scheme, 2008, to address the indebtedness of farmers

SCARDB and RRB, an amount of Rs.16,615 crore

and difficulties of the farming community, especially

was

b.

3.17

3.18

NABARD as the nodal agency implemented the

disbursed

to

banks

as

at

end-March

2009.

Box 3.1 Agricultural Debt Waiver and Debt Relief Scheme, 2008: Salient Features • The Scheme defines a farmer cultivating (as owner/tenant farmer/share cropper) agricultural land (i) upto 1 ha. (2.5 acres) as marginal farmer, (ii) between 1-2 ha. (2.5-5 acres) as small farmer and more than 2 ha. (> 5 acres) as other farmer.

• In the case of ‘other farmers’, a one-time settlement (OTS)

• The Scheme shall be applicable to all direct agricultural loans extended to SF/MF and other farmers by Scheduled Commercial Banks, RRB, co-operative credit institutions (including urban co-operative banks) and Local Area Banks (LAB) that were, (i) disbursed between 31 March 1997 and 2007, which were overdue on 31 December 2007 and remained unpaid till 29 February 2008; and (ii) loans disbursed before 31 March 1997, which were restructured/rescheduled by banks in 2004 and 2006 through special packages of GoI, and in the normal course upto 31 March 2007, as per RBI guidelines on account of natural calamity, whether overdue or not.

and PM’s special relief package, the ‘other farmers’ will be

• A farmer availing investment credit for allied activities, where the principal loan amount is < Rs.50,000, would be classified as ‘SF/MF’ and where the principal amount is > Rs.50,000, as ‘other farmer’. • In the case of SF/MF, the entire ‘eligible amount’ shall be waived.

would be extended wherein a rebate of 25% of the eligible amount would be given subject to the farmer repaying the balance 75%. • In the case of revenue districts covering DPAP, DDP areas given rebate of 25% of the eligible amount or Rs.20,000 whichever is higher subject to the farmer repaying the balance amount. If ‘eligible amount’ is
53

Ch-Eng-3.p65

53

7/14/2009, 3:03 PM

The

share

of

SCB,

SCARDB

and

RRB

was

towards

interest

subvention,

aggregate

utilisation

Rs.10,507 crore, Rs.2,246 crore and Rs.3,862 crore,

stood at Rs.2,538.97 crore (Rs.1,284.56 crore during

respectively.

2006-07

and

Rs.1,254.41

crore

during

2007-08).

Interest subvention payable to NABARD, co-operative

c.

Liquidity Support to SCB and RRB

banks and RRB for 2008-09 has been estimated at

3.19

In order to enable co-operative banks and RRB

Rs.2,565 crore.

to tide over the temporary liquidity problem due to implementation of the ADWDR Scheme, NABARD

e.

Package for Sugar Industry

provided liquidity support of Rs.1,551.15 crore and

3.21

NABARD is the nodal agency in respect of

Rs.302.43 crore to SCB and RRB, respectively, at

co-operative banks for implementing the GoI ‘package

9 per cent p.a. during kharif 2008. Similar liquidity

for restructuring of term loans of co-operative sugar

support scheme was also made available for rabi 2008-

mills’. As against Rs.138.54 crore received from GoI

09 to SCB and RRB at 4.5 and 5.5 per cent,

under the package, interest subvention of Rs.116.18

respectively, with subvention from GoI. During rabi

crore was released to co-operative banks in respect of

2008-09 as against sanction of Rs.2,992.65 crore,

75 co-operative sugar mills. NABARD is also the

utilisation by banks was of Rs.2,415.23 crore.

designated nodal agency for routing interest subvention claims of co-operative banks under ‘the scheme for

d.

Interest Subvention to Farmers

providing financial assistance to sugar undertakings–

3.20

The Union Budget 2008-09 announced the

2007’.

continuance of interest subvention during 2008-09, to enable banks to provide crop loans upto Rs.3 lakh to

D.

farmers at 7 per cent p.a. The operationalisation of the scheme

envisaged

suitable

interest

subvention

to

3.22

Interest Rates on Refinance Assistance The rates of interest on ST/MT refinance to

NABARD and 3 per cent interest subvention on

co-operative banks, RRB and scheduled commercial

involvement of own funds by co-operative banks/RRB.

banks and long-term (LT) loans to State Governments

As at end-March 2009, of the aggregate sum of

for

Rs.3,109.36 crore received from GoI for 2006-07

credit institutions during 2008-09 are indicated in

(Rs.1,331.36

Table 3.1.

crore)

and

2007-08

(Rs.1,778

crore)

contribution

to

share

capital

of

co-operative

Table 3.1: Rates of Interest (Per cent) Sr.

Purpose

Agency

Interest Rate

SCB/RRB SCB SCB SCB Scheduled Commercial Banks SCB & Scheduled

3.5/4.5 9.5 9.0 8.75

Commercial Banks RRB SCB^ RRB^^ State Governments

9.5 9.0 5.5*-5.75** 5.75*-6.0** 9.5

No. 1. 2. 3. 4. 5.

SAO Pledge of securities ST (Others- other than weavers’) ST (Weavers’- Apex/Regional WCS) ST (Weavers’)- Financing of PWCS

6.

Working capital requirements of SHDC and SHnDC#

7. 8.

ST-OSAO loans MT (Conversion) loan

9.

LT loans to State Governments

* : NPA < 20%

** : NPA > 20 %

# : Last year’s policy continues.

^ : Net/gross NPA depending on eligibility.

54

Ch-Eng-3.p65

54

7/14/2009, 3:03 PM

9.5

^^ : Net NPA

3.23

NABARD extended refinance for crop loans to

refinance was made available to those SCB and RRB,

co-operatives banks and RRB at 3.5 and 4.5 per cent

which including their involvement of owned funds,

p.a., respectively, with interest subvention from GoI. The

extended crop loans at 7 per cent p.a. to farmers.

Investment Credit A. 3.24

Rescheduling Principal Amount Repayment

restrictions on ceilings prescribed for total financial outlay (TFO) and refinance amount under Automatic

Consequent to the announcement of ADWDR

Scheme, 2008, by GoI, NABARD agreed to reschedule instalments of principal amount from SCARDB falling due during June-December 2008 to 31 January 2009 or any other earlier date as preferred by the SCARDB, subject to certain conditionalities. During the year, NABARD received proposals for rescheduling principal amount from Andhra Pradesh, Chhattisgarh, Himachal Pradesh,

Orissa,

Punjab,

Haryana,

Rajasthan

and

Uttar Pradesh SCARDB and rescheduled an amount of Rs.1,061 crore.

Refinance Facility (ARF) for commercial banks, RRB, SCB and PUCB was completely removed, the ceiling on

TFO

Rs.50

for

lakh.

Cent

SCARDB per

cent

was

raised

refinance

was

to made

available for thrust areas and for all purposes in hilly States (Himachal Pradesh, Jammu & Kashmir and Uttarakhand),

NER

&

Sikkim

and

Andaman

&

Nicobar Islands. Refinance was extended to Section 11 non-compliant SCB/DCCB in States that have executed MoU for implementing the recommendations of

the

Task

Force

on

Revival

of

STCCS.

The

relaxations in eligibility criteria in respect of recovery, gross/net NPA that were hitherto available only to

B.

Interim Finance to SCARDB

States in NER were extended to Jammu & Kashmir,

3.25

In order to address the liquidity crunch faced by

Himachal Pradesh and Uttarakhand. SCB, SCARDB

SCARDB after the announcement of ADWDR Scheme,

and RRB continued to be classified under A/B/C/D

2008, NABARD decided to extend interim finance to

categories based on their gross/net NPA, recovery

them, on a case-to-case basis even if they had

position, net worth and profitability. However, (i) SCB

defaulted to NABARD either in interest payment or

with gross NPA > 20 per cent, (ii) SCARDB with

principal repayment or both. The facility was, however,

recovery < 30 per cent, (iii) commercial banks/PUCB/

available subject to the condition that (i) the total

ADFC/NEDFi with net NPA > 3 per cent, and (iv)

principal and interest amount due to NABARD during

RRB, with deposit erosion > 30 per cent were

June-December 2008 plus the liquidity support by way

considered

of interim finance is fully covered by the amount

the year.

receivable

under

the

ADWDR

scheme,

finance) payable to NABARD to be covered by State Rs.70

crore

guarantee. was

During

sanctioned

to

the

year,

Madhya

Pradesh

SCARDB under the scheme.

C. 3.26

refinance

was

2008-09, relaxed

the

availing

refinance

during

D.

Security Norms

3.27

Release of refinance to SCARDB/SCB, eligible

Section

11

non-compliant

SCB/DCCB

and

non-

scheduled SCB (for farm sector) was only against government guarantee. This requirement was waived for category ‘A’ and profit making SCB/DCCB. In the

Eligibility Criteria for drawal of Refinance During

for

and

(ii) the outstanding dues (principal + interest + interim Government

ineligible

policy

considerably.

for

event

government

guarantee

not

forthcoming,

alternative security like pledge of government securities

drawing

While

of

the

or fixed deposit receipts issued by scheduled banks was considered on a case-by-case basis. Commercial 55

Ch-Eng-3.p65

55

7/14/2009, 3:03 PM

banks, be

RRB,

PUCB

exempted

from

and

NBFC

furnishing

continued

to

security/government

guarantee for availing refinance.

a.

Agency-wise Disbursements

3.30

Commercial banks, with a share of 56 per cent

of the total refinance disbursed during the year continued to be the single largest group availing

E.

Interest Rates on Refinance

3.28

Owing

to

the

changing

money

market

refinance (Table 3.2/Chart3.2).

The share of all other

agencies

disbursed

in

total

refinance

showed

conditions and consequent impact on the cost of

declining trend in absolute and percentage terms,

incremental

though SCARDB showed an improvement in absolute

market

borrowings

of

NABARD,

the

interest rates were revised six times during 2008-09. The interest rates, last revision being in February 2009, stood at 9 and 8.5 per cent for commercial banks

and

RRB/co-operative

banks/other

agencies,

terms.

b.

Spatial Distribution of Refinance

3.31

Refinance disbursement across regions varied

finance

widely with the highest disbursement in southern region

provided to SCARDB was enhanced from 9.5 to 9.75

followed by northern, central, eastern, western and

per cent p.a. with effect from 22 September 2008.

northeastern regions (NER) (Table 3.3/Chart 3.3). In

The

respectively.

The

interest

Nicobar

interest

rates

Islands,

in

rate

interim

Sikkim,

Andaman

&

absolute terms, however, both central and eastern

Pradesh,

Jammu

&

regions witnessed a decrease while the southern and

NER,

Himachal

on

Kashmir and Uttarakhand were kept in the lowest

northern regions registered a significant increase.

interest slab throughout the year. Table 3.2: Agency-wise Refinance Disbursement

F.

(Rs. crore)

Refinance Support

Agency

2006-07

2007-08

2008-09

1,742.72 1,130.67 4,568.82 1,352.81 -

1,950.58 826.55 3,951.73 2,313.99 3.42

1,986.54 801.51 5,867.19 1,879.04 1.01

compared to the disbursement of Rs.9,046.27 crore

SCARDB SCB Commercial Banks RRB PUCB/ADFC

(including Rs.65.05 crore under ST-SAO) during the

Total

previous year.

*: Including ST-SAO refinance to SCARDB.

3.29

The

2008-09 Rs.64.32

total

refinance

amounted crore

under

to

disbursement

Rs.10,535.29

ST-SAO

for

during (including

SCARDB)

as

8,795.02

56

Ch-Eng-3.p65

a

56

7/14/2009, 3:03 PM

9,046.27* 10,535.29*

3.32

Disaggregation of refinance disbursements by

Table 3.3: Region-wise Refinance Disbursement

agencies and states indicated that while 77 per cent of

(Rs. crore)

the disbursement to RRB was accounted for by Andhra

Region

2006-07

2007-08

2008-09

Pradesh, Karnataka, Haryana, Uttar Pradesh, Orissa

Central

1,695.62

1,810.40

1,526.02

and Tamil Nadu, around 70 per cent of the refinance

Eastern

1,102.83

1,134.73

1,102.99

disbursed

Northern

2,111.10

1,957.78

2,636.45

167.87

178.57

174.18

to

the

SCB

was

in

Andhra

Pradesh,

Himachal Pradesh, Orissa, Uttar Pradesh and West

North-Eastern

Bengal. Of the refinance disbursed to SCARDB, 68 per

Southern

2,710.62

3,252.53

4,298.91

cent was absorbed in Haryana, Punjab, Kerala and

Western

1,006.98

712.26

796.74

8,795.02

*

10,535.29*

Uttar Pradesh. The trends once again reflect the

Total

varying absorptive capacity of different category of

* : Including ST-SAO refinance to SCARDB. Central : Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Uttarakhand. Eastern : Bihar, Jharkhand, Orissa, West Bengal and A&N Islands. Northern : Haryana, Himachal Pradesh, Punjab, Rajasthan, J&K, Delhi and Chandigarh. NER : Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. Southern: Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Pondicherry and Lakshadweep Islands. Western : Gujarat, Goa, Maharashtra, DN Haveli and Daman & Diu.

banks in different states.

c.

Sector-wise disbursements

3.33

Of

the

total

refinance

disbursement

of

Rs.10,535.29 crore during 2008-09, NFS and SHG activities

with

26

and

25

per

cent,

respectively,

accounted for the major share, followed by farm

9,046.27

mechanisation (14.4%). Of the other activities, land development (9%) and minor irrigation improved their

eight

states

(Haryana,

Karnataka,

Kerala,

Madhya

shares (5.2%) over the previous years (Table 3.4).

Pradesh, Punjab, Rajasthan, Tamil Nadu and West Bengal) and refinance of Rs.16.83 crore covering 548

i.

Farm Sector

3.34

The scheme for ‘Financing Purchase of Land for

Agricultural

Purposes’

borrowers. under

implementation

since

August 2001, aimed to provide credit facility to SF/MF, share

croppers/tenant

agricultural

land.

farmers

During

for

2008-09,

purchase bank

loan

of of

Rs.19.60 crore was extended covering 607 borrowers in

During

2008-09,

25

per

cent

of

the

refinance was against loans disbursed to small farmers (Table 3.5).

ii.

Non-Farm Sector

3.35

During the year, refinance disbursed under NFS

stood at Rs.2,706.79 crore, of which

Rs.268.47 crore

57

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Table 3.4: Sector-wise Disbursement of Refinance

Table 3.5: Refinance disbursed to Small Farmers vis-à-vis Total Disbursements

(Rs. crore) Sector

2006-07

2007-08

2008-09

MI 670.97(7.6) LD 651.30(7.4) FM 1,857.51(21.1) P&H 313.73(3.6) DD 504.02(5.7) PF/SGP/ AH-Others 206.66(2.4) Fisheries 38.30(0.4) Forestry 8.38(0.1) S & M Yard 35.61(0.4) SGSY 355.06(4.0) NFS 2,265.16(25.8) SC/ST-AP 28.32(0.3) SHG 1,292.86(14.7)

403.68(4.5) 462.14(5.1) 1,747.65(19.3) 341.82(3.8) 605.87(6.7)

545.85(5.2) 949.94(9.0) 1,514.03(14.4) 374.54(3.6) 489.41(4.6)

216.29(2.4) 25.45(0.3) 6.39(0.1) 136.28(1.5) 258.58(2.8) 2,747.95(30.4) 20.52(0.2) 1,615.50(17.8)

298.70(2.8) 77.15(0.7) 6.56(0.1) 141.01(1.3) 201.12(1.9) 2,706.79(25.7) 28.94(0.3) 2,620.03(24.9)

567.14(6.4) 8,795.02

458.15(5.1) 9,046.27*

581.22(5.5) 10,535.29*

(100.0)

(100.0)

(100.0)

Others Total

(Rs. crore) Purpose

Total Disbursement Disbursement to SF

MI and LD

1,495.79

575.83

38

Diversified Purposes*

7,377.91

1,640.21

22

8,873.70

2,216.04

25

Total

* : Including ST-SAO refinance to SCARDB.

Assistance to SF (% to total disbursement)

* : Excludes refinance for farm mechanisation, storage and market yards, forestry, etc.

31 March 2009, the cumulative refinance support under NFS stood at Rs.24,061.51 crore.

iii.

micro-Finance

3.36

During 2008-09, NABARD extended refinance of

Rs.2,620

crore

under

the

SHG-bank

linkage

programme, registering an increase of 62 per cent over

MI

:

Minor Irrigation.

LD

: Land Development.

FM

:

Farm Mechanisation.

PF

: PoultryFarming.

DD

:

Dairy Development.

SGP : Sheep, Goat and Piggery.

loans

AH

:

Animal Husbandry.

P & H : Plantation and Horticulture.

31 March 2008, revealed that both the number of

the previous year. The savings kept as deposits and

S&M Yard : Storage and Market Yards

outstanding

position

of

SHG,

as

on

savings accounts and amount of savings mobilised

Figures in parentheses indicate percentage to total.

improved by 20 and 8 per cent, respectively. Similarly, Agency-wise,

the number of loan accounts and amount of loan

commercial banks accounted for 57 per cent, followed

outstanding registered a growth of 25 and 37 per cent,

by co-operative banks (33%) and RRB (10%). As on

respectively (Table 3.6). However, while savings per

was

towards

rural

housing

(10%).

Table 3.6: Agency-wise Savings and Loans Outstanding to SHGs (As on 31 March) (Rs. crore) Agency

2007 No.

2008 Amount

No.

Amount

a. Savings Commercial Banks

22,93,771(55)

1,892.42(54)

28,10,750(56)

2,077.73 (55)

RRBs

11,83,065(28)

1,158.29(33)

13,86,838(28)

1,166.49 (31)

6,83,748(16)

462.00(13)

8,12,206(16)

541.17 (14)

41,60,584(100)

3,512.71(100)

50,09,794(100)

3,785.39 (100)

Co-operative Banks Total Savings per SHG (Rs.)

8,469

7,556

b. Loans Outstanding Commercial Banks RRBs Co-operative Banks Total

18,93,016(65)

8,760.38(71)

23,78,847(66)

11,475.47(68)

7,29,255(25)

2,801.76(22)

8,75,716(24)

4,421.04(26)

2,72,234(9)

804.35(06)

3,71,378(10)

1,103.39(06)

28,94,505(100)

12,366.49(100)

36,25,941(100)

16,999.90(100)

Loan o/s per SHG (Rs.)

42,724

46,884

Figures in parentheses indicate percentage to total.

58

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58

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SHG declined by 11 per cent, loans outstanding per SHG increased by 10 per cent.

3.37

The recovery position of banks with respect to

their

SHG

portfolios

revealed

that,

as

on

31 March 2008, of the 329 reporting banks, 223 banks

(68%)

reported

recovery

>

80

per

cent.

Agency-wise, 24 (out of 33), commercial banks 47 (out of 70)

RRB

and 152 (out of 226) co-operative banks

reported recovery > 80 per cent (Chart 3.4).

3.38

MFI are increasingly providing financial services

to the poor by raising funds from banks and their own resources for on-lending to SHG. MFI in India operate as

NGO-MFI,

non-profit

Section

25

NBFC-MFI,

co-operative MFI and for-profit NBFC-MFI. During 2007-08, 518 MFI were financed by banks to the tune of Rs.1,970.15 crore,

thus, registering a growth of 55

and 71 per cent in respect of number of MFI and amount disbursed, respectively. Total loans outstanding increased to Rs.2,748.84 crore as on 31 March 2008, registering a growth of 73 per cent over 2006-07 (Table 3.7).

Rs.64.56 crore and NABARD share of Rs.31.55 crore. Of

these,

10

projects

have

been

sanctioned

in

association with RRB and 2 with commercial banks covering

activities

cultivation,

such

Individual

infrastructure,

as

button

Quick

mushroom/herb

Freeze

(IQF),

agri

modern rice mill, etc. Since 2003,

40 projects involving TFO of Rs.736.11 crore, bank loan of Rs.486.28 crore and NABARD share of Rs.214.11

crore

have

been

sanctioned

as

on

31 March 2009. An amount of Rs.36.95 crore was disbursed during the year, registering an increase of

G.

Co-financing

3.39

During

2008-09,

35 per cent over 2007-08. As at end-March 2009, 12

new

projects

were

sanctioned with TFO of Rs.94.96 crore, bank loan of

the cumulative disbursement under the co-financing arrangement stood at Rs.109.76 crore.

Table 3.7: Progress under MFI-Bank Linkage Programme (As on 31 March) (Rs. crore) Agency

Bank Loan Disbursed

MFI

Amount

(No.) Commercial Banks

Loans Outstanding

2007-08P

2006-07

MFI

Amount

(No.)

2008P

2007 MFI

Amount

(No.)

MFI

Amount

(No.)

327

1,151.34

497

1,968.60

541

1,584.27

1,072

2,745.24

RRB

7

0.22

8

1.51

8

0.20

24

3.58

Co-operative Banks

-

-

13

0.04

1

0.01

13

0.02

334

1,151.56

518

1,970.15

550

1,584.48

1,109

2,748.84

Total

The actual number of MFIs would be less as some MFIs have availed loans from more than one bank.

P : Data provisional.

59

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Rs.3,516.65 crore, bank loan of Rs.1,556.90 crore and Rs.2,307.26 crore and subsidy of Rs.413.32 crore and Rs.513.52 crore for 1,791 (1,578 cold storages and 213 onion godowns) and 16,593 projects were sanctioned under cold storage/onion godown and rural godown, respectively. The cumulative capacity created under cold storage/onion godown and rural godown as on 31 March 2009, stood at 73.54 lakh tonnes (73.19 lakh tonnes of cold storage/0.35 lakh tonnes of

3.40

godown)

and

208.24

lakh

tonnes,

respectively.

Fly Ash Brick making Cluster at Yembodi

H.

onion

b.

Capital Investment Subsidy Schemes

Agricultural Marketing Infrastructure, Grading and Standardisation

3.42

The scheme in operation, since 2004, aims at

Since 2000-01, NABARD as the nodal agency,

establishing/

strengthening

of

infrastructure

for

continued to oversee implementation of the various

marketing, grading, standardisation, quality certification

Capital Investment Subsidy (CIS) schemes of GoI

of agricultural produce and creation of marketing

through

the

infrastructure in agriculture and allied sectors. During

progress with bankers and GoI. During 2008-09, four

2008-09, projects involving Tuna long liners, fishing

CIS schemes, viz., (i) construction of cold storages,

boats and fishing nets as functional infrastructure were

onion godowns and rural godowns, (ii) development/

also made eligible for subsidy under the Scheme. It

strengthening of agriculture marketing infrastructure,

could

grading

amended the APMC Act to allow private participation.

administering

and

subsidy

standardization,

and

monitoring

(iii)

establishing

be

implemented

in

only

such

States

that

Agri-Clinic and Agri-Business Centres (ACABC) by agriculture graduates and (iv) supporting bankable projects for commercial production of organic inputs like bio-fertilizer, vermiculture hatchery and composting units

of

fruit

and

vegetable

wastes,

etc.,

under

National Project on Organic Farming (NPOF) were implemented.

Box 3.2 Cold Chain Infrastructure for Apples in Himachal Pradesh M/s. Adani Agri Fresh Ltd. established three controlled atmosphere (CA) cold storage units with a capacity of 6,000 MT each and infrastructure for grading, sorting, mechanised handling, packing and marketing of fresh apples.

a.

3.41

Cold Storages, Onion Godowns and Rural Godowns

The units with TFO, bank loan and NABARD refinance of

During the year, 94 and 3,013 projects were

of Himachal Pradesh. The CA technology used in these units

sanctioned

under

cold

storages/onion

godowns

(Box 3.2) and rural godowns with TFO of Rs.239.44 crore and Rs.526.09 crore, bank loan of Rs.150.75

Rs.173.39 crore, Rs.105.99 crore and Rs.95.39 crore, respectively, are set up in Rewali, Sainj and Rohru districts increases the shelf life of apples from 3 months in conventional cold storages to 10 months. The apple growers are, thus, able to realise 20% higher prices at Rs.25-28/kg. The improved infrastructure facilities of CA storages have

crore and Rs.349.90 crore and subsidy of Rs.37 crore

helped to reduce tiers of intermediaries enabling a win-win

and Rs.59.17 crore, respectively. As at end-March

situation for growers and promoters.

2009,

cumulative

TFO

of

Rs.2,770.78

crore

and

60

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60

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As on 31 March 2009, 20 states and 5 UTs had

Government. The studies covered investments under

amended the APMC Act and were eligible to receive

farm and non-farm sector, micro-credit, government

subsidy assistance for projects under the Scheme.

sponsored schemes and rural housing for identifying factors

3.43

During the year, 564 projects were sanctioned

affecting

smooth

implementation

of

investments/schemes and to ensure prompt corrective

involving TFO and bank loan of Rs.545.94 crore

measures.

and Rs.366.89 crore, respectively, while subsidy of

and

Rs.61.43

Cumulatively

studies conducted by 20 ROs in 2007-08 has been

3,265 projects involving TFO and bank loan of

brought out in the form of a booklet for dissemination

Rs.1,295.66 crore and Rs.863.59 crore, respectively,

among client institutions.

were

crore

sanctioned

was

and

disbursed.

subsidy

of

Rs.141

A

compilation

recommendations

of

of

the

28

major

findings

investment

specific

crore

released.

J.

Physical Achievements

c.

3.47

The refinance disbursement supporting varied

Establishing ACABC

economic activities under various types of investments 3.44

The scheme, aimed at providing fee based

extension services to farmers, was announced by MoA, GoI for implementation during 2006-07 and continued during 2008-09. During the year, subsidy amounting to Rs.1.60 crore was disbursed to 147 ACABC projects. Cumulatively, 204 projects were sanctioned with a total subsidy release of Rs.2.29 crore.

d.

3.45

during the year are presented in Table 3.8. Under minor irrigation (MI) 13,000 tubewells with pumpsets and 16,000 pumpsets on existing wells were financed. Tractor financing continued to be the major item of investment under FM with 43,000 units financed during the year. During 2008-09, land area of 99,000 ha. was developed. Under the animal husbandry sector, dairy farming and sheep/goat rearing showed

National Project on Organic Farming

an increase of 1.77 lakh and 3.08 lakh animals, respectively.

The subsidy based NPOF in operation since

2005 was extended during 2008-09. An amount of

The

poultry

sector

showed

good

growth with 73 lakh birds being financed during 2008-09.

Rs.40.25 crore was earmarked as subsidy for the purpose. Both NABARD and National Co-operative Development

Corporation

(NCDC)

are

the

implementing agencies. Since inception, 416 units (378 vermi-hatchery, 29 bio-fertilizer and 9 fruit & vegetable waste compost) have been sanctioned with subsidy of Rs.11.94 crore, as on 31 March 2009. Of the Rs.11.32 crore received from GoI, subsidy of Rs.7.90 crore has been released.

I.

Investment and Scheme Specific Studies

K.

Credit Planning

a.

Potential Linked Credit Plans

3.48

NABARD, adopting a consultative approach,

continued to prepare district-wise Potential Linked Credit Plans (PLP), to guide banks in the preparation of their Annual Credit Plans. A review of the PLP exercise was initiated during the year and revised guidelines issued to improve the quality and content of the

document.

To

make

the

PLP

documents

contemporary, a new chapter ‘Financial Inclusion’ was

During 2008-09, 37 investment and 5 scheme

included. The general and technical scrutiny of select

specific studies were conducted in association with

PLP was also undertaken to enhance and fine-tune

financing banks and nodal departments of the State

the contents.

3.46

61

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Table 3.8: Units Financed and Completed Sr. Investments No.

1.

Units

Units Financed (upto 31 March)

Units Completed (upto 31 March)

2008

2009

2008

2009

‘000

1,599

1,612

1,582

1,594

Minor Irrigation i.

Tubewells with pumpsets

ii. Dugwells with pumpsets

@

*

‘000

2,076

2,094

2,063

2,081

iii. Dugwells with conventional lift

‘000

1,707

1,724

1,706

1,723

iv. Pumpsets on existing wells

‘000

2,451

2,467

2,422

2,436

‘000

1,837

1,886

1,805

1,849

‘000 ha.

3,252

3,351

3,190

3,285

‘000

1,384

1,427

1,350

1,391

ii. Power tillers

‘000

162

164

159

160

iii. Other farm equipments

‘000

719

741

711

733

‘000 ha.

2,261

2,323

2,215

2,273

v.

Others

**

2.

Land Development***

3.

Farm Mechanisation i.

Tractors

4.

Plantation & Horticulture

5.

Forestry

lakh ETPs

2,348

3,216

2,332

2,657

6.

Storage

‘000 tonnes

18,635

18,636

18,448

18,449

7.

Market Yards

No.

3,013

3,080

2,987

3,047

8.

Dairy Development

‘000 animals

15,843

16,020

15,626

15,789

9.

Sheep/ Goat Rearing

‘000 animals

38,161

38,469

37,725

38,010

10. Piggery

000 animals

1,692

1,702

1,685

1,693

11. Poultry

lakh birds

1,819

1,892

1,797

1,860

No.

22,679

22,765

22,036

22,082

ii. Other Boats

No.

73,681

75,019

73,000

73,799

iii. Brackish Water Aquaculture

ha.

5,362

5,371

5,301

5,308

‘000 ha.

414

417

409

412

13. Non-Farm Sector

‘000

8,032

8,268

7,892

8,088

14. Miscellaneous$

‘000

14,786

15,330

14,486

14,671

12. Fishery i.

Mechanised Boats

iv. Fresh Water Aquaculture

@

: Includes borewells with pumpsets.

*

**

: Includes dugwells/ dugwells-cum-borewells, deep tubewells with pumpsets, deepening/ renovation of wells, sprinkler, pipeline, storage/water

: Includes dug-cum-borewells with pumpsets.

ETP : Entire Trans-Planting.

harvesting tank, lift irrigation, drip, pump house, shallow tubewells/million shallow tubewell programme, etc. ***

: Includes soil conservation, saline/ alkaline soil, channels/ lining/ under grouW2nd pipeline, wasteland and farm development.

$

: Includes bullock pairs, bullock carts, camels, camel carts, SHGs, other activities under AH, Kisan bikes, sericulture, ACABCs, soil/water testing, compost/ manure plants, gobar gas plants, vermiculture, SRTO, contract farming,AEZs, SC/ST Action Plan, bee- keeping, etc.

Note : While estimating the completed units, appropriate adjustments have been made for units financed upto March 2009, 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.

62

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b.

State Focus Paper

3.49

The district-wise/sector-wise potentials projected

in the PLP are aggregated into the State Focus Paper (SFP) presenting a comprehensive picture of potentials available in the State for development of various sectors of the rural economy. The SFP highlights the critical infrastructure gaps and linkage support required from various line departments to facilitate credit flow as estimated in the SFP. The SFP are presented to bankers and State Governments at the state level Credit

Seminars

to

facilitate

necessary

budgetary

support for bridging the gaps and enable banks to augment credit flow.

c.

Integrated District Plans

3.50

The Ministry of Panchayati Raj and Planning

Commission, GoI introduced preparation of Integrated Development Plans (IDP) for the 250 poorer districts

Exhibition of products made by SHG members

i.

To enable SCB and RRB avail refinance for ST-SAO purposes, NABARD relaxed its NPA norms by 5 percentage points. An additional 5 to 15 percentage points relaxation for assessing eligible quantum limits was extended to both SCB and RRB.

ii.

The NPA criteria for drawal of refinance under investment credit was relaxed by 5 and 3 percentage points for co-operative banks and RRB, respectively. Refinance to the extent of cent per cent bank loan was provided. The rate of interest on refinance for commercial banks in NER and Sikkim was fixed at 50 basis points lower than in other parts of the country (9%). In the case of cooperative banks and RRB, the interest rate on refinance continued to be 8.5 per cent as in other parts of the country.

iii.

Interest rate on refinance to commercial banks and RRB on loans to MFI for on-lending to clients/SHG was 3 percentage points less than that charged by banks, subject to a minimum of 8.5 per cent as against 9 per cent in other states.

iv.

To facilitate creation of infrastructure facilities under RIDF, NABARD extended 90 per cent of the eligible project cost for roads and social sector projects as against 80 and 85 per cent, respectively, in rest of the country. Mobilisation advance was also extended at 30 per cent of the RIDF loan. The loan is phased over a period of five years for major/medium irrigation projects

under the Backward Regions Grants Fund (BRGF). It aims at embedding the participative planning process and providing funds to local governments for filling gaps based on the local needs under the flagship programmes.

NABARD

was

associated

with

the

Technical Support Group of Planning Commission for preparing the Manual of Guidelines for preparing IDP. The Planning Commission and NABARD conducted regional workshops to orient various state and district level officials in preparing IDP. The Bank is also involved as a Technical Support Institution (TSI) in preparation of plans in 17 districts covering 5 states, viz., Andhra Pradesh, Jharkhand, Maharashtra, Tripura and Uttar Pradesh. The plans are under various stages of finalisation and approval.

L.

Special Package for NER

3.51

NABARD

continued

its

policy

of

facilitating

larger flow of credit to NER and Sikkim by granting relaxations to commercial banks, co-operative banks and RRB operating in the region. The initiatives, which were operational during 2008-09, are given below.

(loan > Rs.50 crore) and for four years for other projects compared to three years given to other states. 63

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Loans under Rural Infrastructure Development Fund 3.52

The

Government

instituted

the

Rural

Infrastructure Development Fund (RIDF) with NABARD during 1995-96, with an initial corpus of Rs.2,000 crore by way of deposits from commercial banks to the extent of their respective shortfalls in agriculture lending under

priority

sector.

The

Fund

has

since

been

continued with annual allocation being announced in the

Union

Budget.

The

Union

Budget

2008-09

B.

Terms and Conditions

3.54

The lending rate on loans continued to be 0.5

per cent above the Bank Rate prevailing at the time of sanction of loan (6.5%). Loans are secured by means of irrevocable letters of authority (mandate) executed by State Governments registered with RBI and Time Promissory

Notes.

Each

drawal

under

sanctioned

announced the XIV Tranche of Rs.14,000 crore, raising

projects is considered as a separate loan repayable in

the aggregate allocation to Rs.86,000 crore. During

five equal instalments over seven years, including

2008-09, Rs.4,000 crore was also allocated under a

moratorium of two years. Further, states are sanctioned

separate window for funding rural roads component of

loans within the ceiling of normative allocation (based

Bharat Nirman Programme, introduced during 2006-

on

07, raising the allocation to Rs.12,000 crore. As on 31

infrastructure index and performance under RIDF) of

March 2009, the cumulative allocation under both

the RIDF corpus at the beginning of the financial year.

components of the fund stood at Rs.98,000 crore.

Funds

its

terrain,

are

rural

population,

provided

to

CD

state

ratio,

rural

governments

on

reimbursement basis. As the on-going projects under

A.

Eligible Projects

RIDF are spread over several tranches, the pace of

3.53

The GoI has approved a broad range of 31

actual drawal of funds depends upon implementation

sectors/activities for financing under RIDF XIV. These

at

include

Article 293 (3) of the Constitution, which determines

projects relating to rural roads and bridges,

the

field

level.

minor/medium/major/community irrigation, mini/hydel/

their

non-conventional power projects, drinking water, soil

Institutions during the year.

conservation,

watershed

development,

borrowing

States

powers

are

also

from

governed

by

Central

Financial

was

per

reclamation,

drainage, flood protection, forest development, joint

3.55

forest

requirements of the state and ranged from 3 to 4 years

management,

marketing

infrastructure,

The

phasing

fisheries, infrastructure for rural education and public

The

maximum

health institutions, etc.

medium/ major irrigation and other stand-alone projects

industries/animal

involving

loan

phasing of

Rs.50

projects period crore

to in and

hilly

the

an

rural

for

as

with

for

year

projects

husbandry/

infrastructure

extra

of

the

states.

case

above,

of was

five years.

C.

Operations

a.

Sanctions and Disbursements

3.56

During the year 85,527 projects involving a

loan amount of Rs.14,719.42 crore were sanctioned under RIDF XIV, thereby increasing the cumulative number sanctioned

of

projects to

to

3,65,003

Rs.88,359.09

crore.

and Of

amount the

total

amount sanctioned during the year, rural roads and Barrage built under RIDF, Jharkhand

bridge projects accounted for 46 per cent, irrigation

64

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64

7/14/2009, 3:03 PM

projects 28 per cent, social sector projects 18 per

Table 3.9: Sector-wise Projects and Amount Sanctioned

cent, power sector projects 2 per cent and others 6

(As on 31 March 2008)

per

cent

(Chart

3.5/Table

3.9).

The

position of sector-wise sanctions and disbursements is given in Table 3.10. An amount of Rs.7,500 crore was disbursed during 2008-09 to the National Rural Roads

Development

Agency

(NRRDA),

taking

the

total disbursements to Rs.12,000 crore (Rs.4,000 crore each under RIDF XII, XIII & XIV) equalling the aggregate

sanctioned

amount

under

the

Bharat

Nirman Component. 3.57

The

period

of

implementation

of

projects

sanctioned under RIDF VIII and IX was closed as at end-September and December 2008, respectively. At present, the projects under implementation pertain to those sanctioned under RIDF X to XIV. 3.58

During

the

year,

disbursements

worth

Rs.10,458.64 crore were effected. As per the phasing of projects under various tranches (RIDF I to XIV), the total

amount

against

sanctioned

which

was

Rs.73,733.64

disbursements

crore

and

aggregated

Rs.946.56

disbursed crore

to

States and

Purpose

in

the

Rs.486.36

NER crore,

respectively, during 2008-09. The state-wise analysis of ratio of disbursements to sanctions as per approved phasing under tranches VIII to XIV revealed that Nagaland topped with 112 per cent, followed by

RIDF XIV (2008-09)

Irrigation No. Amount Rural Bridge No. Amount Rural Roads No. Amount

Share RIDF I to XIII (%) (Total)

Share (%)

67,105 4,145.11

78.5 28.2

1,31,934 25,020.85

47.2 34.0

986 2,129.33

1.10 14.4

11,360 7,018.47

4.1 9.5

6,991 4,616.38

8.2 31.4

61,321 24,548.93

21.9 33.3

Social sector* No. Amount

8,095 2,667.48

9.5 18.1

50,406 8,383.57

18.0 11.4

Power sector** No. Amount

12 231.74

0.01 1.6

729 1,613.05

0.3 2.2

Others*** No. Amount

2,338 929.38

2.7 6.3

23,726 7,054.80

8.5 9.6

Total No. Amount

85,527 14,719.42

100.0 100.0

2,79,476 100.0 73,639.67 100.0

*

: Includes projects relating to Rural Drinking Water Supply, Primary/ Secondary Schools, Public Health Institution, Pay & Use Toilets and Anganwadi Centres.

**

: Power includes projects relating to System Improvement in Power Sector and Mini/Small Hydel projects.

aggregated

Rs.56,052.20 crore (Table 3.11). The amount of loan sanctioned

(Rs. crore)

cumulative

***

: Includes soil conservation, watershed development, rain water harvesting, flood protection, CADA, drainage, cold storages, fishing harbour/jetties,, riverine fisheries, animal husbandry, forest development, inland waterways, rubber plantations, seed/agri./ horti. farms, citizen information centres, food park, rural libraries, rural market/ yard/ godown, meat processing, rural knowledge centres, rural industrial estates/centre, etc.

Uttarakhand (100%), Sikkim and Mizoram (94% each), Tamil Nadu (81%), Punjab (80%), Haryana (79%), Gujarat (77%), Madhya Pradesh (76%), Himachal Pradesh (75%), Chhattisgarh (72%), Rajasthan and Jammu & Kashmir (71% each) and Andhra Pradesh (70%). Slow pace of actual utilisation of loans under RIDF compared to sanctions was due mainly to delay in administrative and technical approval by State Governments,

land

acquisition

problems,

delay

in

obtaining statutory clearances and tendering process, inadequate budgetary support, lack of coordination among implementing departments, etc. 65

Ch-Eng-3.p65

65

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Table 3.10: Sanctions and Disbursements under various Sectors (As on 31 March 2009) (Rs. crore) Sector

Amount Sanctioned

Phased

Disbursed

% of Disbursement *

Irrigation

29,165.96

24,923.49

18,872.81

75.7

Rural Road & Bridges

38,313.11

32,299.22

25,653.20

79.4

Social Sector

11,051.05

8,347.36

6,022.31

72.1

Power

1,844.79

1,542.91

1,230.37

79.7

Others

7,984.18

6,620.66

4,273.51

64.5

Total

88,359.09

73,733.64

56,052.20

76.0

*

: With respect to amount phased.

b.

Deposits/Repayments

3.59

The interest payable by NABARD on the deposits

RIDF

from commercial banks continued to be equal to the prevailing

Bank

Rate

(6%).

With

the

receipt

stood at Rs.66,329.42 crore (Chart 3.6).

An

amount of Rs.2,998.33 crore was received from the State Governments towards repayment of RIDF loans during 2008-09.

of

Rs.18,805.21 crore (including Rs.6,647.43 crore under

D.

Employment Generation

Bharat Nirman) as deposits from commercial banks

3.60

It is expected that the projects, sanctioned under

during the year, the cumulative deposits received under

RIDF, on implementation will facilitate expansion of

Table 3.11: Cumulative Sanctions and Disbursements under different Tranches (As on 31 March 2009) (Rs. crore) RIDF Tranche

Corpus

No. of

Amount

Projects

Sanctioned

Phased

Disbursed

Disbursement *

2,000 2,500 2,500 3,000 3,500 4,500 5,000 23,000

4,168 8,193 14,345 6,171 12,106 43,168 24,598 1,12,749

1,906.21 2,636.08 2,732.69 2,902.55 3,434.52 4,488.51 4,582.32 22,682.88

1,906.21 2,636.08 2,732.69 2,902.55 3,434.52 4,488.51 4,582.32 22,682.88

1,760.87 2,397.95 2,453.53 2,482.00 3,054.96 4,070.85 4,052.59 20,272.75

92.4 91.0 89.8 85.5 88.9 90.7 88.5 89.4

5,500 5,500 8,000 8,000 10,000 12,000 14,000

20,887 19,548 17,190 29,875 42,279 36,948 85,527

5,950.19 5,638.51 7,717.47 8,300.59 10,600.95 12,749.09 14,719.42

5,950.19 5,638.51 7,717.47 8,300.59 10,600.95 9,600.83 3,242.22

5,141.75 4,870.36 6,198.38 5,727.50 5,770.84 5,057.14 3,013.48

86.4 86.4 80.3 69.0 54.4 52.7 92.9

Total

63,000

2,52,254

65,676.22

51,050.76

35,779.45

70.1

Grand Total

86,000

3,65,003

88,359.10

73,733.64

56,052.20

76.0

Closed Tranches I II III IV V VI VII Total Ongoing Tranches VIII IX X XI XII XIII XIV

*:

With phased amount.

66

Ch-Eng-3.p65

% of

66

7/14/2009, 3:03 PM

the production base in rural areas and creation of

Box 3.3 Accretion to Rural Infrastructure and Employment

additional employment opportunities (Box 3.3).

(lakh)

E.

Monitoring of RIDF Projects

3.61

Monitoring

implementation

of is

RIDF

imperative

projects to

under

ensure

timely

completion and quality of assets being created. Though the

primary

responsibility

of

monitoring

of

RIDF

projects vests with State Governments, NABARD also undertakes monitoring of RIDF projects by exception. This two-pronged monitoring approach results in better

Rural Infrastructure Additional irrigation potential Rural road network Rural bridges

144.97 ha. 2.73 km. 5.06 mt.

Employment Generation Due to increased irrigation - Recurring (jobs) - Non-recurring (person days) From non-irrigation projects- Non-recurring (person days)

70.55 22,568 42,785

implementation of projects, as various constraints are identified, reviewed and sorted out at regular intervals.

Major observations/issues were taken up with the

The High Power Committee (HPC) at State level has

implementing

proven to be an effective mechanism for monitoring

Department of State Governments for improving the

and in ensuring speedy and timely completion of

pace and quality of the project execution.

departments

as

also

the

Finance

projects. The HPC, chaired by the Chief/Finance Secretary of the State, meets quarterly to review the

F.

Capacity Building Support

pace of project implementation.

3.63

Infrastructure

deficient

states

also

have

comparatively lower off-take of RIDF because of their 3.62

NABARD

carried

out

monitoring

of

RIDF

weak

implementing

apparatus.

With

a

view

to

projects through desk review based on periodic returns

overcoming this limitation, NABARD initiated capacity

and field visits undertaken by HO/RO officers, DDM

building of the stakeholders by organising awareness

and consultants hired by the bank. During the year

workshops for officials

5,290 projects were monitored through field visits.

Departments and State Governments.

of different Line/Implementing

67

Ch-Eng-3.p65

67

7/14/2009, 3:03 PM

Kerala revealed that the projects were viable despite the

time

over-run

(15-39

years)

in

completion

(Table 3.12). The economic rate of return (ERR) of these investments ranged between 15 and 38 per cent, resulting in income and employment generation. While

no

change

in

the

cropping

pattern

was

observed, crop production and yield under all projects improved. The bridge project had an impact in terms of

savings

in

accessibility,

vehicle

improvement

operating in

cost,

quality

of

better

life,

etc.

Investment in regulator-cum-bridge project benefited Thattarkadavu Bridge under RIDF - XII, Kerala

2,600 ha. of

arable land by preventing entry of

saline water into the fields. The study recommended

G.

Rural Infrastructure Financing Alternative

3.64

adequate fund allocation by State Government for better

The gigantic gap in rural infrastructure cannot

be bridged by the state governments alone in view

maintenance

between Command

different Area

of

the

structures,

implementing Development

coordination

agencies,

Authority,

viz.,

Irrigation

of their limited resources and organisational structure. In

order

to

leverage

private

resources

and

its

Box 3.4

a

Public-Private Partnership for Rural Infrastructure Projects

Memorandum of Agreement (MoA) with Infrastructure

The Memorandum of Agreement (MoA) between NABARD and

Leasing & Financial Services Ltd (IL&FS). This will

IL&FS aims at developing an integrated approach in planning

be a step towards developing products and services

for rural infrastructure across the country, based on shared

and in fine-tuning the design of innovative delivery

concern and collaborative leadership structure, whose scope

implementing

systems

capacity,

like

NABARD

Special

Purpose

signed

Vehicles

(SPV)

(Box 3.4).

would comprise setting-up both programme and project-based institutional

arrangements,

for

taking

up

projects

in

commercially feasible/viable Public-Private-Partnership (PPP) format and achieving the same through conceptualisation and

Economic Impact of Investments

implementation of workable frameworks and processes. This would include design, engineering, financing, procurement,

3.65

NABARD

evaluation

construction, improvement, operation and maintenance on

studies to assess field-level performance of various

Build, Operate and Transfer (BOT) and any other appropriate

investment

income

forms of PPP with defined roles for the parties, including project

accrual, employment generation and viability. During

development and management of public system projects

2008-09, three ex-post evaluation studies on projects

financed by NABARD, partly or wholly, under RIDF or

supported Programme

continued

activities

under and

and

RIDF three

to their

and

conduct impact

on

SHG-Bank

commodity

specific

Linkage

otherwise.

studies,

In order to implement this Agreement, NABARD and IL&FS will

examining the entire supply chain management were

identify specific programme/project areas in various States to

completed.

take forward the objectives of this Agreement. The MoA will enable NABARD to work out self-supporting and

a.

Infrastructure Investments

3.66

The evaluation study on investments in medium

irrigation,

bridge

and

regulator-cum-bridge

bankable formats for launching infrastructure projects relevant

projects

to agriculture and rural development and provide valuable advice to GoI and State Government agencies to leverage their budgetary resources for these programmes.

under RIDF in Kannur and Ernakulam districts of 68

Ch-Eng-3.p65

68

7/14/2009, 3:03 PM

Table 3.12: Benefits under RIDF Investments (Per unit) State/

Type of

Reference

Investment

Year

*

Capital

Net

Benefited

ERR

Cost

Incremental

Area (ha.)

(%)

(Rs. lakh)

Income

Employment Generation (lakh persondays)

(Rs. lakh)^ Kerala/

a. Medium

2004-05

16,667

612

4,334

Recurring

Non-recurring

2.35

6.5

15

Irrigation b. Bridge c.

Regulator-

253

36

355

17

0.09

0.51

1,056

354

2,600

38

1.22

2.11

cum- Bridge *: Economic Rate of Return

^: With Imputed Value of Family Labour

findings,

of members graduating to micro-enterprises (income

NABARD has decided to consider commitments by

generating asset creation) activities such as dairy, flour

State Government/s for maintenance and repair of

mill,

projects already financed under RIDF as a parameter

decoration, etc., varied between 29 per cent in Gujarat

for allocation of funds among States from 2009-10

and 32 per cent in Jammu & Kashmir. Income

onwards.

generating

Department,

etc.

Based

on

the

study

rickshaw,

grocery

activities

shop,

(without

brick

kiln,

asset

mandap

creation),

viz.,

purchase of inputs for farm enterprises, mushroom

b.

3.67

SHG Bank Linkage Programme: Micro-Enterprises among SHG members The evaluation studies on micro-entrepreneurship

among SHG members in Gujarat and Jammu & Kashmir revealed that with the passing of time SHG members shifted from consumption to production loans for setting-up income generating micro-enterprises. In

cultivation, etc., were also undertaken by 35 and 39 per cent members in Gujarat and Jammu & Kashmir, respectively

(Table

3.13).

Absence

of

rotation

in

leadership, declining membership of SHG over time, lack

of

product

diversification,

use

of

low-level

technology, inadequate infrastructure, etc., were some of the constraints identified.

c.

Commodity Specific Studies

loan utilised in asset creation improved from 8 in the

3.68

Commodity

first linkage to 67 by the fifth linkage. The percentage

mango and sugarcane were undertaken during the year

Gujarat, it was observed that the percentage of bank

Specific

Studies

on

groundnut,

Table 3.13: Micro-Enterprise among SHG Members State/ Reference Year

Gujarat/ 2004-05 Jammu & Kashmir/

No. Studied

Average Loan SizeCumulative* (Rs.)

% of SHG Members Undertaking IncomeMicroGenerating Enterprises Activities

Net Income/ Unit (Rs.)

Recovery (%)

SHG

Members

20

49

74,313

35

29

13,262

93

15

150

56,880

39

32

15,602

100

2004-05 * : Includes the bank loan availed during fifth and second linkages in Gujarat and Jammu & Kashmir, respectively.

69

Ch-Eng-3.p65

69

7/14/2009, 3:03 PM

to identify the issues relating to activities of the entire

co-operative

supply chain management (Table 3.14).

crushing units in Gujarat was due to procurement of

sector

vis-à-vis

solvent

and

other

raw material at a lower cost and no payment of

i.

Groundnut

3.69

Groundnut

Pradesh,

brokerage is

Gujarat,

mainly

cultivated

Karnataka,

in

Andhra

Maharashtra

and

Rajasthan. Being primarily a rainfed oilseed crop, its productivity reveals much variation across regions. The

commodity

specific

study

on

groundnut

in

Gujarat, Jharkhand and Rajasthan revealed that the net income realisation of farmers was maximum in Rajasthan

(Rs.22,470/ha.),

(Rs.13,798/ha.)

and

followed

Jharkhand

by

Gujarat

(Rs.4,166/ha).

Lack

of technology and traditional methods of cultivation were responsible for low net income realisation in Jharkhand. Although the investments in processing units was profitable, unavailability/irregular supply of raw

materials

led

to

under-utilisation

of

installed

capacities in Gujarat (41%) and Rajasthan (67%). High returns to investments (>50%) in groundnut processing

in

Rajasthan

were

attributed

to

rapid

on

raw

material

and

finished

goods.

Farm gate price realised by farmers was 66 and 45 per cent of the retail price in Jharkhand and Rajasthan,

respectively.

Though

groundnut

was

mainly exported in the form of hand picked and selected (HPS) and value added nuts, the residual levels of aflatoxin in groundnut consignments did not meet

the

export

quality

specifications

of

the

European Union. The study suggested standardisation of

agronomic

practices,

extension

services,

technological innovations for increasing productivity, promotion

of

contract

farming,

formation

of

co-operative processing mills, improved storage and drying techniques to prevent aflatoxin contamination, etc.

ii.

Mango

3.70

Mango, a tropical fruit, is popular in both fresh processed

rise in oil prices vis-à-vis groundnut prices and lower

and

cost of investment in plant and machinery. The high

undertaken

price (Rs.194/qtl) realised by processing units in the

West Bengal, some of the major mango producing

in

forms. Andhra

The

study

Pradesh,

on

mango

Maharashtra

and

Table 3.14: Commodity Specific Studies Commodity

State/ Reference Year

Sample Size*

Yield (kg/ha)

Groundnut

Gujarat/ 2005-06 Rajasthan/2006-07 Jharkhand/ 2006-07 Andhra Pradesh/ West Bengal/ Maharashtra/ 2005-06 Karnataka/

60 92 56 75 104 59

1,958 2,321 630 9,880 45,000 8,000 A/ 9,984 K 99,837

Uttar Pradesh/

107 (90)

Mango

Sugarcane

(32) (70) (56) (42) (20) (40)

57 (40)

55,575

Cost of Cultivation @ (Rs./ha) 23,926 21,980 15,721 13,585 35,815 62,760A/ 52,572 K 84,078 56,417

Net Income Farmers Processors (Rs./ha.) (Rs./qtl) 13,798 22,470 4,166 41,990 2,42,838 1,00,536 A/ 1,29,588 K 17,979/ 40,649 ** (-) 3,478/ 866 **

2005-06

Figures in parentheses indicate the number of farmers covered. A : Alphoso mango K: Kesar mango * : Includes farmers, processors, traders, etc. @ : With imputed value of family labour. ** : For ratoon sugarcane crop. . # : Net income of Rs.2/kg for canned pulp processing and Rs.6.36/kg for jelly making. ^: Net income of Rs.11/kg for mango pickles, Rs.8/kg for sauce, Rs.25/kg for jam, Rs.60/kg for jelly and Rs.31/litre for squash. $ : Bulk of groundnut production marketed as shells/kernels.

70

Ch-Eng-3.p65

70

7/14/2009, 3:03 PM

141-194 63 $ 200-636 # 800-6,000 ^ 900 (-)82 to 113 6.10 **

states,

revealed

that

the

investments

in

mango

zone

(Uttar

Pradesh,

Uttarakhand,

Bihar,

Punjab,

orchards for different varieties were financially viable

Haryana) accounting for 67 and 62 per cent of the

with financial rate of return (FRR) > 50 per cent

area and production, respectively. The tropical zone

in West Bengal, 20.8 per cent in Andhra Pradesh,

(Maharashtra,

17.6 per cent (Alphonso) and 23.2 per cent (Kesar) in

Karnataka) accounts for only 33 per cent of the area,

Maharashtra. Net income/ha. was maximum in West

but contributes 38 per cent of the production owing

Bengal (Rs.2,42,838) due mainly to very high yield

to relatively high productivity. The study on sugarcane

level. Although the scope for mango processing is

conducted

immense, processing activity was limited, owing to

representing

preference for consuming fresh fruits. Some of the

indicated that sugarcane cultivation, in Uttar Pradesh

major

were,

was not profitable as the returns, due to use of local

(i) prevalence of oral lease system for mango orchards

varieties, especially by small farmers, were insufficient

in West Bengal, which deterred FI from lending,

to cover all costs, particularly family labour. However,

(ii) indiscriminate use of chemical fertilizers/pesticides

relatively better returns in Karnataka were due to

constraints

identified

by

the

study

affecting the health of trees and production in the long run and (iii) predominance of middlemen in the supply chain resulting into low producers’ share in consumer rupee (28.8% in Andhra Pradesh). export

front,

though

India

has

the

On the

potential

to

become a major exporter, lack of quality control, inadequate

post-harvest

infrastructure,

incidence

of

fruit fly/stone weevil and inadequate follow-up of required pre-harvest practices by the producers, etc., led to a dismal share of exports in total production (0.45% during 2004-05). Further, hybrid varieties like Mallika and Amrapally posed a threat to traditional varieties like Fazli, Aswina, Gopalbhog, etc., in West Bengal. The study recommended rejuvenation of old orchards and awareness creation among the farmers regarding the agricultural practices, export processes, loan

facilities,

management,

etc.

Improved

infrastructure

support

post like

harvest packaging

house, cold storage, etc., ending the rumali system of marketing

(bidding

under

handkerchief)

in

Maharashtra, organisation of farmers into co-operative

Andhra

in

Pradesh,

Karnataka

both

types

Gujarat

and of

Uttar

and

Pradesh,

agro-climatic

regions,

above normal rainfall received during the reference year, which reduced the cost of irrigation. Similarly, sugar processing as a solo activity did not work out to be a viable proposition for sugar mills in Uttar Pradesh and Karnataka. This was due to factors such as small size of the plants, high cost of procuring sugarcane,

declining

controlled

marketing,

diversification

in

trend

in

free

limited

favour

of

sugar

prices,

opportunities co-generation

for using

bagasse, etc. With an average crushing capacity of 4,519 TCD (tonnes crushed daily) and 4,630 TCD in Karnataka

and

Uttar

Pradesh,

the

sugar

mills

operated on an average for 132 and 146 days, respectively. Stagnant productivity and variability in area under sugarcane and increase in number of units/capacities adversely affected the working period of the sugar mills. Diversification in the form of ethanol production and co-generation of power by sugar mills can be considered for improving their financial

health.

The

study

also

recommended

societies, organising mango exhibitions might help

upgrading sugar mills, timely payment to farmers for

farmers realise better price.

supply of sugarcane, investment in R&D to increase sugar recovery percentage, evolve disease/pest resistant

iii. 3.71

varieties,

Sugarcane

adoption

promotion

Although primarily a tropical crop, sugarcane

cultivation in India is concentrated in the sub-tropical

of

of

contract

improved farming,

farm

practices,

transparency

in

dealings of sugar mills, especially, with the small farmers, etc.

71

Ch-Eng-3.p65

71

7/14/2009, 3:03 PM

NABARD Consultancy Services C.

Progress

(Nabcons), a wholly owned subsidiary of NABARD, has

3.75

During

established itself as a professional consultancy service

assignments

provider in the sphere of agriculture, allied activities and

consultancy fees of Rs.16.66 crore registering a growth

rural development. The clientele includes GoI, State

of 89 per cent in the fee amount. Thrust was laid on

Governments, National Institute of Agriculture Marketing

contracting high value assignments like monitoring of

(NIAM),

infrastructure projects under Prime Minister’s Special

3.72

NABARD

Consultancy

commercial

Agricultural

banks,

small

Pvt.

Ltd.

entrepreneurs,

year, against

Nabcons

contracted

321

year)

last

109

involving

Package for Arunachal Pradesh, UPDASP, study for

signed

assessment and development of financial models for

Memorandum of Understanding (MoU) with a number

handicrafts artisans, etc. During 2008-09, the company

of banks and International Consultancy Organisations

completed 122 assignments involving consultancy fee of

for promotion of business and jointly bid for a number

Rs.10.42 crore (Table 3.15).

UPDASP,

Board-Mauritius,

the (as

APRACA,

SIDBI,

Marketing

Services

etc.

Nabcons

has

of assignments successfully. 3.76

Some of the new areas covered include, study of

A.

Management

foot and mouth disease in five States to assess the

3.73

The Board of Nabcons under the Chairmanship

economic

loss,

supply

chain

management,

NRM

of Dr. K.G. Karmakar, Managing Director, NABARD

(Hinduja Foundation), study on financial inclusion

comprises of eight Directors. Consequent upon the

(for RBI), restructuring of Maharashtra Agricultural

retirement of Dr. R. Balakrishnan, ED, NABARD and

Marketing Federation, review of strategy for Agriculture

Shri

(CEO),

Marketing Board – Mauritius, study of rural finance

Nabcons, the Board was reconstituted by inducting Shri

policies and regulation in Cambodia and Laos, etc.

P.L. Behera, ED, NABARD and Shri Madan Mohan as

During 2008-09, the company earned an income of

CEO, Nabcons. The five independent Directors remained

Rs.11.27 crore as compared to Rs.10.19 crore during the

unchanged.

previous year. Profit after tax stood at Rs.4.28 crore as

S.M.

Mehta,

Chief

Executive

Officer

compared to Rs.3.82 crore during the previous year, registering a growth of 15 per cent.

B.

Developments

3.74

During 2008-09, Nabcons acquired ISO 9001: Table 3.15: Client Profile of Nabcons

2008 certification. In addition to executing five foreign

(As on 31 March 2009)

assignments (one each in Nepal, Laos, Cambodia, Vietnam

and

Indonesia),

Nabcons

also

arranged

international programmes for delegates from Kenya,

(Rs. lakh) Assignments completed

Client Institution

2008-09

Sri Lanka, Bangladesh, etc., thus earning foreign

Amount

No.

Amount

Government of India

63

385.01

426

2,220.20

State Government

21

500.14

97

1,102.01

International Organisations

11

49.37

55

256.79

3

18.20

34

81.61

Corporate Houses

12

62.75

110

393.85

development consultancies in Africa in the areas of mF,

Individuals

12

26.49

154

166.00

NRM, livelihood opportunities, etc.

Total

122

1,041.96

876

4,220.66

exchange worth $ 1.10 lakh. The company entered the Mutual Fund Advisory Services in September 2008 and, as

at

end-March

2009,

earned

a

revenue

of

Rs.29.47 lakh. With a view to tapping the potential for consultancy in African nations, Nabcons is opening a liaison office in Nairobi, Kenya. The positioning of Nabcons in Kenya is expected to garner potential rural

Banks

72

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Cumulative

No.

72

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Management of Resources 3.77 The financial resources of NABARD increased by Rs.19,470 crore during 2008-09 as against an increase of Rs.17,486 crore during 2007-08. The resources were augmented by issue of Corporate Bonds, Bhavishya Nirman Bonds (BNB), NABARD Rural Bonds, RIDF Deposits, Term Deposits, Certificate of Deposits, Commercial Paper and Term Money Borrowings (TMB). Repayment of RIDF deposits and redemption of Bonds amounted to Rs.2,375 crore and Rs.9,248 crore, respectively. The funds deployed for supporting investment credit operations (including development of rural infrastructure) and loans to State Governments for contributing to the share capital of co-operative credit institutions together increased by Rs.15,863 crore and the production and marketing credit (including liquidity support) decreased by Rs.68 crore during 2008-09. The details on sources and uses of funds are furnished in Table 3.16 and 3.18, respectively.

scheduled commercial banks not achieving their priority sector lending obligations, was set up with NABARD to enhance its refinance operations to ST co-operative credit institutions. NABARD received deposits from commercial banks aggregating Rs.4,622 crore under this Fund.

C.

Borrowings

3.81 The market borrowings of NABARD as percentage to working funds registered a significant decline during 2008-09 (Table 3.17).

Table 3.16: Sources of Funds (As on 31 March) (Rs. crore) Particulars Capital, Reserves & Surplus

Sources of Funds NRC (LTO) and (Stab.) Funds

A.

Capital Deposits, Bonds & Debentures

3.78 The authorised capital of NABARD continued to be Rs.5,000 crore as also the paid up capital, which remained the same since 2001-02 at Rs.2,000 crore (Rs.550 crore subscribed by GoI and Rs.1,450 crore by RBI), as on 31 March 2009.

B.

STCRC Fund

Borrowings from GoI

Borrowings from Commercial Banks

Deposits

3.79 Deposits from tea, coffee and rubber companies outstanding as on 31 March 2009 aggregated Rs.60 crore. Term deposits aggregrated Rs.421 crore. During the year, NABARD received deposits from commercial banks aggregating Rs.18,805 crore under RIDF VI to XIV. Repayments of Rs.2,375 crore were made to commercial banks under RIDF V to XI upto 31 March 2009. Deposits outstanding under various tranches of RIDF as on 31 March 2009 were Rs.47,023 crore as against Rs.30,593 crore as on 31 March 2008.

Certificate of Deposits

Term Money Borrowings

RIDF Deposits

Foreign Currency Loan

Other Liabilities/Funds

Total

3.80 The (Refinance)

Short-term Co-operative Rural Credit [STCRC] Fund, with contribution by

2008

2009

10,603

11,586

(10.7)

(9.8)

15,159

15,571

(15.4)

(13.2)

28,806

24,366

(29.2)

(20.6)

-

4,622

-

(3.9)

370

354

(0.4)

(0.3)

2,500

500

(2.5)

(0.4)

1,422

1,816

(1.4)

(1.5)

-

244

-

(0.2)

30,593

47,023

(31.0)

(39.8)

508

498

(0.5)

(0.5)

8,745

11,596

(8.9)

(9.8)

98,706 (100.0)

1,18,176 (100.0)

Figures in parentheses indicate percentage to total.

73

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a.

Bonds

iii.

3.82 Government of India has withdrawn the option available to NABARD for raising resources through issue of Capital Gain Bonds (CGB), Tax Free Bonds and Priority Sector Bonds (PSB) from 1 April 2006. Consequently, issue of Corporate Bonds, BNB and NABARD Rural Bonds were the major sources of raising resources during 2008-09.

i.

Capital Gain Bonds

3.83 During the year, under CGB an amount of Rs.4,086.51 crore was redeemed and the outstandings stood at Rs.690.94 crore, with a weighted average cost of 5.38 per cent. Investors have been given option to reinvest the amount received on redemption of CGB as term deposit for one year at a fixed rate of interest. Along with this, term deposits were also offered for institutional investors under structured deals. An amount of Rs.421.94 crore has been raised under term deposits during the year.

ii.

Priority Sector Bonds and Corporate Bonds

3.84 During the year, PSB worth Rs.325 crore and Corporate Bonds worth Rs.4,185 crore were redeemed. Corporate Bonds worth Rs.1,464 crore were issued during 2008-09. There were no outstandings under PSB, as on 31 March 2009, while it was Rs.18,156.50 crore under Corporate Bonds.

Table 3.17: Market Borrowings of NABARD (As on 31 March) (Rs. crore) Year

Total Working Funds

Outstanding Market Borrowings *

2005

60,779

22,261 (36.6)

2006

67,605

24,084 (35.6)

2007

81,220

32,146 (39.6)

2008

98,706

33,606 (34.0)

2009

1,18,176

27,779 (23.5)

* : Includes deposits (excluding RIDF deposits and STCRC Fund), borrowings, bonds and foreign currency borrowings. Figures in parentheses indicate percentages of outstandings market borrowing to total working funds.

Tax Free Bonds

3.85 Tax Free Bonds worth Rs.535.15 crore were redeemed during the year. Thus, as on 31 March 2009, no outstanding amount remains under these Bonds.

iv.

Statutory Liquidity Ratio (SLR) Bonds

3.86 Though no SLR bonds were issued during the year, an amount of Rs.116.23 crore was repaid. The outstandings under SLR bonds aggregated Rs.277.98 crore as on 31 March 2009.

v.

Bhavishya Nirman Bonds

3.87 During the year, BNB worth Rs.2,766.76 crore were issued. The outstandings under BNB aggregated to Rs.4,554.22 crore as on 31 March 2009.

vi.

Certificate of Deposits

3.88 NABARD raised resources worth Rs.1,816.15 crore by way of Certificate of Deposits (CD) during 2008-09.

vii.

Term Money Borrowings

3.89 In order to meet the gap in resources, NABARD started raising resources through TMB from 1 August 2008. As on 31 March 2009, TMB raised aggregated Rs.244.07 crore.

viii.

Commercial Papers

3.90 NABARD raised resources worth Rs.180.62 crore by way of Commercial Papers during 2008-09 with face value of Rs.200 crore. As on 31 March 2009, outstandings under Commercial Papers stood at Rs.180.62 crore.

ix.

Rural Bonds

3.91 During the year, Rural Bonds (with benefit under Section 80C of IT Act) worth Rs.20.64 crore were issued. The total outstandings under Rural Bonds, since inception, aggregated Rs.23.98 crore as on 31 March 2009.

b.

Funds from GoI

3.92 During the year, an amount of Rs.16.40 crore was repaid on maturity to GoI against the loans drawn earlier under various externally aided projects.

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c.

Corporate Borrowings

3.93 An amount of Rs.2,000 crore was repaid during the year. The amount outstanding under corporate borrowings aggregated Rs.500 crore as on 31 March 2009.

d.

Borrowings in Foreign Currency

3.94 The borrowings in foreign currency from KfW, Germany aggregated Rs.498.29 crore (• 94.04 million), as on 31 March 2009. The foreign exchange risk on this loan as well as interest payments have been hedged at a cost of 1.02 per cent for 10 years.

D.

Short-Term Co-operative Rural Credit (Refinance) Fund

3.95 As per the Union Budget 2008-09 announcement, a STCRC (Refinance) Fund has been established with NABARD with a corpus of Rs.5,000 crore. RBI had also allocated the above amount among the public and private sector banks having a shortfall in achievement of agriculture lending target of 18 per cent. As on 31 March 2009, NABARD had raised demand for deposits to the extent of Rs.5,000 crore against which deposit of Rs.4,622.28 crore was received from the participating commercial banks.

E.

Agricultural Debt Waiver and Debt Relief Scheme, 2008

3.96 With a view to ensuring adequate financing of agriculture operations by banks, RBI provided liquidity support to NABARD to the extent of Rs.17,500 crore on 16 October 2008, to be allocated by NABARD amongst co-operative banks and RRB, based on the extent of debt waiver/relief afforded by them under the ADWDR Scheme, 2008. Drawals were made and disbursed to co-operative banks and RRB on receipt of claims from the banks. Subsequently, GoI released an amount of Rs.17,500 crore to NABARD in two tranches in December 2008. The entire amount has been repaid to RBI, including the accrued interest of Rs.155.79 crore. As on 31 March 2009, Rs.16,611.01 crore has been released by NABARD, representing 56 per cent of the claims received from co-operative banks and RRB.

F.

Restructuring of Term Loans of Co-operative Sugar Mills – Interest Subvention

3.97 GoI had announced a revised package on restructuring of Term Loans of Co-operative Sugar Mills. Under this package, GoI has agreed to provide interest subvention upto a maximum of 3 per cent. As against Rs.138.54 crore received from GoI towards interest subvention, an amount of Rs.116.18 crore was disbursed during the year.

Uses of Funds A.

Loans and Advances

a.

Schematic Lending

3.98 The amount outstanding under schematic lending including subscriptions to Special Development Debentures to SCARDB, was Rs.33,334.81 crore as on 31 March 2009 as against Rs.32,401 crore as on 31 March 2009.

b.

ST, MT and MT (Conversion) Loan Assistance

3.99 The ST loans advanced for financing SAO to the SCB (Rs.13,897.88 crore) and RRB (Rs.2,816.50 crore) together with other ST loans to SCB (Rs.62.12 crore) and RRB (Rs.119.73 crore) decreased to Rs.16,896.23 crore, as on 31 March 2009, from Rs.17,381.50 crore as on 31 March 2008. 3.100 As on 31 March 2009, the amount outstanding under (i) LT investment non-project loans stood at Rs.251.92 crore, and (ii) MT (conversion) loans stood at Rs.200.68 crore compared to Rs.118.20 crore as on 31 March 2008. The amount outstanding under the Liquidity Support Scheme for SCB and RRB aggregated Rs.2,590.92 crore as on 31 March 2009 as against Rs.1,939.89 crore as on 31 March 2008.

c.

Loans to State Governments

i.

Project Loans under RIDF

3.101 The project loans to State Governments under RIDF stood at Rs.45,616.21 crore as on 31 March 2009, compared to Rs.30,648.59 crore as on 31 March 2008. 75

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75

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ii.

Non-Project Loans

3.102 The amount outstanding under non-project LT loans to State Governments for contribution to the share capital of co-operative credit institutions, amounted to Rs.251.93 crore as on 31 March 2009, compared to Rs.290.14 crore as on 31 March 2008.

d.

Other Loans

3.103 Other loans outstanding stood at Rs.47.98 crore, as on 31 March 2009, as against Rs.27 crore as at end-March 2008, which included outstanding amounts of loans issued under various funds, viz., CDF, MFDEF, WDF and TDF.

B.

CD, mutual funds, CBLO, etc. During the year, NABARD liquidated its ST deposits and G-sec investments to support its business operations. As on 31 March 2009, the total investments of the surplus funds of the Bank in ST deposits, money market instruments, G-sec, etc., aggregated Rs.16,194.75 crore.

Investment of Surplus Funds

3.104 NABARD deployed its surplus funds in government securities (G-sec), ST deposits with commercial banks and other instruments such as CP, Table 3.18: Uses of Funds (As on 31 March) (Rs. crore) Particulars Cash and Bank Balance Government Securities and other Investments Production and Marketing Credit Conversion of Production Credit into MT Loans Liquidity Support MT & LT Project Loans LT Non-Project Loans Loans out of RIDF Co-finance Loans Other Loans (including MT Investment Credit) Fixed Assets & Other Assets Total

2008 10,314 (10.4)

2009 13,975 (11.8)

2,582 (2.6) 17,382 (17.6) 118 (0.1) 1,940 (2.0) 32,401 (32.8) 290 (0.3) 30,649 (31.1) 66 (0.1) 27 2,937 (3.0) 98,706

2,995 (2.5) 16,896 (14.3) 20 2,591 (2.2) 33,335 (28.2) 252 (0.2) 45,616 (38.6) 94 (0.1) 48 (0.1) 2,353 (2.0) 1,18,176

(100.0)

(100.0)

Figures in parentheses indicate percentage to total.

C.

Co-finance

3.105 The Bank has entered into agreements with commercial banks to co-finance various projects. The outstanding as on 31 March 2009 aggregated Rs.94.48 crore, an increase from Rs.66 crore as on 31 March 2008.

Income and Expenditure 3.106 The total income of NABARD during the year amounted to Rs.7,050.68 crore as against Rs.5,509.10 crore during the previous year. Out of this, a sum of Rs.597.40 crore has been provisionally earmarked towards payment of Income Tax and Fringe Benefit Tax (net of deferred tax asset), and Rs.340 crore has been contributed to Special Reserves in terms of Section 36(1)(viii) of Income Tax Act, 1961. Of the remaining income, Rs.400 crore has been transferred to the NRC (LTO) Fund and Rs.10 crore to the NRC (Stabilisation) Fund under Sections 42 and 43, respectively, of the NABARD Act, 1981. 3.107 Out of the balance income amounting to Rs.5,703.28 crore (Rs.4,257.15 crore in the previous year), after meeting the total expenditure of Rs.5,063.15 crore (Rs.3,761 crore in the previous year), the surplus amounted to Rs.640.13 crore, including withdrawals of Rs.48.15 crore from funds against expenditure debited to P&L account (Rs.30.31 crore during 2007-08). The surplus has been transferred to CDF - Rs.38.11 crore (Rs.53.07 crore in the previous year); R&D Fund - Rs.8.61 crore (Rs.7.49 crore in the previous year); Reserve Fund - Rs.555.53 crore (Rs.405.11 crore in the previous year); Investment Fluctuation Reserves - Rs.42 crore (Rs.25.78 crore in the previous year); Financial Inclusion Fund - Rs.32.50 crore (Rs.5 crore in the previous year); Financial Inclusion Technology Fund - Rs.18.50 crore (Rs.5 crore in the previous year) and Farmers’ Technology Transfer Fund Rs.31.61 crore (Rs.25 crore in the previous year).

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Capacity Building of Client Institutions

IV The

financial

institutions

health

continue

NABARD.

and to

Regional

growth

of

rural

areas

of

concern

be

Banks

under

increasing

pressure

from

competitors

to

like public sector commercial banks, private sector

and

banks, new generation banks, etc. The Bank has, therefore, been striving towards improving the health of

the dispensation of credit for agriculture and rural

these

development.

initiatives.

institutions,

(RRB)

come

Co-operative Banks continue to play a crucial role in These

Rural

credit

however,

have

institutions

through

various

developmental

number

of

Institutional Development 4.2

This section discusses the performance of co-

cent

during

2007-08,

the

borrowing

operative banks and RRB, various measures and

members increased substantially (64%). Deposits of

initiatives taken by NABARD during the year to

PACS decreased by 2 per cent while borrowings

facilitate their development and improve performance.

increased by 11 per cent (as on 31 March 2008) compared to the previous year. The loans issued

A.

Rural Co-operative Credit Institutions:

increased by 14 per cent over the previous year (Table 4.1).

a.

Performance

4.3

Primary Agricultural Credit Societies (PACS), the

SCB and DCCB, increased by 16 per cent while

credit institutions at the grassroots level, deal directly

borrowings of SCB increased by 1 per cent and that of

with individual borrowers and grant short, medium and

DCCB increased by 4 per cent. Loans issued by SCB

long-term loans. The membership of PACS improved

and

during the period 2007-08 and aggregated 12.98 crore,

respectively. The loans outstanding increased by 6 and

of which borrowing members at 7.87 crore constituted

12 per cent during 2007-08 over the previous year

61 per cent. While membership of PACS grew by 3 per

(Table 4.2).

4.4

Table 4.1: Performance of PACS (As on 31 March) (Rs. crore)

As on 31 March 2008, the deposits of

DCCB

increased

by

9

and

10

per

cent,

Table 4.2: Growth of Short-Term Co-operative Credit Structure (As on 31 March) (Rs. crore)

Particulars Numbers (lakh) Membership (lakh) Borrowing Members (lakh) Owned Funds Deposits Borrowings Loans issued

*

Source: NAFSCOB

2006

2007

2008

1.06

0.97

0.97

1,252

1,258

1,298

461

479

787

9,292

11,039

11,004

19,561

23,484

23,013

41,018

43,714

48,708

42,920

49,613

56,447

*: April-March

Particulars

SCB

Number Share Capital Reserves Deposits Borrowings Loans Issued* Loans Outstanding

DCCB

2007

2008P

31 1,247 9,461 48,559 22,256 52,924 47,335

31 1,534 9,859 56,324 32,577 57,455 50,005

*: April-March

2007

2008P

370 370 5,413 5,973 26,862 27,666 92,352 1,07,094 29,912 31,114 84,823 93,162 90,153 1,01,368

P: Data provisional

Data for Bihar, Himachal Pradesh and Manipur SCB and DCCB in Bihar and HP repeated for 2007-08.

77

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4.5

In the case of LT co-operative credit structure,

Table 4.4: Working Results of Co-operative Banks (Rs.crore)

their performance in terms of business operations is a cause for concern. Borrowings by both State

Agency

Co-operative Agriculture and Rural Development Banks (SCARDB) and Primary Co-operative Agriculture and Rural Development Banks (PCARDB) during the year ending

2008

decreased

by

1

and

3

per

Total

In Profit

In Loss

(No.)

No. Amount

No. Amount

SCB 2006-07

31

27

592

4

44

2007-08 *

31

26

515

5

49

cent,

DCCB@

respectively, over the previous year. While loans issued

2006-07

370

271

733

98

765

by SCARDB and PCARDB decreased by 9 and 8 per

2007-08 *

370

261

874

108

902

cent, respectively, loans outstanding decreased by 2

SCARDB$$

and 3 per cent, respectively, over the previous year

2006-07

20

9

309

9

70

2007-08

20

9

147

9

48

(Table 4.3)

PCARDB 2006-07

696

371

438

325

507

b.

Working Results

2007-08

697

350

434

347

618

i.

Profitability

Data for 2007-08 provisional @ : Profitability position of Baran DCCB in Rajasthan is not available for the year 2007 and Boudh DCCB in Orissa for 2008.

4.6

Out of 31 SCB, 26 were in profit during 2007-08

*

with overall profit at Rs.515 crore. At the aggregate level, SCB as a group earned a net profit of Rs.466 crore during 2007-08. While 261 (out of 370) DCCB earned overall profit of Rs.874 crore, nearly one third of the DCCB incurred losses to the extent of Rs.902 crore during 2007-08.

: Data for SCB and DCCB in Bihar, Himachal Pradesh, and Manipur repeated from 2007.

$ : Data for Boudh DCCB in Orissa is not available and Kumbhakonam DCCB in Tamil Nadu is neither in profit nor in loss. $$ : Data for Manipur SCARDB is not available as the SCARDB is under orders of liquidation. For 2005-06 and 2006-07 profit/loss data for Bihar SCARDB is not received.

In the case of the LT co-

operative structure, while the profits at the aggregate

PCARDB declined. PCARDB at the aggregate level

level for SCARDB and PCARDB have been declining,

incurred a loss of Rs.184 crore during 2007-08 while

the losses have been on the rise in the case of loss

SCARDB generated an aggregate profit of Rs.99 crore

making units. The number of profit making and loss

(Table 4.4).

making SCARDB remained static during the two year period 2006-08 yet the number of profit making

4.7

The

data

on

the

aggregate

amount

of

accumulated losses of co-operative credit institutions, Table 4.3: Growth of Long-Term Co-operative Credit Structure (As on 31 March)

as on 31 March 2008, show an increasing trend (Table 4.5).

(Rs. crore) SCARDB#@ 2007 2008P

Particulars Number Share Capital Reserves Deposits

20

20

696

697

792

789

922

912

2,279

2,685

2,646

602

Borrowings

16,684

Loans Issued* Loans Outstanding

695 16,519

Table 4.5: Accumulated Losses (As on 31 March)

PCARDB# 2007 2008P

355 12,767

Year

SCB

3,289

2006

276

5298

924

2724

350

2007

389

5719

964

2891

2008#

429

6106

1354

3283

12,411

2,436

2,221

1,970

1,822

18,625

18,325

12,108

11,756

P : Data provisional * : April-March # : Data for Bihar, HP, and TN repeated. @ : Manipur SCARDB under orders of liquidation.

(Rs.crore) DCCB SCARDB* PCARDB**

Data for 2008 Provisional. # : Data for SCB and DCCB in Bihar, Himachal Pradesh and Manipur repeated. * : Data for Bihar, HP and Tamil Nadu repeated for 2007-08 and Manipur SCARDB under orders of liquidation. ** : Data for HP and Tamil Nadu repeated for 2007-08.

78

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Table 4.6: Region-wise Working Results of SCB (As on 31 March) (Rs. crore) Region

Profit/Loss

NPA

NPA as % to loans

Recovery (%)

outstanding

(As on 30 June)

(+) / (-) 2006-07

2007-08

2007

2008

2007

2008

2007

2008

72.44

65.12

763.47

820.01

13.85

12.50

82.54

82.94

Central

122.57

101.33

301.86

321.99

3.07

2.92

98.16

97.75

Eastern

Northern

30.94

32.15

501.11

533.52

10.82

10.78

70.64

78.86

Western

317.34

276.11

2,565.97

2,352.33

20.48

19.75

79.06

67.54

8.42

10.10

2,154.49

1,718.23

15.51

11.85

87.91

87.69

-3.94

-19.39

417.10

422.61

43.34

40.40

43.02

42.56

547.77

465.42

6,704.00

6,168.69

14.16

12.34

86.00

84.35

Southern North-Eastern All-India

Data for 2008 provisional.

4.8

During 2007-08, profits of SCB declined in all

whereas Kerala and Tripura SCB reduced their losses

regions except the eastern (4%) and southern (20%)

during 2007-08. The losses of Arunachal Pradesh and

regions, thus, affecting the profitability position of SCB

Assam SCB increased considerably.

as a whole (Table 4.6). Losses of SCB in NER increased

substantially.

While

profits

of

12

SCB

4.9

In the case of DCCB, profits during 2007-08

(Andaman & Nicobar, Andhra Pradesh, Chandigarh,

increased across all regions, except in southern region

Delhi, Goa, Gujarat, Jammu & Kashmir, Meghalaya,

where losses declined (5%). At the aggregate level,

Orissa,

though the number of DCCB in profit decreased, the

Sikkim,

improved,

as

Uttar on

Pradesh

31

and

March

West

2008,

Bengal)

ten

SCB

amount of profit showed an increase (19%). However,

(Chhattisgarh, Haryana, Karnataka, Madhya Pradesh,

the

Maharashtra,

Tamil

recorded an increase (Table 4.7). The extent of profits

Nadu and Uttarakhand) showed declining profitability

and number of profit making DCCB increased in

as compared to previous year. Puducherry SCB, which

Haryana,

was in profit in 2006-07, incurred loss during 2007-08,

Uttar Pradesh and West Bengal.

Mizoram,

Punjab,

Rajasthan,

number

and

amount

Jharkhand,

of

Madhya

loss-making

Pradesh,

DCCB

Karnataka,

Table 4.7: Region-wise Working Results of DCCB (As on 31 March) (Rs. crore) 2006-07* Region

DCCB

Total NPA Profit

(No.) Central

2007-08

#$

No.

Amt.

Loss

Profit

No.

Amt.

No.

Amt.

Loss No.

NPA %

Recovery (%)

to Loans Outstanding

(As on 30 June)

Amt.

2007

2008

2007

2008

2007

2008

104

71

121.64

33

186.00

77

179.53

27 188.37

3118.04

3481.63

30.14

28.86

61.57

46.94

Northern

73

56

118.32

16

44.01

57

121.37

16

1128.32

1357.69

6.83

7.22

82.92

65.01

Eastern

64

45

42.78

19

59.39

44

51.12

19 105.61

1241.64

1465.07

20.77

22.35

64.36

53.07

Western

49

37

167.64

12

226.54

30

182.06

19 313.08

6127.07

6940.32

21.75

22.32

60.34

44.30

Southern

80

62

282.19

18

249.03

53

339.70

27 236.60

4759.43

5496.04

16.09

16.73

77.60

64.86

All-India 370 271 732.51

98 764.97

57.95

261 873.78 108 901.61 16374.50 18740.75 18.16 18.49 71.08 55.82

Data for 2008 provisional.

* : Data for 1 DCCB in Rajasthan not available for 2007.

# : Data for 1 DCCB in Orissa not available for 2008.

$ : Data for DCCB in Bihar and Himachal Pradesh repeated from 2007

79

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Table 4.8: Region-wise Working Results of SCARDB (As on 31 March) (Rs. crore) Region

No. of

Profit / Loss

Branches

Total NPA

NPA as %

(+) / (-)

to loans

Recovery (%)

outstanding

(As on 30 June)

2008

2006-07

2007-08

2007

2008

2007

2008

2007

2008

Central

349

29.68

22.38

2340.40

2708.84

40.07

47.06

33.77

69.18

Eastern

204

-2.31

-2.94

374.73

451.72

40.72

46.24

31.33

33.03

38

-0.09

-0.03

16.84

18.25

57.82

58.98

61.74

70.98

North-Eastern Northern

85

6.24

72.27

1409.38

699.75

24.07

12.57

79.06

58.00

Southern

56

-12.88

-12.11

687.41

757.61

16.94

18.78

50.31

46.82

Western

181

218.41

-19.31

813.93

1489.25

42.36

76.01

32.55

8.33

All-India

912

239.05

-132.08

5642.69

6125.41

30.30

33.43

44.24

49.39

Data for 2008 for Bihar, Himachal Pradesh and Tamil Nadu repeated.

Manipur SCARDB under liquidation.

4.10 During 2007-08, SCARDB in central and northern regions increased its profit while those in other regions incurred losses. Alhough the SCARDB in the NER reduced its losses substantially (78%), at the aggregate level, SCARDB were loss-making entities, incurring a net loss of Rs.132 crore (Table 4.8). The profits of the SCARDB increased in Kerala, Madhya Pradesh, Punjab and Rajasthan while it decreased in Gujarat and West Bengal. The losses of SCARDB increased further in Chhattisgarh, Jammu & Kashmir, Tripura and Uttar Pradesh. SCARDB in Assam and Haryana turned to profit during 2007-08 while Karnataka and Maharashtra SCARDB that were in profit, incurred losses during 2007-08. During 200708, overall profit of PCARDB declined owing to decline in profit across all regions, with the exception

of the northern region. The number and extent of losses of loss-incurring PCARDB increased in all regions, except northern region (Table 4.9). The number of profit-making PCARDB increased in Chhattisgarh, Haryana, Kerala and Punjab, while the number of loss-incurring PCARDB increased substantially in Karnataka, Maharashtra, Rajasthan and West Bengal during 2007-08.

ii.

Costs and Margins

4.11

The overall returns and cost of funds, as a

percentage to working funds, for SCB as a group worked out to 4.92 and 7.15 per cent, respectively. Thus, the financial margin available to SCB was 2.23 per cent (excluding miscellaneous income of 0.63%) during

Table 4.9: Region-wise Working Results of PCARDB (As on 31 March) (Rs. crore) Region

2006-07 Profit

2007-08 Loss

Profit

Total NPAs

Loss

Recovery (%) (As on 30 June)

No.

Amt.

No.

Amt.

No.

Amt.

No.

Amt.

2007

2008

2007

2008

2007 2008

Central

20

2.92

30

53.48

17

0.97

33

119.60

555.78

744.21

37.51

53.39

56.71

Eastern

11

2.60

59

28.52

7

1.46

63

38.42

229.28

201.18

37.52

28.48

50.60

48.66

Northern

85

31.38

59

125.98

95

133.81

50

56.88

1984.83

2159.94

34.46

40.13

57.69

41.22

252 379.14

151

116.03

230

295.57

173

133.21

1090.54

1266.55

33.00

37.60

54.11

45.84

26

183.28

1

2.02

28

269.79

456.02

767.93

48.00

84.90

23.75

4.10

Southern Western

3

22.19

All-India 371 438.23

325 507.29

350 433.83

347 617.90

4316.45 5139.81

Data for 2008 for Orissa, Himachal Pradesh and Tamil Nadu repeated

80

Ch-Eng-4.p65

NPA as % to loans o/s

80

7/15/2009, 10:59 AM

35.65 43.72

56.81

52.25 40.46

2007-08. The average transaction and risk costs of SCB

Table 4.10: Composition of NPA of Co-operative Banks

during 2007-08 worked out to 1.30 and 0.69 per cent,

(As on 31 March 2008)P

respectively. SCB as a group earned a net margin* of

(Rs.crore)

0.87 per cent during 2007-08 compared to 0.42 per cent

Assets Classification

during the previous year. In the case of DCCB, the

Sub-

overall return (yield on assets) to working funds and cost

Standard

2,779.29

7,858.62

3,304.95

3,004.94

of funds was 7.63 and 5.28 per cent, respectively. Thus,

Doubtful

2,652.44

8,222.09

2,802.80

2,111.07

SCB#

DCCB#

SCARDB*

PCARDB**

the gross margin available to DCCB was 2.54 per cent

Loss Assets

736.96

2,660.04

17.66

23.80

(excluding miscellaneous income of 2.01%). The average

Total NPA

6,168.69

18,740.75

6,125.41

5,139.81

transaction

Provisions required

2,654.30

6,555.69

1,395.13

909.16

Provisions made

2,997.90

7,110.79

1,417.75

944.99

and

risk

costs,

were

1.93

and

1.33,

respectively, during 2007-08. DCCB as a group earned net margin* of 1.30 per cent during 2007-08. 4.12

The risk cost as a percentage to working funds

for SCB ranged between 0.05

(Gujarat) and 3.21

(Goa), the average being 0.69 per cent. Similarly,

P : Data provisional * : Data for Bihar, HP and TN repeated from previous year. Manipur SCARDB under orders of liquidation. ** : Data for Tamil Nadu and Himachal Pradesh repeated from previous year. # : Data for SCB/DCCB in Bihar, HP and Manipur repeated from previous year.

average risk cost for DCCB worked out to 1.33 per cent, with a range of 0.14 (Andhra Pradesh) and

4.15

Compared to the all-India average, NPA were

10.18 per cent (Jharkhand) during 2007-08.

lower in northern (3%), eastern (11%) and southern (12%) regions, and higher in central (13%), western

4.13

During 2007-08, out of 18 reporting SCARDB,

(20%)

and &

north-eastern Nicobar

(40%)

regions.

SCB

in

half had positive net margins. Similarly in case of

Andaman

PCARDB out of 12 states, in six they had positive net

Delhi,

margins.

West Bengal and Uttarakhand continued to exhibit

Nagaland,

Islands,

Arunachal

Pradesh,

Puducherry,

Rajasthan,

Tripura,

high NPA levels. NPA for DCCB was higher for all

iii.

Non- Performing Assets (gross) and Recovery Performance

regions except for northern (7%) and southern regions (17%). DCCB in Haryana, Himachal Pradesh, Punjab

4.14

At the aggregate level, the percentage of gross

and Rajasthan had low NPA levels while those in

NPA

to

Jharkhand,

total

loans

and

advances

outstanding

decreased to 12.34 (SCB) while it increased to 18.49 per cent in the case of DCCB as on 31 March 2008. (Table 4.6 and 4.7). In absolute terms,

NPA were

estimated at Rs.6,169 crore and Rs.18,741 crore for SCB and DCCB as on 31 March 2008, registering an

Pradesh,

Uttar Jammu

Pradesh, &

Chhattisgarh,

Kashmir,

Madhya

Maharashtra

and

Andhra Pradesh had very high NPA levels as on 31 March 2008. 4.16

The average loan recovery of SCB and DCCB

declined to 84 and 56 per cent, respectively, as on 30

increase of 15 and 14 per cent, respectively (Table

June 2008. In absolute terms, the loan recovery of

4.10). The percentage of NPA to total loans and

SCB increased to Rs.25,891 crore (by 13%) as on 30

advances outstanding in the case of SCARDB and

June 2008 from Rs.22,987 crore as on 30 June 2007.

PCARDB increased to 33.43 and 43.72 per cent (as

The loan recovery of SCB in Orissa and Goa increased

on 31 March 2008) from 30.30 and 35.65 per cent,

considerably to 93 and 76 per cent, respectively, as on

respectively (Tables 4.8 and 4.9). Total NPA of

30 June 2008, while SCB in Assam, Jammu &

SCARDB and PCARDB estimated at Rs.6,125 crore

Kashmir, Gujarat, Kerala, Madhya Pradesh, Mizoram,

and Rs.5,140 crore showed an increase of 9 and 19

Tripura and Tamil Nadu marginally improved their

per cent, respectively.

loan recovery performance. The recovery performance

* Includes miscellaneous income. 81

Ch-Eng-4.p65

81

7/15/2009, 10:59 AM

Table 4.11: Frequency Distribution of Cooperative Banks according to Range of loan recovery percentage (As on 30 June) (Number) Recovery (%)

SCB

<40

DCCB

SCARDB

PCARDB

2007

2008@

2007$

2008#

2007*

2008^*

2007

2008**

5

3

51

131

8

9

295

253

>40 to <60

2

6

81

86

5

2

183

137

>60 to <80

12

11

110

74

3

6

146

66

>80

12

11

97

55

3

2

72

14

Total

31

31

339

346

19

19

696

470

Data provisional for 2008. @ : Data of Bihar, Himachal Pradesh and Manipur SCB repeated from previous year. $ : Data for DCCB in Rajasthan and one DCCB in Punjab not available. # : DCCB-wise data for Bihar (22), Himachal Pradesh (2), not available.

^ : Data for Bihar, Himachal Pradesh, and Tamil Nadu SCARDB repeated from previous year. * : Manipur SCARDB under orders of liquidation. ** : Data for PCARDB in Tamil Nadu (180), Himachal Pradesh (1) and Orissa (46) not available.

of SCB in northern and southern regions was very high

55 (16%) had high recovery levels (>80%). Many of

whereas recovery in NER declined further to 42.56 per

the DCCB in Rajasthan, Madhya Pradesh, Jharkhand,

cent.

Orissa, Maharashtra, and Andhra Pradesh, had a loan recovery

of

less

than

40

per

cent

to

demand

As on 30 June 2008, out of 31 SCB, 11 each

(Table 4.12). Loan recovery performance of DCCB

had recovery above 80 per cent or between 60 and 80

improved in Jammu and Kashmir and Kerala, while it

per cent (Table 4.11). Out of 346 reporting DCCB,

declined in Andhra Pradesh, Chhattisgarh, Gujarat,

217 (63%) had recovery less than 60 per cent and only

Haryana,

4.17

Maharashtra,

Orissa,

Punjab,

Rajasthan,

Table 4.12: Frequency Distribution of States/ UTs according to Level of Loan Recovery of SCBs and DCCBs (As on 30 June 2008) Recovery (%)

SCB

DCCB

<40

Arunachal Manipur

and

Haryana (2), Jammu and Kashmir (1) Rajasthan (9), Jharkhand (7), Orissa (5), West Bengal (3), Chhattisgarh (3), Uttar Pradesh (32), Uttarakhand (3), Gujarat (4), Maharashtra (17), Andhra Pradesh (21), Karnataka (3), and Tamilnadu (2), Madhya Pradesh (19)

>40 and <60

Assam, Megahlaya, Tripura, Jammu and Kashmir, Sikkim and Maharashtra

Haryana, (13), Rajasthan (9), Jharkhand (1), Orissa (7), West Bengal (5), Chhattisgarh (2), Uttar Pradesh (11), Uttarakhand (3), Gujarat (6), Maharashtra (6), Andhra Pradesh (1), Karnataka (4) Kerala (2), Tamil Nadu (4), Madhya Pradesh (11), Punjab (1)

>60 and <80

Chandigarh, Himachal Pradesh, Mizoram, Nagaland, Andaman and Nicobar, West Bengal, Chhattisgarh, Uttar Pradesh, Goa, Andhra Pradesh, Pondicherry

Haryana (3), Jammu and Kashmir (2), Rajasthan (10), Orissa (5), West Bengal (7), Chhattisgarh (1), Uttar Pradesh (5), UttaraKhand (2), Gujarat (2), Maharashtra (7), Karnataka (5), Kerala (3), Tamil Nadu (5), Pujnab (9), Madhya Pradesh (8)

>80

Delhi, Haryana, Rajasthan, Orissa, Pradesh, Uttarakhand, Karnataka, Kerala, Tamil

Pradesh,

Bihar

Punjab, Madhya Gujarat, Nadu

Haryana(1), Rajasthan (1), West Bengal (2), Uttar Pradesh (2), Uttarakhand (2), Gujarat (6), Maharashtra (1), Karnataka (9), Kerala (9), Tamil Nadu (12), Punjab (10)

31*

Total

346**

* : Data for Bihar, Himachal Pradesh and Manipur SCB repeated from previous year ** : DCCB-wise data for Bihar (22) and Himachal Pradesh (2) not available.

82

Ch-Eng-4.p65

82

7/15/2009, 10:59 AM

Tamil Nadu, Uttar Pradesh, Uttarakhand, Jharkhand and West Bengal.

c.

Areas of Concern

4.19

NABARD, as a matter of policy, continues to

emphasise the need for co-operative banks to be 4.18

As regards SCARDB, the loan recovery in

managed by duly elected Boards of Management.

respect of SCARDB in Assam and Uttar Pradesh

However, the phenomenon of superseding elected

improved

cent,

Boards continued in some States. As on 31 March

Although SCARDB

2008, Boards were superseded in 11 SCB (out of

in Jammu & Kashmir, Madhya Pradesh, Puducherry

reporting 29) and 159 DCCB (out of reporting 360) in

and Tripura marginally improved their loan recovery

the ST Structure, and in 8 SCARDB (out of 20) and

performance, the recovery performance of West Bengal

in 260 PCARDB (out of 697) in the LT Structure

declined significantly (33%), as on 30 June 2008. Low

(Table 4.14).

considerably

to

88

respectively, as on 30 June 2008.

and

71

per

recovery performance and its declining trend are a matter of concern. Out of 19 SCARDB, 11 had

d.

Development Action Plans / Memorandum of Understanding

(54%) had recovery below 40 per cent, while 80 (17%)

4.20

NABARD has been preparing institution specific

had recovery above 60 per cent. Recovery was less

Development

Action

than 40 per cent in many PCARDB in Maharashtra

Memorandum

of

(29), Karnataka (157), Haryana (13) and West Bengal

co-operative banks and RRB function as viable and

(13), Rajasthan (12) Chhattisgarh (3) and Punjab (26)

sustainable entities since 1994-95. The process was

(Table 4.13). While the recovery performance of

executed in three phases from 1994-95 to 1999-2000

SCARDB improved by 5 percentage points, in case of

(Phase I), 2000-01 to 2003-04 (Phase II) and 2004-05

PCARDB it declined by 16 percentage points (as on 30

to 2006-07 (Phase III).

June 2008). The loan recovery performance of all

focused and effective, PACS were included into the

PCARDB (except Kerala) declined significantly to 23

process during Phase III. PACS were advised to

per cent.

prepare viability action plans under the guidance of

recovery less than 60 per cent and only 2 above 80 per cent (Table 4.11). Out of 470 reporting PCARDB, 253

Plans

(DAP)

Understanding

and

(MoU)

executing to

enable

In order to make it more

Table 4.13: Frequency Distribution of States/UT according to levels of Loan Recovery of SCARDB and PCARDB (As on 30 June 2008) Recovery (%) < 40

SCARDB

PCARDB

Chhattisgarh, Bihar, Gujarat,

Haryana (13), Punjab (26) Rajasthan (12), West Bengal (13), Chhattisgarh (3),

Jammu & Kashmir,Maharashtra

Maharashtra (29), Karnataka (157),

Karnataka, Rajasthan, Tamil Nadu and West Bengal > 40 and

Himachal Pradesh, Orissa

Haryana (6), Punjab (38), Rajasthan (22),West Bengal (8), Chhattisgarh (8), Madhya Pradesh (26), Karnataka (19), Kerala (10),

< 60 > 60 and

Haryana, Madhya Pradesh,

Punjab (20), Rajasthan (2) West Bengal (2), Chhattisgarh (1), Madhya Pradesh

< 80

Uttar Pradesh, Punjab Tripura,

(10), Karnataka (1), Kerala (30)

Kerala > 80

Assam and Puducherry

Total

19*

Punjab (5), West Bengal (1), Madhya Pradesh (2) and Kerala (6). 346**

*: Data for Manipur SCARDB not available. Data for SCARDB in Bihar, Orissa, Himachal Pradesh and Tamil Nadu repeated. **: Data for PCARDB in Himachal Pradesh(1), Orissa (46) and Tamil Nadu (180) not available.

83

Ch-Eng-4.p65

83

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Table 4.14: Elected Boards under Supersession (As on 31 March 2008) SCB*

Particulars

Organisation Development Initiatives

4.23

Organisational Development Initiative (ODI) is

DCCB* SCARDB* PCARDB*

Total Institutions (No.)

31

370

20

697

Reporting (No.)

29

360

17

642

as an internally driven re-engineering process which facilitates

Institutions where Boards under Supersession (No.) Boards under supersession (%)

11

159

8

260

38

44

40

37

and

achieves

change

in

organisational

structure and culture, HRD, strategic planning, etc., vis-à-vis external environment to improve effectiveness and

*Data provisional

efficiency

of

the

organisation

to

fulfill

its

mission. NABARD has been conducting ODI since

respective DCCB and enter into MoU with it. The revised/modified

Phase

IV

of

DAP/MoU

for

both

ST and LT structures covers the period 2007-08 to 2011-2012. 4.21

f.

1994-95

co-operative In

view

facilitate banks

of

the

(amalgamation) of

Considering the need for a common and more

to

revival

improve changing

and and

for

their

RRB

for

of

ODI

health.

for

banks

STCCS),

objective

and

financial

environment

co-operative

package

methodology

action

RRB

(adoption

the

design,

has

been

effective forum, it was decided to have a single high-

changed. This would focus on financial inclusion

powered ‘State Level Task Force’ (SLTF) for effective

and

sustainable

monitoring of performance of co-operative banks on

ODI

were

quarterly basis. This was effective from 1 April 2008.

Managing

As on 31 March 2009, 22 RO have formed SLTF

2008-09, 10 ODI for RRB and 5 BRAMHA for co-

in their states. The Annual Review for 2007-08

operative banks were conducted.

viability.

renamed Human

For

‘Business

Aspirations’

co-operative

banks,

Revitalisation (BRAMHA).

and

During

revealed that Chhattisgarh, Karnataka, Maharashtra, Meghalaya, Orissa and Rajasthan SCB had made

g.

Revival of Short-Term Rural Cooperative Credit Structure

13 States 28,915 PACS have signed MoU with their

4.24

Based on the recommendations of Task Force

respective DCCB.

for Short-Term Rural Co-operative Credit Structure

successful

efforts

2007-08.

According

e.

to

achieve to

the

the

data

targets

set

available

for from

(STCCS), GoI announced a Revival Package for an

Co-operative Development Fund

estimated outlay of Rs.13,596 crore in 2006. The

The Co-operative Development Fund (CDF) is

package was aimed at reviving the STCCS by making

replenished/augmented every year through contributions

it a well-managed and vibrant channel to serve the

from NABARD’s surplus. The balance in the fund as

credit needs of rural India. It provided an integrated

on 31 March 2009 was Rs.125 crore. Support under

package of (a) financial assistance to bring the system

the

to an acceptable level of health, (b) introducing legal

4.22

Fund

is

provided

for

various

developmental

initiatives by co-operative credit institution and has

and

resulted in improved deposit mobilisation, MIS, human

democratic, self-reliant and efficient functioning, and

resource

overall

(c) measures to improve the quality of management.

2008-09,

During 2008-09, seven States (Assam, Jammu &

availability,

efficiency

thus

contributing

of

the

structure.

crore

was

sanctioned

During

to

institutional

reforms

for

their

crore

Kashmir, Jharkhand, Manipur, Meghalaya, Mizoram

disbursed (including sanctions of previous years). As on

and Sikkim) executed MoU with GoI and NABARD

31

and

to implement the package, taking the total number to

disbursements were Rs.87.98 crore and Rs.77.73 crore,

25 as at end-March 2009, covering 96 per cent of

respectively.

the STCCS.

Rs.5.95

March

2009,

and

cumulative

Rs.3.81 sanctions

84

Ch-Eng-4.p65

necessary

84

7/15/2009, 10:59 AM

(i)

i.

Financial Assistance

4.25

Financial assistance was to be provided for

cleansing

of

balance

sheets

of

STCCS

(as

on

31 March 2004). Capital infusion was to be given to ensure minimum CRAR of 7 per cent, subject to

legal

and

institutional

reforms.

Bottom

up

approach was adopted with financial assistance to PACS first, followed by DCCB and SCB. Eligibility of PACS was determined on their recovery position as on 30 June 2004. Capitalisation of ineligible PACS would take place in the next upper tier by settling their dues to the higher tier and State Government to

decide

future

set-up

of

ineligible

PACS.

The

liability of funding the package is to be shared by GoI, State Governments, and the STCCS, based on origin of loss and existing commitments. Financial

democratic

institutions,

functioning

(ii)

of

autonomy

the in

co-operative

financial

and

administrative matters and (iii) regulatory control of RBI on these institutions. During the year four states, viz., Bihar, Maharashtra, Meghalaya and Tamil Nadu passed bills to amend their CSA, taking the total number of States that have amended CSA to 10. Out of remaining 15 states, draft amendments proposed by 9 were vetted by NABARD, while amendments are being drafted in remaining six states. Based on the amendments, the Rules and Bye-laws of the societies are being revised by the States. ‘Fit and Proper Criteria’ have also been prescribed by RBI for election/ appointment as Directors and CEO of SCB and DCCB and the qualifications of the present incumbents are under review.

assistance is also being provided by World Bank (US$

600

million),

Asian

Development

Bank

v.

Management Information System

(US$ 1 billion) and KfW Germany (• 140 million) to GoI for funding the Package.

Common Accounting System and

4.29

The Common Accounting System (CAS) and

Management Information System (MIS) for PACS have been formulated and are being put in place in all

ii.

Special Audit

4.26

The special audit of STCCS, as on 31 March

2004, was completed in 78,391 (out of 84,726) PACS across 25 States. The special audit of DCCB was completed in eight states and was in progress in another two States.

PACS to standardise accounting systems and decisionmaking process. Instructions for adoption of CAS/MIS amongst PACS were issued to all implementing States while books of accounts as per the CAS were printed and distributed in nine states. Training on CAS/MIS was also initiated to ensure smooth implementation of the system. Once operationalisation of CAS/MIS and

iii.

Monitoring the Implementation Process

development of capacities to maintain the new system

4.27

Implementation of the Package is guided and

manually are achieved, computerisation of CAS/MIS

monitored

by

Implementing

and

Monitoring

will

be

provided.

Preparatory

administrative

work

Committees at the National (NIMC), State (SLIC) and

for computerisation was taken up in eight states during

District (DLIC) levels. NIMC is headed by Secretary,

the year.

Financial Services, MoF, GoI and has members from RBI, NABARD and participating State Governments.

vi.

HRD Initiatives

4.30

Emphasising

So far, the NIMC has met six times. The SLIC and DLIC have been constituted in all implementing states.

functionaries

and

on their

the Board

training

of

Members,

PACS training

modules along with training material in vernacular

iv.

Legal Reforms

4.28

The

Co-operative

States

are

Societies

languages, elaborate trainers’ manual and guidelines to

amend

Acts

their

(CSA)

to

respective

have been developed. A four-day training programme

ensure

for PACS’ Secretaries on ‘How to do the existing 85

Ch-Eng-4.p65

85

7/15/2009, 10:59 AM

business better in the post reform scenario?’, with

including

specific thrust on resource mobilisation, loan products,

the

housekeeping and accounting was conducted. Further,

requirements, sharing pattern of losses, etc (Box 4.1).

Sikkim

institutions,

keeping their

in

view

present

the

health

business,

of

training

two training modules of two-day each on ‘CAS/MIS’ and ‘business diversification and best practices in governance

and

management’

were

designed

h.

Revival of Long-Term Rural

for

Co-operative Credit Structure

PACS’ Secretaries. Training was also imparted on CAS & MIS for departmental auditors and supervisors of co-

4.33

operative banks to enable them to provide hand

(Chairman: Prof. A. Vaidyanathan) on Long-Term

holding support to the PACS functionaries. A two-day

Co-operative

training programme for Board Members of PACS on

finalised a package for revival of the LTCCS and the

self-sustenance

and

same has been approved by the Union Cabinet. The

management of resources and a three-day programme

package will help credit flow for long-term investment

for Board of Directors of SCB/DCCB on change in the

purposes to around 16 million members of LTCCS and

post reform scenario were organised. Training was

help revive SCARDB and PCARDB.

through

improved

governance

Based on recommendations of the Task Force Credit

Structure

(LTCCS),

GoI

has

imparted to 227 master trainers from 16 states, who in turn trained 1,687 district level trainers. A State Level Nodal Agency was identified to coordinate and ensure smooth conduct of the programmes in each State. As on 31 March 2009, training was imparted to 63,789 PACS Secretaries from 13 States and 89,242 elected board members of PACS from 10 States in first and second modules, respectively. In addition, training was provided on CAS/MIS to 47,302 PACS functionaries (3,356 bank supervisors/departmental auditors) from 14 States.

Release of Funds to PACS

4.31

During

2008-09,

NABARD

released

of eligible PACS in Andhra Pradesh, Chhattisgarh, Haryana,

Madhya

Pradesh,

Maharashtra,

Orissa, Uttar Pradesh and West Bengal. Cumulative recapitalisation support released in these states stood at Rs.6,166.17 crore, with GoI, State Government and STCCS share at Rs.4,874.47 crore, Rs.474.49 crore 31

4.34

During

Registrars

the

of

year,

an

Co-operative

All-India Societies

Conclave (RCS)

of was

organised at BIRD to emphasise the role of the Registrar in implementation of revival package for STCCS. It discussed the issues emerging in the NIMC and SLIC meetings, viz., compilation of statistics on co-operative movement in India, audit, compliance to NABARD

inspection

reports,

availability

of

State

of the GoI’s interest subvention scheme, revival/reform

Rs.3,567.42 crore as GoI share towards recapitalisation

and

Other Initiatives

Government Guarantee for SCARDB, implementation

vii.

Gujarat,

g.

Rs.817.21 March

crore,

2009.

This

respectively, support

has

as

on

enabled

33,411 PACS (40%) to be fully recapitalised.

Box 4.1 Special Package for NER: Highlights • State Governments enabled to contribute to equity of SCB in excess of 25% only when required to comply with Section 11 (1) of B. R. Act, 1949 (AACS). • PACS to act initially as agents of SCB/RRB/ commercial banks. Training to be imparted to build their capability for financial intermediation over a period of 4 years. • GoI’s grant assistance for a period of 4 years for HR initiatives, training and capacity building. • All PACS & SCB, irrespective of recovery, eligible to receive recapitalisation assistance contributed by GoI and State Government in the ratio 90:10.

viii.

Special Package for NER

4.32

In November 2008, GoI announced a package

providing special dispensation for STCCS in NER

• Recapitalisation amount to be placed in separate account with SCB and to be released as and when PACS attain capacity to function as a independent institutions.

86

Ch-Eng-4.p65

86

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of Primary & Apex WCS, etc. An all India meet of

objective of being rural commercial and professionally

CEO of SCB was held to obtain feed-back on the

managed

major policy/operational issues and problems faced in

Committee

general and in particular with reference to ADWDR

recommended RRB as most suited for achieving cent

Scheme, 2008 and to facilitate their business and

per cent financial inclusion. NABARD too has been

institutional development also.

working towards developing RRB as a strong credit delivery

4.35

The All-India Conference of Principals of RICM/

banks. on

channel

Owing

to

Financial

and

their

uniqueness,

the

Inclusion

recognized

and

effective

tool

for

financial

inclusion.

ICM was organised at BIRD, Lucknow during 2008-09 to provide a forum for coordinating the efforts of

i.

Amalgamation

4.38

As per GoI directives, the process of sponsor

various partners and improving the effectiveness of training for co-operative institutions. NABARD initiated the process of capacity building to familiarise Board members

of

co-operative

banks

with

the

recent

developments in banking in general and co-operative banking in particular as well as their roles and responsibilities. Training/reading materials were made available in English, Hindi and local languages. Faculty

bank-wise amalgamation of RRB (started in 2005) continued and three newly amalgamated RRB were formed during the year. As on 31 March 2009, the total number of RRB stood at 86 (45 amalgamated and 41 stand alone, including the new RRB set up in Puducherry during 2007-08).

Members of RICM/ICM/ACSTI were trained at BIRD to handle the massive training programme. As on 31 March 2009, 196 Board members (39 DCCB and 1 SCB) were trained in 12 programmes. The Bank also organised 13 exposure visits for 805 staff/Committee Members of PACS to 19 good working PACS that were able to achieve a turnaround in their business and recovery performance on their own.

ii.

Recapitalisation Support

4.39

The Union Budget 2007-08 had announced

recapitalisation support to 27 RRB (11 amalgamated and 16 stand alone) having negative net worth (as

on

31

March

2007).

By

end-March

2008,

recapitalisation support of Rs.1,795.97 crore was to be contributed by GoI, sponsor banks and State Governments in the ratio of 50:35:15. As on 31

h.

4.36

Human Resource Policy for Co-operative Banks A Working Group on Human Resource Policy

for co-operative banks (Chairman: Shri S.K. Mitra, ED, NABARD) was constituted to study the norms of recruitment/ promotion/training/computerization level in co-operative banks and suggest a rationalised policy. During the year, two meetings of the Working Group

March 2009, 26 RRB have been fully recapitalised and one RRB has been partly recapitalised with total funding support of Rs.1,783.41 crore. Till date, GoI released its entire share of recapitalisation support amounting to Rs.897.98 crore to 27 RRB, while sponsor banks and State Governments have released Rs.619.80 crore and Rs.265.63 crore, respectively, to 26 RRB.

were held.

iii.

Branch Expansion Programme

4.40

In accordance with the announcement in the

B.

Regional Rural Banks

a.

Restructuring Initiatives

4.37

The process of revitalizing the RRB has been

taking the cumulative number to 715 (as on 31 March

on-going since 2005 to help them reaffirm their

2009). Against 758 licenses issued by RBI, 43 licenses

Union Budget 2007-08, RRB had opened 474 branches during 2008-09 against the target of 758 branches,

87

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87

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were pending with RRB for opening of branches. In

per RBI guidelines, RRB have started financing under

view of RRB requesting relaxation in branch licensing

General Credit Card (GCC) and opening ‘No Frills’

norms, RBI has allowed RRB greater flexibility in

deposit accounts. Total number of accounts (deposits

opening new branches, so long as they show improved

and loans) stood at 834.85 lakh and 929.22 lakh as

profits and financial health. Further, to be eligible for

on

opening new branch/es, RRB should (i) not have

(Table 4.17).

31

March

2007

and

2008,

respectively

defaulted in maintenance of SLR and CRR during the last two years, and (ii) be making operational profits, show improvement in net worth and its net NPA

vii. 4.44

should not exceed 8 per cent.

ICT solution for Financial Inclusion The

Committee

on

Financial

Inclusion

had

identified 256 districts as most excluded districts in the

iv. 4.41

country.

Review of Performance

The

taking-up

Committee

10

pilot

had

projects

recommended, with

ICT

RRB

solutions.

In continuation of the mechanism for review of

Accordingly, 15 RRB were identified from 14 States for

performance of RRB by GoI, introduced during 2007-

an R & D project on Financial Inclusion with ICT

08, two review meetings were held, one on 27 August

based solutions through use of smart cards, POS

2008

Union

devices and mobile technology in different regions and

Finance Minister and the other on 16 January 2009

client groups in the country. The project, a PPP model,

under

is funded by World Bank, with back ended incentive

under the

the

Chairmanship

Chairmanship

of

of the

Hon’ble Union

Finance

Secretary.

provided by NABARD under its Financial Inclusion Fund (FIF).

v.

Village Adoption and Debt Swap

4.42

RRB were asked to adopt at least one village

b.

Financial Performance

per branch for financing indebted farmers to swap the

4.45

Following the amalgamation of RRB (2005-06

debt taken from moneylenders. RRB had adopted

onwards),

17,490 and 20,981 villages as at end-March 2008 and

(2004-05) to 91 with a network of 14,761 branches

2009, respectively, of which 7,811 villages have been

covering 591 notified districts in 26 States and 1 UT

freed from debt to moneylenders.

(Puducherry) as on 31 March 2008. As at end-March

their

number

was

reduced

from

196

2009, the number of RRB stood at 86 with a network of 15,235 branches. Over a period of four years

vi.

Financial Inclusion

4.43

The Government envisages RRB as a strong

significantly (33%), while their deposits and investments

intermediary for financial inclusion in rural areas. As

increased by 15 and 5.4 per cent, respectively. The

(2005-09),

aggregate

reserves

of

RRB

increased

Table 4.17: Status of Financial Inclusion (As on 31 March) (Lakh) Year

Deposit Accounts Total

No Frills

Loan Accounts Total

GCC

SHG

KCC

Tenant

SSI/ artisans/SCC & retail trades.

2007

669.88

34.54

164.97

1.083

6.52

82.84

1.08

35.74

2008

758.02

81.17

171.20

2.35

7.20

93.14

1.03

33.53

88

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88

7/15/2009, 10:59 AM

borrowings also increased by 6.6 per cent. The loans

During

and advances outstanding as on 31 March 2009

sustainable viability and 28 current viability, showing

increased by 12 per cent over the previous year

improvement by way of increase in profits, reduction

(Table 4.18).

in losses or by transcending from loss to profit. The

2007-08,

out

of

91

RRB,

54

attained

aggregate reserves of the 54 RRB that had wiped off 4.46

During

2008-09,

their

their accumulated losses increased to Rs.6,150 crore

performance and reported gross profit of Rs.1,745.84

as at end-March 2009. The net worth of RRB as a

crore, an increase of 26 per cent over 2007-08. The

whole had also increased by 10 per cent to Rs.6,750

remaining 5 RRB despite continuing as loss-making

crore as on 31 March 2009, while accumulated losses

entities

to

declined by 2 per cent over 2007-08. Region-wise

Rs.33.85 crore. The net profit posted by RRB, as a

performance of RRB during 2007-08 varied widely.

group, increased by 29 per cent during 2008-09.

While all RRB (excepting Puduvai Bharathiar Grama

reduced

their

81

losses

RRB

by

improved

39

per

cent

Bank that started functioning from 26 March 2008) in the western and southern region were in profit, Table 4.18: Indicators of Performance

126, 14, 13 and 5 RRB in the central, northern,

(As on 31 March) (Rs. crore)

eastern and north-eastern regions, respectively, were in profit (Table 4.19).

2007

2008

2009P

96*

91*

86*

Branch Network (No.)

14,520

14,761

15,235

Share Capital

196.00

197.00

197.00

Deposit

2,188.43

2,832.53

3,971.84

Reserves

4,901.54

5,703.06

6 150.00E

Deposits

83,143.55

99,093.46 1,14,317.45

Borrowings

9,775.80

11,494.00

12,250.00

E

maintained their recovery performance above national

Investments

45,666.14

48,559.54

51,159.00 E

average, it declined compared to their performance

(Outstanding)

48,492.59

58,984.27

6,5840.78

Loans Issued@

33,043.49

38,581.97

38,581.00 E

81

82

81

Particulars No. of RRB

Share Capital

Loans & Advances

c.

Recovery Performance

4.47

As on 30 June 2008, the recovery performance

of RRB (87) declined to 78 per cent from 81 per cent as on 30 June 2007 (Table 4.19). Though RRB in the northern (85%) and southern (80%) regions

during the previous year. Recovery performance of

RRB earning Profit (No.)

RRB in NER (72%), though lower than the national average

improved

that

eastern

of

over region

the

previous

(69%)

year,

declined.

while

RRB

in

Tamil Nadu registered the highest recovery (94%),

Amount of Profit (A)$

926.40

1,383.69

1,745.84

15

8

5

Amount of Losses (B)

301.25

55.58

33.85

Net Profit (A – B)$

625.15

1,328.11

1,711.99

2,759.49

2 624.22

2,574.00E

RRB incurring

followed

by

Punjab

(91%),

Mizoram

(87%)

and

Kerala (83%). Out of 87 RRB as at end-June 2008,

Losses (No.)

Accumulated Losses RRB with accumulated losses (No.) Recovery (%) **

39

36

35

79.80

80.81

77.76

6.55

6.05

5.58

4,526.48

6,107.37

6,750.00 E

NPA to loans outstanding (%) Net worth

36 had above 80 per cent and 2 had below 40 per cent (Table 4.20).

d.

Non-Performing Assets

4.48

The aggregate gross NPA of all RRB improved

from 6.55 per cent, as at end-March 2007 to 6.05 per cent as at end-March 2008 and further to 5.58, as on 31 March 2009. During 2008-09, 56 RRB recorded the gross NPA levels below the national

* : After amalgamation. ** : As on 30 June

$ : Before Tax P : Provisional

@ : During the year E : Estimated

average. 22 RRB had NPA level above the national average (> 5.58% and < 20%) and only 3 RRB 89

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89

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Table 4.19: Region-wise Working Results of RRB (As on 31 March 2008) (Rs. crore) Region

RRBs (No.)

Profit Earning

No. North-Eastern

Amt.

Loss Incurring No.

Net Profit

Accumu lated Losses

Loans & Advances O/S

NPAs

Amt.

Recovery (%) (As on 30 June)

Amount

%

2007

2008

8

5

34.52

3

7.66

26.86

235.07

2190.51

217.94

9.95

64.73

71.54

Eastern

15

13

104.61

2

32.69

71.92

1726.56

10196.69

1147.13

11.25

70.65

68.52

Northern

16

14

245.01

2

12.38

232.63

261.47

8133.23

299.94

3.69

89.63

85.01

Central

27

26

458.04

1

2.85

455.19

271.12

15182.12

1166.64

7.68

80.00

77.20

Western

9

9

56.22

-

-

56.22

130.00

3093.30

219.22

7.09

77.57

66.95

Southern

15

15

485.29

-

-

485.29

0.00

20188.42

515.47

2.55

83.98

80.52

All-India

91

83 1383.69

8

55.58

1328.11

2624.22

58984.27

3566.34

6.05

80.81 77.76

# : Puduvai Bharathiar Grama Bank, Puducherry started functioning from 26.3.2008, hence, data pertains to 90 RRBs only as on 31.3.2008.

registered high NPA level (>20%). Low NPAs levels

4.50

were observed in the case of RRB in southern region

Review of Model RRB Officers’ and Employees’ Service

(2%) followed by northern (3%), central (5%), western

Regulations,

and eastern (8%) regions, while RRB in NER had

Promotion of Officers & Other Employees) Rules, 1998

NPA of 14 per cent, as at end-March 2009.

(Chairman

The Committee to Undertake a Comprehensive 2000, Shri

and

Amaresh

RRB

(Appointment

Kumar,

ED,

&

NABARD)

submitted its Report, which is under the consideration

e.

Human Resource Policy for RRB

4.49

Major recommendations of the Committee to

of GoI.

formulate a Comprehensive Human Resource Policy for RRB Personnel (Chairman: Dr. Y.S.P. Thorat) were accepted by GoI during the year. These include norms for, (i) categorisation of RRB/their branches, (ii) staffing

4.51

The

Working

Group

on

Capacity

Building

Requirements of RRB personnel, constituted under the Chairmanship of Shri Amaresh Kumar, ED, NABARD

pattern at Head Office/controlling offices/branches and

submitted its report to GoI. Action is being initiated

(iii)

for

recruitment/promotion

of

staff,

transfer,

etc.

implementing

the

recommendations

involving

NABARD circulated these recommendations among

various agencies, viz., NABARD, sponsor banks, RRB,

sponsor banks/RRB for implementation.

BIRD, etc.

Table 4.20: Frequency Distribution of States according to Levels of Recovery of RRBs (As on 30 June 2008) Recovery (%)

States

< 40

Bihar (1), Nagaland (1)

> 40 and < 60

Assam (1), Bihar (2), Madhya Pradesh (1), Maharashtra (3), Uttar Pradesh (1), Manipur (1)

> 60 and < 80

Andhra Pradesh (2), Chhattisgarh (2), Gujarat (3), Haryana (1), Himachal Pradesh (1), Karnataka (3), Kerala (1), Jammu & Kashmir (2), Jharkhand (2), Madhya Pradesh (4), Maharashtra (2), Meghalaya (1), Orissa (4), Rajasthan (2), Tripura (1), Uttarakhand (1), Uttar Pradesh (5), West Bengal (3).

>80

Andhra

Pradesh

(3),

Arunachal

Pradesh

(1),

Assam

(1),

Bihar

(1),

Chhattisgarh

(1),

Haryana

(1),

Himachal Pradesh (1), Jammu & Kashmir (1), Karnataka (3), Kerala (1), Madhya Pradesh (3), Maharashtra (1), Mizoram (1), Orissa (1), Punjab (3), Rajasthan (4), Tamil Nadu (2), Uttarakhand (1) and Uttar Pradesh (6)

90

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90

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Supervision of Banks NABARD inspects SCB and DCCB in terms of

systems, (viii) delay in submission of returns and

the powers vested under Section 35 (6) of the

satisfactory compliance to inspection observations, (ix)

B. R. Act, 1949 (AACS) and RRB under Section 35

lack

(6) of the B. R. Act, 1949. NABARD also conducts

internal checks and control system, (xi) incidence of

voluntary

frauds,

4.52

inspection

Co-operative borrowings unique

of

SCARDB

and

Societies

and

Federations

outstanding

from

it.

nature

of

these

Apex having

corporate (xii)

governance,

improper

(x)

valuation

weaknesses

of

securities

in and

irregularities in investment portfolio, (xiii) insufficient

the

provision for depreciation and (xiv) violation of Credit

NABARD’s

Monitoring Arrangement (CMA) norms, etc. These

Considering

institutions,

of

holistic,

were communicated to the concerned banks, RCS,

off-site),

State Governments and sponsor banks for corrective

portfolio studies, monitoring, guiding and facilitating

action. NABARD continued to hold discussions with

functions, besides the basic objective of ensuring

the Boards of Directors of SCB/DCCB/RRB, core area

conformity with banking regulations and prudential

compliance

norms. Statutory inspections of all SCB, DCCB and

compliance reports, conveying the supervisory ratings

RRB

for confidential information of the top management

supervisory

role

encompassing

not

is

comprehensive

inspections

complying

(on-site

with

and and

minimum

capital

requirements of B. R. Act, 1949 (AACS)/RBI Act, 1934

and

continue

voluntary to

be

inspections

conducted

all

SCARDB

annually.

of

Statutory

inspections of DCCB and RRB with positive net worth and

voluntary

inspections

of

Apex

Co-operative

Societies/Federations are conducted once in two years.

with

CEOs

of

the

banks,

rating

of

of the banks, etc.

b.

Board of Supervision

4.54

The Board of Supervision [BoS] (for SCB,

DCCB and RRB) met thrice during the year. It reviewed: (i) the functioning of SCB and SCARDB,

A.

Operational Matters

(ii) functioning of co-operative credit institutions and

a.

Inspection of Banks

frauds

4.53

During 2008-09, statutory inspections of 324

insolvent/weak

RRB in Kerala, Bihar and Rajasthan, (iii) review of in

supervised DCCB

banks, and

(iv)

RRB,

functioning (v)

impact

of of

banks (30 SCB, 243 DCCB and 51 RRB) and

supervision on banks performance, (vi) issues and

voluntary inspections of 17 SCARDB and 2 Apex Co-

perspectives of listing of RRB, (vii) scheduling of

operative Societies (CO-OPTEX AND PONTEX) were

amalgamated RRB, (viii) supervisory trends pertaining

conducted.

registered

to rating of banks, (ix) banks’ compliance to various

improvement and recomplied with minimum capital

important statutory provisions, (x) progress on disposal

requirement/operational

of complaints against supervised banks, (xi) guidelines

While

several norms,

banks sizeable

number

of

banks continue to exhibit weaknesses. Some of the

for

appointment

of

Chartered

Accountants,

(xii)

supervisory concerns brought out by the inspections of

appropriate guidelines to banks detailing

these banks were, (i) non-compliance with statutory

for valuation of properties and ensuring accountability

provisions, (ii) improper application of IRAC norms

of valuers, etc.

methodology

resulting in inflated profit/reduced losses, shortfall in provisions, etc., (iii) high level of NPA/erosion of assets, (iv) deficiencies in sanction, appraisal of loans/ advances (v)

and

inadequate

post-disbursement financial

margins/high

follow-up, cost

c.

Health of Supervised Banks

i.

Compliance to Minimum Share Capital Requirement

of

management/adverse working results, (vi) ineffective

4.55

As on 31 March 2009, the number of SCB

funds management, (vii) inadequate risk management

and DCCB not complying with provisions of Section 91

Ch-Eng-4.p65

91

7/15/2009, 10:59 AM

11(1) of the B.R. Act, 1949 (AACS), stood at 5

4.59

and 108, respectively. The total erosion in the value

complied with Section 42 (6)(a)(i) of the RBI Act,

of assets of these 113 non-compliant co-operative

1934,

banks

had

42 (6)(a)(ii) of the Act, ibid. Inspection of 4 RRB

affected deposits to the extent of Rs.4,937.47 crore

would be taken up during 2009-10 as these RRB

(19.6% of total deposits) in addition to their entire

were amalgamated in the year 2008-09. The erosion

share capital. Of the non-complying DCCB, 37 were

in the value of assets of the 21 RRB not complying

granted exemption from the provisions of Section

with Section 42 (6)(a)(i) of the Act ibid stood at

11(1) of the Act, ibid., by GoI, while the applications

Rs.2,310.07

for

Rs.1,090.63 crore (6.2% of total deposits) as on

aggregated

grant

of

Rs.15,106.81

exemption

in

crore,

respect

which

of

62

banks

(1 SCB and 61 DCCB) were under consideration by

As on 31 March 2009, out of 86 RRB, 61 and

48

crore,

complied

thus,

with

eroding

Section

deposits

worth

31 March 2009.

the RBI/GoI.

ii.

Grant of Licence/Scheduling of Banks

4.56

No new licence was granted during the year

and the number of licensed co-operative banks, thus, remained unchanged at 89 (14 SCB and 75 DCCB)

B.

Policy Decisions/ Guidelines

a.

Co-operative Banks

4.60

During

year,

NABARD

issued

revised

guidelines for SCB/DCCB on (i) exposure norms and

as on 31 March 2009.

the

monitoring/reporting

procedures

under

CMA,

(ii) investment management by co-operative banks, (iii) calculation of Net Demand and Time Liabilities During the year, no SCB was included in the

(NDTL) for the purpose of maintenance of CRR/SLR,

Second Schedule to the RBI Act, 1934. Thus, the

(iv) revised framework of Long Form Audit Report

number of Scheduled SCB remained unchanged at

(LFAR) in co-operative banks, etc. The Asset-Liability

16. Following amalgamation of RRB, inspections of

Management

22 RRB were taken up on an urgent basis during the

in select SCB, on a pilot basis, during 2007-08,

year.

and

was extended to all SCB from 1 August 2008

the

and was also introduced in 31 select DCCB from

4.57

Based

on

the

recommendations,

33

inspection

RRB

were

findings

included

in

(ALM)

system

(Box

4.2)

introduced

1 September 2008. On the advice of NABARD,

Second Schedule to the RBI Act, 1934.

the National Federation of State Co-operative Banks

iii.

Compliance with various Sections of Acts

4.58

As on 31 March 2009, 5 SCB and 108 DCCB

did B.

not R.

Act,

comply

with

respect

to

of

capacity to pay their depositors in full and 14 SCB

from 1 April 2007. The RBI has also permitted NABARD to

and

introduce ALM system in all SCB, RRB and DCCB, based

did

not

with

(3)(a)

The ALM system was introduced in 5 SCB and 12 RRB

DCCB

(AACS),

22

their

333

1949

Section

Box 4.2 Asset Liability Management

comply

with

Section

22 (3)(b) of the Act, ibid., as the affairs of these

on the feedback given by NABARD. The implementation of ALM system in these banks was reviewed closely and after

banks were conducted in a manner detrimental to the

taking into account the need for Risk Based Supervision, it

interests of their depositors. Similarly, out of 16

was further decided to introduce the ALM system in all RRB

Scheduled SCB, 2 were not complying with Section

and SCB from 1 August 2008. Subsequently, it was also

42

capital

extended to 31 DCCB from 1 Spetember 2008. NABARD is

requirement), and 11 were not complying with Section

monitoring the progress in implementation of ALM in all

(6)(a)(i)

of

RBI

Act,

42 (6)(a)(ii) of the Act, ibid.

1934

(minimum

these banks.

92

Ch-Eng-4.p65

92

7/15/2009, 10:59 AM

(NAFSCOB)

issued

a

Code

on

Standards

and

iii.

The ALM system introduced in 12 select RRB

Fair Practices to all co-operative banks. All SCB

during 2007-08 was extended to all RRB from 1

and DCCB were suitably advised on the modus

August 2008.

operandi

of fraud in a branch of a DCCB in

iv.

cash credit under consortium arrangement. A circular on adherence to prudential norms and completion of

reconciliation

of

accounts

of

the

banks

Committees and convening their meetings. v.

was

up of Internal Inspection and Audit System’ in the

Master

Circular

on

frauds,

rationalising

the

classification of frauds, submission of returns and

issued to all SCB and DCCB. A Master Cirular was issued to all co-operative banks on ‘Toning

Issue of detailed guidelines for forming Audit

monitoring thereof issued. vi.

A comprehensive circular for implementation of compliance

banks.

function

operationalisation.

issued

This

is

to in

all

RRB

conformity

for with

Basel I Principle and the recommendations of 4.61

In the case of SCARDB, NABARD issued (i)

Advisory

Panel

for

Committee

on

Financial

guidelines on IRAC and provisioning norms to be

Sector Assessment (CFSA), constituted by the

observed following implementation of the ADWDR

RBI and GoI.

Scheme, (ii) advised SCARDB that GoI had decided to

pay

interest

instalment/s

of

on the

the

second

‘eligible

and

amount’

subsequent under

vii. A circular each on Lenders’ Financial Discipline (for co-operative banks and RRB), Codes of

the

Standards and Fair Practices to RRB, revised

ADWDR Scheme at the prevailing yield-to-maturity

off-site surveillance (OSS) returns for RRB, were

(YTM) rate on 364-day GoI Treasury Bills. Hence,

issued.

these banks need not make any provisions for loss in present value (PV) terms for amount receivable from

viii. RRB were advised to follow the LFAR on the lines of commercial banks.

GoI under the Scheme. A circular was issued to all SCARDB revising the instruction dealing with the

ix.

Modus

operandi

of

certain

high-value

frauds

accounting system related to the ADWDR Scheme,

detected were shared with the banks for their

2008.

safeguards. x.

b.

RRB

4.62

For RRB, the following major decisions were

Anti-Money Laundering (AML) obligations issued.

taken by the Bank. i.

Implementation of revised inspection guidelines and the possibility of introducing inspections on the

Instructions on Know-Your Customer (KYC) and

pattern

followed

by

RBI

for

commercial

banks on a pilot basis for amalgamated RRB to

C.

Other Developments

4.63

In

order

to

improve

the

quality

and

effectiveness of inspection, NABARD conducted three regional supervision seminars for officers engaged in supervision. The Bank also convened the seventh National Seminar on Audit to sensitise Chartered

be explored.

Accountants engaged for the first time in audit of ii.

Issue of Master Circular on disclosure norms and

SCB/DCCB, consequent to amendment of the State

instructions including Capital to Risk Weighted

CSA in states that signed MoU for implementing the

Asset Ratio (CRAR) in the Annual Note on

STCCS package, thus, helping to improve the quality

Accounts in their Balance Sheets, as on 31

and effectiveness of audit. The National Seminar on

March 2008. A road map for stipulation of

Investment Management for SCB (in association with

CRAR

the NAFSCOB) and state level seminars to streamline

for

suggested to

RRB RBI.

from

31

March

2009,

was

the

investment

operations

in

SCB/DCCB

were 93

Ch-Eng-4.p65

93

7/15/2009, 10:59 AM

organised.

Three

Regional

Seminars

on

Internal

Checks and Control Systems for Chiefs of Audit and

policy issues received from NAFSCOB culminated in a number of collaborative activities.

Inspection Departments of co-operative banks were also

organised.

regional

In

addition,

training

management

NABARD

programmes co-operative

investment

consultancy services to Bank Indonesia, on developing

workshops for RRB/SCB/select DCCB implementing

supervised by the BI, in October 2008. A five-

ALM system; and workshop on AML, KYC and

member

monitoring of frauds through its TEs as well as state

November 2008 to study supervisory practices adopted

level sensitisation programmes on prudential norms,

by NABARD and other related interventions. The

CMA, frauds, etc., for auditors and supervised banks

exchange of experience between the two institutions

through

has

Special

portfolio

and

A team of officers from NABARD provided

an early warning system (EWS) for the rural banks

ROs.

banks

4.65

RRB;

its

for

on

conducted

studies

were

conducted in select co-operative banks on investment

delegation

been

from

mutually

BI

visited

rewarding

and

NABARD

led

to

in

good

organisational linkage.

portfolio, internal checks and control systems, CMA and MIS.

4.66

During

the

year,

NABARD

also

initiated

measures towards re-engineering of the supervisory 4.64

For a holistic and more effective approach

tasks.

Licences

for

use

of

IT-based

product,

towards supervision, especially in strengthening internal

Regulator

checks and control systems in the supervised banks,

knowledge management of inspecting officers. The

NABARD

software provides relevant circulars, instructions and

initiated

Chartered

dialogue

Accountants

with

of

the

India

Institute (ICAI)

of for

reports,

Plus,

subject-wise,

strengthening the audit mechanism in co-operative

institutions

banks.

Senior

officials

statutory/regulatory

(RBI, IBA, SEBI, FEDAI, IRDA, CVC,

platform. The trial version of a new IT product

NABARD invited officials of Financial Intelligence Unit

on

of India (FIU), Ministry of Finance, GoI, to several

months in Maharashtra and Andhra Pradesh ROs on

seminars involving co-operative banks and RRB to

a pilot basis. An ‘e-mail forum’ has been put in

deliberate on KYC and AML norms under the Anti-

place on the Bank’s corporate intranet, NABNET,

Money

wherein

and

invited

the

strengthening

NABARD, etc.) both offline and on a web-based

2002,

were

from

for

to

Act,

ICAI

obtained

deliberate at the seventh National Seminar on Audit.

Laundering

of

were

was

also

risk-based

users

supervision

can

post

was

any

installed

for

three

query/suggestion

on

associated with the Conferences of Principal Officers

supervision

of RRB and Trainers’ Training Programme on AML

responded to by a team of experts, thus, helping to

convened by FIU. Similarly, inputs and feedback on

build an FAQ.

related

matters,

94

Ch-Eng-4.p65

an

94

7/15/2009, 10:59 AM

which

are

quickly

Organisation and Management

V

NABARD continued to lay emphasis on capacity

within

building,

this. The developments during the year vis-à-vis

development

of

skills

and

technical

the

expertise of its staff and strove to refine existing

the

training

human

modules,

enhance

design

exposure

new

to

programmes

various

and

institutions

country

and

management

abroad

and

resources

of

to

achieve

administration

the

Bank

are

of

encaptured

here.

General A.

Board of Directors

5.2

The Board of Directors met five times during

He was also nominated as a Member of the

the year. The Executive Committee and the Audit

Executive Committee. d.

Smt. Shakuntala Jakhu, on her taking over as

Committee of the Board met four times each while the

Financial Commissioner and Principal Secretary,

Sanctioning Committee for Loans under RIDF met six

Agriculture Department, Government of Haryana,

times. The Risk Management Committee of the Board

was appointed as Director vice Shri Krishna Mohan,

met thrice.

with effect from 5 November 2008. She was also nominated as Member of the Executive

5.3

The

following

changes

took

place

in

the

Committee.

composition of the Board during the year. a.

Shri T. Nandakumar, Secretary, Agriculture and

e.

as

Director

with

effect

Amarendra

Department

Co-operation, Ministry of Agriculture, GoI, was appointed

Shri

of

Pratap

Singh,

Secretary,

Agriculture

and

Sugarcane,

Government of Jharkhand was appointed as

from

Director with effect from 1 December 2008 vice

1 September 2008, vice Dr. P. K. Mishra. He was

Shri A.K. Sarkar. He was also nominated as a

also nominated as Member of the Sanctioning

Member

Committee for Loans under RIDF.

of

Audit

Committee

and

Risk

Management Committee of the Board. b.

Dr.

S.

Chellappa,

Agriculture

Production

Commissioner and Principal Secretary, Government

f.

Shri

O.

Nabakishore

Singh,

Commissioner

of Andhra Pradesh, was appointed as Director vice

(Agriculture),

Shri Pankaj Dwivedi with effect from 9 May 2008

appointed

and was also nominated as a Member of the

19 January 2009 vice Shri Letkhogin Haokip.

Sanctioning Committee for Loans under RIDF.

He was also nominated as a Member of Project

Shri Pankaj Dwivedi had been appointed as

Sanctioning Committee for Loans under RIDF.

as

Government

of

Manipur

was

Director

with

effect

from

Director with effect from 29 April 2008 vice Shri D. K. Panwar. c.

B.

Other Senior Executives

5.4

S/Shri S.K. Mitra and Amaresh Kumar continued

Shri Krishna Mohan, Financial Commissioner and Principal

Secretary,

Agriculture

Department,

Government of Haryana was appointed as Director

as Executive Directors of the Bank and guided the RO

with effect from 10 July 2008 vice Shri Raj Kumar.

and HO Departments for effective functioning of the 95

Ch-Eng-5.p65

95

7/15/2009, 11:03 AM

organisation. Dr. R. Balakrishnan, ED, superannuated on 30 September 2008. Shri P. L. Behera and Dr. Prakash Bakshi were elevated to the post of Executive Directors during the year.

Inspection of NABARD

5.5

The

financial by

Regional/DDM Offices

5.6

In addition to the Head Office at Mumbai, the

Bank has 28 RO, a sub-office at Port Blair, a Cell at Srinagar and Training Establishments in Bolpur,

C.

conducted

D.

Hyderabad, Lucknow and Mangalore. As on 31 March 2009, there were 392 DDM offices, covering 490 districts

inspection

of

NABARD

was

including 98 tagged districts. The remaining districts are

between

6

January

and

managed by the District Development Officers (DDO)

19 February 2009 with reference to its financial position

RBI

from their respective RO. No new DDM office was

as on 31 March 2008.

opened during the year.

Human Resource Management A.

Training and Skill Upgradation

a.

Officers and Executives

5.7

During 2008-09, National Bank Staff College

Bangladesh, Sri Lanka, Philippines, Malaysia, Germany

(NBSC), Lucknow conducted 91 programmes on various

and South Africa. A separate team of 10 officers from

subjects for 1,816 officers and 9 programmes for

NABARD

232 officers of client banks on various finance related

leadership of Shri S. K. Mitra, ED, NABARD to study

issues.

the regulatory arrangements

New

programmes

on

5.9

During the year, 18 exposure visits for officers

were organised with funding support from GTZ to study mF co-operatives and MFI regulation in Indonesia,

bio-diesel,

bamboo

cultivation, financial inclusion, etc., were introduced

and

MFI

visited

Indonesia

under

the

for rural/smaller financial

institutions.

during the year. In addition, 40 officers were deputed for tailor-made

programmes

on

software

development,

ii.

Visits by Senior Management

deputed for 118 off-the-shelf programmes, workshops,

5.10

Shri U. C. Sarangi, Chairman, attended the

seminars and conferences organised by various reputed

Study

institutions. Some of the areas covered in these

Mechanism for PACS in Germany and Hungary in

programmes were strategic HRM, information systems,

September 2008. He also attended the 55th EXCOM

audit, risk management, treasury management, Right to

Meeting and other related events of APRACA in Russia

Information Act, women empowerment, negotiation

in November 2008.

outdoor management, etc., while 218 officers were Visit

Programme

on

Deposit

Protection

skills, mutual funds, water harvesting and ground water recharge, etc.

b.

Other Employees

5.11

Training was imparted to employees (Group ‘B’

i.

Overseas Training / Exposure Visits

5.8

During the year, 223 officers were deputed for

and ‘C’) at National Bank Training Centre (NBTC),

various overseas training programmes, exposure visits,

Lucknow and Zonal Training Centre (ZTC), Hyderabad.

seminars, etc. Besides this, 98 officials from client/

During 2008-09, 62 training programmes covering 771

partner institutions, viz., GoI, RBI, State Government,

participants were conducted. A pre-promotional training

commercials banks, RRBs, co-operative banks, NGO,

programme for DA (Secretarial) in Group ‘B’ for

etc., were also deputed for programmes organised by

promotion to Private Secretary in Group ‘A’ was

HO, RO and RTC.

conducted at NBTC, Lucknow.

96

Ch-Eng-5.p65

96

7/15/2009, 11:03 AM

c.

5.12

Support for Higher Studies by Officers The

support

Bank

officers

introduced to

pursue

schemes higher

to

Table 5.1: Promotions effected during the Year Particulars

facilitate/

education.

The

Total

Of which SC

ST

Officers in Grade ‘B’ to ‘C’

86

12

5

Officers in Grade ‘A’ to ‘B’

100

17

9

modified incentive scheme for professional studies in

Group ‘B’ to Group ‘A’

21

1

1

part-time and distance learning courses was introduced

Group ‘C’ to Group ‘B’

46

12

8

253

42

23

with effect from 2 April 2008. During the year, 33

Total

employees availed of the facility. Further, under the staff scheme for higher studies, one officer was granted study leave to pursue Post-Graduate Diploma in Management

b.

Staff Assessment

at the Institute of Management Technology (IMT),

5.14

An in-house group under the Chairmanship

Ghaziabad.

of Shri S.K. Mitra, ED was constituted to assess

B.

Recruitment, Promotion and Staff Strength

a.

Recruitment and Promotion

5.13

During the year, recruitment of 102 officers in

staff

requirements

of

the

Bank.

Based

on

the

recommendation of the Group, additional 3, 12 and 21 posts in Grade ‘F’, ‘E’ and ‘D’, respectively, were approved by the Board.

c.

Staff Strength

(RDBS), Rajbhasha Service and Grade ‘B’ in Legal

5.15

As on 31 March 2009, the total staff strength

Service was completed and 99 (97 in RDBS and 2 in

stood at 4,886 out of which 1,255 belonged to SC

Rajbhasha) and 3 (Legal) officers were appointed in

(17.4%) and ST (8%) categories. The total number of

Grades ‘A’ and ‘B’, respectively. The process of

employees in Group ‘A’, ‘B’ and ‘C’ stood at 2,887,

recruiting an additional 120 officers in Grade ‘A’ in

1,122

RDBS during 2009-2010 has also been initiated. During

ex-servicemen and physically challenged employees

the year, 13, 27 and 43 promotions were effected from

stood at 103 and 91, constituting 2.1 and 1.8 per cent

Grade ‘E’ to ‘F’, ‘D’ to ‘E’ and ‘C’ to ‘D’, respectively.

of the total staff strength, respectively. During the year,

The details of other promotions effected upto Grade ‘C’

88 officers in Grade ‘C’ availed of the Optional Early

are given in Table 5.1.

Retirement Scheme.

Grade ‘A’ in the Rural Development Banking Service

and

877,

respectively,

The

strength

of

Administrative and Other Matters A.

Industrial Relations

5.16

Industrial

relations

in

Kerala, and presided over by Shri U. C. Sarangi, the

Bank

continued

to be harmonious during the year. Periodic discussions were All

held India

National

between NABARD

Bank

the

Management

Employees’

Officers’

Chairman. 5.17

The Central Complaints Committee at HO and

and

the

Committees at RO have been functioning effectively for

Association

and

preventing of sexual harassment of women at workplace.

Association.

About

372

B.

Welfare Measures for SC/ST Employees

event, held at Thiruvananthapuram between 19 and

5.18

The Bank continued to adhere to instructions

23 January 2009. The Meet was inaugurated by

issued by GoI regarding reservations for SC/ST in

Shri V. S. Achutanandan, Hon’ble Chief Minister,

recruitment and promotions. Quarterly meetings of the

employees from the Bank’s various units participated in the XII NABOTSAV – the annual cultural and sports

97

Ch-Eng-5.p65

97

7/15/2009, 11:03 AM

Senior Executives and Chief Liaison Officer with

important functional areas were also hosted on the

representatives of the Welfare Association of SC/ST were

NABNET. These are updated every month. NABARD

held

training

also developed the District Agricultural Development

programmes for 242 SC/ST staff members and pre-

at

HO

and

RO.

Pre-promotional

Index for a comparative position of districts in respect of

recruitment training for 5,194 SC/ST candidates were

agricultural development in various states. The model

conducted at 21 Centres.

was tested in Maharashtra, Karnataka and Rajasthan. Apart from internal and external circulars, an e-journal

C.

Other Staff Benefits

5.19

During

‘Issues in Agriculture and Rural Development’ was aggregating

made available on the NABNET. To improve the quality

Rs.1,956.38 lakh was sanctioned to 270 employees. The

of data management in the Bank, a three-day workshop

disbursements against the sanctions, including sanctions

was conducted at NBSC, Lucknow, for officers handling

of previous year, amounted to Rs.2,297.74 lakh.

data in RO.

the

year,

housing

loan

D.

Library

5.20

NABARD maintains a Central Library at HO,

F.

Information Technology

Mumbai, besides its units in RO. The Library Committee

5.22

During the year, LAN was set up in 34 units

supervises the functioning of these libraries. The Central

(HO/RO/SO/TE) of the Bank. The scope of the Bank’s

Library houses 26,000 books in English and Hindi and

inter-office portal was enlarged to host more information

subscribes to 105 journals and magazines, on agriculture

regarding model projects, NABARD publications, Annual

and

development,

Report, business and organisational data/statistics, etc. A

information technology, etc. The Library also subscribes

discussion forum was introduced to make the portal more

to institutional memberships of the British Library and

interactive and user-friendly. Limited accessibility was

NIRD-Hyderabad,

major

extended to ex-staff members also. The Bank decided to

libraries in Mumbai. Further, on-line access to the

replace Lotus Smart Suite as the corporate office

Library

also

automation system with the Open Office Suite. In order

enabled. With a view to providing a wider choice to the

to improve the efficiency of DDM and facilitate them in

staff and broad base the selection of books, four

discharging field duties, each of them was provided a

exhibitions were arranged at HO.

Laptop. The Human Resource Management System

allied

activities,

banking,

and

Catalogue

networks

and

relevant

rural

with

other

articles

was

(HRMS), developed in-house to cater to the needs

E.

Data Management

of

5.21

During 2008-09, district profile data containing

the entire processes of training needs assessment,

information in 14 broad areas, viz., geo-physical

annual transfer operations, assessment on promotion,

features of the district, demographic profile, animal

interviews, etc. Members of the Interview Board set up for

population,

rural

internal promotions were given online access to enable

infrastructure, key banking statistics, trend in area/

them to retrieve the profile of the candidates. During

production/productivity of major crops, etc., in respect

the

of 560 districts were uploaded on the NABNET.

M/s. KPMG to study the activities, systems, processes and

In addition, two new data products, (i) MIS for Top

IT applications currently in vogue in the Bank as also to

Management, comprising of 66 statements, on latest

suggest a suitable IT Roadmap. In order to effectively

achievements in all major business and development

control travel and related costs, save executive time and

areas and (ii) Star Performance Indicators indicating the

facilitate direct interaction it has been decided to set up

comparative

the Video Conferencing System in the Bank.

land

holding/utilisation,

position

of

irrigation,

achievements

by

RO

in

HRMD

year,

and

GAD,

NABARD

was

engaged

98

Ch-Eng-5.p65

98

expanded

7/15/2009, 11:03 AM

the

to

include

services

of

G. 5.23

Office Premises / Residential Quarters

external auditors. The concurrent audit of Central Library and HRMD (leave section) was also entrusted to

The construction of Natural Resource Management

Centre (NRMC) in Kolkata, RO building in Itanagar and sub-office in Port Blair is in progress. In addition, 17 other major construction activities aggregating Rs.150 crore are in the pipeline. The Bank owns 17 office premises out of 29. The Bank has placed an order for procuring 62 residential flats for officers in Ranchi from the State Government and has also procured a suitable plot for its office building in Raipur.

the external auditors during the year. The checklist for concurrent audit was further revised keeping in view the items falling under Information System Audit. Off-site monitoring

of

CAC

undertaken

through

established monthly

in

audit

RO/TE

was

returns.

Two

workshops to improve the efficiency and effectiveness of the CAC in RO/TE, were organised at RTC-Mangalore and NBSC-Lucknow. Pursuant to the directions of the Board of NABARD, ICRA Management Consulting Services Ltd. (iMACS) was assigned a study on Risk Management System in NABARD. The study was

H.

Vigilance

5.24

NABARD conducted six Preventive Vigilance

completed

Inspections of RO for maintaining transparency in decision-making by laying emphasis on systems and procedures followed by them. In addition, one Chief Technical Examiner (CTE) type inspection of civil/

and

the

recommendations

have

been

submitted for consideration of the top management. The operational

risk

to

NABARD

by

the

constituents

continued to be monitored on an on-going basis. During the year, the Operational Risk Management Committee met twice.

electrical works at Cenotaph Road quarters of Tamil Nadu RO was carried out. Two training programmes

J.

Public Relations

were

5.27

In its endeavour to build a strong corporate image

conducted

at

RTC,

Mangalore

and

NBSC,

Lucknow to equip officers attached to RO/TE about the

and disseminate information on rural development

role of Enquiry Officer and Presenting Officer. The Bank

programmes, NABARD initiated measures to widen its

also observed ‘Vigilance Awareness Week’ from 3 to 7

media coverage. The Bank continued to publicise

November 2008.

‘Bhavishya Nirman Bonds’ and ‘Rural Bonds’ as well as areas like ‘Co-financing’, ‘Rural Innovation Fund’, ‘Village Development Programme’, etc. Recruitment of

I.

Inspections

5.25

During 2008-09, inspections of 21 RO, 2 TE

staff was also widely advertised. NABARD regularly and 14 HO Departments were conducted as approved by

the

Audit

Committee

of

the

Board

(ACB).

Major findings of the inspections along with the compliance status were placed before the Executive Directors’ Committee and ACB. The major areas of concern were also put forth to the top management as flash reports. 5.26

responded to queries/issues on agriculture and rural sector. The Bank continued to bring out its monthly and quarterly

publications,

NABARD

Newsletter

and

NABARD Parivar, which were also made available to retired employees. During the year, NABARD Parivar won the first prize in the ‘Headlines’ category of the Annual House Journal Awards of ABCI. NABARD Newsletter is also available electronically.

The concurrent audit of all RO/TE continued to

be undertaken by the Concurrent Audit Cells (CAC) of

K.

Visit of Parliamentary Committees

respective RO/TE, while that of select HO departments,

5.28

Eight Parliamentary Committees held discussions

viz.,

with

NABARD

FD,

AD,

GAD,

Premises

Department

and

Co-financing Cell of ICD continued to be done by

on

various

aspects.

These

were:

(i) Committee on Government Assurances (Lok Sabha), 99

Ch-Eng-5.p65

99

7/15/2009, 11:03 AM

(ii) Committee on Subordinate Legislation, (iii) Standing

Hindi. In order to motivate staff members to work in

Committee on Agriculture, (iv) Drafting and Evidence

Hindi, the Cash Award Scheme continued to be

Sub-Committee of the Parliament on Official Language,

implemented. Staff members were also deputed for

(v) Parliamentary Standing Committee on Personal/

participation in inter-bank competitions organised by

Public Grievance, Law and Justice, (vi) Committee on

respective TOLIC. Rajbhasha Shield for 2007-08 was

Government Assurances (Rajya Sabha), (vii) Committee

awarded to Madhya Pradesh, Gujarat and Andhra

on Subordinate Legislation – RRB’ Service Regulation,

Pradesh RO for Regions ‘A’, ‘B’ and ‘C’, respectively,

and

and NBSC, Lucknow among TE. At the HO level, the

(viii)

Committee

of

Parliament

on

Official

Language.

Shield was awarded to Corporate Planning Department and

Central

Statistical

Information

Department.

Effective from 2008-09, the evaluation criteria for

L.

Promotion of Hindi

5.29

NABARD continued to promote the use of Hindi

Rajbhasha Shield were modified to make the scheme more

objective

and

productive.

Gujarat

RO

was

in its everyday functioning. To enable the staff to work

awarded Rajbhasha Shield by TOLIC, Ahmedabad for

in Hindi, 56 workshops were conducted and training on

best performance in use of Hindi among FI while Assam

the use of new bilingual software APS Saral was

RO ranked first among banks operating in NER by the

imparted. A three-day orientation programme was

Regional Implementation Office, GoI.

organised

to sensitise senior officers to the official

language policy of GoI. In addition, the 20th Business

5.31

Plan Meet of Rajbhasha officers at Hyderabad, a five-

three National Level Awards, viz., Best Hindi House

day

During the year, ‘Rashtriya Bank Srijana’ bagged

for

Rajbhasha

Journal

an

orientation

Surjan Foundation-Raipur and ABCI Award in the

workshop for nodal officers handling the work of Hindi

category of Indian language publications. The corporate

in the RO in NER were also conducted. The Official

license for APS Saral, the advanced unicode-compliant

Language Implementation Committees (OLIC) at HO/

version of APS 2000++ was procured and the software

RO/TE undertook quarterly reviews on use of Hindi in

installed across regional offices. This is expected to ease

their respective offices. On-site inspections of five RO

the process of electronic communication in Hindi

and two TE were conducted. Hon’ble Members of the

between NABARD and other institutions. In addition to

Drafting

regular

translation

officers

at

training

NBSC,

and

Parliamentary

programme

Lucknow

Evidence Committee

and

Sub-Committee on

Official

of

Language

Award

from

translation

Procedure

for

Ashirvad-Mumbai,

work,

Settlement

the of

‘Model Claims

Mayaram

Operational of

Deceased

reviewed the progress of Hindi in Sikkim and Kerala

Depositors’, ‘Funds and Investment Management in

RO and NBSC, Lucknow.

Co-operatives’,

‘Reading

Material

for

the

Elected

Members on Boards of DCCB and SCB’ were translated 5.30

The

Bank

continued

to

organise

various

competitions across all offices to encourage the use of

in Hindi. Many RO brought out PLP and Inspection Reports in Hindi.

100

Ch-Eng-5.p65

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7/15/2009, 11:03 AM

Annual Accounts 2008-2009

101

Balance Sheet-09-A Final.p65

101

7/15/2009, 11:33 AM

Khimji Kunverji & Co. 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, 2009 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. 1/14/2004–BOA dated March 26, 2009 issued by Ministry of Finance, Department of Economic Affairs (Banking Division). Also incorporated in the Balance Sheet, Profit and Loss Account and Cash Flow Statement are the returns from 16 Regional Offices, 1 Sub–Office and 2 Training Centers which have not been subjected to audit. These unaudited offices account for 15.56% of advances, 0.13% of deposits and term money borrowings, 15.19% of interest income and 0.30% 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 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 Regional Offices and Training Centers of the Bank have been found adequate for the purposes 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 contains 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, 2009; 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 Dated: June 17, 2009 For and on behalf of Khimji Kunverji & Co. Chartered Accountants

Hasmukh B. Dedhia Partner (F-033494) Suit 52, Bombay Mutual Building, Sir Phirozshah Mehta Road, Fort, Mumbai - 400 001, India. Telephones: +91 22 22662550, 22661270, 22662011 • Fasimile: +91 22 22664045 E-mail: [email protected] • Website: www.khimjikunverji.com

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NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT BALANCE SHEET AS ON 31 MARCH 2009 Sr. No. 1.

FUNDS AND LIABILITIES

SCHEDULE

Capital (Under Section 4 of the NABARD Act, 1981)

(Rupees)

As on 31.03.2009

As on 31.03.2008

2000,00,00,000

2000,00,00,000

2.

Reserve Fund and Other Reserves

1

9535,20,60,005

8602,84,75,385

3.

National Rural Credit Funds

2

15571,00,00,000

15159,00,00,000

4.

Funds out of grants received from International Agencies

3

154,81,78,661

170,38,44,460

5.

Gifts, Grants, Donations and Benefactions

4

5111,01,92,515

3967,49,29,810

6.

Other Funds

5

2101,80,68,588

1518,00,64,973

7.

Deposits

6

52127,12,34,628

30698,81,85,462

8.

Bonds and Debentures

7

23703,63,05,906

28700,12,30,600

9.

Borrowings

8

3592,94,14,312

4800,26,56,118

Current Liabilities and Provisions

9

4278,56,76,956

3089,53,14,729

118176,11,31,571

98706,47,01,537

634,56,79,356

605,58,18,093

10.

Total Forward Foreign Exchange Contracts (Hedging) as per contra

(Rupees) Sr. No.

PROPERTY AND ASSETS

SCHEDULE

As on 31.03.2009

As on 31.03.2008

1.

Cash and Bank Balances

10

13975,21,04,689

10314,24,14,644

2.

Investments

11

2994,68,29,886

2582,05,89,335

3.

Advances

12

98852,67,05,981

82872,42,54,280

4.

Fixed Assets

13

247,17,14,222

257,28,88,784

5.

Other Assets

14

2106,37,76,793

2680,45,54,494

118176,11,31,571

98706,47,01,537

634,56,79,356

605,58,18,093

Total Forward Foreign Exchange Contracts (Hedging) as per contra Commitment and Contingent Liabilities

17

Significant Accounting Policies and Notes on Accounts

18

Schedules referred to above form an integral part of accounts. As per our attached report of even date Khimji Kunverji & Co. Chartered Accountants

Hasmukh B. Dedhia Partner Mumbai Date : June 17, 2009

Umesh Chandra Sarangi Chairman

S. Akbar Chief General Manager Accounts Department Mumbai : June 17, 2009

Dr. K.G. Karmakar Managing Director

T. Nandkumar Director

Usha Thorat Director

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NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2009 Sr.No. INCOME

(Rupees)

2008-09

2007-08

5693,02,22,426 1214,81,25,586 92,55,15,672 50,29,52,260

4518,08,36,863 903,34,71,377 51,71,40,176 35,95,18,391

7050,68,15,944

5509,09,66,807

SCHEDULE

2008-09

2007-08

15 16 A 16 B

4255,90,25,220 693,38,57,487 92,49,80,587 21,36,41,786

3137,48,84,464 495,96,97,851 105,91,02,349 21,63,06,861

Total “B”

5063,15,05,080

3760,99,91,525

5.

Profit before Tax (A - B)

1987,53,10,864

1748,09,75,282

6.

a) Provision for Income Tax b) Deferred Tax - Asset (Adjustment) (Refer Note B-12 of Schedule 18) c) Provision for Fringe Benefit Tax

674,00,00,000

560,00,00,000

(-) 80,20,00,000 3,60,00,000

(-) 41,45,00,000 3,40,00,000

1390,13,10,864

1226,14,75,282

1. 2. 3. 4.

SCHEDULE

Interest received on Loans and Advances (Refer Note B-2 & 3 of Schedule 18) Income from Investment Operations/ Deposits Discount and Commission Other Receipts (Refer Note B-5 of Schedule 18) Total “A”

Sr.No. EXPENDITURE 1. 2. 3. 4.

7.

Interest and Financial Charges Establishment and Other Expenses Provisions Depreciation (Refer Note B-16 of Schedule 18)

Profit after Tax Significant Accounting Policies and Notes on Accounts

18

Schedules referred to above form an integral part of accounts.

PROFIT AND LOSS APPROPRIATION ACCOUNT Sr.No.

APPROPRIATIONS / WITHDRAWALS

1.

2.

(Rupees) 2008-09

2007-08

Profit for the year brought down Add: Withdrawals from Funds against expenditure debited to Profit & Loss A/c a) Co-operative Development Fund (Refer Schedule 1) b) Research and Development Fund (Refer Schedule 1) c) Watershed Development Fund (Refer Schedule 5) d) Micro Finance Development and Equity Fund (Refer Schedule 5) e) Farm Innovation & Promotion Fund (Refer Schedule 1)

1390,13,10,864 3,81,14,043 8,76,10,683 24,91,45,824 9,92,70,242 73,40,088

1226,14,75,282 3,06,99,557 7,48,95,872 11,90,51,701 7,38,32,004 46,08,634

Profit available for Appropriation

1438,27,91,744

1256,45,63,050

340,00,00,000 400,00,00,000 10,00,00,000 3,81,14,043 8,76,10,683 42,00,00,000 18,50,00,000 32,50,00,000 31,61,42,310 46,55,57,504 504,53,67,204

320,00,00,000 400,00,00,000 10,00,00,000 53,06,99,557 7,48,95,872 25,78,45,000 5,00,00,000 5,00,00,000 25,00,00,000 0 405,11,22,621

1438,27,91,744

1256,45,63,050

Less: Transferred to: a) Special Reserve u/s 36(1) (viii) of IT Act, 1961 b) National Rural Credit (Long Term Operations) Fund c) National Rural Credit (Stabilisation) Fund d) Co-operative Development Fund e) Research and Development Fund f) Investment Fluctuation Reserve g) Financial Inclusion Fund h) Financial Inclusion Technology Fund i) Farmers Technology Transfer Fund j) Farm Innovation & Promotion Fund k) Reserve Fund Total Refer Schedule 18 for Significant Accounting Policies and Notes on Accounts. As per our attached report of even date Khimji Kunverji & Co. Chartered Accountants Hasmukh B. Dedhia Partner Mumbai Date : June 17, 2009 Umesh Chandra Sarangi Chairman

S. Akbar Chief General Manager Accounts Department Mumbai : June 17, 2009 Dr. K.G. Karmakar Managing Director

T. Nandakumar

Usha Thorat

Director

Director

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SCHEDULES TO BALANCE SHEET Schedule 1 - Reserve Fund and Other Reserves (Rupees) Sr. Particulars No.

Opening Balance as on 01.04.2008

Transferred From P&L Appropriation

Transferred to P&L Appropriation

Balance as on 31.03.2009

4718,80,35,657

504,53,67,204

0

5223,34,02,861

1.

Reserve Fund

2.

Research and Development Fund

50,00,00,000

8,76,10,683

8,76,10,683

50,00,00,000

3.

Capital Reserve

74,80,53,208

0

0

74,80,53,208

4.

Investment Fluctuation Reserve

5.

Co-operative Development Fund

6.

Soft Loan Assistance Fund for Margin Money

7.

Agriculture & Rural Enterprise Incubation Fund

8. 9.

Foreign Currency Risk Fund Special Reserve Created & Maintained u/s 36(1)(viii) of Income Tax Act, 1961

10.

Farm Innovation & Promotion Fund

73,00,00,000

42,00,00,000

0

115,00,00,000

125,00,00,000

3,81,14,043

3,81,14,043

125,00,00,000

10,00,00,000

0

0

10,00,00,000

5,00,00,000

0

0

5,00,00,000

147,06,03,936

0

0

147,06,03,936

3395,00,00,000

340,00,00,000

0

3735,00,00,000

4,17,82,584

46,55,57,504

73,40,088

50,00,00,000

Total

8602,84,75,385

945,66,49,434

13,30,64,814

9535,20,60,005

Previous year

7802,41,16,398

811,45,63,050

11,02,04,063

8602,84,75,385

Schedule 2 - National Rural Credit Funds (Rupees) Sr. Particulars No.

1. 2.

Opening Balance as on 01.04.2008

Contribution by RBI

Transferred from P&L Appropriation

Balance as on 31.03.2009

13615,00,00,000

1,00,00,000

400,00,00,000

14016,00,00,000

1544,00,00,000

1,00,00,000

10,00,00,000

1555,00,00,000

Total

15159,00,00,000

2,00,00,000

410,00,00,000

15571,00,00,000

Previous year

14747,00,00,000

2,00,00,000

410,00,00,000

15159,00,00,000

National Rural Credit (Long Term Operations) Fund National Rural Credit (Stabilisation) Fund

Schedule 3 - Funds out of Grants received from International Agencies (Rupees) Sr. No.

Particulars

1.

National Bank - Swiss Development Coop. Project

2. 3. 4.

Opening Balance as on 01.04.2008

Grants received/ adjusted during the year

Interest credited to the Fund

Exp./Disb./ adjust. during the year

Balance as on 31.03.2009

54,71,00,174

90,77,000

0

0

55,61,77,174

Rural Innovation Fund (Refer Note B-9 of Schedule 18)

109,73,98,549

0

5,05,40,943

25,50,49,494

89,28,89,998

Rural Promotion Fund (Refer Note B-8 of Schedule 18)

5,49,05,183

1,76,25,141

0

0

7,25,30,324

44,40,554

5,09,07,803

0

2,87,67,192

2,65,81,165

KfW - NABARD V Fund for Adivasi Programme Total

170,38,44,460

7,76,09,944

5,05,40,943

28,38,16,686 154,81,78,661

Previous year

182,63,92,591

6,16,75,699

6,21,16,899

24,63,40,729 170,38,44,460

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Schedule 4 - Gifts, Grants, Donations and Benefactions (Rupees) Sr. No.

Par ticulars

Opening Balance as on 01.04.2008

Grant received during the year

Interest Credited to the Fund

Adjusted against the expenditure

Balance as on 31.03.2009

11,45,898

6,47,96,054

4,42,023

6,23,98,314

39,85,661

0

16,37,34,736

2,28,182

14,38,42,327

2,01,20,591

Indo German Watershed Development Programme Andhra Pradesh (Refer Note B-9 of Schedule 18)

52,84,458

3,42,22,285

1,76,130

3,59,98,229

36,84,644

Indo German Watershed Development Programme Gujarat (Refer Note B-9 of Schedule 18)

74,39,581

1,00,80,108

2,43,625

1,23,15,630

54,47,684

Indo German Watershed Development Programme Rajasthan (Refer Note B-9 of Schedule 18)

42,37,753

70,40,297

3,25,906

73,89,813

42,14,143

9,65,12,324

45,00,000

9,91,638

3,04,99,000

7,15,04,962

7,02,569

0

0

42,503

6,60,066

0

2,39,35,333

0

2,39,35,333

0

4,98,357

60,00,000

0

72,35,053

(-) 7,36,696

0

2,96,39,708

0

2,96,39,708

0

20,82,710

14,81,22,000

0

14,03,14,800

98,89,910

4,26,890

21,09,52,600

0

20,85,95,400

27,84,090

0

3,64,42,626

0

2,10,00,000

1,54,42,626

A. 1. 2.

3. 4. 5. 6. 7.

KfW - NB - IX Adivasi Development Programme Maharashtra (Refer Note B-9 of Schedule 18) KfW-NB-Indo German Watershed Development Programme - Phase III - Maharashtra (Refer Note B-9 of Schedule 18)

KfW Umbrella Programme on Natural Resource Management (Refer Note B-9 of Schedule 18) NABARD Grant for Fixed Assets under NB-SDC HID Project

8.

GTZ-NABARD RFP - Financial Component

9.

NE Council Fund for Miscellaneous Training Programme

10.

KfW NB SEWA Bank Capitalisation of RFIs

B. 1.

Capital Investment Subsidy for Cold Storage Projects - NHB

2.

Capital Subsidy for Cold Storage - NHM

3.

Capital Subsidy for Cold Storage - TM North East

4.

Credit Linked Capital Subsidy for Technology Upgradation of SSIs

7,08,39,480

1,31,36,000

0

7,75,85,128

63,90,352

5.

Capital Investment Subsidy for Rural Godowns

4,94,51,650

78,00,00,000

0

59,17,74,198

23,76,77,452

6.

On-farm Water Management for Crop Production

89,62,638

0

0

87,70,820

1,91,818

7.

Million Shallow Tubewell Programme - Bihar

228,95,48,442

0

0 (-) 2,71,81,447

231,67,29,889

8.

Cattle Development Programme - Uttar Pradesh (Refer Note B-9 of Schedule 18)

3,74,98,385

0

17,28,923

1,69,54,000

2,22,73,308

Cattle Development Programme - Bihar (Refer Note B-9 of Schedule 18)

4,01,40,212

0

19,82,468

1,49,45,000

2,71,77,680

10.

National Project on Organic Farming

3,52,31,798

3,68,33,000

0

2,57,52,960

4,63,11,838

11.

Integrated Watershed Development Programme Rashtriya Sama Vikas Yojana

7,93,35,452

14,41,93,344

0

3,72,33,304

18,62,95,492

14,41,93,344

0

0

14,41,93,344

0

9.

12.

Capital Investment Subsidy Scheme Horticulture Development - Bihar

13.

Rain Water Harvesting Scheme

57,93,313

0

0

(-) 24,88,031

82,81,344

14.

Kutch Drought Proofing Project

68,90,555

0

0

4,43,336

64,47,219

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Schedule 4 - Gifts, Grants, Donations and Benefactions (Rupees) S r. No.

Pa r ticulars

Opening Balance as on 01.04.2008

Grant received during the year

15.

Dairy and Poultry Venture Capital Fund

24,06,52,774

35,00,00,000

16.

Capital Subsidy for Agriculture Marketing Infrastructure, Grading and Standardisation

53,21,990

17.

Vidharbha Package

18.

Adjusted against the expenditure

Balance as on 31.03.2009

0

34,96,79,705

24,09,73,069

77,05,09,000

0

61,43,30,770

16,15,00,220

63,26,230

0

0

63,26,230

0

Livelihood Advancement Business School Sultanpur, Uttar Pradesh (Refer Note B-9 of Schedule 18)

70,68,766

0

4,57,349

0

75,26,115

19.

Livelihood Advancement Business School Rae Bareli , Uttar Pradesh (Refer Note B-9 of Schedule 18)

1,01,03,957

0

6,53,726

0

1,07,57,683

20.

Multi Activity Approach for Pover ty Alleviation - Sultanpur, Uttar Pradesh (Refer Note B-9 of Schedule 18)

86,44,952

0

4,70,663

82,00,000

9,15,615

Multi Activity Approach for Pover ty Alleviation - BAIF - Rae Bareli, Uttar Pradesh (Refer Note B-9 of Schedule 18)

2,24,91,402

0

12,22,446

2,15,25,000

21,88,848

22.

Capital Subsidy Scheme Agri Clinics Agri Business Centres

2,31,46,360

0

0

1,60,54,665

70,91,695

23.

Ar tificial Recharge of Groundwater in Hard Rock Area

1536,75,00,000

0

0

143,34,08,400

1393,40,91,600

21.

Interest Credited to the Fund

24.

Subsidy Reserve - CSAMI under RIDF

0

69,47,300

0

0

69,47,300

25.

DWDR Scheme 2008

0

17500,00,00,000

0

16611,01,23,675

888,98,76,325

26.

Interest Subvention (Sugar TL)

0

138,53,76,000

0

116,18,47,080

22,35,28,920

26,09,93,479

(-) 3,50,00,000

0

6,78,13,854

15,81,79,625

C

Revival Package of Short Term Cooperative Credit Structure 1.

Cost of Special Audit

2.

Recapitalisation Assistance to Credit Cooperative Societies

2048,32,12,766

3838,76,00,000

0

3567,41,93,693

2319,66,19,073

3.

Technical Assistance

14,96,75,184

40,00,00,000

0

13,33,71,772

41,63,03,412

4.

Human Resources Development

14,09,11,818

50,00,00,000

0

12,72,87,260

51,36,24,558

5.

Implementation Cost

6,26,64,323

35,00,00,000

0

26,73,69,939

14,52,94,384

D

Long Term Co operative Credit Structure (LTCCS)

0

20,00,00,000

0

0

20,00,00,000

3967,49,29,810

21902,90,60,391

89,23,079

20760,27,20,765

5111,01,92,515

711,81,48,778

4923,66,29,181

81,57,993

1668,80,06,142

3967,49,29,810

Total Previous year

E

As on 31.03.2009

As on 31.03.2008

1.

Grants to RRBs/SCBs/SLDBs under ARDR Scheme, 1990

2695,37,95,937

2695,37,95,937

2.

Less : Grants Released to RRBs/SCBs/SLDBs under ARDR Scheme, 1990

2695,37,95,937

2695,37,95,937

0

0

Total

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Schedule 5 - Other Funds Sr. Particulars No.

Opening Additions/ Balance as on Adjustments 01.04.2008 during the year

Transferred from P & L Appropriation

(Rupees) Interest Credited

Expenditure/ Disb.during the year

Transferred to P&L Appropriation

Balance as on 31.03.2009

1.

Watershed Development Fund (Refer Note B-9 of Schedule 18)

613,68,48,645

527,52,11,636

0

2.

Micro Finance Development and Equity Fund (Refer Note B-9 of Schedule 18)

126,60,86,662

20,00,00,000

0

6,04,41,953

8,80,32,101

9,92,70,242

133,92,26,272

3.

Interest Differential Fund (Forex Risk)

117,67,59,671

14,05,00,274

0

0

0

0

131,72,59,945

4.

Interest Differential Fund (Tawa) (Refer Note B-1 of Schedule 18)

11,41,518

13,930

0

0

0

0

11,55,448

5.

Adivasi Development Fund

1,93,60,592

1,45,94,702

0

0

0

0

3,39,55,294

6.

Tribal Development Fund

602,98,67,885

5,00,000

0

0 28,05,33,698

0

574,98,34,187

7.

Financial Inclusion Fund (Refer Note B-9 of Schedule 18)

15,00,00,000

0

18,50,00,000

94,71,129

36,14,706

0

34,08,56,423

8.

Financial Inclusion Technology Fund (Refer Note B-9 of Schedule 18)

15,00,00,000

0

32,50,00,000

96,43,865

9,44,899

0

48,36,98,966

9.

Farmers Technology Transfer Fund

25,00,00,000

0

31,61,42,310

0

6,61,42,310

0

50,00,00,000

Total

1518,00,64,973

563,08,20,542

82,61,42,310

41,78,70,367 68,84,13,538

34,84,16,066 2101,80,68,588

Previous year

1112,28,92,249

385,67,09,519

35,00,00,000

42,67,77,994 38,34,31,085

19,28,83,704 1518,00,64,973

33,83,13,420 24,91,45,824

Schedule 6 – Deposits

24,91,45,824 1125,20,82,053

(Rupees)

Sr. Particulars No.

as on 31.03.2009

as on 31.03.2008

1.

From Central Government

0

0

2.

From State Government

0

0

3.

From Others a) Tea / Rubber / Coffee Deposits b) Term Deposits c) Commercial Banks (Deposits under RIDF) d) Short Term Cooperative Rural Credit Fund

60,45,95,645 421,63,02,000 47022,75,11,983 4622,28,25,000

106,08,44,199 0 30592,73,41,263 0

Total

52127,12,34,628

30698,81,85,462

Schedule 7 – Bonds and Debentures (Rupees) Sr. Particulars No. 1.

SLR Bonds

2.

Tax Free Bonds

3.

Priority Sector Taxable Bonds

4.

Non Priority Sector Bonds

5.

Capital Gains Bonds

6.

Bhavishya Nirman Bonds

7.

NABARD Rural Bonds Total

as on 31.03.2009

as on 31.03.2008

277,98,11,000

394,21,11,000

0

535,15,00,000

0

325,00,00,000

18156,50,00,000

20877,50,00,000

690,93,90,000

4777,45,10,000

4554,22,17,906

1787,45,72,600

23,98,87,000

3,35,37,000

23703,63,05,906

28700,12,30,600

108

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Schedule 8 – Borrowings Sr. No.

(Rupees)

Particulars

1.

From Central Government

2.

From Reserve Bank of India

3.

From Others : (a) In India (i) Certificate of Deposits (ii) Commercial Paper (iii) Term Money Borrowings (iv) From Commercial Banks (b) Outside India (i) From International Agencies Total

as on 31.03.2009

as on 31.03.2008

353,80,83,226

370,20,89,182

0

0

1816,15,33,900 180,61,86,000 244,07,00,000 500,00,00,000

1421,92,03,300 0 0 2500,00,00,000

498,29,11,186

508,13,63,636

3592,94,14,312

4800,26,56,118

Schedule 9 - Current Liabilities and Provisions (Rupees) Sr. No.

Particulars

as on 31.03.2009

as on 31.03.2008

2012,53,59,327

1674,07,05,305

1.

Interest / Discount Accrued

2.

Sundry Creditors

596,61,60,450

67,63,27,343

3.

Provision for Gratuity (Refer Note B-17 of Schedule 18)

261,52,90,025

232,66,17,081

4.

Provision for Pension (Refer Note B-10 and B-17 of Schedule 18)

637,35,36,151

466,91,98,168

5.

Provision for Encashment of Ordinary Leave (Refer Note B-17 of Schedule 18)

24,52,09,592

19,30,26,212

6.

Unclaimed Interest on Bonds with RBI

7.

Unclaimed Interest on Bonds

8.

Unclaimed Interest on Term Deposits

9.

Bonds matured but not claimed (Refer Note B-11 of Schedule 18)

10.

11,56,586

9,36,66,167

6,29,04,755

27,913

0

69,11,50,000

81,87,70,000

0 72,72,63,808 493,07,00,000 2,12,28,000 4,54,00,000 35,48,250 94,64,83,187

35,73,98,880 54,54,47,856 419,37,00,000 1,66,08,000 13,16,00,000 37,97,358 15,80,57,185

4278,56,76,956

3089,53,14,729

Provisions and Contingencies (a) Depreciation in Value of Investment a/c - G. Sec. (Refer Note B-7 of Schedule 18) (b) Amortisation of G. Sec. - HTM (c) For Standard Assets (d) Depreciation in value of Investments (e) Sacrifice in Interest Element of Restructured Loans (f) Provision for Other Assets & Receivables (g) Provision for Income Tax [Net of Advance Tax] Total

6,54,086

Schedule 10 - Cash and Bank Balances (Rupees) Sr. No. 1. 2.

Particulars Cash in hand Balances with : a) Reserve Bank of India b) Others (I) In India (i) Other banks in India a) On Current Account b) Deposit with Banks (ii) Remittances in Transit (iii) Collateralised Borrowing and Lending Obligations (II) Outside India Total

as on 31.03.2009

as on 31.03.2008

21,579

21,531

169,67,65,931

3795,85,77,121

420,21,61,811 13067,10,00,000 185,25,16,092 132,96,39,276 0

107,56,48,175 5789,00,00,000 157,59,35,668 464,22,32,149 0

13975,21,04,689

10314,24,14,644

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Schedule 11 – Investments Sr. No. 1.

Particulars Government Securities a) Securities of Central Government (Refer Note B-6 of Schedule 18) [Face Value Rs. 1530,30,50,000 (Rs. 1380,30,50,000)] [Market Value Rs. 1602,95,63,114 (Rs. 1406,58,19,973)] b) Treasury Bills [Face Value Rs. 168,50,00,000 (Rs.278,77,75,000)]

2.

Other Approved Securities

3.

Equity Shares in : a) Agri-Development Finance Companies : i)

NABARD Financial Services Ltd. [52,00,000 - Equity shares of Rs.10 each]

Rs. 5,20,00,000

ii) Agri-Business Finance [Andhra Pradesh] Ltd. [52,00,000 - Equity shares of Rs.10 each]

Rs. 5,20,00,000

iii) Agri Development Finance [Tamil Nadu] Ltd. Rs. 5,20,00,000 [52,00,000 - Equity shares of Rs.10 each] b) Agricultural Finance Corporation Ltd. [1,000 - Equity shares of Rs.10,000 each] c) Small Industries Development Bank of India [1,60,00,000 - Equity shares of Rs.10 each (face value)] d) Agriculture Insurance Company of India Ltd. [6,00,00,000 - Equity shares of Rs.10 each] e) NABARD Consultancy Services Pvt. Ltd. [50,00,000 - Equity shares of Rs.10 each] f) National Commodity and Derivatives Exchange Ltd. [45,00,000 - Equity shares of Rs.10 each] g) Multi Commodity Exchange of India Ltd. [12,50,000 - Equity shares of Rs.10 each] 4.

Others a) Units of Liquid Mutual Funds (Refer Note B-24 of Schedule 18) b) APIDC-Venture Capital Pvt. Ltd. - BVF [50,000 (50,000) class A units of Rs. 1000 (800) each] c) Commercial Paper [Face Value Rs.150,00,00,000 (Rs. Nil)] Total

(Rupees) as on 31.03.2009

as on 31.03.2008

1555,21,24,186

1422,29,02,151

156,51,75,000

260,41,87,184

0

0

15,60,00,000

15,60,00,000

1,00,00,000

1,00,00,000

48,00,00,000

48,00,00,000

60,00,00,000

60,00,00,000

5,00,00,000

5,00,00,000

4,50,00,000

4,50,00,000

1,25,00,000

1,25,00,000

1000,00,00,000

760,00,00,000

5,00,00,000 142,60,30,700

4,00,00,000 0

2994,68,29,886

2582,05,89,335

Schedule 12 – Advances (Rupees) Sr. No. 1.

2.

Particulars Refinance Loans a) Production & Marketing Credit b) Conversion Loans for Production Credit c) Medium Term Investment Credit- Non-Project loans d) Liquidity Support e) Other Investment Credit : i) Medium Term and Long Term Project Loans (Refer Note B-15 of Schedule 18) ii) Long Term Non-Project Loans Direct Loans a) Loans under Rural Infrastructure Development Fund b) Other Loans: i) Cooperative Development Fund ii) Micro Finance Development Equity Fund iii) Watershed Development Fund iv) Tribal Development Fund c) Co-Finance Loans (Net of Provision) Total

as on 31.03.2009

as on 31.03.2008

16896,23,31,000 20,06,77,000 4,80,000 2590,91,89,000

17381,49,72,000 118,20,43,000 9,60,000 1939,88,56,605

33334,81,37,417 251,92,69,717

32401,00,02,486 290,14,34,014

45616,21,10,206

30648,59,05,219

3,27,78,368 29,74,13,365 14,72,11,100 23,52,000 94,47,56,808

3,51,05,480 16,41,99,746 6,64,64,900 3,68,000 66,39,42,830

98852,67,05,981

82872,42,54,280

110

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Schedule 13 - Fixed Assets Sr. No. 1.

Particulars

as on 31.03.2008

144,16,62,113 34,73,754 144,51,35,867 32,37,09,461

118,43,09,971 25,73,52,142 144,16,62,113 30,07,14,152

112,14,26,406

114,09,47,961

256,05,62,671 1,96,46,744 258,02,09,415 135,58,29,200

244,58,60,686 11,47,01,985 256,05,62,671 125,56,08,556

122,43,80,215

130,49,54,115

54,85,48,549 1,57,37,977 56,42,86,526 15,65,752 56,27,20,774 52,71,25,392

56,90,90,253 1,24,47,228 58,15,37,481 3,29,88,932 54,85,48,549 50,01,79,543

3,55,95,382

4,83,69,006

61,87,59,611 6,26,97,833 68,14,57,444 2,00,55,046 66,14,02,398 59,23,72,621

63,23,32,978 3,62,81,283 66,86,14,261 4,98,54,650 61,87,59,611 55,82,35,788

Book Value

6,90,29,777

6,05,23,823

VEHICLES Opening Balance Additions/adjustments during the year Sub-Total Less: Cost of assets sold/written off Closing Balance (at cost) Less: Depreciation to date Book Value

4,19,68,259 1,63,83,824 5,83,52,083 1,07,49,021 4,76,03,062 2,63,20,620 2,12,82,442

3,92,01,244 51,79,072 4,43,80,316 24,12,057 4,19,68,259 2,38,74,380 1,80,93,879

247,17,14,222

257,28,88,784

LAND : Freehold & Leasehold (Refer Note B-14 of Schedule 18) Opening Balance Additions/adjustments during the year Closing Balance (at cost) Less: Amortisation of Lease Premia Book Value

2.

PREMISES (Refer Note B-14 of Schedule 18) Opening Balance Additions/adjustments during the year Closing Balance (at cost) Less: Depreciation to date Book Value

3.

FURNITURE & FIXTURES Opening Balance Additions/adjustments during the year Sub-Total Less: Cost of assets sold/written off Closing Balance (at cost) Less: Depreciation to date Book Value

4.

5.

(Rupees) as on 31.03.2009

COMPUTER INSTALLATIONS & OFFICE EQUIPMENTS Opening Balance Additions/adjustments during the year Sub-Total Less: Cost of assets sold/written off Closing Balance (at cost) Less: Depreciation to date

Total

Schedule 14- Other Assets (Rupees) Sr. No.

Particulars

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Accrued Interest Deposits with Landlords Deposits with Government Departments and Other Institutions Housing loan to staff Other Advances to staff Advances to Landlords Capital Work in Progress [Purchase of Staff Quarters & Office Premises] Sundry Advances Advance Tax (Net of Provision for Income Tax) Deferred Tax Assets [Refer Note B-12 of Schedule 18] Expenditure recoverable from Government of India/International Agencies Discount Receivable Total

as on 31.03.2009

as on 31.03.2008

1501,44,94,051 1,23,85,912 2,28,58,811 103,55,76,565 64,33,12,331 1,54,000 9,84,29,348 26,19,12,331 0 384,99,00,000 4,37,219 12,43,16,225

2173,58,69,541 1,00,90,952 2,16,00,208 98,42,58,611 56,24,05,783 2,73,433 4,96,86,759 28,44,91,070 0 304,79,00,000 1,64,48,340 9,15,29,797

2106,37,76,793

2680,45,54,494

111

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Schedule 15 – Interest & Financial Charges (Rupees) Sr. Particulars

2008-09

2007-08

25,76,35,682

27,02,49,958

No. 1.

Interest Paid on a)

Loans from Central Government

b)

Borrowings from Reserve Bank of India

c)

Bonds (Refer Note B-4 of Schedule 18)

d)

Special Loan Deposits from State Governments

e)

Tea / Coffee / Rubber Deposits

f)

Term Money Borrowings

g)

Term Deposits

h)

Borrowings from International Agencies

i)

Commercial Paper (Refer Note B-4 of Schedule 18)

j)

Short Term Cooperative Rural Credit Fund (Refer Note B-4 of Schedule 18)

k)

Deposits under RIDF

l)

Cattle Development Programme (UP & Bihar)

m)

Watershed Development Fund

n) o)

5,99,45,694

0

1581,54,51,596

1361,55,15,697

0

6,690

3,24,31,169

4,76,68,588

38,26,30,457

0

8,95,97,323

0

27,70,71,578

24,32,59,546

7,18,81,566

0

27,69,81,135

0

2157,00,88,384

1400,62,85,028

37,11,391

14,90,600

33,83,13,420

34,73,68,791

Financial Inclusion Fund

94,71,129

0

Financial Inclusion Technology Fund

96,43,865

0

p)

Micro Finance Development and Equity Fund

6,04,41,953

7,94,09,203

q)

Indo German Watershed Development Programme - Andhra Pradesh

1,76,130

2,17,699

r)

Indo German Watershed Development Programme - Rajasthan

3,25,906

1,67,216

s)

KfW - NB Indo German Watershed Development Programme Phase III - Maharashtra

2,28,182

12,31,130

t)

KfW - NB - IX Adivasi Development Programme

4,42,023

2,11,824

u)

Indo German Watershed Development Programme - Gujarat

2,43,625

1,09,631

v)

Corporate Borrowings from Banks and FIs in India

130,08,45,106

187,90,01,244

w)

Rural Innovation Fund

5,05,40,943

6,21,16,899

x)

Livelihood Advancement Business School RF Project Sultanpur, Uttar Pradesh

4,57,349

4,95,616

Multi Activity Approach for Poverty Alleviation BAIF Project Sultanpur, Uttar Pradesh

4,70,663

17,64,718

z)

Livelihood Advancement Business School RF Project Rae Bareli, Uttar Pradesh

6,53,726

8,81,983

aa)

Multi Activity Approach for Poverty Alleviation BAIF Rae Bareli, Uttar Pradesh

12,22,446

15,76,950

ab)

Other Deposits / Borrowings

12,83,178

0

ac)

Discount on Certificate of Deposits

175,19,07,902

61,49,39,574

ad)

Tribal Development Fund - Wadi [West Bengal]

0

29,824

y)

Project -

2.

Discount on Collateralised Borrowing and Lending Obligations

3,17,86,414

3,91,67,660

3.

Swap Charges

3,14,00,171

3,28,30,183

4.

Discount, Brokerage, Commission & Issue exp. on Bonds and Securities

13,17,45,114

12,64,14,035

5.

Repo Interest Expenditure

0

24,74,177

4255,90,25,220

3137,48,84,464

Total

112

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Schedule 16 A - Establishment and Other Expenses (Rupees) Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

15.

16.

Particulars

2008-09

2007-08

Salaries and Allowances Contribution to / Provision for Staff Superannuation Funds Travelling & Other allowances in connection with Directors’ & Committee Members’ Meetings Directors’ & Committee Members’ Fees Rent, Rates, Insurance, Lighting, etc. Travelling Expenses Printing & Stationery Postage, Telegrams & Telephones Repairs Auditors’ Fees [includes Rs.Nil (Previous Year Rs 2,03,136) paid to erstwhile auditors] Legal Charges Miscellaneous Expenses Expenditure on Miscellaneous Assets Expenditure on Study & Training [Including Rs.5,52,86,037 (Rs. 4,77,77,782) pertaining to establishment expenses of Regional Training Colleges] Expenditure on Promotional Activities under (i) Cooperative Development Fund (ii) Micro Finance Development and Equity Fund (iii) Watershed Development Fund (iv) Farm Innovation and Promotion Fund Wealth Tax

251,39,90,425 266,79,98,747

233,08,89,082 123,39,40,370

34,35,966 1,49,375 19,14,09,388 23,59,04,413 2,52,26,434 6,58,96,399 5,85,61,031

16,47,887 1,58,250 19,11,04,599 19,68,77,252 2,76,11,644 6,42,32,097 3,89,31,822

7,11,496 11,55,909 50,27,83,251 55,30,410 25,00,60,356

7,11,466 15,81,688 41,63,64,138 67,10,778 19,77,01,338

3,81,14,043 9,92,70,242 24,91,45,824 73,40,088 1,71,73,690

3,06,99,557 7,38,32,004 11,90,51,701 46,08,634 2,30,43,544

Total

693,38,57,487

495,96,97,851

Schedule 16 B - Provisions (Rupees) Sr. No. 1. 2. 3. 4. 5. 6. 7.

Particulars Provisions for : Amortisation of G. Sec Standard Assets Non Performing Assets Depreciation in Investments G.Sec [Refer Note B-7 of Schedule 18] Depreciation in Value of Investment Account - Equity Sacrifice in Interest Element of Restructured Accounts Other Assets / Receivables Total

2008-09

2007-08

18,18,15,952 73,70,00,000 8,88,11,531 0 46,20,000 (-) 8,62,00,000 (-) 10,66,896

18,18,15,952 62,52,00,000 2,22,76,786 35,73,98,880 (-) 36,12,000 (-) 12,35,00,000 (-) 4,77,269

92,49,80,587

105,91,02,349

Schedule 17 - Commitments and Contingent Liabilities (Rupees) Sr. No. 1. 2.

Particulars

As on 31.03.2009

As on 31.03.2008

Commitments on account of capital contracts remaining to be executed Sub Total “A” Contingent Liabilites Disputed claims for additional payments towards construction of premises Sub Total “B”

16,80,39,000 16,80,39,000

4,51,19,000 4,51,19,000

3,36,60,000 3,36,60,000

9,11,29,000 9,11,29,000

Total (A + B)

20,16,99,000

13,62,48,000

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Schedule 18 SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2009

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 are 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 Agriculture and Rural Enterprises Incubation Fund, Micro Finance Development and Equity Fund, Watershed Development Fund and Cooperative Development Fund. d. Expenses not exceeding Rs.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 installation 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 Rs.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 at higher of 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. 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 Furniture and Fixtures

114

20%

Computer Installations

32%

Office Equipments

20%

Vehicles

20%

114

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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.

5.8 Unquoted Shares are valued at breakup value, if the latest Audited Accounts of the investee companies is available, or at Re.1/- per share as per RBI guideline.

Investments

5.1 In accordance with the RBI guidelines, Investments are classified into "Held for Trading" (HFT), "Available for Sale" (AFS) and "Held to Maturity" (HTM) categories (hereinafter called "categories"). Under each of these categories, investments are further classified under (i) Government Securities (ii) Other Approved Securities (iii) Shares and (iv) Others.

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. 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 carried at cost and provision for depreciation / 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 classified as "AFS", depreciation / appreciation is recognised in the category for investments classified as "HFT". 5.7

Treasury Bills are valued at carrying cost.

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. 115

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8.

Retirement Benefits

10.

Segment Reporting

8.1 The Bank has a Provident Fund Scheme managed by RBI. Contribution to the Fund is made on actual basis.

10.1 Segment revenue includes interest and other income directly identifiable with / allocable to the segment.

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.

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".

8.3 Provision for Pension is made based on actuarial valuation.

10.3 Income, which relates to Bank as a whole and not allocable to segments is included under "Other unallocable bank income".

8.4 Employer's contribution to Provident Fund relating to the pension optees (part of Pension Fund) are maintained with RBI. 8.5 Provision for Encashment of Ordinary Leave is made on the basis of actuarial valuation.

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. 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 Fringe Benefit Tax and Wealth Tax is provided in accordance with the provisions of the relevant Acts.

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.

116

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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, 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 the Accounts

1. In terms of TAWA Command Area Development Project Agreement, interest chargeable by the Government of India (GoI) on loans to the Bank at 6.5% (6.5%) per annum has been accounted to the extent of 4.5% (4.5%) by credit to the "Interest Differential Fund" to be utilised for certain specified purposes and the balance 2% has been paid to GoI. 2. Interest Received on Loans and Advances includes Rs. Nil (Rs. 37.36 crore) representing Interest Subvention received from GoI for providing assistance under Liquidity Support to State Co-operative Banks (SCBs) / Regional Rural Banks (RRBs). The scheme is closed. 3. Interest Received on Loans and Advances includes Rs. 10.70 crore (Nil) representing Interest Subvention received from GoI for providing assistance under Liquidity Support to State Co-operative Banks (SCBs) / Regional Rural Banks (RRBs) for Rabi 2008-09. 4. Subvention received / receivable from GOI amounting to Rs. 874.44 crore (Rs. 879.74 crore) being the difference between the cost of borrowing by NABARD and the refinance rate, has been reduced from interest and financial charges. 5 Other receipts includes Rs.32.02 crore (Rs.28.87 crore) received / receivable from GoI towards administration charges on providing refinance under interest subvention scheme to SCBs and RRBs for financing Seasonal Agricultural Operations. 6. Investments in Government securities includes the following securities pledged with Clearing Corporation

of India Limited as collateral security for Business segments: (Rs. crore) Particulars

Face Value

Pledged for Business Segment (Securities) Pledged for Business Segment (Collateralised Borrowing and Lending Obligation)

10.00

(10.00)

1,212.00 (1212.00)

Book Value 9.25

(11.19)

1,220.97 (1256.67)

7. Investments under HTM category excluding investments in subsidiaries as on 31 March 2009 stood at 22.90% as against 43.43 % as at 31 March 2008. As per RBI directives, the bank has shifted investments amounting to Rs. Nil (Rs. 480.65 crore, book value Rs. 432.30 crore) from HTM to AFS category. The resultant diminution in the value of the shifted investments amounting to Rs. Nil (Rs. 35.74 crore) has been provided for, at the year end. 8. In accordance with the Memorandum of Understanding entered into with the Swiss Agency for Development Cooperation, repayments of loan, service charges and other receipts made out of Rural Innovation Fund (RIF) are being credited to the Rural Promotion Fund (RPF). 9. Interest at the rate of 6.00% per annum on unutilised balances of RIF, Watershed Development Fund, KfW NB IGWDP - (Andhra Pradesh, Gujarat, Maharashtra and Rajasthan), KfW NB IX Adivasi Development Programme and KfW Umbrella Programme on Natural Resource Management has been credited to respective fund based on respective agreements. Further, interest at the rate of 6.47% 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. 10. Pending receipt of confirmation of balance of Provident Fund Account in respect of employer's contribution as on March 31, 2009 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. 117

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11. Outstanding balance payable on account of 'bonds matured but not claimed' amounting to Rs.69.12 crore (Rs.81.88 crore) includes Rs.1.53 crore (Rs.1.53 crore) on account of SLR Bonds issued by the Bank which were earlier serviced / managed by RBI. From October 1, 2003, servicing of these bonds was taken over by the Bank. 12. 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 Rs.80.20 crore between net deferred tax assets of Rs.384.99 crore and Rs.304.79 crore as at March 31, 2009 and March 31, 2008 respectively; as detailed below:

17.1 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 recognises 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. a. Reconciliation of opening and closing balances of defined benefit obligations: (Rs. crore)

(Rs. crore) Sr. Deferred Tax Assets No. 1

Provision for Retirement Benefits made in the books but allowable for tax purposes on payment basis

31 March 2009

31 March 2008

344.80

267.84

2

Depreciation on Fixed Assets

23.71

24.59

3

Amortisation of G Sec

16.48

12.36

384.99

304.79

Total

13. Provision for Income 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. 14. 'Land' and 'Premises' include Rs. 34.77 crore (Rs.35.94 crore) paid towards Office Premises and Staff Quarters for which conveyance is yet to be completed.

17. Disclosure required under AS 15 (Revised) on "Employee Benefits" is as under:

Pension

Gratuity

Leave Encashment

Present value of defined benefit obligation at the beginning of year

705.11 (632.97)

232.66 (195.05)

92.18 (72.88)

Current Service Cost

20.90 (18.67)

17.26 (14.08)

9.10 (5.64)

Interest Cost

56.41 (50.64)

18.62 (15.60)

7.37 (5.83)

Actuarial (gain)/ loss

127.38 (17.34)

-9.84 (12.12)

10.64 (15.66)

Benefits paid

-17.79 (-14.51)

-8.17 (-4.19)

-3.78 (-7.83)

Present value of defined benefits obligations at the year end

892.01 (705.11)

250.53* (232.66)

115.51 (92.18)

* Excludes incremental gratuity of Rs. 11 crore to be paid to employees who have retired on or after January 01, 2006. b. Amount recognized in the balance sheet as on 31 March 2009: (Rs. crore)

15. The Bank has subscribed to debentures issued by various State Land Development Banks / State Cooperative Agriculture & Rural Development Banks, which are included under "Advances - Other Investment Credit - Medium Term and Long Term Project Loans". The value of Allotment Letters / Debenture Scrips, yet to be received, as at the year end, aggregates to Rs.195.33 crore (Rs.14.42 crore). 16. Depreciation charged in Profit & Loss Account is net of Swiss Development Corporation share of depreciation amounting to Rs. 42,503 (Rs. 1,27,677) on assets purchased under SDC- HID project.

Particulars

Particulars

Pension (Partly Funded)

Gratuity (Unfunded)

Leave Encashment (Funded)

Present value of defined benefits obligations as at the year end

892.01 (705.11)

250.53 (232.66)

115.51 (92.18)

254.66 (238.19) @

0.00 (0.00)

90.99 (72.88)$

637.35 (466.92)

250.53 (232.66)

24.52 (19.30)

Fair value of plan assets as at the year end Liability recognized in the Balance sheet as at the year end @

Represents the Banks contribution towards PF for pension optees available with RBI.

$

Represents the amount invested with Insurance companies towards the liability for Leave Encashment.

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c. Expenses recognized in the Profit and Loss Account during the year:

Profit and Loss account during the year is Rs.12.29 crore (Rs.12.74 crore)

(Rs. crore) Particulars

Pension

Gratuity

Leave Encashment

Current Service Cost

20.90 (18.67)

17.26 (14.08)

9.10 (5.64)

Interest Cost

56.41 (50.64)

18.62 (15.60)

7.37 (5.83)

Actuarial (gain)/ loss

127.38 (17.34)

-9.84 (12.12)

11.21 (15.66)

-

0.00 (0.00)

-2.69 (0.00)

188.06 (68.10)

26.04 (41.80)

24.99^ (27.13)

Expected return on Plan Assets Expense recognized in the statement of Profit & Loss ^

d.

18. 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. 19. The movement in Contingent Liability as required in AS 29 "Provisions, Contingent Liabilities and Contingent Assets" is as under: (Rs. crore) Particulars

net of income on plan assets Rs. 3.11 crore (Rs. Nil).

Actuarial assumptions:

Particulars

Pension

Mortality Table (LIC)

2007-08

Opening Balance

9.11

58.78

Provided during the year

0.01

0.00

Reversed during the year

5.75

49.67

Closing Balance

3.37

9.11

20. Prior period items included in the Profit and Loss account are as follows: Gratuity

Leave Encashment

1994-96 1994-96 (Ultimate) (Ultimate)

Discount rate (per annum)

2008-09

(Rs. crore) Sr. No. Particulars

1994-96 (Ultimate)

7.5%

7.5%

7.5%

Salary growth (per annum)

4%

7%

7%

Withdrawal rate

1%

1%

1%

17.2 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. 17.3 The aforesaid liabilities include employees deputed to subsidiaries.

liability

of

17.4 The above information is certified by the actuary, except in respect of pension for fair value of plan assets, expected return on plan assets and expense recognized in profit and loss account.

2008-09

2007-08

1

Depreciation

0.032

0.000

2

Other Expenses

0.041

0.000

3

Dividend Income

0.000

0.625

Total

0.073

0.625

21. Capital adequacy ratio of the Bank as on 31 March 2009 is 25.85% (26.61%) as against a minimum of 9% as stipulated by RBI. 22. During the year the bank has implemented an Optional Early Retirement Scheme (OERS) for its officers in Grade C who have completed 45 years of age and 22 years of service with the bank. A provision of Rs.15.03 crore has been made in current year and included under the head "Salaries and Allowances". 23.

NPA on staff loans: (Rs. crore)

17.5 Defined Contribution Plan:

Particulars

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

2008-09

2007-08

Opening Balance

0.10

0.11

Addition during the year

0.00

0.00

Written Back during the year

0.03

0.01

Closing Balance

0.07

0.10

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24.

Investments in Mutual Funds: (Rs. crore)

S.No

Name of the Mutual Fund

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

FY 2008-09 Market Value

Book Value

Market Value

100.00 50.00 50.00 75.00 100.00 75.00 50.00 50.00 50.00 50.00 50.00 100.00 50.00 50.00 50.00 50.00 0.00

100.04 50.02 50.02 75.03 100.02 75.02 50.00 50.01 50.01 50.11 50.01 100.05 49.93 50.01 50.02 50.01 0.00

60.00 60.00 60.00 60.00 60.00 60.00 40.00 60.00 60.00 60.00 60.00 60.00 0.00 0.00 0.00 0.00 60.00

60.02 60.01 60.02 60.02 60.02 60.01 40.01 60.02 60.02 60.01 60.02 60.02 0.00 0.00 0.00 0.00 60.01

1000.00

1000.31

760.00

760.21

Birla Sun life Tata Kotak Mahindra UTI ICICI Prudential HDFC Canara Robeco SBI Reliance ING Franklin Templeton LIC Religare IDFC Deutsche Baroda Pioneer PRINCIPAL

Total

FY 2007-08

Book Value

25. As per the information available with the Bank, there are no dues payable under Micro, Small and Medium Enterprises Development Act 2006. 26. Previous year's figures have been regrouped / rearranged wherever necessary.

(c)

(Rs. crore) Particulars

Figures in brackets pertain to previous year.

28. The following additional information is disclosed in terms of RBI circular No.RBI/2008-2009/63 (DBOD.FID.FIC.2/01.02.00/2008-09) dated 01July 2008.

31 March 2009

31 March 2008

43,436.86 27.61

38,880.81 36.47

On - Balance Sheet Items Off - Balance Sheet Items

(d) 27.

Risk weighted assets

Pattern of Capital contribution as on the date of the balance sheet (Rs. crore)

Contributor

31 March 2009

31 March 2008

Reserve Bank of India Government of India

1,450 550

1,450 550

Total

2,000

2,000

28.1 Capital (a)

Capital to Risk-weighted Assets Ratio (CRAR)

28.2

Asset Quality and Credit Concentration

(e)

Net NPA position

(Percent) Particulars

31 March 2009

31 March 2008

25.85 24.45 1.40

26.61 25.34 1.27

CRAR Core CRAR Supplementary CRAR

(b)

Particulars

31 March 2009

31 March 2008

0.0306648

0.0232661

Percentage of Net NPAs to Net Loans & Advances

(f)

Asset classification (Rs. crore)

Subordinated Debt (Rs. crore)

Particulars Amount of subordinated debt raised and outstanding as Tier II Capital

31 March 2009

31 March 2008

Nil

Nil

Classification

2008-09 Amount

(%)

Standard Sub-standard Doubtfull Loss

98822.36 6.86 23.45 0.00

99.969 0.007 0.024 0.000

82,853.14 99.977 2.40 0.003 16.88 0.020 0.00 0.000

Total

98852.67

100.00

82872.42 100.00

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7/15/2009, 11:33 AM

Amount

(%)

(g)

Provisions made during the year

(i) (Rs. crore)

Provisions against

2008-09

2007-08

73.70

62.52

8.88

2.23

Standard Assets Non Performing Assets Investments (Net)

(35.28)

35.38

Income Tax (including Fringe Benefit Tax)

677.60

563.40

Total

724.90

663.53

(h)

(Rs. crore)

Largest Single Borrower

II Largest Borrower Group

Movement in Net NPAs (Rs. crore)

III Ten Largest Single Borrowers for the year

2008-09 2007-08

(A) Net NPAs as at beginning of the year

19.28

(B) Add: Additions during the year

11.03

7.16

(C) Sub-total (A+B)

30.31

30.12

0.00

10.84

30.31

19.28

(D) Less: Reductions during the year (E) Net NPAs as at the end of the year (C-D)

2008-09 Credit Exposure as % to

Category

I

Particulars

Credit exposure as percentage to Capital Funds and as percentage to Total Assets

IV Ten Largest Borrower Groups

22.96

(j)

2007-08 Credit Exposure as % to

Capital Funds

Total Assets

Capital Funds

Total Assets

106.32

10.15

43.25

4.56

Not Applicable

333.06

31.81

Not Applicable

Not Applicable

270.19

28.48

Not Applicable

Credit exposure to the five largest industrial sectors as percentage to total loan assets: Not Applicable

28.3 Liquidity (k) (l)

Maturity pattern of Rupee Assets and Liabilities Maturity pattern of Foreign Currency Assets and Liabilities (Rs. crore)

Sr. No.

Item

More than 1 year upto

More than 3 years upto

More than 5 years upto

1 year

3 years

5 years

7 years

48326.90 (43,339.36)

28354.64 (21,629.83)

23204.68 (17,758.77)

14243.36 (11,714.26)

3551.34 (3,843.23)

117680.92 (98,285.44)

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

48326.90 (43,339.36)

28354.64 (21,629.83)

23204.68 (17,758.77)

14243.36 (11,714.26)

3551.34 (3,843.23)

117680.92 (98,285.44)

3.

Rupee Liabilities

16553.97 (19,155.78)

22015.52 (15,913.71)

24003.42 (17,067.14)

17404.61 (11,389.93)

37205.11 (34,250.74)

117182.63 (97,777.30)

4.

Foreign currency liabilities

9.94 (9.96)

64.33 (64.32)

108.68 (108.68)

108.69 (108.69)

206.64 (216.50)

498.29 (508.14)

16563.91 (19,165.74)

22079.85 (15,978.03)

24112.10 (17,175.82)

17513.3 (11,498.62)

37411.75 (34,467.24)

117680.92 (98,285.44)

1.

Rupee Assets

2.

Foreign currency assets

Total Liabilities #

More than 7 years

Total

#

Less than or equal to

Net of provision made as per RBI directives on Standard Assets, NPA as well as for diminution in value of Investments aggregating to Rs.495.19 crore (Rs.421.03 crore).

28.4 Operating results Particulars

2008-09

2007-08 6.13

(m)

Interest income as a percentage to average working funds

6.47

(n)

Non interest income as a percentage to average working funds

0.13

0.08

(o)

Operating profit as a percentage to average working funds

1.86

1.97

(p)

Return on average Assets (%)

1.30

1.38

(q)

Net Profit per Employee (Rs. in crore)

0.28

0.25

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28.5 Movement in the provisions (a)

Provision for Non Performing Assets (Loan Assets) (Rs. crore)

Particulars

2008-09

2007-08

Opening balance as at the beginning of financial year

5.52

3.18

Add: Provision made during the year

8.88

2.34

Less: Write off, write back of excess provision

0.00

0.00

Closing balance at the close of financial year

14.40

5.52

(b)

Provision for depreciation in investments (Rs. crore) Particulars

2008–09

A.

Opening balance as at the beginning of the financial year

B.

Add (i) Provisions made during the year

37.40 (2.02) 0.63 (35.80)

(ii) Appropriation, if any, from Investment Fluctuation Reserve Account during the year C.

Sub Total [A+B(i)+B(ii)]

D.

Less (i) Write off, Write Backs of excess provision (ii) Transfer, if any, to Investment Fluctuation Reserve Account

0.00 (0.00) 38.03 (37.82)

35.91 (0.42) 0.00(0.00) 35.91 (0.42)

E.

Closing balance as at the close of financial year (C-D)

28.6 Restructured accounts During the current financial year six loan accounts outstanding to the extent of Rs. 51.63 crore (Rs. 15.13 crore) have been rescheduled. Out of the above, two loan accounts outstanding of Rs. 26.47 crore (Rs. 9.44 crore) is classified as Standard asset and four loan accounts outstanding of Rs.25.16 crore (Rs. 5.69 crore) has been classified as Doubtful Asset. There is no Interest sacrifice on these reschedulements. The interest sacrifice on loans restructured during FY 2005-06 amounted to Rs.31.08 crore. Interest sacrifice is reviewed at each balance sheet date and necessary provision is made or reversed. Accordingly, Rs.8.62 crore (Rs.12.35 crore) was written back during the current financial year.

28.7 Assets sold to : NIL (NIL) securitisation company/ reconstruction company 28.8 Forward Rate Agreements : NIL (NIL) and Interest Rate Swaps 28.9 Interest Rate Derivatives : NIL (NIL)

2.12 (37.40)

28.10 Investments in Non Government Debt Securities

: NIL (NIL)

28.11 Corporate Debt Restructuring (CDR)

: NIL (NIL)

28.12 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 55.99 million Euro and interest thereon for a period of 10 years and 40 million Euros 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 Rs. 634.57 crore and the value of outstanding principal liability in the books of account stood at contracted value i.e. Rs. 498.29 crore. The quantitative disclosure in this regard is as under:

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(Rs. crore) Sr. Particulars No. 1.

2.

3. 4.

5.

Derivatives (Notional Principal amount) A) For Hedging B) For Trading Marked to Market Positions [1] a) Asset (+) b) Liability (-) Credit Exposure [2] Likely impact of one percentage change in interest rate (100*PV01) a) on hedging derivatives b) on trading derivatives Maximum and Minimum of 100*PV01 observed during the year a) on hedging b) on trading

Currency Derivatives

Interest Rate Derivatives

498.29 (508.14) NA

NA NA

136.28 (97.44) NA NA NA NA NA NA NA NA

NA NA NA NA NA NA NA NA NA

28.13 Exposures where the FI had exceeded prudential exposure limits during the year

: NIL (NIL)

28.14 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 - Chairman 2. Dr. K G Karmakar - Managing Director (Rs. crore) Name of the Party

Nature of Relationship

Nature of Transaction

Dr. Y.S.P. Thorat

Key Management Personnel - Ex-Chairman Key Management Personnel - Chairman Key Management Personnel - Managing Director

Remuneration including perquisites Remuneration including perquisites Remuneration including perquisites

Shri U. C. Sarangi Dr. K.G. Karmakar

Amt. of transaction during the year

Outstanding

0.00 (0.07) 0.14 (0.02) 0.22 (0.08)

-

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.

28.15 Issuer categories in respect of investments made (Rs. crore) Sr. No. Issuer

(1)

(2)

1. 2. 3. 4. 5. 6.

PSUs FIs Banks` Private Corporates Subsidiaries/Joint ventures Others (Net of Provision) including Mutual Funds Provision held towards depreciation

7.

Total

Amount

Investment made through private placement

'Below investment grade' Securities held

'Unrated' Securities held

'Unlisted' Securities

(3)

(4)

(5)

(6)

(7)

60.00 (60.00) 48.00 (48.00) 20.60 (20.60)

60.00 (60.00) 48.00 (48.00) 20.60 (20.60)

-

20.60 (20.60)

60.00 (60.00) 48.00 (48.00) 20.60 (20.60)

1152.23 (769.09)

11.75 (0.00)

0.00 (0.00)

11.75 (0.00)

1152.23 (769.09)

2.12 (1.66)

-

-

-

2.12 (1.66)

(128.60)

0.00 (0.00)

1282.95

(899.35)

140.35

32.35 (20.60) 1282.95

(899.35)

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28.16 Non performing investments:

NIL (NIL)

28.17 Disclosure on Repo transactions (Rs. crore) Particulars

Minimum outstanding during the year

Maximum outstanding during the year

Daily average outstanding during the year

Outstanding as on 31 March 2009

Securities sold under repo

0.00 (206.42)

0.00 (206.42)

0.00 (0.56)

0.00 (0.00)

Securities purchased under reverse repo

275.00 (0.00)

275.00 (0.00)

0.75 (0.00)

0.00 (0.00)

Development Banks, State Coop. Banks, Regional Rural Banks etc. as refinance against the loans disbursed by them to the ultimate borrowers.

28.18 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, cofinance loans and loans given to voluntary agencies / nongovernmental organisations for developmental activities. ii) to

Refinance: Includes Loans and Advances given State Governments, Commercial Banks, Land

(b)

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.

Information on Primary Business Segment (Rs. crore)

Revenue

Direct Finance

Refinance

Treasury

Unallocated

Total

2337.37 (1536.94)

3389.92 (3007.63)

1307.36 (955.06)

16.03 (9.46)

7050.68 (5509.09)

Results

118.46 (79.66)

1181.87 (1224.76)

1283.21 (894.18)

-596.01 (-450.51)

1987.53 (1748.09)

Assets

45798.54 (30822.03)

54265.45 (54058.31)

16434.04 (8950.55)

1678.08 (4875.58)

118176.11 (98706.47)

Liabilities

47695.61 (31176.46)

51039.60 (50951.52)

192.86 (167.86)

19248.04 (16410.63)

118176.11 (98706.47)

0.00(0.00)

0.00(0.00)

18.18(18.18)

21.36(21.63)

39.54 (39.81)

9.07(23.19)

64.65(29.09)

0.46(35.38)

47.76(64.23)

121.94 (151.89)

Other Items : Amortization & Depreciation Non Cash Expenses (other than above)

(c)

Since the operations of the Bank are confined to India only there is no reportable secondary segment.

As per our attached report of even date Khimji Kunverji & Co Chartered Accountants Hasmukh B. Dedhia Partner Mumbai Mumbai: 17 June 2009

S. Akbar Chief General Manager Accounts Department Date: 17 June 2009

Umesh Chandra Sarangi

Dr. K. G. Karmakar

T. Nandkumar

Usha Thorat

Chairman

Managing Director

Director

Director

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National Bank for Agriculture and Rural Development Cash flow for the year ended 31 March 2009 (Rupees) Particulars (a)

2008-09

2007-08

1987,53,10,864

1748,09,75,282

Depreciation

21,36,41,786

21,63,06,861

Provisions and Amortisations

18,53,69,056

53,51,25,563

Cash flow from Operating activities Net Profit as per Profit and Loss a/c before tax Adjustment for:

Provision for Non performing Assets Provision for Standard Assets Provision for sacrifice in interest element of Restructured Loan Profit / Loss on sale of Fixed Assets Interest credited to various Funds (including addition/ adjustment made to Interest Differential Fund)

8,88,11,531

2,22,76,786

73,70,00,000

62,52,00,000

(-) 8,62,00,000

(-) 12,35,00,000

(-) 7,61,670

2,05,11,318

61,78,34,663

64,16,48,347

Other Expenses

0

0

Income from Investment (including Discount Income)

(-) 1307,36,41,258

(-) 955,06,11,552

Expenditure from various Funds

(-)20857,49,50,989

(-)1731,84,53,498

(-) 20001,75,86,017

(-) 745,05,20,893

(-) 6610,57,48,689

402,13,61,457

Operating profit before changes in operating assets Adjustment for net change in: Current Assets Current Liabilities

1110,19,36,226

710,03,19,377

Increase / Decrease of Bonds

(-) 4996,49,24,694

(-) 191,77,45,150

Increase / Decrease in Borrowings

(-) 1207,32,41,806

1628,56,71,289

21428,30,49,166

10461,96,05,956

Increase in Loans and Advances (Including Housing Loan & Other Advances to Staff)

(-) 16067,34,69,946

(-) 13429,94,33,700

Cash generated from operating activities

(-) 26344,99,85,760

(-) 1164,07,41,664

(-) 598,75,73,999

(-) 459,78,97,070

(-) 26943,75,59,759

(-) 1623,86,38,734

Increase / Decrease in Deposits

Payment of Income Tax

Net cash flow from operating activities

(A)

(b) Cash flow from Investing activities Income from Investment (including Discount Income)

1307,36,41,258

955,06,11,552

Increase / Decrease in Fixed Asset

(-) 11,17,05,555

(-) 42,28,33,123

Increase / Decrease in Investment

(-) 431,26,76,503

(-) 559,22,13,016

864,92,59,200

353,55,65,413

22461,69,90,603

5303,10,94,480

22461,69,90,603

5303,10,94,480

(-) 3617,13,09,956

4032,80,21,159

4525,24,14,644

492,43,93,485

908,11,04,689

4525,24,14,644

Net cash used / generated from investing activities

(B)

(c ) Cash flow from financing activities Grants / contributions received

Net cash raised from financing activities Net increase in cash and cash equivalent (A)+(B)+(C ) Cash and Cash equivalent at the beginning of the period

Cash and cash equivalent at the end of the period

(C)

125

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National Bank for Agriculture and Rural Development Cash flow for the year ended 31 March 2009 (Rupees) 1. Cash and cash equivalent at the end of the period includes :

2008-09

2007-08

21,579

21,531

Balance with Reserve Bank of India

169,67,65,931

3795,85,77,121

Balances with other Banks in India

420,21,61,811

107,56,48,175

Remittances in Transit

185,25,16,092

157,59,35,668

Collateralised Borrowing and Lending Obligations

132,96,39,276

464,22,32,149

Total

908,11,04,689

4525,24,14,644

Cash in hand

2. 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 date Khimji Kunverji & Co. Chartered Accountants

Hasmukh B. Dedhia Partner Mumbai Date : June 17, 2009

Umesh Chandra Sarangi Chairman

S. Akbar Chief General Manager Accounts Department Mumbai : June 17, 2009

Dr. K.G. Karmakar Managing Director

T. Nandkumar Director

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Usha Thorat Director

Consolidated Balance Sheet Profit and Loss Account & Cash Flow of NABARD & its Subsidiaries (NABCONS,ADFT,ABFL & NABFINS)

2008-09

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Khimji Kunverji & Co. 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, 2009, 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 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 examining, on test basis, evidence supporting amounts and disclosures in financial statements. 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 for 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 Rs 53.83 crore and Rs14.79 crore respectively. The financial statements of three subsidiaries, being not audited, 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 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 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: a)

in the case of the Consolidated Balance Sheet, of the state of affairs of the Bank as at March 31, 2009;

b)

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

c)

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 Dated: June 17, 2009 For and on behalf of Khimji Kunverji & Co. Chartered Accountants

Hasmukh B. Dedhia Partner (F-033494) Suit 52, Bombay Mutual Building, Sir Phirozshah Mehta Road, Fort, Mumbai - 400 001, India. Telephones: +91 22 22662550, 22661270, 22662011 • Fasimile: +91 22 22664045 E-mail: [email protected] • Website: www.khimjikunverji.com

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National Bank for Agriculture and Rural Development Consolidated Balance Sheet as on 31 March 2009 (Rupees) Particulars

As on 31.03.2009

As on 31.03.2008

Capital

2000,00,00,000

2000,00,00,000

Reserve Fund and Other Reserves

9551,33,61,533

8614,18,37,839

15571,00,00,000

15159,00,00,000

154,81,78,661

170,38,44,460

Gifts Grants, Donations and Benefactions

5111,01,92,515

3967,49,29,810

Other Funds

2101,80,68,588

1518,00,64,973

12,73,59,475

11,96,69,848

Deposits

52127,12,34,628

30698,81,85,462

Bonds and Debentures

23702,62,34,987

30122,04,33,900

Borrowings

3592,94,14,312

3378,34,52,818

Current Liabilities and Provisions

4281,43,94,987

3092,22,07,877

118206,84,39,686

98732,46,26,987

14018,72,65,778

10352,51,52,981

2974,08,29,886

2561,45,89,335

98858,23,52,501

82878,81,34,744

Fixed Assets

247,31,45,985

257,42,30,724

Other Assets

2108,48,45,536

2682,25,19,203

118206,84,39,686

98732,46,26,987

FUNDS AND LIABILITIES

National Rural Credit Funds Funds Out of Grants received from International Agencies

Minority Interest

TOTAL FUNDS AND LIABILITIES

PROPERTY AND ASSETS Cash and Bank Balances Investments Advances

TOTAL PROPERTY AND ASSETS

As per our attached report of even date Khimji Kunverji & Co. Chartered Accountants

Hasmukh B. Dedhia Partner Mumbai Date : June 17, 2009

Umesh Chandra Sarangi Chairman

S. Akbar Chief General Manager Accounts Department Mumbai : June 17, 2009

Dr. K.G. Karmakar Managing Director

T. Nandkumar Director

Usha Thorat Director

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National Bank for Agriculture and Rural Development Consolidated Profit and Loss Account for the year ended 31 March 2009 (Rupees) Particulars

2008-09

2007-08

Interest Received on Loans and Advances

5694,13,82,207

4518,31,32,065

Income from Investment operations

1218,59,65,570

906,66,95,489

Discount Received

92,55,15,672

51,71,40,175

Other Receipts

60,18,62,544

44,91,27,953

7065,47,25,993

5521,60,95,682

4255,90,43,429

3152,68,04,735

698,69,20,566

486,19,42,059

Income:

TOTAL INCOME Expenditure: Interest and Financial Charges Establishment and other expenses Depreciation

21,39,95,163

21,65,89,205

Provisions

93,04,17,887

105,68,36,154

-

3,83,633

TOTAL EXPENDITURE

5069,03,77,045

3766,25,55,786

Profit before Income Tax

1996,43,48,948

1755,35,39,896

Preliminary expenses written off

Provision for Income Tax

676,66,13,885

562,41,27,188

Provision for Fringe Benefit Tax

3,66,35,726

3,45,27,535

Deferred Tax Asset Adjustment

(-) 80,28,25,064

(-) 41,42,86,923

9,397

1,43,06,538

1396,39,15,004

1229,48,65,558

80,65,434

(-)18,93,517

1395,58,49,570

1229,67,59,075

1395,58,49,570

1229,67,59,075

48,14,80,880

30,30,87,768

1443,73,30,450

1259,98,46,843

Special Reserve u/s 36(I)(viii) of the Income Tax Act, 1961

340,00,00,000

320,00,00,000

National Rural Credit (Long Term Operations) Fund

400,00,00,000

400,00,00,000

Short / (Excess) provision for Income Tax in earlier years Profit after Tax Share of Profit / Loss in Subsidiaries attributable to Minority Interest Profit available for Appropriation Appropriations: Profit as above Add: Withdrawals from various funds against expenditure debited to Profit & Loss Account Total Profit Available for Appropriation Transferred to:

National Rural Credit (Stabilisation) Fund Co-operative Development Fund

10,00,00,000

10,00,00,000

3,81,14,043

53,06,99,557

Research & Development Fund

8,76,10,683

7,48,95,872

Investment Fluctuation Reserve

42,00,00,000

25,78,45,000

Financial Inclusion Fund

18,50,00,000

5,00,00,000

Financial Inclusion Technology Fund

32,50,00,000

5,00,00,000

Farm Innovation and Promotion Fund

46,55,57,504

0

Farmers Technology Transfer Fund

31,61,42,310

25,00,00,000

509,99,05,910

408,64,06,414

1443,73,30,450

1259,98,46,843

Reserve Fund Total

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Additional Notes to Consolidated Accounts 1.

Consolidation has been done pursuant to the listing agreement with stock exchange

2.

Financial statements of the subsidiaries except NABARD Consultancy Services (Private) Limited 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

82.41

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 infra-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 Rs.21.40 crore (21.66 crore) included in the Consolidated Financial Statement, 0.17% (0.13%) 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.

Disclosure as required under AS – 17 "Segment Reporting" in consolidated financial statement are as under: (Rs. crore)

Revenue

Direct Finance

Refinance

Treasury

Unallocated

Total

2340.89 (1539.27)

3389.92 (3007.63)

1307.36 (955.06)

27.30 (19.65)

7065.47 (5521.61)

Results

120.78 (81.02)

1181.87 (1224.76)

1283.21 (894.18)

-589.43 (-444.61)

1996.43 (1755.35)

Assets

45814.35 (30837.30)

54265.45 (54058.31)

16434.04 (8950.55)

1693.00 (4886.31)

118206.84 (98732.46)

Liabilities

47711.41 (31191.72)

51039.60 (50951.52)

192.86 (167.87)

19262.97 (16421.36)

118206.84 (98732.46)

0.02(0.03)

0.00(0.00)

18.18(18.18)

21.37(21.63)

39.58(39.84)

9.62(25.26)

64.66(29.09)

0.46(35.38)

47.75(64.27)

122.49(154.00)

Other Items : Amortisation & Depreciation Non Cash Expenses (other than above)

Note: There are no reportable secondary segments for the bank and its subsidiaries.

8.

Previous Year figures have been regrouped / rearranged wherever necessary

As per our attached report of even date Khimji Kunverji & Co. Chartered Accountants

Hasmukh B. Dedhia Partner Mumbai Date : June 17, 2009

Umesh Chandra Sarangi Chairman

S. Akbar Chief General Manager Accounts Department Mumbai : June 17, 2009

Dr. K. G. Karmakar Managing Director

T. Nandkumar Director

Usha Thorat Director

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National Bank for Agriculture and Rural Development Consolidated Cash Flow Statement for the year ended 31 March 2009 (Rupees) Particulars

2008-09

2007-08

1996,43,48,948 21,39,95,164 18,53,69,056 9,42,07,091 73,70,00,000 (-) 8,62,00,000 61,78,34,663 0 (-)1307,40,79,660 (-) 7,61,799 (-) 20857,49,50,989 (-)19992,32,37,526

1755,35,39,896 21,65,89,206 53,51,25,563 2,22,76,786 62,52,00,000 (-) 12,35,00,000 64,16,48,347 3,83,633 (-)903,34,71,377 2,05,11,318 (-) 1731,84,53,498 (-) 686,01,50,126

(-) 6610,56,33,642 1109,81,36,716 (-) 4996,49,24,694 (-)1207,32,41,806 21424,95,42,087 (-)16067,23,06,900 (-) 26339,16,65,765 (-) 601,39,55,521

398,47,17,891 708,28,46,611 (-)191,77,45,150 1628,56,71,289 10461,02,50,436 (-)13425,10,46,317 (-) 1106,54,55,366 (-) 463,77,13,257

(-) 26940,56,21,286

(-) 1570,31,68,623

(-) 29,24,875 1307,40,79,660 (-) 11,21,48,627 (-) 432,27,47,422

(-) 32,93,101 903,34,71,377 (-) 42,28,66,375 (-) 559,22,13,016

(B)

863,62,58,736

301,50,98,885

(c ) Cash flow from financing activities Grants / contributions received Net cash raised from financing activities (C) Net increase in cash and cash equivalent (A)+(B)+(C) Cash and cash equivalent at the beginning of the period

22461,69,90,603 22461,69,90,603 (-) 3615,23,71,947 4527,11,51,488

5303,10,94,480 5303,10,94,480 4034,30,24,742 492,81,26,746

911,87,79,541

4527,11,51,488

(a)

Cash flow from Operating activities Net profit as per P & L a/c before tax Depreciation Provisions and Amortisations Provision for Non performing Assets Provision for Standard Assets Provision for Sacrifice in interest element of restructured loan Interest credited to various funds Other expenses Income from Investment Profit / Loss on sale of Fixed Asset Expenditure from various funds Operating profit before working capital changes Adjustment for net change in: Current Assets Current liabilities Proceeds of Bonds Increase / Decrease in Borrowings Increase / Decrease in Deposits Increase/Decrease in Loans and Advances Cash generated from operating activities Payment towards Income tax Net cash flow from operating activities

(A)

(b) Cash flow from Investing activities Dividend paid Income from Investment Increase / Decrease of Fixed Assets Increase / Decrease in Investments Net cash used in investing activities

Cash and cash equivalent at the end of the period

Cash and cash equivalent at the end of the period includes :

2008-09

2007-08

Cash in hand Balance with Reserve Bank of India Balances with other Banks in India Remittances in Transit Collateralised Borrowing and Lending Obligations

27,285 173,44,35,078 420,21,61,810 185,25,16,092 132,96,39,276

27,338 3797,73,08,158 107,56,48,175 157,59,35,668 464,22,32,149

Total

911,87,79,541

4527,11,51,488

As per our attached report of even date Khimji Kunverji & Co. Chartered Accountants Hasmukh B. Dedhia Partner Mumbai Date : June 17, 2009

S. Akbar Chief General Manager Accounts Department Mumbai : June 17, 2009

Umesh Chandra Sarangi Chairman

Dr. K.G. Karmakar Managing Director

T. Nandkumar Director

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Usha Thorat Director

Regional Offices/Sub-Office/Training Establishments REGIONAL OFFICES ANDHRA PRADESH 1-1-61, RTC Cross Road, Musheerabad, Hyderabad – 500 020 Tel No. : (040)27685555, 27612640 Fax No.: (040) 27611829 E-mail : [email protected] [email protected]

GUJARAT Opp.Municipal Garden, Usmanpura Ahmedabad – 380 013 Tel No. : (079) 27552257-58-59 Fax No.: (079) 27551584 E-mail : [email protected]

MADHYA PRADESH E-5, Arera Colony, Ravishankar Nagar,Post office Bittan Market Bhopal – 462 016 Tel No. : (0755) 2463341, 2463369, 2466695 Fax No.: (0755) 2466188 E-mail : [email protected]

NEW DELHI NABARD Tower 24, Rajendra Place New Delhi - 110 125 Tel No. : (011) 41539353, 25818707 Fax No.: (011) 41539187, 41539185 E-mail : [email protected]

ARUNACHAL PRADESH Bank Tinali, VIP Road, P.B. No. 133, Itanagar – 791 111 Arunachal Pradesh Tel No. : (0360) 2212675, 215967 Fax No.: (0360) 2212675 E-mail : [email protected]

HIMACHAL PRADESH NABARD Bhavan, Block Number 32 S.D.A. Commercial Complex Dev Nagar, Kasumpati Shimla - 171 009 Tel No. : (0177) 2624160, 2622258 Fax No.: (0177) 2622271 E-mail : [email protected] [email protected].

MAHARASHTRA 54, Wellesley Road, Shivaji Nagar, Pune – 411 005 Tel No. : (020) 25541439, 25542090 Fax No.: (020) 25542250 E-mail : [email protected]

ORISSA ‘Ankur’, 2/1, Nayapalli Civic Centre, P. B. No. 179, Bhubaneshwar – 751 015 Tel No. : (0674) 2553884 Fax No.: (0674) 2552019 E-mail : [email protected] [email protected]

ASSAM G.S.Road, Post Box No.1 Opposite Assam Secretariat Dispur Guwahati - 781 006 Tel No. : (0361) 2235661, 2238013/14 Fax No. : (0361) 2235657 E-mail : [email protected]

JAMMU & KASHMIR IVth Floor, B-II, South Block, Bahu Plaza, Rail Head Complex, Post Bag No. 2, Jammu-180012, Tel No. : (0191) 2472355, 2472287 Fax No.: (0191) 2472337 E-mail : [email protected]

MANIPUR 89/686, Lalambung, RIMS Road, Lamphelpat, Imphal – 795 004, Manipur Tel No. : (0385) 2416192, 2410706 Fax No. : (0385)2416191 E-mail : [email protected]

PUNJAB & HARYANA Plot No. 3, Sector 34-A, Post Box No. 7, Chandigarh – 160 022 Tel No. : (0172)5046700, 5071401 Fax No.: (0172) 5046702 E-mail : [email protected]

BIHAR Maurya Lok Complex, Block ‘B’, 4th & 5th floor, Dak Bunglow Road, Post Box No.178, Patna – 800 001 Tel No. : (0612) 2223985 Fax No.: (0612) 2238424 E-mail : [email protected] [email protected]

JHARKHAND Opp. Adivasi College Hostel Karamtoli Road Ranchi - 834 001 Tel No. : (0651) 2361107 Fax No. : (0651) 2361108 E-mail : [email protected]

MEGHALAYA Dipu Cottage, Upper Lachumiere, Shillong – 793 001 Tel No. : (0364) 2501518 Fax No.: (0364) 2227463 E-mail : [email protected] [email protected]

RAJASTHAN 3, Nehru Place, Tonk Road, Post Bag No.104, Jaipur – 302 015 Tel No. : (0141) 2740821 Fax No.: (0141) 2742161 E-mail : [email protected]

CHHATTISGARH Pithalia Complex, K.K. Road Fafadih Raipur - 492 009 Tel No. (0771) 2888499 Fax No. (0771) 2884992 E-mail [email protected] [email protected]

KARNATAKA 113/1, Jeevan Prakash Annexe, J.C. Road, P. B. No.29, Bangalore – 560 002 Tel No. : (080) 22225241/44 Fax No.: (080) 22222148 E-mail : [email protected]

MIZORAM Ramhlun Road Bawngkawan Aizwal - 796 014 Tel No. : (0389) 2346119, 2343428 Fax No. : (0389) 2340815 E-mail : [email protected]

SIKKIM Om Nivas, Church Road, Post Box No.46, Gangtok –737 101 Tel No. : (03592)203015, 204173 Fax No.: (03592) 204062 E-mail : [email protected] [email protected]

GOA Third floor, Nizari Bhavan, Menezes Braganza Road, Panaji – 403 001. Tel No. : (0832) 2220490, 2432967, Fax No.: (0832) 2223429 E-mail : [email protected]

KERALA Punnen Road, Statue, P. B. No. 202 Thiruvananthapuram – 695 039 Tel No. : (0471) 2323846, 2323590, 2323859 Fax No.: (0471) 2324358 E-mail : [email protected]

NAGALAND 4th Floor, West Wing Administrative NSCB Bldg. Khermahal, Circular Road Dimapur - 797 112 Tel No. : (03862) 227040, 235600, 235601 Fax No. : (03862) 227040 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] [email protected]

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TRIPURA Palace Compound (East), Uzirbari Road, Post Box No.9, Agartala - 799 001 Tel No. : (0381) 2224125, 2229633,2229644 Fax No.: (0381) 2224125 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) 2740230-31 Fax No. : (0135) 2748610 E-mail : [email protected] [email protected]

UTTAR PRADESH 11, Vipin Khand, Gomti Nagar, Lucknow - 226 010 Tel No. : (0522) 2304530, Fax No.: (0522) 2304531 E-mail : [email protected]

WEST BENGAL ‘‘Abhilasha’, 2nd floor 6, Royd Street, Post Box No.9083 Kolkata - 700 016 Tel No. : (033) 22552102, 22267943 Fax No.: (033) 22494507 E-mail : [email protected] [email protected]

SUB-OFFICE/CELL PORT BLAIR Kannada Sangh Building, Ground Floor,18,Tagore Road, Head Post Office, Port Blair – 744 101 Tel No.: (03192) 233308 Fax No.: (03192) 237696 E-mail : [email protected] [email protected]

SRINAGAR CELL Opp. Gate No. 1 Amar Singh College Gogji Bagh Srinagar - 190 008 Tel No. : (0194) 2310280 Fax No.: (0194) 2310479

TRAINING ESTABLISHMENTS BOLPUR Bolpur Lodge, Regional Training College, Bolpur – 731 204, Birbhum (West Bengal) Tel No. : (03463) 252812, 254065 Fax No.: (03463) 252295 E-mail : [email protected] [email protected]

LUCKNOW National Bank Staff College, Sector ‘H’, LDA Colony, Kanpur Road, Lucknow – 226 012 Tel No. : (0522) 2421072 Fax No.: (0522) 2421035 E-mail : [email protected]

LUCKNOW Banker’s Institute of Rural Development, Sector ‘H’, L.D.A. Colony, Kanpur Road, Lucknow – 226 012 Tel No. : (0522) 2421137, 2421154, 2421055, 2421187 Fax No.: (0522) 2421176, 2421047 E-mail : [email protected] [email protected] Website : www.birdindia.com

HYDERABAD Zonal Training Centre, 10-1-128, Masab Tank, Hyderabad – 500 028 Tel No. : (040) 23375007 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]

MANGALORE Regional Training College, Manjusha Building, Bejaji Church Road, Near KSRTC Bus Main Stand, Bejaji, Mangalore - 575004. Tel No. : (0824) 2225836, 2225831 Fax No.: (0824) 2225835 E-mail : [email protected]

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