NABARD's Performance 2023-24 PDF

For Internal Use only Snapshot of NABARD’s Performance - 2023-24 The National Bank for Agriculture and Rural Development Act, 1981 provided for establishment of a development bank to be known as the National Ban...

For Internal Use only Snapshot of NABARD’s Performance - 2023-24 The National Bank for Agriculture and Rural Development Act, 1981 provided for establishment of a development bank to be known as the National Bank for Agriculture and Rural Development (National Bank) for providing and regulating credit as well as other facilities for promotion and development of agriculture, micro enterprises, small enterprises and medium enterprises, cottage and village industries, handlooms, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas. NABARD with its Head Office at Mumbai has a pan-India presence with 31 Regional Offices, and 479 District Development Managers (DDMs) engaged in rural development. NABARD’s Training Establishments located at Lucknow, Kolkata and Mangaluru, cater to the capacity building requirements of rural financial institutions of the country, besides its own staff. As an apex development financial institution of the country, NABARD’s initiatives are aimed at building an empowered and financially inclusive rural India through specific goal oriented departments which can be broadly categorised as: Financial, Developmental and Supervision, touching almost every aspect of rural economy. From providing refinance support to building rural infrastructure, from preparing district credit plans to guiding and motivating the banking industry in achieving the targets under these plans, from supervising Cooperative Banks and Regional Rural Banks (RRBs) to helping them develop sound banking practices and on-boarding them to the CBS platform, from designing new development schemes to implementation of GoI’s schemes, from training handicraft artisans to providing them a marketing platform for marketing of products and empowering women to digital financial inclusion, NABARD has touched lives of millions. A Business Target of ₹4.48 lakh crore with Balance Sheet of ₹9.04 lakh crore was approved by the Board for the F.Y. 2023-24. With concerted and collective efforts put in by every NABARDian, NABARD’s balance sheet size touched the figure of ₹9 lakh crore, registering YoY growth of 13.6% during 2023-24. The hard work and commitment shown by HoDs, RO- In-Charges and all staff members helped NABARD to achieve business level (disbursements under loan products) of ₹4.36 lakh crore, besides achievement under developmental programmes. This business achievement comprised of ₹3.16 lakh crore under refinance, ₹73,879 crore under different products of BID, ₹46,041 crore under products of SPD and ₹474 crore under DSM. Going by the past performance, a Business Budget of ₹5.31 lakh crore has been approved by the Board for 2024-25. With continued momentum, greater zeal and enthusiasm NABARD is expected to touch balance sheet figure of ₹10 lakh crore during the FY 2024-25. The document ‘Snapshot of NABARD’s Performance - 2023-24’ is an attempt to incorporate all the activities undertaken by HO Departments during the year 2023-24. The document is divided into four parts viz., financial functions of NABARD, Developmental functions, Internal Service Operations and NABARD Subsidiaries. 1  For Internal Use only I. Financial Functions 1. Refinance Support Ensuring adequate flow of formal credit to agriculture sector for production & marketing activities, and capital formation has been the principal focus of NABARD. NABARD through refinance schemes supports the resources of banks/ FIs. Over the years the concessional refinance extended by NABARD, with support of GoI & RBI, under STCRCF, STRRBF and LTRCF has resulted not only in augmentation of credit, both for agriculture and allied activities, but has also made credit at the ground level affordable. Department of Refinance maintained the momentum like previous financial year and achieved 24% and 15% growth in Long Term and Short-term refinance respectively during 2023-24. Total ST refinance reached an all-time high disbursement of ₹1,83,153 crore surpassing the target of ₹1,51,641 crore. The disbursement under LT refinance has been moderately lower than the target of ₹1,74,690 crore and reached at ₹ 1,32,487 crore during 2023-24. This could be achieved in spite of non-availability of SLF 3 from RBI as envisioned in the Business Budget. 1. Refinance performance during 2023-24 Refinance (₹crore) Sl. Particulars No. 2022-23 2023-24 Ach. Target Ach. % ach. 1 Total LT Refinance 1,07,014.74 1,74,690.00 1,32,486.90 76 (ii) Out of 1 LTRCF** 14,875.07 25,000.00 15,154.22 61 Total ST Refinance 2 1,58,905.25 1,51,641.00 1,83,152.52 121 (i+ii+iii+iv) (i) ST(SAO)* 64,224.20 75,000.00 65,675.67 88 (ii) Additional ST(SAO) 65,564.60 57,443.00 79,463.31 138 ST(Others), including (iii) 29,076.55 19,148.00 37,933.75 198 Weavers (iv) SFB 40.00 50.00 79.79 160 Total ST and LT 3 2,65,920.09 3,26,331.00 3,15,639.42 97 Refinance (1 +2) *As against Board approved target of ₹75,000 crore, RBI released ₹65,675.67crore ** As against Board approved target of ₹25,000 crore, RBI released ₹15,154.22crore 2  For Internal Use only Trends in Refinance The total refinance including the ST and LT in the year 2019-20 which was ₹1,78,562.33 crore increased to ₹3,15,639.44 crore in the year 2023-24, with a steady average growth of 16%. a) LT Refinance NABARD’s long-term refinance lays emphasis on investment credit which leads to capital formation through asset creation. Capital formation in agriculture is critical to increase agricultural production and productivity, protects farmers from uncertainty due to climatic changes and provides them sustainable flow of income. In order to give a boost to the investment credit in agriculture, Government of India set up ‘Long Term Rural Credit Fund’ (LTRCF) with NABARD in 2015, created out of the shortfall in priority sector lending of Scheduled Commercial Banks, for providing long term refinance support to Cooperative Banks and RRBs at concessional rate, against their term lending for agricultural activities. LTRCF plays a vital role in providing long term credit to small and marginal farmers who account for 86% of total number of landholdings. The details of LT refinance disbursed during the last 5 years are as under: (₹ crore) Year LT Refinance Out of (‘a’), amount % of LTRCF disbursed (a) disbursed under LTRCF disbursement to LT refinance 2019-20 78,180 14,929 19 2020-21 92,786 14,881 16 2021-22 1,16,102 15,190 13 2022-23 1,07,015 14,875 14 2023-24 1,32,487 15,154 11 The CAGR of LT Refinance over the past 5 years was 11.13% and the refinance amount increased from ₹78,180 crore in 2019-20 to ₹1,32,487 crore in 2023-24. During the year the increase has been a stupendous 24% over the previous year. Refinance Trend for the last 5 years (₹ crore) 200000.00 183153.00 152135.96 158905.30 150000.00 130964.16 132487.00 116135.55 107015.00 100382.10 92786.22 100000.00 78180.23 50000.00 0.00 2019-20 2020-21 2021-22 2022-23 2023-24 Total Short Term Refinance LT Refinance -Total 3  For Internal Use only (i) Agency wise break up The share of Commercial Banks in total refinance disbursement has been 67%, followed by StCBs and RRBs share of 13% and 10%, respectively. Share of NABARD Subsidiaries and NBFCs together was 7% and that of SCARDBs was 2%. The disbursement to NBFCs, including NBFC - mFIs, has increased from ₹ 2,080 crore to ₹7000 crore, an increase of ₹4,920 crore. (₹crore) 2023-24 2022-23 Agency % % Target Disb. Target Disb. Share Share Commercial 111705.00 88378.15 67 75,000 74,928.76 70.0 Banks RRBs 22006.00 13460.61 10 18,000 11,825.56 11.1 StCBs 19594.00 17113.97 13 12,500 12,955.13 12.1 SCARDBs 3024.00 2100.65 2 3,000 2,284.77 2.1 NabSamruddhi 1019.61 555 578.87 0.5 NABKISAN 4500.00 1479.18 3 1,350 1,192.14 1.1 NABFINS 1934.75 1,225 1,169.51 1.1 NBFC including 13861.00 7000.00 5 11,870 2,080.00 1.9 NBFC-mFI) State Govt. 0.00 0.00 0 0 - - Total 1,74,690.00 1,32,486.90 100 1,23,500 1,07,014.74 100 (ii) State wise Analysis: State wise Refinance disbursement Odisha MADHYA PRADESH North Eastern states 1% 3% 2% TAMIL NADU Total Punjab 3% 13% WEST BENGAL 4% HARYANA 4% MAHARASHTRA Kerala 4% 13% UTTAR PRADESH 6% TELANGANA 6% Other states 10% RAJASTHAN 6% Gujarat 9% ANDHRA PRADESH 7% KARNATAKA 9% 4  For Internal Use only Tamil Nadu topped the year with refinance disbursement of ₹17,133.12 crore followed by Maharashtra with disbursement of ₹16,761.25 crore during the year. Karnataka and Gujarat had percentage share of 9%, Andhra Pradesh, Rajasthan, Telangana and Uttar Pradesh each had percentage share of 7%. The top 14 states contributed 89% of the total refinance disbursement. Northeastern States’ share was mere 1%. Total share of other 10 states, excluding the Northeastern States was 10%. The refinance disbursement to NABARD Subsidiaries was ₹4,433.54 crore and to NBFC/mFIs was ₹7,000 crore with share of 3% and 5%, respectively during the year. Tamil Nadu, Gujarat, and Maharashtra were the top three states recording growth over last year’s performance in terms of amount with ₹9,605.27 crore, ₹4,146.72 crore and ₹3,889.74 crore disbursement, respectively. West Bengal, Madhya Pradesh and Bihar were the other important states having significant reduction in refinance during the year over the last year with ₹3,950.67 crore, ₹ 1,373.48 crore and ₹1,283.56 crore decrease, respectively. b) ST Refinance NABARD provides short term refinance to StCBs, DCCBs, RRBs and SCBs for a period not exceeding 18 months for production, marketing, and procurement activities. The ST refinance products of NABARD are detailed below: (i) ST (SAO) - Short-Term refinance for Seasonal Agriculture Operations: Concessional refinance is available under this product to StCBs and RRBs through STCRC and STRRB funds, respectively, for production of crops. The allocation for these funds is received from RBI, out of the shortfall of Priority Sector Lending of Scheduled Commercial Banks. As against a proposed budget of ₹55,000 crore and ₹20,000 crore under STCRC and STRRB fund respectively during the year FY 2023-24, ₹50,517.76 crore and ₹15,157.91 crore, were received and the same was disbursed. Achievement under short term refinance during the last five years was as below: (₹crore) Product 2019-20 2020-21 2021-22 2022-23 2023-24 ST (SAO) 54,740 54,373 55,695 64,224 65,676 Additional ST (SAO) 37,672 41,358 67,818 65,564 79,463 ST (Others) 7,970 11,733 28,590 29,077 37,934 SFB 33 40 80 Total 1,00,382 1,07,464 1,52,136 1,58,905 1,83,153 ST refinance disbursements in 2023-24 reached an all-time high of ₹1,83,152.52 with overall growth of 15% against last year’s refinance of ₹1,58,905 crore. Additional ST (SAO) recorded increase of 21% while ST-SAO increased by 2%. The non-availability of additional funds from the Priority Sector shortfall (STCRC and STRRB) from RBI contributed to the low growth in ST-SAO disbursement. 5  For Internal Use only (ii) ST (Others) Short Term Credit limit in the form of a cash credit is available at commercial rate of interest for activities other than Seasonal Agricultural Operations i.e. marketing of crops, working capital loans to individuals, bonafide commercial or trade transactions, production and marketing activities of artisans and village/cottage/tiny sector industries, financing persons belonging to weaker sections and engaged in trade, business and service activities, including distribution of inputs for agriculture and allied activities. During 2023-24, refinance of ₹37,933.8 crore was disbursed under ST (Others), reporting a growth of 30% over refinance of ₹29,076.6 crore disbursed during 2022-23. (iii) Additional ST (SAO) Since 2016-17, Additional Short-Term refinance for (SAO) over and above normal ST (SAO) limit is provided to StCBs/RRBs through market borrowings, to tide over the liquidity constraints arising due to increased ground level demand for credit, low accretion of deposits and to offset the delay in receipt of STCRC/ STRRB funds allocated by RBI/GoI, etc. During the year 2023-24, ₹79,463.32 crore was disbursed under Additional ST (SAO) with the growth of 21% over previous year. c) Performance under Special Refinance Products (i) Special Refinance Schemes To address the issue of reverse migration and to give boost to the agriculture and rural sector in the post COVID era, NABARD introduced following three special refinance schemes under which refinance at concessional rate of interest was made available to eligible financial institutions. These schemes also continued in 2022-23. However, no fund has been received under this scheme for 2023-24. PACS as MSCs: Agriculture Infrastructure Fund (AIF) scheme of GoI under Atmanirbhar Bharat initiative, for establishing decentralized farm-gate Post Harvest Management infrastructure, includes PACS as one of the eligible institutions for availing bank loan and claiming interest subvention under the scheme. NABARD introduced Special Refinance Scheme to saturate all the potential PACS for conversion as Multi Service Centres, over a period of three years commencing from the year 2020-21. Under the scheme refinance is provided to StCBs at 3% for lending to PACS at 4%, to create quality infrastructure (capital assets) and increase their business portfolio in tune with needs of membe₹ Interest subvention of 3% is available for eligible purpose under AIF, resulting the effective rate of 1% to PACS. ₹621.84 crore has been disbursed during the year 2023-24 under the scheme SRS PACS as MSC. Scheme for promoting micro food processing activities - Scheme for promoting micro food processing activities in rural areas, with concessional rate of interest to give fillip to the recently launched “PM Scheme for Formalisation of Micro Food Processing Enterprises (PM -FME)” under Atmanirbhar Bharat Abhiyan by MoFPI, GoI. The disbursement during the current year is NIL (ii) Schematic Refinance for Water, Sanitation and Hygiene (WASH) To provide clean water, sanitation, and hygienic conditions to rural and semi urban areas and thereby to protect human health during outbreak of infectious disease, NABARD introduced 6  For Internal Use only a special refinance scheme on Water, Sanitation and Hygiene (WASH). Under the scheme the concessional refinance is available to banks and eligible financial institutions for WASH activities. Cumulative disbursement under the scheme till 31 March 2024 was ₹163.47 crore. (iii) ST Refinance to SFBs To further accelerate the financial inclusion by facilitating credit availability to farmers for agricultural operations, working capital loans in MSE sector, loans to retail trade, small businesses, professionals, and other unorganized sector, at affordable rate of interest, SFBs were included as an eligible institution to avail ST refinance. An amount of ₹79.79 crore has been extended to Shivalik SFB during 2023-24. (d) Other Initiatives during the year i) Pilot Project on World’s largest Grain Storage Plan Ministry of Cooperation, GoI has implemented Pilot Project for World’s Largest Grain Storage Plan in Cooperative Sector. NABARD has provided concessional refinance under Special Refinance Scheme for PACS as MSC to StCBs at 3% for lending to PACS at 4% (availing margin of 1% to be shared between DCCB and StCB). Interest subvention of 3% is also available for eligible purpose under AIF. The effective rate of interest to PACS under the facility is just 1%. Further MoU's have been signed among NBCC, NCDC, NCCF, NABARD, Ministry of Cooperation, GoI and Department of Consumer Affairs, GoI for implementation of project. Eleven Godowns under Pilot Project were inaugurated by Hon’ble PM on 24 February 2024 under World’s Largest Grain Storage Plan. Hon’ble PM also laid foundation stones for construction of 500 godowns under the said scheme. ii) Sugar Ethanol Interest Subvention scheme The Government of India introduced Sugar Ethanol Interest Subvention scheme in 2018-19 with a view to increase the production of ethanol and its supply under the 'Ethanol Blended Petrol (EBP).' NABARD is the nodal agency responsible for managing the Sugar Ethanol Interest Subvention Scheme of the Department of Food and Public Distribution (DFPD), Government of India. As per the instructions of GoI, NABARD has opened a CNA account with ICICI Bank to release interest subvention. As on 31 March 2024, ₹570.90 crore has been released to 65 banks through the CNA account. Interest Subvention of ₹492.26 crore (817 quarterly claims settled) has been provided to the sugar mills through Cooperative Banks, RRBs and SCBs, etc. during the year 2023-24. Cumulatively ₹930.90 crore (2170 quarterly claims settled) has been provided to the sugar mills. NABARD has launched a sugar ethanol portal to speed up the claims settlement process. Claims of ₹ 492.26 crore have been settled during the FY24 bringing the total interest subvention under the scheme to ₹930.90 crore. iii) Kisan Rin portal Kisan Rin Portal has been developed by MoA&FW, GoI for online submission of KCC-MISS claims by the banks and has gone live on 26 December 2022. Presently, data entry is going on in the portal. As on 31.03.2024, 297 Cooperative Banks and 43 RRBs have started data entry in the portal. NABARD is monitoring the progress in respect of Cooperative Banks and RRBs. To facilitate the banks, we have already conducted several online training programmes and 7  For Internal Use only weekly VCs for nodal officers of Cooperative Banks and RRBs with the technical support of technical team of MoA&FW. As on 31 March 2024, Cooperative Banks have completed 62% data and 36% claim entry on the portal and RRBs have completed 89% data entry and 26% claim entry on the portal. iv) NABPARIKSHAN APP DoR is undertaking verification of refinanced assets through a digital app “NABPARIKSHAN”. The application enables the ROs and DDMs to monitor and verify the assets for which refinance has been availed in terms of aspects such as eligibility of assets, purpose, borrower, NPA status, etc. As on 31 March 2024, 1,600 assets have been verified. v) Floating rate under Long Term (LT) – To cater to the demand from our client banks, floating rate product was introduced by Department of Refinance in 2023-24 under Long Term Refinance for Public Sector Commercial Banks, Private Sector Commercial Banks, Small Finance Banks, NBFCs and NBFC-mFIs. vi) KCC Saturation Phase As a part of the Prime Minister’s package for farmers, Hon’ble Finance Minister had announced to cover 2.5 crore farmers under the second phase of KCC Saturation Scheme to facilitate credit to the farm sector. Department of Animal Husbandry and Dairying and Department of Fisheries, GoI also decided to simultaneously launch a special drive to provide KCC to 1.5 crore dairy farmers belonging to milk unions and milk producing companies and 1 crore fish farme₹ Instructions were issued to Cooperative Banks for implementation of second phase of the saturation campaign with special focus on Animal Husbandry farme₹ As on 31 March 2024, 146.58 lakh KCC with credit limit of ₹1,41,639.91 crore (out of which 7.58 lakh KCCs with credit limit of ₹6,063.85 crore for dairy farmers and 0.53 lakh KCCs with credit limit ₹315.77 crore for fish farmers) were issued by Cooperative Banks and RRBs. e) Implementation of Capital Subsidy Schemes of the Government of India NABARD has been playing an important role in channelling subsidy to eligible banks under various credit-linked subsidy schemes of Government of India, primarily for agriculture projects and priority sector activities. Implementation of these schemes has also enabled enhancement of ground level credit (GLC) to agriculture and allied sector and priority sector activities. The following capital subsidy schemes are being implemented by NABARD: i) New Agriculture Marketing Infrastructure sub scheme of Integrated Scheme for Agricultural Marketing (ISAM) The Revised Agricultural Marketing Infrastructure sub scheme of ISAM was approved by the Ministry of Agriculture and Farmers’ Welfare (MoA&FW) for implementation w.e.f. 22 October 2018 for the period coterminous with the 14th Finance Commission i.e. up to 2019- 20. GoI had approved the continuation of the scheme till 31 March 2026. The scheme lays special focus on developing and upgrading of Gramin Haats as GrAMs through strengthening of infrastructure thereof, which may function as farmer-consumer market (retail market) and collection/aggregation points (spokes) with linkages to secondary market (hub) and on processing/exporting with participation of FPOs, other farmers’ groups and eligible private sector promote₹ Capital subsidy ranging from 25% to 33.33% of the capital cost for institutions eligible for refinance from NABARD or any other FI such as State Financial 8  For Internal Use only Corporations (SFCs) approved by DAC&FW is provided under the scheme. Claims of ₹ 915.42 crore have been settled during the FY24 bringing the total subsidy under the scheme to ₹1384.48 crore. ii) Agri Clinics and Agri Business Centres (ACABC) The Central Sector Scheme of Agri-Clinics and Agri-Business Centres was launched in April 2002 by Ministry of Agriculture, GoI with the objective of supplementing the efforts of public extension by facilitating qualified agricultural professionals to set up agri-ventures. GoI revised the guidelines with effect from 4 August 2010 by providing for only composite subsidy instead of capital subsidy and interest subsidy. Composite subsidy of 44% of the project cost for women, SC/ST & all categories of candidates from North East and Hill states and 36% of project cost for all other beneficiaries is provided under the scheme. During 2023-24 the scheme was in force. Claims of ₹11.42 crore have been settled during the FY24 bringing the total subsidy under the scheme to ₹146.89 crore. Performance under ACABC, New AMI Scheme and Old AMI Scheme Performance during 2023-24 (₹ Crore) Particulars ACABC New AMI Scheme Old AMI Scheme No. of Units 239 4679 -- Subsidy released (₹ crore) 11.42 915.42 -- Cumulative Performance as on 31 March 2024 No. of Units 3697 7498 42260 Subsidy released (₹ crore) 146.89 1384.48 4466.91 Cumulative performance as on 31 March 2024 Scientific storage capacity of 608.53 lakh MT involving 42260 units has been created under Rural Godown Scheme, Agri Marketing Infrastructure, Grading and Standardization Scheme and Agri Marketing Infrastructure Scheme (Old Scheme) involving subsidy of ₹4466.91 crore. Scientific storage capacity of 203.83 lakh MT involving 7498 units has been created under New AMI scheme, involving subsidy of ₹1384.48 crore. 3697 units have been assisted involving subsidy of ₹146.89 crore under Agri Clinics and Agri Business Centre Scheme. f). Interest Subvention released by NABARD under various GoI schemes NABARD implements crop loan interest subvention scheme of GoI for Cooperative Banks and RRBs, under which interest subvention of 1.5% is provided to banks for extending crop loans up to ₹3 lakh at a concessional interest rate of 7% per annum. The scheme also provides an incentive of 3% subvention to the farmers making prompt repayment of loans, thereby making credit available at an effective interest of 4% per annum. GoI has given its approval for continuation of Modified Interest Subvention Scheme for Short Term Loans for agriculture and allied activities availed through KCC during the Financial Year 2023-24. Besides loans for raising crops, the government extends similar subvention to loans against Negotiable Warehousing Receipts (NWRs) devised to avoid distress sale of produce by small and marginal farme₹ Interest subvention of 1.5% to banks and 3% to farmers towards prompt repayment incentive (PRI) is also extended on short-term loans up to ₹ 2 lakh to animal husbandry and fisheries 9  For Internal Use only farmers, provided the loans are extended by banks @ 7% per annum. In case of farmers possessing KCC for raising crops and involved in activities related to animal husbandry and/or fisheries, the interest subvention on short-term loan is available on an overall limit of ₹3 lakh per annum. NABARD has released an amount of ₹ 8297.17 crore under Interest Subvention Scheme for Short Term crop loan during the year 2023-24. NABARD also implements interest subvention scheme under DAY-NRLM, for Cooperative Banks and RRBs. During the year 2023-24, NABARD has released ₹1,036.15 crore to Women SHGs through Cooperative Banks and RRBs under this scheme with cumulative disbursement of ₹5638.86 crore. NABARD is the nodal agency for implementing Scheme for extending Soft Loan to Sugar Mills to facilitate payment of cane dues for sugar season 2018-19. Interest Subvention of ₹294.63 crore (992 quarterly claims settled) has been released to the sugar mills through Cooperative Banks, RRBs and SCBs during the year 2023-24. 10