_annual report 09-10 english
TRANSCRIPT
NATIONAL BANK FOR AGRICULTURE
AND RURAL DEVELOPMENT
Plot: C-24/‘G’, Bandra-Kurla Complex
Post Box: 8121, Bandra (East)
Mumbai - 400 051
CHAIRMAN
Ref.No.NB.Secy./ 774 /AR-1/2010-11
12 July 2010
21 Ashadha 1932 (Saka)
The Secretary
Government of India
Ministry of Finance
Department of Financial Services
New Delhi-110 001
The Governor
Reserve Bank of India
Central Office
Mumbai- 400 001
Dear Sir
In pursuance of Section 48(5) of the National Bank for Agriculture and Rural Development Act, 1981, I
transmit herewith the following documents :
i. A copy of the audited Annual Accounts for the year ended 31st
March 2010 alongwith a copy of the
Auditors’ Report and
ii. Two copies of the Annual Report of the Board of Directors on the working of National Bank during the
year ended 31st
March 2010.
Yours faithfully
Umesh Chandra Sarangi
Letter of Transmittal
Board of Directors
Directors appointed
under Section 6(1)(c) of the
NABARD Act, 1981
Directors appointed
under Section 6(1)(d) of the
NABARD Act, 1981
Directors appointed
under Section 6(1)(e) of the
NABARD Act, 1981
Umesh Chandra Sarangi
Chairman
Dr. K. C. Chakrabarty Lakshmi Chand Shashi Rekha
Rajagopalan
P. K. Basu B. K. Sinha Alok Nigam
Roshan Lal Letkhogin Haokip L. C. Goyal M. I. Khandey
Dr. K. G. Karmakar
Managing Director
ContentsPage No.
NABARD at a Glance
Key Data References
Principal Officers
Highlights .................................................................................................................................................................................. 1
I. Rural Economic Environment ...................................................................................................................................... 17
• Global Economy ........................................................................................................................................................ 17
• Indian Economy ......................................................................................................................................................... 18
II. Development Initiatives ................................................................................................................................................ 32
• Farm Sector ................................................................................................................................................................ 32
• Rural Non-Farm Sector .............................................................................................................................................. 41
• Financial Inclusion ..................................................................................................................................................... 43
• Micro-Finance ............................................................................................................................................................ 47• NABARD Consultancy Services ................................................................................................................................. 52
• Research and Development Activities ........................................................................................................................ 53
• Training Personnel of RFIs ......................................................................................................................................... 54
III. Business Operations ...................................................................................................................................................... 56
• Production Credit ....................................................................................................................................................... 56
• Investment Credit ....................................................................................................................................................... 60
• Rural Infrastructure Development .............................................................................................................................. 66
IV. Capacity Building of Client Institutions .................................................................................................................... 77
• Institutional Development .......................................................................................................................................... 77
• Supervision over Banks ............................................................................................................................................. 90
V. Organisation and Management ................................................................................................................................... 94
• Management .............................................................................................................................................................. 94
• Human Resources Management ................................................................................................................................ 95
• Administrative and Other Matters ............................................................................................................................... 97
VI. Financial Performance & Management of Resources ........................................................................................... 101
• Sources of Funds ..................................................................................................................................................... 101
• Uses of Funds .......................................................................................................................................................... 103
• Investment of Surplus Funds .................................................................................................................................... 104
Auditors’ Report .................................................................................................................................................................... 106
Balance Sheet ....................................................................................................................................................................... 107
Profit and Loss Account 2009-10 ...................................................................................................................................... 108
Consolidated Financial Statements 2009-10 .................................................................................................................. 131
Regional Offices/Sub-Office/Training Establishments .................................................................................................... 137
Abbreviations ....................................................................................................................................................................... 139
1.1 Food Inflation ....................................................... 20
1.2 Policy Recommendations on Agriculture &
Rural Development ................................................. 23
1.3 Impact of Credit on Crop Yields .............................. 25
1.4 Yield Effect of Kisan Credit Card (KCC) ................... 29
1.5 Task Force to look into Issues of Private
Moneylenders ........................................................ 31
2.1 Major findings of Mid-Course Evaluation of
WDF Watershed Projects by CRIDA .......................... 32
2.2 Findings of a Quick Study in
Distressed Districts ................................................. 33
2.3 Impact Evaluation Study of IGWDP Watersheds
in Maharashtra by Action for Food
Production (AFPRO) : Major Findings ...................... 39
Boxes
2.4 German collaboration inWatershed Programmes ........................................... 39
2.5 UPNRM Projects - Initiatives ................................... 40
2.6 RIF Success Story - Solar Lanternsfor Weavers .................................................................... 41
2.7 Projects Sanctioned under FIF
during 2009 - 2010 ............................................... 45
2.8 Projects Sanctioned Under FITFduring 2009 - 2010 ............................................... 46
2.9 Grant Assistance for MFI Ratings ............................. 49
4.1 Revised Licensing norms for
Co-operative Banks ................................................ 91
5.1 Repositioning initiative of NABARD .......................... 95
NABARD AT A GLANCE
Sources of Fund 2010 2009 Net
Accretion
Capital 2000 2000 0
Reserve & Surplus 10674 9535 1139
NRC(LTO) Fund 14417 14016 401
NRC (Stabilisation) Fund 1566 1555 11
Deposits 505 482 23
Bonds and Debentures 20004 23704 -3700
Borrowings from GoI 147 354 -207
Borrowings from
Commercial Banks 500 500 0
Foreign Currency Loan 494 498 -4
Certificate of Deposits 379 1816 -1437
Commercial Paper 2680 181 2499
Collateralised Borrowing
and Lending Obligation 215 0 215
Term Money Borrowings 762 244 518
RIDF Deposits 59869 47023 12846
STCRC Fund 9622 4622 5000
Other Liabilities 5685 4279 1406
Other Funds 6773 7367 -594
Total 136292 118176 18116
(Rs. crore)
Uses of Funds 2010 2009 Net
Utilisation
Cash and Bank Balances 9628 13975 -4347
Collateralised Borrowing
and Lending Obligation 0 0 0
Investment in
a) GOI Securities 1991 1555 436
b) ADFC Equity 15 15 0
c) AFC Equity 1 1 0
d) SIDBI Equity 48 48 0
e) AICI Ltd. 60 60 0
f) NCDEX Ltd. & MCX Ltd. 15 6 9
g) Nabcons 5 5 0
h) Mutual Fund/VCF 905 1005 -100
i) Treasury Bills 0 157 -157
j) Commercial Paper 744 143 601
Loans and Advances
a) Production &
Marketing Credit 24073 16896 7177
b) Conversion of Production
Credit into MT Loans 0 20 -20
c) Liquidity Support 20 2591 -2571
d) MT & LT Project Loans 35742 33335 2407
e) LT Non Project Loans 199 252 -53
f) Other Loans 131 48 83
g) RIDF Loans 60255 45616 14639
h) Co-finance 84 94 -10
(Net of Provision)
Fixed Assets 235 247 -12
Others Assets 2141 2107 34
Total 136292 118176 18116
KEY DATA REFERENCES
Page Particulars Unit Numerical Value Amount (Rs. crore)
No. 2008-09 2009-10 2008-09 2009-10
Economic Indicators
18 Overall GDP1 % Growth 6.7 7.4 P – –
18 Agri GDP1+ % Growth 1.6 0.2 P – –
19 Share of Agri GDP in total GDP % 15.6 QE 14.6 RE – –
21 South-west Monsoon % deviation from normal -2 -36 – –
21 North-east Monsoon -31 8 – –
24 GLC % increase 18.6 21.5 P 3,01,908 3,66,919 P
25 Foodgrains production million tonnes 234.46 218.19 3rd AE – –
25 Oilseeds production million tonnes 27.72 25.41 3rd AE – –
25 Sugarcane production million tonnes 285.03 274.66 3rd AE – –
25 Cotton production million bales++ 22.28 22.83 3rd AE – –
28 KCC Issued million 8.59 5.97 38,245 34,982
Development Initiatives
32 Watersheds No. 38 59 58 196
34 FIPF- projects No. 14 17 2 0.55
34 Tribal development projects No. 74 79 49 236
35 FTTF No. of projects 12 151 2 4.9
35 Farmers’ Club No. of clubs 9,989 16,590 – –
37 NABARD-KfW Projects No. 8 8 32 41
41 RIF- promotional programmes No. of projects 65 155 12 17.7
42 REDP No. 2,083 2,627 13 10.48
43 SCC Issued lakh 1.5 0.63 628 240
45 & 46 FITF & FIF No. of projects 9 33 – –
47 SHG Credit Linked lakh 10.81 16.09 11,132 12,253
52 Consultancy Assignments - Contracted No. of projects 109 83 17 17.11
53 R&D Fund - Sanction No. of projects 12 9 0.87 1.01
Business Operations
57 Financial Support by NABARD – – – 50,577 57,069
Refinance - ST Credit
58 ST (SAO) - SCB No. 20 20 15,448 18,109
59 - RRB No. 76 80 3,547 6,832
59 Weavers’ - SCB No. 5 5 266 177
60 ST (OSAO) - RRB – – – 191 542
60 Refinance - Investment Credit 10,535 12,009
64 Farm Sector – – – 4,256 4,029
64 NFS – – – 2,707 3,466
64 SHG – – – 2,620 3,173
64 Co-financing projects No. 12 8 37 12
69 RIDF Loans - Sanction No. of projects 85,527 39,015 14,719 15,630
69 & 70 - Disbursement – – 10,459 18,888
72 - Completed – 122 62 10 10.9
Performance of RFI
ST Co-operatives
79 SCB in profit @ No. 26 26 286 395
79 DCCB in profit @ No. 261 320 868 1,611
LT Co-operatives
79 SCARDB in profit @ No. 9 11 150 405
79 PCARDB in profit @ No. 283 326 210 206
ST Co-operatives - NPA Position
80 SCB - NPA @ % to loan O/S 12.3 11.9 6,190 5,763
80 DCCB - NPA @ % to loan O/S 18.5 17.9 18,753 17,929
LT Co-operatives - NPA Position
81 SCARDB - NPA@ % to loan O/S 35 30.3 6,435 4,938
81 PCARDB - NPA @ % to loan O/S 43.5 39.1 5,117 4,393
RRB
89 RRB in profit No. 80 78 1,824 2,551
89 RRB - NPA Position % to loan O/S 4.14 3.66 – –
91 Inspection of banks^@@ No. 343 360 – –
91 Co-operative banks@@ No. 292 299 – –
91 RRB@@ No. 51 61 – –
Financial Performance & Management of Resources
101 Market Borrowings – – – 27,779 25,254
101 Total Working Funds – – – 1,18,176 1,36,656
QE : Quick Estimate RE : Revised Estimate P : Provisional 1 : At Factor Cost at 2004-2005 prices
+ : Includes agriculture, forestry and fishing ‘++ : Of 170 kgs each ^ : Voluntary inspections ‘@@ : Statutory Inspections
@ : Data pertains to financial years 2007-08 & 2008-09 AE : Advanced Estimate.
PRINCIPAL OFFICERS(31 March 2010)
EXECUTIVE DIRECTORS
S. K. Mitra Amaresh Kumar P. L. Behera Dr. Prakash Bakshi
CHIEF GENERAL MANAGERS
(Rural Development Banking Service)
D. B. Gore K. V. Raghavulu V. Ramakrishna Rao B.B.Mohanty A. K. Mathur C. R. Patnaik B. S. Shekhawat
(Andhra Pradesh) (Orissa)
S. G. Rathod R. Narayan A. K. Jain S. Mohapatra C. K. Gopalakrishna P. Satish K. C. Shashidhar
(Tamil Nadu) (Assam) (Madhya Pradesh) (Maharashtra) (Kerala)
Pankaj Pandit Dr. Venkatesh Tagat S. C. Kaushik P. Mohanaiah S. T. Raghuraman P. Das Suraj Bhan
(Karnataka) (Punjab) (West Bengal) (Himachal Pradesh) (Uttaranchal)
J. C. Mishra J. K. Kanojia D. P. Mishra M. V. Ashok V. Sreenarayanan G. C. Panigrahi S. G. Siddesh
(Uttar Pradesh) (Jharkhand) (NBSC) (Gujarat)
K. K. Gupta T. Moharana S. Akbar A. K. Srivastava B. B. Nayak S. Balan H. K. Talreja
(Chhattisgarh) (Haryana)
M. L. Sukhdeve K. Muralidhara Rao M. M. Mishra D. P. Panda
(Jammu & Kashmir) (Rajasthan) (Bihar)
CHIEF GENERAL MANAGERS
(Economic / Legal / Technical Service)
Dr. A. K. Bandyopadhyay U. N. Srivastava Dr. Sandip Ghosh V. Kameswara Rao
(Economic) (Legal) (Technical) (Technical)
GENERAL MANAGERS IN-CHARGE OF REGIONAL OFFICES/
TRAINING INSTITUTIONS
S. Chakrabarty P. C. Sahoo K. Jindal H. R. Dave A. P. Sandilya
(RTC, Bolpur) (Mizoram) (Tripura) (New Delhi) (Goa)
B. G. Mukhopadhyay G. Chintala K. C. Panda B. K. Dey M. M. Baheti
(Arunachal Pradesh) (Andaman & Nicobar) (Nagaland) (Sikkim) (RTC, Mangalore)
DEPUTY GENERAL MANAGERS IN-CHARGE OF
REGIONAL OFFICES/SUB-OFFICE
A. B. Das N. J. Mupid
(Manipur) (Meghalaya)
ASST. GENERAL MANAGER IN-CHARGE OF SRINAGAR CELL
P. L. Negi
1
Highlights
Rural Economic Environment
1. The Indian economy is estimated to have
registered a growth rate of 7.4 per cent in 2009-10 as
against 6.7 per cent witnessed in 2008-09, while the
global economy is expected to dip from 3.0 per cent
in 2008 to (-) 0.6 per cent in 2009. At the sectoral
level, the growth rates during 2009-10 over 2008-09
are expected to be 8.5 per cent (56.9 per cent of
GDP) for services, 9.3 per cent (28.5 per cent of
GDP) for industry and 0.2 per cent (14.6 per cent of
GDP) for agriculture.
2. The Gross Domestic Savings as a proportion to
GDP declined from 36.4 per cent during 2007-08 to
32.5 per cent during 2008-09 and this is estimated to
increase to 34.0 per cent during 2009-10. It is
estimated that the Gross Domestic Investment as a
proportion to GDP marginally decelerated from
35.6 per cent during 2008-09 to 35.0 per cent during
2009-10. The overall share of consumption
expenditure, both private and public, in GDP, is
estimated to decline marginally from 70.9 per cent in
2008-09 to 69.4 per cent in 2009-10.
3. The inflation rate as measured by variations in
the wholesale price index on a monthly basis
remained volatile during 2009-10. The overall
inflation rate decreased from 8.4 per cent during fiscal
2008-09 to 3.8 per cent during fiscal 2009-10, but
during the same period, the food inflation increased
from 8.0 per cent to 14.6 per cent.
4. During South-West monsoon (June-September)
2009, the country received 36 per cent less than the
Long Period Average (LPA) rainfall and during
post-monsoon season (October-December), the rainfall
received was 8 per cent above the LPA.
5. The impact of the delayed and sub-normal
monsoon was reflected in reduced area under crop
cultivation during kharif season. Taken together for
kharif and rabi seasons, the crop coverage during
2009-10 at 157.6 million hectares was 3.2 per cent
lower than that during 2008-09. The major changes
in cropping pattern during 2009-10 over 2008-09 were
in rice [(-) 14.3 per cent], cotton (13.4 per cent),
pulses (5.7 per cent) and oilseeds [(-) 4.6 per cent].
6. As against the target of Rs.3,25,000 crore of
credit flow to agriculture for 2009-10, the banking
system disbursed Rs.3,66,919 crore (provisional) as
on 31 March 2010, achieving 12.9 per cent more
than the target. Commercial banks, Co-operative
banks and Regional Rural Banks disbursed
Rs.2,74,963 crore, Rs.57,500 crore and Rs.34,456 crore,
respectively. Their corresponding shares in credit flow
were 84.6 per cent, 17.7 per cent and 10.6 per cent,
respectively.
7. The Gross Capital Formation in agriculture and
allied sectors in real terms increased from Rs.78,848 crore
in 2004-05 to Rs.1,38,597 crore in 2008-09 – an
increase of 76 per cent in four years. The GCF in
agriculture and allied sectors as a proportion of total
GDP stood at 2.7 per cent in 2004-05 and improved
to 3.3 per cent in 2008-09.
8. During 2009-10, 5.97 million Kisan Credit
Cards were issued by banks with credit limits of
Rs.17,411 crore. Of the total 90.64 million credit
cards issued by February 2010, 39.80 million cards
(43.9 per cent) were issued by commercial banks,
followed by 37.76 million cards (41.7 per cent) by
co-operative banks and 13.08 million cards (14.4 per cent)
by regional rural banks.
9. According to the 3rd advance estimates, the
country’s foodgrain production during 2009-10 has
been pegged at 218.19 million tonnes as compared to
234.46 million tonnes during 2008-09.
2
10. During 2008-09, while the area under various
horticulture crops increased by 2.5 per cent from
20.2 million hectares during 2007-08, production
increased by 3.6 per cent from 212.8 million tonnes
during 2007-08.
11. During 2008-09, the livestock and fisheries
sector contributed over 4.0 per cent of the total GDP
and about 33.34 per cent value of output from
agriculture and allied activities. As a result of the
increase in milk production in the country by 3.5 per
cent during the period between 2007-08 and
2008-09, the per capita availability of milk increased
from 252 grams per day to 258 grams per day.
Similarly, fish production increased by 7.0 per cent
between 2007-08 and 2008-09.
12. The rise in the MSP for common paddy,
moong and wheat during 2009-10 over the year
2008-09 were 11.8 per cent, 9.5 per cent and 1.8
per cent, respectively. Giving due consideration for
margins to farmers on account of risk as well as
profit on the cost of production including the cost
of transportation, the Government of India has
fixed the Fair & Remunerative Price (FRP) of
sugarcane at Rs.129.84 per quintal during 2009-10,
which was over 51 per cent higher than the
Statutory Minimum Price for the year 2008-09. For
the year 2010-11 seasons, the Government has
hiked the FRP of sugarcane by 7 per cent at
Rs.139.12 per quintal.
13. The stock of foodgrains (rice and wheat) held
by Food Corporation of India as on April 1, 2010 at
42.84 million tonnes was higher by 22.30 per cent over
the level of 35.03 million tonnes as on April 1, 2009.
The off-take of foodgrains (rice and wheat) under
Targeted Public Distribution System (TPDS) and other
Schemes at 48.86 million tonnes during 2009-10 was
23.70 per cent higher than that at 39.50 million tonnes
during 2008-09.
14. NABARD disbursed Rs.25,485 crore against
the claims of Rs.25,858 crore under the Agricultural
Debt Waiver and Debt Relief Scheme, 2008. The
share of SCB, SCARDB and RRB stood at
Rs.15,681 crore, Rs.3,513 crore and Rs.6,291 crore,
respectively.
Development Initiatives
Farm sector
15. During the year, 59 watershed projects were
sanctioned taking the cumulative number to 513,
spread over 94 districts in 14 States. Under the Prime
Minister’s Relief Package for 31 districts in four
States, 2.83 lakh ha. was taken up for
implementation during the year, taking the cumulative
area to 8.71 lakh ha. and aggregate financial
commitment to Rs.958 crore. During 2009-10,
Rs.89.41 crore and Rs.14.79 crore were disbursed as
grant and loan, respectively, taking such cumulative
disbursements to Rs.197.77 crore and Rs.30.00 crore,
respectively. Under the Special Plan for Bihar
component of Rashtriya Sam Vikas Yojana, the
number of watershed projects sanctioned rose to 79
by the end of the year, covering an area of 83,593 ha.
in eight districts in South Bihar. The amount
disbursed during the year was Rs.8.37 crore while the
cumulative figure was Rs.13.99 crore.
16. The Village Development Programme had been
implemented in 953 villages of 437 districts across 25
States, as on 31 March 2010. Under the Tribal
Development Fund, financial assistance of Rs.236.19 crore
was sanctioned during the year for 79 projects,
benefiting 63,113 tribal families. As on 31 March 2010,
Rs.543.62 crore had been sanctioned for 191 projects
benefiting 1,56,330 families.
17. The corpus of the Farm Innovation and
Promotion Fund was enhanced from Rs.5 crore to
Rs.50 crore and 17 proposals in 11 states with
3
financial assistance of Rs.155.37 lakh were
sanctioned during the year. Cumulatively, 78 projects
with financial support of Rs.618 lakh have been
sanctioned, of which 25 projects with financial
assistance of Rs.104 lakh have been completed. The
corpus of Farmers’ Technology Transfer Fund was
also enhanced during the year from Rs.25 crore to
Rs.50 crore and 151 diverse and innovative
proposals for transfer of technologies were
sanctioned a grant assistance of Rs.488 lakh in 22
states. During the year, 16,590 Farmers’ clubs were
launched taking the total number of clubs to 54,805
covering 1,04,648 villages in 587 districts. Under the
scheme of ‘Capacity Building for Adoption of
Technology’, during the year, 6,516 farmers were
taken on 261 exposure visits by NABARD, in
collaboration with select research institutes, KVKs
and SAUs.
18. During the year, a “Pilot project for augmenting
productivity of lead crops/activities through adoption
of sustainable agricultural practices” was launched in
900 villages at the national level with the aim of
augmenting income of the farmers through enhanced
production and productivity of lead crops/activities.
Rural Non-Farm Sector
19. During 2009-10, 155 innovative projects were
sanctioned under the Rural Innovation Fund, taking
the cumulative number to 252. An amount of
Rs.17.70 crore was sanctioned taking the cumulative
commitment to Rs.38.37 crore, as on 31 March 2010.
An amount of Rs.10.69 crore was disbursed during
the year for 252 projects taking the cumulative
disbursements to Rs.17.99 crore.
20. The District Rural Industries Project was
extended to 106 districts by March 2007 and 43 of
them phased out by 2007-08, on successful
implementation. During 2009-10, GLC flow in 42
districts covered under various phases reached
Rs.675.99 crore and refinance availed of was
Rs.11.11 crore. In all, 45,701 units were set up
generating employment for 1.42 lakh persons. Since
inception, GLC flow aggregated Rs.24,295.11 crore,
facilitating establishment of 19.50 lakh units and
generating employment opportunities for 44.48 lakh
persons. The cumulative refinance availed amounted
to Rs.3,658.46 crore as on 31 March 2010.
21. The ‘Scheme for Strengthening of Rural Haats’
introduced in 1999 in DRIP districts was extended to
all districts, village bazaar boards, SHGs, NGOs and
to PRIs/PACS, during the year. The quantum of
assistance was increased to Rs.5 lakh from Rs.3 lakh
and coverage extended to include permanent
structure/s as per local requirements. During 2009-10,
grant support of Rs.298.72 lakh was sanctioned to 87
rural haats.
22. During 2009-10, 15 participatory clusters,
including two rural tourism, were sanctioned with a
total grant support of Rs.225 lakh and five on-location
cluster workshops were conducted, taking the total
number of such programmes to 25.
23. As on 31 March 2010, 116 Women
Development Cells were supported in 58 RRBs, 55
Co-operative banks and three SCARDBs, with
disbursement of Rs.40.39 lakh to address gender
issues in credit and support services. Under
Marketing of Non-Farm Products of Rural Women
and Assistance to Rural Women in Non-Farm
Development schemes, grant support of Rs.6.92
lakh and Rs.17.56 lakh, respectively, were released
as on 31 March 2010.
24. During 2009-10, 263 marketing events/
exhibitions, were supported with grant assistance of
Rs.146.13 lakh. To enable rural artisans/craftsmen
realise remunerative prices and to establish marketing
linkages, 119 rural marts in 22 States were sanctioned
grant assistance of Rs.133.91 lakh, during 2009-10.
Cumulative grant support of Rs.332.52 lakh had been
provided to 321 rural marts across 22 States.
4
25. During the year, 1.02 lakh Swarojgar Credit
Cards (SCC) with credit limits of Rs.411.05 crore were
issued for facilitating hassle-free availability of credit
for investment and working capital requirements of
small/micro-entrepreneurs. The cumulative number of
SCC was 10.86 lakh involving credit limit of
Rs.4,418.38 crore.
Financial Inclusion
26. The total contribution under Financial Inclusion
Fund (FIF) and Financial Inclusion Technology Fund
(FITF) stood at Rs.50 crore each as on 31 March 2010.
As on 31 March 2010, 50,225 villages have been
covered under Financial Inclusion through FIF & FITF
with a sanction amount of Rs.19.47 and Rs.21.83 crore,
respectively. NABARD and UNDP have entered into
collaboration for financial inclusion in seven states
with focus on SCs/STs/minorities. NABARD has also
collaborated with Indian Institute of Banking &
Finance (IIBF), Post Offices & Farmers’ Clubs in
providing financial support for SCs/STs and Women.
Microfinance
27. The Microfinance programme in India has
emerged as not only the largest in the world having
covered about 8.6 crore poor households as on
31 March 2009, but also the main contributor
towards financial inclusion in the country. As on
31 March 2009, 61.21 lakh SHGs maintained bank
savings of Rs.5,545.62 crore and 42.24 lakh SHGs
had loan outstanding of Rs.22,679.84 crore. During
the year 2009-10, while 16.09 lakh groups availed of
bank credit of Rs.12,253.51 crore, 581 Micro Finance
Institutions (MFIs) availed of Rs.3,732.33 crore of
bank credit. As on 31 March 2010, 1,915 MFIs had
loan outstanding of Rs.5,009.09 crore. The share of
SHG loan to GLC increased to 4.07 per cent in 2008-09
from 3.8 per cent in 2007-08.
28. During 2009-10, an amount of Rs.20.49 crore
was released as grant support for SHG promotional
activities and Rs.60.42 crore to MFIs for capital
support/Revolving Fund Assistance (RFA) as against
Rs.18.73 crore and Rs.15.93 crore in the previous
year, respectively. During 2009-10, grant assistance of
Rs.28.78 crore was sanctioned to various agencies for
promoting 71,268 SHGs, taking the cumulative
assistance sanctioned to Rs.107.66 crore for 4,92,746
groups as on 31 March 2010. The cumulative
disbursement was Rs.40.38 crore for 2,36,683 SHGs.
An expenditure of Rs.9.93 crore was incurred for
capacity building initiatives for all stakeholders in the
SHG segment.
29. During the year, grant support of Rs.6.76 lakh
was given for the rating of five MFIs. During the year,
capital support of Rs.6.87 crore was sanctioned to
10 agencies taking the cumulative support to
Rs.27.87 crore for 33 agencies and RFA amounting
to Rs.23 crore was sanctioned to 13 agencies, taking
the cumulative credit sanctioned to Rs.74.02 crore to
42 agencies.
30. Under the Rajiv Gandhi Mahila Vikas
Pariyojana (RGMVP), 21,868 SHGs were promoted in
select districts of Uttar Pradesh, of which 12,749 were
credit linked as on 31 March 2010. In addition, 676
Cluster Level Federations and 15 Block Level
Federations were also formed.
31. During the year, 1530 Micro-Enterprise
Development Programmes (MEDPs) were conducted
for 38,313 SHG members on location-specific farm,
non-farm and service sector activities. Cumulatively,
2,843 MEDPs were conducted for 71,518 participants
as on 31 March 2010.
32. NABARD continued to extend support for
SHG-Post Office Linkage Programme in Tamil Nadu.
NABARD sanctioned additional Rs.200 lakh RFA to
India Post for onward lending to SHGs. Cumulatively,
2828 SHGs have opened zero-interest savings
accounts, of which 1,195 SHGs have been credit
5
linked by Post Offices, with loans amounting to
Rs.321.25 lakh as on 31 March 2010. RFA of Rs.5 lakh
for on-lending to 50 SHGs in East Khasi Hills in
Meghalaya was also sanctioned to India Post.
33. A survey conducted by NABARD-GTZ Rural
Finance Institutions Programme (RFIP) revealed that
786 MFOs were in existence in 13 priority states, with
a high geographical concentration (75%) in two states
(Andhra Pradesh and Tamil Nadu) and the remaining
scattered over 11 states.
34. Under the NABARD-KfW SEWA Bank project
under implementation in Gujarat, KfW released a
grant assistance of Rs.2.94 crore to SEWA Bank
during 2009-10, taking the cumulative release under
the project to Rs.6.87 crore.
NABARD Consultancy Services
35. During the year, Nabcons opened a liaison
office in Nairobi, Kenya to garner potential rural
development consultancies in the African continent.
Nabcons undertook assignments for APRACA in
Mongolia and Uzbekistan. Nabcons was approved as
a pass-through agency by Ministry of Rural
Development (MoRD), GoI for assisting skill
development and training programme under SGSY
package. Nabcons contracted 83 assignments with a
fee of Rs.1,711 lakh during the year as against 122
assignments for Rs.1,666 lakh last year. During the
year 2009-10, the company earned an income of
Rs.1,278 lakh consisting of Rs.997 lakh from
assignments, Rs.110 lakh from mutual fund
distribution and Rs.171 lakh from income on
investments/other miscellaneous activities.
Research and Development Fund
Activities
36. During the year, Rs.982.98 lakh was utilised
from the R&D Fund for activities like research projects/
studies (Rs.100.03 lakh), seminars (Rs.61.16 lakh),
training/summer placement (Rs.802.84 lakh), and
other activities (18.97 lakh). As on 31 March 2010,
the cumulative disbursement stood at Rs.118.52 crore.
During 2009-10, nine research projects and 112
seminars involving grant assistance of Rs.137.10 lakh
and Rs.88.71 lakh were sanctioned respectively. An
amount of Rs.787.32 lakh was utilised from the R&D
Fund during the year for capacity building of the staff
of Rural Financial Institutes (RFIs). During 2009-10,
under the Summer Placement Scheme, projects on
agriculture and rural development, allied sector,
agri-business and social development were assigned
to 57 students by 21 ROs, TE and HO, entailing an
expenditure of Rs.15.52 lakh.
Other Development Initiatives
37. The Centre for Microfinance Research (CMR)
in BIRD brought out the first issue of its half-yearly
journal, ‘The Microfinance Review’. During the year,
grant assistance of Rs.70 lakh was released by
NABARD to CMR taking the cumulative assistance to
Rs.194.18 lakh. An APRACA Centre of Excellence
(ACE) in Linkage Banking was set up in CMR, as a
Leading Centre of Knowledge in Linkage Banking.
38. During the year, NABARD sanctioned grant
assistance of Rs.7.53 lakh to National Institute of
Rural Banking (NIRB), Bangalore for conducting 21
programmes. Further, an amount of Rs.4.24 lakh and
Rs.24.92 lakh were released to NIRB, Bangalore and
Indian Institute of Bank Management (IIBM),
Guwahati, respectively.
39. Financial support of Rs.390.20 lakh from the
Co-operative Development Fund (CDF) was disbursed
to the Junior Level Training Centres (JLTCs),
Agricultural Co-operative Staff Training Institutes
(ACSTIs) and Integrated Training Institutes (ITIs) for
conduct ing 1019 programmes covering 12,088
participants during 2009-10.
6
40. The total financial support extended by
NABARD in 2009-10 was Rs.57,069 crore, registering
a growth of 13 per cent over 2008-09.
Production Credit
41. As an incentive to co-operative banks that
covered the maximum number of new farmers during
2008-09 in the wake of implementation of ADWDR
Scheme, 2008, additional credit limits were provided.
Again, credit limit applications were exempt from
being routed through RCS, in states, which had
executed MoU for implementing the GoI package for
revival of Short Term Co-operative Credit Societies
(STCCS) and amended their Co-operative Societies
Acts. Relaxations were also granted to co-operative
banks not complying with Section 11(1) of Banking
Regulation Act, 1949 (AACS).
42. During 2009-10, ST-SAO limits were sanctioned
to 20 SCBs aggregating Rs.18,109 crore as against
Rs.15,448 crore sanctioned during 2008-09. The credit
limits included Rs.1,809.95 crore for the Oilseeds
Production Programme (OPP), Rs.155.62 crore for
National Pulses Development Programme (NPDP) and
Rs.592.99 crore for credit requirements of tribals under
the Development of Tribal Population (DTP). The SCBs
reached a maximum outstanding credit of Rs.17,436.66
crore during 2009-10, with a utilisation of 96 per cent.
43. During 2009-10, ST (weavers) credit limits
aggregating Rs.177.32 crore were sanctioned to five
State Co-operative Bank (SCBs) (Andhra Pradesh,
Karnataka, Puducherry, Tamil Nadu and West Bengal)
for production/procurement/marketing activities, as
against Rs.265.63 crore during 2008-09. The
maximum outstanding, was Rs.180.78 crore, as
against Rs.166.66 crore last year.
44. During the last three years, 4,172 Handloom
Weavers’ Groups (HWGs) were formed by banks in 12
States [viz., Orissa (1366), Andhra Pradesh (1220),
Jharkhand (500), Karnataka (498), Assam (272),
Madhya Pradesh (103), West Bengal (88), Bihar (82)
and other States (43)]. Of these, 1,781 Groups have
been credit linked.
45. ST refinance to State Co-operative Agriculture
and Rural Development Bank (SCARDB) for Seasonal
Agricultural Operations (SAO) was continued during
the year, with a refinance of Rs.95.92 crore extended
to Kerala (Rs.74.87 crore) and Rajasthan (Rs.21.05 crore)
SCARDBs at 4.5 per cent, for lending to the ultimate
borrowers at 7 per cent.
46. During 2009-10, limits of Rs.6,832.13 crore
were sanctioned to 80 RRBs under ST-SAO as against
Rs.3,546.81 crore sanctioned to 76 RRBs in 2008-09.
The limits included Rs.577.85 crore for OPP,
Rs.143.86 crore for DTP and Rs.4 crore for NPDP. The
maximum outstanding was Rs.6,779.79 crore, forming
99 per cent of the limit sanctioned during 2009-10.
47. The aggregate limit for ST-OSAO sanctioned
to RRBs during 2009-10 was Rs.542 crore, as against
Rs.190.80 crore last year. The maximum utilisation
was Rs.318.24 crore (59%).
48. Aggregate interest subvention of Rs.1,284.56 crore
was provided by GoI to NABARD, co-operative banks
and RRBs for the year 2007-08. An amount of
Rs.1,205.17 crore has been disbursed for 2008-09.
Interest subvention for 2009-10 was estimated at
Rs.2,600 crore.
49. NABARD continued to act as the nodal agency
for the package announced by GoI for assisting
co-operative sugar mills for loans availed of from
co-operative banks. Out of Rs.138.54 crore received
from GoI as interest subvention, Rs.131.22 crore
Business Operations
7
pertaining to 76 co-operative sugar mills, was released
to the co-operative banks. An additional sum of
Rs.113.07 crore was estimated as claims from banks
for 2008-09, 2009-10 and 2010-11. Under the
Scheme for ‘Providing Financial Assistance to Sugar
Undertakings–2007’ for payment of cane dues for
2006-07 and 2007-08 sugar seasons, GoI placed
Rs.125.71 crore with NABARD, for release against
interest subvention claims. An amount of Rs.60.97
crore was sanctioned to 59 sugar mills operating in
Goa, Gujarat, Karnataka, Maharashtra, Orissa and
Uttar Pradesh.
50. The rates of interest on refinance under
ST(SAO) and ST(Others) to co-operative banks, RRBs
and scheduled commercial banks during 2009-10
varied between a minimum of 4 per cent and a
maximum of 8.5 per cent for different purposes.
Investment Credit
51. NABARD continued granting relaxation to
commercial banks, co-operative banks and RRBs in
NER and Sikkim, for enhancing the flow of bank
credit. The initiatives taken during 2009-10 were:
(i) NPA norms for ST(SAO) refinance to State
Cooperative Banks and Regional Rural Banks were
relaxed by 5 and 3 per cent, respectively, (ii) cent per
cent refinance support was extended to all agencies
for all purposes. The rate of interest on refinance to
commercial banks was reduced by 50 basis points.
52. The release of refinance to SCARDBs as also
SCBs/DCCBs for farm and non-farm sector activities
was against Govt. guarantee. However, SCBs that
were in profit during 2007-08 with no accumulated
losses, net NPA less than 5 per cent as on 31 March
2008 and having ‘A’ Audit classification were
exempted from Govt. guarantee. Refinance to other
SCB, including Section 11(1) of BR Act (AACS), non-
compliant SCBs/DCCBs and to non-scheduled SCBs
was only against Government. guarantee. In the event
of Government guarantee not forthcoming,
alternatives like pledge of government securities or
fixed deposit receipts issued by scheduled banks were
considered.
53. With effect from 01 March 2010, the interest
rates charged were, 8 per cent for commercial banks,
7.5 for RRB/co-operative banks and 6.5 for ADFC/
NEDFi. The rates on interim finance to SCARDBs and
ADFCs were 9.75 and 6.5 per cent respectively. A
special reduction of 50 basis points was provided to
commercial banks in NER, hilly states, Eastern States
and a few other states and Union Territories for all
eligible purposes.
54. The refinance disbursed (including ST-SAO to
SCARDBs) during the year touched Rs.12,009.08 crore
as against Rs.10,535.29 crore last year, recording
an increase of 14 per cent. Commercial banks had
the major share at 50.4 per cent. Across the
regions, refinance disbursement varied widely with
the major share going to the South (50%) followed
by North (20%), Central (12%) and others (18%).
During the year, Non Farm Sector (NFS) (28.86%)
and Self-Help Groups (SHG) (26.42%) were the
major sectors for which banks availed of refinance,
followed by Farm Mechanisation (14.3%) and Dairy
Development (6%).
55. Eight new co-finance projects were sanctioned
during the year with total financial outlay (TFO) of
Rs.62.13 crore taking the cumulative number of
projects sanctioned to 48 with cumulative TFO of
Rs.807.52 crore. An amount of Rs.11.99 crore was
sanctioned during the year. NABARD’s cumulative
sanction and disbursement were Rs.229.44 crore and
Rs.136.35 crore, respectively. As on 31 March 2010,
there were 38 on-going cofinance projects.
56. During the year, 60 projects were sanctioned
under cold storages/onion godowns with TFO of
8
Rs.129.81 crore, bank loan of Rs.77.77 crore and
subsidy of Rs.30.28 crore. As on 31 March 2010,
1,851 projects had been sanctioned involving TFO of
Rs.2,900.59 crore, bank loan of Rs.1,634.67 crore
and subsidy of Rs.443.58 crore, respectively. The
cumulative capacity created under cold storages and
storage facilities for onion as on 31 March 2010 stood
at 76.74 lakh MT.
57. During the year, 963 rural godown projects
were sanctioned with TFO of Rs.281.92 crore, bank
loan of Rs.196.82 crore and subsidy of Rs.65.44 crore,
respectively. Cumulatively, as at end March 2010,
17,556 rural godown projects were sanctioned,
involving TFO of Rs.3,798.58 crore, bank loan of
Rs.2,504.08 crore and subsidy of Rs.578.97 crore.
The cumulative capacity created under rural
godown scheme as on 31 March 2010 stood at
221.45 lakh MT.
58. The scheme of Agricultural Marketing
Infrastructure, Grading and Standardisation has been
in operation since 2004. During the year, 573 projects
with TFO of Rs.637.90 crore and bank loan of
Rs.419.54 crore were sanctioned and subsidy of
Rs.49.89 crore was released to 21 States and 5 UT.
Cumulatively, 3,838 units with TFO and bank loan
of Rs.1,933.56 crore and Rs.1,283.13 crore,
respectively, were sanctioned and subsidy of
Rs.190.89 crore was released.
59. The scheme of Agri-Clinics and Agri-Business
Centres (ACABC) was started in 2006-07. A subsidy
of Rs.1.61 crore was disbursed for 76 projects
involving TFO of Rs.5.99 crore and bank loan of
Rs.4.66 crore during the year. Till 31 March 2010,
280 projects with TFO of Rs.20.87 crore, bank loan
of Rs.15.98 crore and subsidy of Rs.3.09 crore were
sanctioned.
60. Under the Capital Investment Subsidy Scheme
for Commercial Production of Organic Inputs, net
subsidy of Rs.1,042.33 lakh had been released to 612
units as on 31 March 2010.
61. Potential Linked Plan (PLP) for 623 districts
were prepared during the year, to serve as a guide in
credit planning exercise and infrastructure
development for 2010-11. Three new District
Development Managers’ offices were opened, taking
the total number of DDM offices to 395. In addition,
100 districts were tagged to specific DDM districts.
Rural Infrastructure Development
62. The RIDF, started in 1995-96, had an
aggregate corpus of Rs.1,00,000 crore till RIDF XV
(2009-10). Additionally, a separate window was
introduced in 2006-07 for funding rural roads
component of Bharat Nirman Programme, with
allocation of Rs.18,500 crore, till 2009-10. The total
allocation for RIDF, thus, stood at Rs.1,18,500 crore,
as on 31 March 2010.
63. During the year 2009-10 (RIDF – XV), 39,015
projects were sanctioned involving loan amount of
Rs.15,629.82 crore, taking the cumulative number of
projects to 4,02,806 and sanctioned amount to
Rs.1,03,718 crore (RIDF I to XV), of which
Rs.85,597.38 crore had been phased. Of the total
amount sanctioned during the year, rural roads
accounted for 29 per cent, irrigation projects 27 per
cent, social sector projects 16 per cent, bridges 15 per
cent and agri-related 13 per cent.
64. Disbursement during 2009-10, under the
ongoing tranches amounted to Rs.12,387.54 crore
taking the cumulative disbursements to Rs.68,439.74 crore,
forming utilisation of 80 per cent. Additionally, an
amount of Rs.6,500 crore was disbursed to the
National Rural Roads Development Agency (NRRDA)
under Bharat Nirman Programme (BNP), taking the total
disbursements during the year to Rs.18,887.54 crore.
9
The cumulative disbursement, as on 31 March 2010,
touched Rs.86,939.74 crore, including Rs.18,500 crore
under BNP. Disbursements under RIDF I to IX have
been closed, while disbursements continued under
RIDF X to XV.
65. With the receipt of Rs.16,395.95 crore as
deposits from commercial banks in 2009-10, the
cumulative deposits received under RIDF stood at
Rs.82,725.38 crore. The rate of interest payable by
NABARD on these deposits continued to be at Bank
rate (at present 6%). An amount of Rs.4,248.07 crore
was received from State Governments towards
repayment of RIDF loans during 2009-10. The total
RIDF loan outstanding was Rs.60,255.45 crore as at
end March 2010.
66. During the year, NABARD carried out
monitoring of 6,670 projects through field visits. As on
31 March 2010, the RIDF projects had created additional
irrigation potential of 156.53 lakh ha, 3.04 lakh km
length of rural roads and 5.84 lakh metre length of
rural bridges and generated recurring employment of
81.17 lakh jobs and non-recurring employment of
57,853 lakh person days.
Evaluation and Commodity Specific
Studies
67. Six DRIP studies conducted during the last two
years revealed that the RNFS units in the study
districts were profitable with a rate of return of above
15 per cent in most cases.
68. Two studies on Cluster Development
Programme (CDP) covering Sisal Fibre and Woodcraft
clusters recommended ensuring fibre availability,
highlighting the environmental benefits of sisal fibre
products compared to cheaper plastic substitutes and
encouraging individual initiatives to establish sisal-
based micro-enterprises. The study on woodcraft
cluster revealed that the number of artisans in the
cluster increased about six times after the
intervention. On an average, the sample artisans
produced 192 idols per annum getting an income of
Rs.1,153 per idol, which yielded a return of 44 per cent
of the fixed costs.
69. Seven studies conducted on Rural
Entrepreneurship Development Programme (REDP)
revealed that the overall success rate in setting up new
enterprises worked out to 34 per cent only in terms of
new enterprises and 58 per cent when wage
employment too was considered. The average annual
net gain in income worked out to Rs.18,663 per
trainee. The programme yielded more than 50 per
cent returns to the investment in all the states studied.
Banks and SHGs emerged as the major sources of
credit. The studies suggested enrichment of the course
material with success stories.
70. A study covering 14 states, viz., Andhra
Pradesh, Assam, Gujarat, Haryana, Himachal
Pradesh, Karnataka, Kerala, Maharashtra, Madhya
Pradesh, Orissa, Punjab, Rajasthan, Uttar Padesh &
West Bengal, was conducted covering 1,876 KCC
holders from 178 bank branches from Co-operative
banks, RRBs and CBs. The study suggested that KCC
penetration could be further improved in terms of
extending loan such as crop loan, working capital for
allied & NFS activities and consumption loan in the
ratio of 4:2:1. The study further suggested that there
is a need to adopt “mission mode” approach to make
KCC into a farmers’ friendly efficient instrument for
effective credit delivery system accompanied by
appropriate institutional mechanism.
71. Under the scheme of rural godowns, 20,393
godowns with capacity of 238.37 metric tonnes were
sanctioned all over the country, and for the same, a
subsidy of Rs.543.02 crore was released. An in-house
study on “Rural Godowns in Gujarat: An Evaluation
Study” had been conducted during 2009-10. The
study showed that major crops stored in these
10
godowns were cotton, castor, mustard, cumin,
tobacco, paddy and bajra. Although the state of
Gujarat tops the list with the maximum number of
rural godowns, the average capacity of godowns in
the state at 217.7 metric tonnes was one of the
lowest in the country. The average bank loan
sanctioned by commercial banks, regional rural
banks and cooperative banks was Rs.6 lakh, Rs.2.89 lakh
and Rs.2.59 lakh, respectively. The utilisation of
capacity created was 67.2 per cent in society-owned
godowns and 68.8 per cent in individual-owned
godowns. While the society-owned godowns attained
break-even level at 25.6 per cent of the available
storage space, the individual-owned godowns
attained it at 53.3 per cent. The repayment
performance of all the godowns selected for the
study was regular. The scheme of rural godown had
injected Rs.1,270.7 lakh of private investment in the
selected districts viz., Patan and Kheda, which
generated 3.4 lakh non-recurring and 1.5 lakh
recurring employment.
72. Five studies on pulses were conducted in five
states. The studies revealed low productivity at 622 kg
per hectare. Total processing cost and sales
proceeds for milling one MT of pulses was Rs.24,698
and Rs.26,400, respectively. The net value addition
per one MT of raw pulses was Rs.1,702, at 7 per
cent of the operating cost. The input-output ratio
was 1:1.06.
73. A study on Mentha, an aromatic herb, was
taken up in the state of Uttar Pradesh which
accounts for 80 per cent of the crop area under
mentha. The per acre cost of cultivation of mentha
varied between Rs.14,765 and Rs.18,625. The
average yield of oil per acre varied between 37.6 kg
and 56.50 kg. The net income per acre varied
between Rs.5,099 and Rs.11,207. The gross value of
production from the sale of menthol crystals/flakes
worked out to Rs.25,87,800 and the net income
realised from processing plant per month worked out
to Rs.77,662.
Capacity Building of Client Institutions
Institutional Development
74. While the deposits of SCBs and DCCBs as on
31 March 2009, increased by 24 and 16 per cent,
respectively over the previous year, the borrowings of
SCBs decreased by 7 per cent and that of DCCBs
increased by 6 per cent. Loans issued by SCBs
increased significantly by 58 per cent and that of
DCCBs decreased by 3.4 per cent. Loans
outstanding of SCBs decreased marginally by 3.5 per
cent while that of DCCBs increased marginally by
1.2 per cent.
75. In the Long-Term Co-operative Credit
Structure (LTCCS), borrowings of SCARDBs, as on
31 March 2009, decreased marginally by 3.3 per cent
while that of Primary Co-operative Agriculture and
Rural Development Banks (PCARDB) increased
marginally by 0.25 per cent, over the previous year.
While loans issued by SCARDBs and PCARDBs
increased by 17 and 16 per cent, respectively, their
loans outstanding decreased by 11 and 5 per cent,
respectively over the previous year.
76. During 2008-09, 26 out of 31 SCBs were in
profit aggregating Rs.395 crore and the remaining 5
were in loss (Rs.71 crore). While 320 out of 370
DCCBs earned overall profit of Rs.1,611 crore, 50
incurred losses to the extent of Rs.337 crore. Eleven
SCARDBs earned an aggregate profit of Rs.405 crore,
while 8 incurred an aggregate loss of Rs.150 crore. Out
of 697 PCARDBs, 326 earned an aggregate profit of
Rs.206 crore, while 365 incurred an aggregate loss of
Rs.360 crore. The aggregate accumulated losses of
11
DCCBs, SCARDBs and PCARDBs declined in 2008-09
with a slight increase for SCBs.
77. During 2008-09, the overall profits of SCBs
increased to 37 per cent over the previous year.
However, profits of SCBs decreased in the Northern
region (9%).
78. In the case of DCCBs, profits during 2008-09
increased across the regions. At the aggregate level,
the number of profit-making DCCBs increased while
the number of loss-making DCCBs reduced.
79. In the LT structure, the number of loss-making
SCARDBs reduced their losess by 65 per cent from
the previous year. During 2008-09, aggregate profit of
SCARDBs was Rs.255 crore. At the aggregate level,
PCARDBs incurred losses of Rs.154 crore during
2008-09.
80. During the year 2008-09, SCARDBs in the
northern region increased their profits, while those in
Central, Eastern and Western regions moved from loss
in 2007-08 to profits in 2008-09. While PCARDB in
Central, Western and Eastern regions increased their
profits, the PCARDB in the Northern region incurred
further losses. At the aggregate level, number of
profit-earning PCARDBs increased profits to
Rs.206.03 crore.
81. At the aggregate level, the percentage of gross
NPA to total loans and advances outstanding in
respect of both SCBs and DCCBs decreased to 11.9
and 17.9 per cent, as on 31 March 2009, from 12.3
and 18.5 per cent as on 31 March 2008, respectively.
In absolute terms, NPA was estimated to be
Rs.5,763.50 crore and Rs.17,929.15 crore for SCBs
and DCCBs as on 31 March 2009, registering a
decline of 7 and 4 per cent, respectively. The
percentage of NPA to total loans and advances
outstanding in the case of SCARDBs and PCARDBs
declined to 30.3 and 39.1 per cent as on 31 March 2009,
from 35.0 and 43.5 per cent, respectively, during the
previous year. The total NPAs of SCARDBs and
PCARDBs were estimated at Rs.4,937.73 crore and
Rs.4,392.95 crore, showing a decline of 23 and 14
per cent, respectively.
82. Regional level NPAs of SCBs vis-à-vis the all-
India average was the lowest in Northern (3.1 %),
and highest in North-eastern (37.4%) regions, as on
31 March 2009. During the same period, NPAs of
DCCBs in Eastern, Western, Central and North-east
regions were higher compared to those in the
previous year.
83. The average loan recovery of SCBs and DCCBs
as on 30 June 2009 improved marginally to 92 and
72 per cent from 85 and 56 per cent, respectively,
over the previous year. In absolute terms, loan
recovery of SCBs improved from Rs.26,433.54 crore
to Rs.33,893.73 crore. At the DCCB level, it increased
from Rs.39,544.40 crore to Rs.57326.77 crore. The
average loan recovery of SCARDBs and PCARDBs, as
on 30 June 2009, declined to 40 and 40.3 per cent
from 50 and 42 per cent, respectively, over the
previous year. In absolute terms, loan recovery of
SCARDB and PCARDB declined to Rs.3,860.44 crore
and Rs.2,842.47 crore, as on 30 June 2009, from
Rs.5,367.81 crore and Rs.3,190.10 crore, respectively,
over the previous year.
84. As on 31 March 2009, 21 SCBs and 9
SCARDBs had executed “DAP/MoU” (Phase IV) with
State Governments and NABARD.
85. As on 31 March 2009, duly elected Boards
were superseded in 8 SCBs and 91 DCCBs in the ST
Structure, and in 9 SCARDBs and in 265 PCARDBs
in the LT Structure.
12
86. During the year, sanctions and disbursements
were Rs.3.76 crore and Rs.3.78 crore, respectively,
under Co-operative Development Fund (CDF). As on
31 March 2010, cumulative sanctions and
disbursements under CDF were Rs.91.74 crore and
Rs.81.51 crore, respectively. Ten Business
Revitalisation and Managing Human Aspirations
programmes, two ODI and two follow-up visits were
conducted for co-operatives during the year.
87. The special audits of STCCS was completed
in 79,530 PACS out of 95,626 PACS across 25 states.
The special audit of CCBs has been completed in
twelve states and in the remaining States, it is in
progress. An amount of Rs.7,972.22 crore has been
released, till 31 March 2010, by NABARD as GoI
share for recapitalisation of 49,764 PACS in fourteen
states, while the state governments have released
Rs.755.80 crore as their share.
88. So far, 14 States have amended their
Cooperative Societies Acts (CSA). The draft
amendments proposed by the remaining 11 States
have been vetted by NABARD, even as previous
amendments in three of these States are awaiting
Presidential assent.
89. Under the GoI package for STCCS, training
has been imparted to 226 master trainers from 16
States, who in turn, trained 1,896 district level
trainers. As on 31 March 2010, training has been
imparted to 72,127 Secretaries of PACS from 14
States, 99,219 elected Board Members of PACS from
11 States, 369 CEO of CCB and 1,671 Directors of
CCB/SCB. In addition, training on CAS/MIS has been
provided to 61,619 PACS functionaries and 3,471
bank supervisors/ departmental auditors.
90. The Task Force, constituted under the
Chairmanship of Shri G. C. Chaturvedi, IAS, Addl.
Secretary (FS), Ministry of Finance, Govt. of India, to
review the need for a separate package for the Revival
of LTCCS submitted its report to the Government of
India on 25 February 2010.
91. The total number of RRBs as on 31 March
2010 was 82 (46 amalgamated and 36 stand alone),
with the formation of four new amalgamated RRBs
in 2009-10.
92. The entire amount of Rs.1,795.97 crore of
recapitalisation support to 27 RRBs, having
negative net worth as on 31 March 2007, was
received from GoI, the state governments and
sponsor banks concerned, in the ratio of 50:15:35,
respectively.
93. In order to free the farmers indebted to money
lenders through debt swap, RRBs, had adopted
24,531 villages, as on 31 December 2009, of which
13,221 had been freed from debt to moneylenders.
94. RRBs had opened 474 branches during 2008-09,
taking the total number of branches of all RRBs to
15,181, as on 31 March 2009. Against the target of
opening 2,000 branches in the next two years,
available information show that RRBs had opened
about 263 branches in 2009-10 taking the total
number of branches to around 15,444.
95. Fifteen RRBs were identified from 14 States for
R & D project on Financial Inclusion with ICT-based
solutions, through use of smart cards, Point of Sale
(PoS) devices and mobile technology, in different
regions and client groups in the country.
96. Under the Financial Inclusion programme,
RRBs had opened 153.81 lakh ‘No Frills’ Deposit
13
Accounts out of a total number of 935.54 lakh
deposit accounts opened as on 31 March 2009. The
number of loan accounts stood at 170.66 lakh during
the corresponding period.
97. Over a period of three years (2008-10),
aggregate reserves of RRBs increased by 38.74 per cent
while deposits and investments increased by 44.4 and
56.9 per cent, respectively. Borrowings also increased
by 61.4 per cent, while loans and advances
(outstanding) increased by 39.4 per cent in 2009-10.
98. Financial projections for RRBs for the year
2009-10 indicate that they were likely to improve their
performance with 78 out of 82 RRBs showing pre-tax
profit to the extent of Rs.2,550.51 crore, as compared
to Rs.1,823.55 crore in 2008-09. The remaining four
RRB incurred losses of Rs.8.4 crore as compared to
Rs.35.91 crore posted by 6 RRB in 2008-09. The
aggregate reserves of RRBs that had wiped off their
accumulated losses in 2008-09 and attained
sustainable viability, increased to Rs.7,912.39 crore
and the net worth increased to Rs.10,256.13 crore.
The accumulated losses of RRBs have decreased by
30.9 per cent over the previous year.
99. The recovery performance of RRBs was
estimated at 79.1 per cent, as on 30 June 2009,
compared to 77.9 per cent as on 30 June 2008.
All 15 RRBs in the Northern, 3 in Western and 10
in Southern region had registered a recovery
performance above the national average. Six RRBs
had a recovery percentage of above 90 while five
others had a recovery percentage of less than 60
per cent.
100. The aggregate gross NPAs of all RRBs declined
from 4.1 per cent, as at 31 March 2009, to 3.7 per cent
as on 31 March 2010.
101. The Committee constituted under the
Chairmanship of Dr. K.C. Chakrabarty, Deputy
Governor, Reserve Bank of India, to examine the
financials of RRBs with CRAR of less than 7 per cent
and suggest measures to bring it to at least 9 per cent
in a phased manner, submitted its Report to GoI on
30 April 2010.
Supervision of Banks
102. During 2009-10, statutory inspections of 343
banks (30 SCBs, 252 DCCBs and 61 RRBs) and
voluntary inspections of 16 SCARDBs and one apex
society, viz. Gujarat Rajya Handloom, Handicraft and
Audhyogic Sahakari Federation Ltd. (GUISCA), were
conducted. Some of the supervisory concerns that
emerged were non-compliance with statutory
provisions and KYC/AML standards, improper
application of IRAC norms, high NPAs, deficiencies in
sanction, appraisal and post disbursement follow up
of loans, inadequate net margins, ineffective funds
management, inadequate risk management systems,
lack of corporate governance, weak internal checks
and control system, frauds, improper valuation of
securities and irregularities in investment portfolio,
violation of Credit Monitoring Arrangement (CMA)/
exposure norms, etc.
103. The Board of Supervision (BoS), constituted by
the Board of Directors of NABARD in 1999, met four
times during the year 2009-10. It reviewed the
functioning of co-operative banks and RRBs including
insolvent/weak banks; frauds; adherence to CMA
norms by co-operative banks; scheduling of
amalgamated RRBs; migratory analysis of supervisory
rating of SCBs, DCCBs and RRBs; compliance of
banks to statutory provisions; disposal of complaints
against supervised banks; etc.
104. As on 31 March 2010, 88 banks (5 SCBs and
83 DCCBs) were not complying with the provisions of
14
Section 11(1) of the B.R. Act, 1949 (AACS). The
total erosion in the value of assets of these 88 non-
compliant banks aggregated Rs.12,054.09 crore,
which had affected their deposits to the extent of
Rs.3,780.55 crore (22.60%) in addition to their entire
share capital. Sixty seven DCCBs and three SCBs
were granted exemption from the provisions of
Section 11(1) of the Act, ibid by GoI, up to 31 March
2010, while applications for grant of exemption in
respect of 17 banks (1 SCB & 16 DCCBs) were under
the consideration of RBI/GoI.
105. The licensing norms for co-operative banks had
been revised by RBI. Consequent upon the revised
licensing norms, RBI had issued licenses to 8 SCBs and
98 DCCBs during the year, thus increasing the number
of licensed banks to 195 (22 SCBs and 173 DCCBs) as
on 31 March 2010. As a one-time measure, RBI, RPCD
delegated to its Regional units the powers to grant
licenses to cooperative banks. The number of scheduled
SCBs remained unchanged at 16.
106. Thirtynine amalgamated RRBs were included
by the RBI in the Second schedule of the RBI Act,
1934, after they were found complying with Section
42(6)(a)(i) &(ii) of the Act. With this, the number of
scheduled RRBs stood at 75 as on 31 March 2010.
107. As on 31 March 2009, it was found that 39 RRBs
had Provision Coverage Ratio (PCR) below 50 per cent,
29 had between 50 per cent & 70 per cent and 18
RRBs had PCR more than 70 per cent.
108. As on 31 March 2010, 5 SCBs and 83 DCCBs
did not comply with Section 22(3)(a) of BR Act, 1949
(AACS), and 9 SCB and 214 DCCB did not comply
with Section 22(3)(b) of the Act, ibid. Similarly, out
of the 16 scheduled SCB, two were not complying
with Section 42(6)(a)(i) of RBI Act, 1934 in regard to
minimum capital requirements of Rs.5 lakh, and three
were not complying with Section 42(6)(a)(ii) of the
Act. As on 31 March 2010, out of 82 RRBs, 70
complied with Section 42(6)(a)(i) of the RBI Act,
1934 and 49 complied with Section 42(6)(a)(ii) of the
Act. The erosion in the value of assets of the 8 RRBs
not complying with Section 42 (6)(a)(i) of the RBI Act
stood at Rs.785.38 crore as on 31 March 2010 with
erosion in their deposits to the extent of Rs.111.02 crore
(2.27 per cent).
109. During the year, detailed guidelines/instructions/
circulars/clarifications were issued to the SCB/DCCB/
SCARDB/RCS on a wide-ranging number of issues:
on prevention/monitoring of frauds; prudential norms
on asset classification, provisioning & income
recognition in PACS; judicious utilization of funds
post revival package; and ADWDR 2008 scheme
implementation; need for timely completion of audit;
working out CRAR by PACS and disclosing it in their
balance sheets; the role of Chairman/CEO in ‘Fraud
Risk Management System’ in banks; importance of
Section 19 of the Banking Regulation Act 1949
(AACS) concerning restriction on holding of shares;
expeditious balancing of books and reconciliation of
inter-branch accounts. Master circular on disclosure
norms and revised guidelines on Long Form Audit
Report (LFAR) were issued to the RRBs. Guidance
note on Credit Risk Management (CRM) was issued to
co-operative banks and RRBs. ROs were issued
guidelines in dealing with cases of non-compliance
with the provisions of Section 42(6)(1)(i) of the RBI
Act, 1934 by RRBs; also, clarifications on compliance
to Section 6 of B.R. Act 1949 (AACS) by co-operative
banks and procedure for valuation of unquoted
securities were provided. Operational Manual for
co-operative banks was prepared based on inputs and
feedback obtained from NAFSCOB on many policy
issues.
15
110. During the year, the Board of Directors of
NABARD met five times. The Executive Committee
and Audit Committee met six times and four times,
respectively, while the Sanctioning Committee for
loans under RIDF and Risk Management Committee
of the Board met seven times and three times,
respectively. As on 31 March 2010, the Board of
NABARD comprised eight new directors under Section
6 (1) (d) and 6 (1) (e) of NABARD Act, 1981.
111. Board of Directors decided to analytically
examine the present and future role of NABARD and
reposition the institution, to enable it to effectively
address emerging and future challenges. This
initiative, termed ‘Project Reposition’, was
started from March 2010 and will be for a period
of 18 months. The Bank has engaged consultancy
agency for the purpose.
112. Reserve Bank of India conducted 12th
Financial Inspection of NABARD with reference to
their financial position as on 31 March 2009 between
27 January to 26 February 2010.
Overseas visits by top management
113. The Chairman attended the 57th EXCOM of
APRACA held in Chiang Mai, Thailand in March
2010. The Managing Director attended the
Regional workshop of FAO in Manila, Philippines in
October, 2009.
Training and Skill enhancement
114. During the year, 85 training programmes
covering 1,675 officers were conducted at NBSC,
Lucknow in functional, behavioural and technical
areas. Fifty four officers were deputed for tailor-made
programmes delivered on post-harvest management,
disaster management, etc., designed to meet
specialised training needs, while 424 officers were
Organisation and Management
deputed for 153 off the shelf programmes, workshops,
seminars and conferences organised by various
institutes of repute. Further, 120 officers were
deputed abroad for various overseas training
programmes, exposure visits, seminars, etc. In
addition, 45 training programmes covering 663
employees were conducted at NBTC, Lucknow and
ZTC, Hyderabad. Pre-promotional training programmes
were also conducted for 47 Group ‘B’ staff for
promotion to Grade ‘A’ and one pre-retirement
programme was conducted for 5 Group ‘B’ and
Group ‘C’ staff.
115. During the year, 51 employees availed of
facilities under the incentive scheme for professional
studies in part-time and distance learning courses.
Study leave was granted to four officers under the
staff scheme for higher studies in well-known
universities/institutions in India as well as abroad.
Other Matters
116. During the year, 108 officers in Gr. ‘A’ of RDBS
were appointed. Further, 695 promotions were effected
in various grades of the officers cadres of which 8, 34
and 92 were promoted to Gr. ‘F’, ‘E’ and ‘D’,
respectively. As at end March 2010, NABARD has total
staff strength of 4,770 employees of which 1,247
belonged to SC/ST constituting 26 per cent.
117. Industrial relations in the Bank continued to be
harmonious during the year. Periodic discussions were
held with the management and All-India NABARD
Officers’ Association/All- India NABARD Employees’
Association.
118. Central Complaints Committee at Head Office
and Committees at ROs are functioning for prevention
of sexual harassment of women at the work place.
119. Preventive vigilance inspection of 8 ROs/TE
was undertaken during the year. The bank observed
16
Vigilance Awareness Week from 2 November to
6 November 2009.
120. During the year, the bank’s intranet was
expanded to collect data/returns from RO/TEs by
means of On-Line Returns Management System
(ORMS) to generate MIS reports. The accounting
software was made bilingual and upgraded with
additional features to include preparation of e-TDS
and other monitoring reports. During the year video
conferencing facility and enhanced Human Resource
Management System software was operationalised in
the bank.
121. Inspection of 16 ROs, one TE and 19 HO
departments were undertaken during the year.
Concurrent audit of HO departments, viz., Finance
Department, Accounts Department, GAD, Premises
Department, Co-financing Cell of ICD, Treasury
Operations, Information System Audit, etc.,
continued to be outsourced to external auditors.
122. The Bank continued to promote the use of
Hindi as an effective tool of mass communication for
its business development. Official Language
Implementation Committee is constituted in all the
offices to monitor the implementation of Rajbhasha
policy of GoI. On-site inspection of eight ROs and six
HO departments were also conducted during the year
with a view to ensuring strict compliance with
Rajbhasha policy.
123. During the year, Members of the Drafting and
Evidence Sub-Committee of the Parliamentary
Committee on Official Languages visited Raipur and
Hyderabad offices of the Bank. During the year,
ROs brought out 102 PLPs and 54 inspection reports
in Hindi.
Financial Performance & Management
of Resources
124. During the year 2009-10, the total Working
Funds increased by 15.3% from Rs.1,18,176 crore to
Rs.1,36,656 crore. The increase was due to net inflow
of RIDF Deposits (Rs.12,846 crore), STCRC Fund
(Rs.5,000 crore), Commercial Papers (Rs.2,499 crore)
and Term Money Borrowings (Rs.519 crore). The
borrowings of NABARD (Rs.25,703 crore) constituted
18.48 per cent of its working funds as on 31 March 2010.
125. The funds utilised for ST (SAO) loans and
ST(OSAO) loans advanced to SCBs and RRBs
together increased by Rs.7,177 crore (42.5 per cent)
to Rs.24,073 crore as on 31 March 2010 from
Rs.16,896 crore as at the end of previous year. RIDF
loans increased to Rs.60,255 crore as on 31 March 2010
compared to Rs.45,616 crore at the end of previous
year, recording a net outflow of Rs.14,639 crore during
the year.
126. The total income of the Bank was Rs.7,964.80 crore
for the year 2009-10 ( Rs.7,050.68 crore during the
previous year). After meeting the expenditure of
Rs.5,692.34 crore as against Rs.5,063.15 crore in the
previous year towards interest/financial charges,
establishment/other expenses, provisions and
depreciation, the profit before tax for the year
amounted to Rs.2,272.45 crore as against
Rs.1,987.53 crore in 2008-09. After providing for
provision/adjustment for taxes, the profit after tax
during the current year amounted to Rs.1,558.26 crore
as against Rs.1,390.13 crore for the previous year.
Amounts of Rs.350 crore, Rs.400 crore, Rs.10 crore
and Rs.679 crore were transferred to Special Reserve
u/s 36(1) (viii) of IT Act 1961, NRC (LTO) Fund, NRC
(Stabilisation) Fund and Reserve Fund, respectively.
Further, an aggregate amount of Rs.190 crore was
transferred to various Funds maintained by the Bank
for development purposes.
17
I
Rural Economic Environment
The Indian economy is estimated have registered a
growth rate of 7.4 per cent during 2009-10 as against
6.7 per cent witnessed during 2008-09. Due to the near
drought conditions, the GDP in agriculture is estimated
to show a meagre growth of 0.2 per cent during
2009-10. However, industry and services sectors
registered comparatively better growth rates. This order
of growth performance is expected to improve per
capita income (at 2004-05 prices) from Rs.31,821
during 2008-09 to Rs.33,588 during 2009-10, an
increase of 5.6 per cent during 2009-10, as against the
previous year’s estimate of 5.0 per cent.
Global Economy
1.2 The growth in the global output witnessed
deceleration from 3.8 per cent in 2007 to 3.0 per cent
in 2008, but is estimated to have declined to (-) 0.6 per
cent in 2009 due to recessionary conditions in
advanced economies. Notwithstanding some positive
signs of revival amidst ongoing policy support and
improving financial market conditions, led by the Asian
economies, especially China and India, the time
horizon for global recovery remains uncertain in view
of subdued consumption demand, increased
unemployment levels and the anticipation of further
contraction in demand.
1.3 In emerging and developing economies, the
growth rate decelerated to 6.1 per cent in 2008 and
further to 2.4 per cent in 2009 compared to 8.3 per
cent in 2007. The global meltdown also impacted the
economic growth of China (9.6 per cent) and India
(7.3 per cent) in 2008 and it is estimated that the
growth in China and India would have further declined
to 8.7 per cent and 5.7 per cent, respectively in 2009.
With the gradual picking up in global trade, the other
indicators of economic activity such as capital flows,
assets and commodity prices remain buoyant. The
projected growth rates in China and India in 2010 are
10.0 per cent and 8.8 per cent, respectively (Table 1.1).
1.4 As per the estimates by Food and Agriculture
Organisation (FAO), the world production of cereals
decreased by 2.0 per cent; oil crops and milk and milk
products increased by 8.2 per cent and 1.3 per cent,
respectively in 2009 over 2008. Low income food deficit
countries accounted for 41.8 per cent, 30.6 per cent and
36.5 per cent of the global output of cereals, oil crops
and milk and milk products, whereas, India’s share, on
a two-year average basis, was 9.2 per cent, 8.4 per cent
and 15.9 per cent, respectively (Table 1.2).
Table 1.1: Overview of Global Economy
(Annual per cent change)
Growth 2008 2009 2010*
A. GDP (Real)
a. World 3.0 (-)0.6 4.2
b. Advanced Economies 0.5 (-)3.2 2.3
i. United States 0.4 (-)2.4 3.1
ii. Euro Area 0.6 (-)4.1 1.0
iii. Japan (-)1.2 (-)5.2 1.9
iv. Newly Industrialised
Asian Economies 1.8 (-)0.9 5.2
c. Emerging and Developing
Economies 6.1 2.4 6.3
i. Developing Asia 7.9 6.6 8.7
ii. China 9.6 8.7 10.0
iii. India 7.3 5.7 8.8
iv. ASEAN - 5** 4.7 1.7 5.4
B. Consumer Prices
a. Advanced Economies 3.4 0.1 1.5
b. Emerging and Developing
Economies 9.2 5.2 6.2
C. Trade Volume
(goods & services)
a. Imports by Emerging and
Developing Economies 8.5 (-)8.4 9.7
b. Exports by Emerging and
Developing Economies 4.0 (-)8.2 8.3
D. Commodity Prices
a. Oil Prices 36.4 (-)36.3 29.5
b. Non-Fuel Prices 7.5 (-)18.7 13.9
* Projections;
** Includes Indonesia, Malaysia, Philippines, Thailand and Vietnam
Source: World Economic Outlook, IMF, April 2010.
18
Table 1.2: Production of Cereals, Oilseeds & Milk products in the World, 2008 and 2009
(Million Tonnes)
Country/Group Cereals Production@ Oil crops Production Milk and Milk Products
% share in % share in % share in
2008* 2009** World 2008-09* 2009-10** World 2008 2009* World
India*** 216.9 200.3 9.2 34.7 36.4 8.4 109.1 112.3 15.9
Asia 973.7 973.6 43.1 125.5 126.1 29.7 248 254.8 36.1
Africa 147.9 155.8 6.7 16.8 16.2 3.9 36.1 36.6 5.2
Central America 41.7 40.4 1.8 1.2 1.2 0.3 15.8 16.1 2.3
South America 134.7 116.6 5.6 104.7 131.2 27.8 57.4 57.7 8.3
North America 457.0 461.1 20.3 107.0 113.8 26.0 94.5 93.7 13.5
Europe 493.9 454.5 21.0 49.0 49.0 11.6 215.4 216.1 31.0
Ocenia 35.1 36.2 1.6 3.0 3.0 0.7 24.6 26.0 3.6
World 2284.0 2238.2 100.0 407.2 440.5 100.0 691.8 701.0 100.0
Developed Countries 1042.9 1009.7 45.4 164.4 170.4 39.5 363.2 365.2 52.3
Developing Countries 1241.2 1228.4 54.6 242.7 270 60.5 328.5 335.7 47.7
Low Income Food
Deficit Countries 948.2 943.3 41.8 129.4 129.9 30.6 250.3 257.6 36.5
Least Developed Countries 137.9 139.3 6.1 10.1 10 2.4 25.7 26.2 3.7
@Rice is measured in terms of paddy (unhusked); *: Estimated; **: Forecast; ***: Dairy year commences from April
Source: FAOSTAT @FAO Statistics Division 2009; December 2009.
Indian Economy
A. Economic Scenario
a. Gross Domestic Product
1.5 After a phase of deceleration in growth from
9.2 per cent during 2007-08 to 6.7 per cent during
2008-09, there has been a recovery during 2009-10,
with an estimated growth rate of 7.4 per cent (Table 1.3).
The increase in the growth rate could be attributed
partly to the growth rates of over 8 per cent in
industry and services sectors. However, the
contribution of agriculture, forestry and fishing sector
is likely to register a growth of 0.2 per cent in its GDP
during 2009-10 due to delayed monsoon and the
consequent declines estimated in the production of
foodgrains and oilseeds.
1.6 Sectoral analysis of growth rates between 2005-06
and 2008-09 revealed a mixed trend. At disaggregated
level, the overall growth rate during 2009-10 comprised
of growth rates of 0.2 per cent in agriculture and allied
activities, 9.3 per cent in industry and 8.5 per cent in
Table 1.3: Economic Indicators
Annual percent change
Particulars 2007-08 2008-09 2009-10^
a. Overall GDP 9.2 6.7 7.4
b. GDP from Agriculture &
Allied Activities 4.7 1.6 0.2
c. Foodgrains Production 6.2 1.6 (-)6.9
d. Industrial Production 8.5 2.8 10.4
e. Inflation as measured by WPI 4.7 8.4 3.8
f. Imports 35.0 19.8 (-)8.2
g. Exports 29.1 12.3 (-) 4.7
Trade Balance* (as % of GDP) (-)0.2 (-)0.2 (-)0.2
Gross Domestic Savings
(as % of GDP) 36.4 32.5 34.0
Gross Domestic Investment
(as % of GDP) 37.6 35.6 37.2
Fiscal Deficit** (as % of GDP) 2.6 6.0 6.6
External Debt (as % of GDP) 18.1 20.5 --
^ : Provisional.
* : based on the balance as per DGCI & S (CMIE, June 2010) and GDP
at current prices.
** : GDP at current prices (Revised estimate).
Source: 1. Min. of Finance (DEA.Div).
2. CMIE, June 2010, Central Statistical Organisation, GoI.
19
services as compared to growth rates of 1.6 per cent,
3.9 per cent and 9.8 per cent, respectively during 2008-09.
On the overall, the contributions of agriculture, industry
and services to the GDP are estimated at 14.6 per cent,
28.5 per cent and 56.9 per cent, respectively during
2009-10 (Table 1.4).
b. Consumption, Savings and Investments
1.7 The Private Final Consumption Expenditure
(PFCE) and Government Final Consumption Expenditure
(GFCE) (at 2004-05 prices) are estimated at
Rs.27,69,769 crore and Rs.5,65,860 crore, respectively,
in 2009-10 as against Rs.26,55,533 crore and
Rs.5,12,126 crore, respectively, in 2008-09. The overall
share of consumption expenditure, both private and
public in GDP, is estimated to decline marginally from
70.9 per cent in 2008-09 to 69.4 per cent in 2009-10.
1.8 The private expenditure on food items as a
proportion to total private consumption has been
gradually declining since 2004-05 while that of
miscellaneous goods and services has been increasing.
While the growth in per capita income accelerated from
5.0 per cent in 2008-09 to 5.6 per cent in 2009-10, that
in per capita private consumption expenditure
decelerated from 5.3 per cent in 2008-09 to 2.9 per cent
during the same period.
1.9 The Gross Domestic Savings (GDS), as a
proportion to GDP, declined from 36.4 per cent during
2007-08 to 32.5 per cent during 2008-09 and this
proportion is estimated to increase to 34.0 per cent
during 2009-10. But it is estimated that the Gross
Domestic Investment (GDI), as a proportion to GDP, to
have accelerated from 35.6 per cent during 2008-09 to
37.2 per cent during 2009-10. At sectoral level, the
capital formation in public sector increased from
8.9 per cent in 2007-08 to 9.4 per cent in 2008-09 and
during the same period, the private sector capital
formation decreased from 27.6 per cent to 24.9 per
cent. Within the private sector, the investment rate for
the corporate sector declined from 16.1 per cent in
2007-08 to 12.7 per cent in 2008-09 and that of the
household sector increased from 11.5 per cent to
12.2 per cent.
c. Inflation
1.10 The inflation rate as measured by variations in
the Wholesale Price Index (WPI) on a monthly basis
remained volatile during 2009-10. The overall inflation
rate decreased from 8.4 per cent during fiscal 2008-09
to 3.8 per cent during fiscal 2009-10, but during the
same period, the food articles prices shot up from
8.0 per cent to 14.6 per cent. Barring food articles,
inflation in other commodity groups receded during
2009-10. (Box 1.1)
d. Trade
1.11 The economy showed progress in integrating
with the world economy as evident from the improved
trade to GDP ratio at 38.9 per cent in 2008-09 as
compared to 22.5 per cent during 2000-01. Despite
the global financial crisis, during 2008-09, both exports
Table 1.4: Sectoral Growth Rates of GDP
(2004-05 prices)
Sector 2005-06 2006-07 2007-08 (RE) 2008-09 (QE) 2009-10 (RE)
Agriculture & Allied 5.2 (18.2) 3.7 (17.1) 4.7 (16.4) 1.6 (15.6) 0.2 (14.6)
Industry# 9.3 (27.9) 12.7 (28.7) 9.5 (28.8) 3.9 (28.0) 9.3 (28.5)
Services 11.1 (53.9) 10.2 (54.2) 10.5 (54.8) 9.8 (56.4) 8.5 (56.9)
Total GDP at factor cost 9.5 (100.0) 9.7 (100.0) 9.2 (100.0) 6.7 (100.0) 7.4 (100.0)
Figures in parentheses indicate percentage shares to total GDP
#: Includes mining & quarrying, manufacturing, electricity, gas and water supply and construction
Source: Central Statistical Organisation, GoI
20
Market prices for major food articles such as grains and
vegetable oils have risen in recent past. However, this is
not the first time India is experiencing inflation, but the
current state of inflation is quite different. For instance,
food inflation and non-food inflation were 20.2 per cent
and 18.0 per cent, respectively during 1991-92. But during
2009-10, the estimated food inflation and non-food
inflation were 14.6 per cent and 3.8 per cent respectively.
The volatility of the inflation rate as measured by variations
in monthly WPI during 2009-10 has been depicted in the
Diagram.
Many factors have contributed to the current run up to the
high food prices. Important among them are (i) adverse
weather conditions and lower growth in agricultural
production, (ii) escalating crude oil price, (iii) rising farm
production costs on the supply side and (i) rapid economic
growth, (ii) rising per capita consumption, (iii) diversion of
crop output for bio-fuels production and (iv) dollar
devaluation on the demand side. All these factors have
contributed to the demand-supply mis-match causing a rise
in food prices.
To arrest food inflation, the Reserve Bank of India and the
Government of India have been taking up various monetary
and fiscal measures. While the Reserve Bank of India has
been trying to absorb excess liquidity by various financial
instruments such as Statutory Liquidity Ratio (SLR), Cash
Reserve Ratio (CRR) and Repo & Reverse Repo Rates, the
Government of India has been trying to increase supply of
foodgrains by (i) allowing import, (ii) reducing import duties,
(iii) removing levy obligation in imports, (iv) banning
exports, (v) allocating additional foodgrains to various
States/UTs under Public Distribution System (PDS). Of late,
both the Reserve Bank and the Government have sought to
gradually exit from stimulus packages, as the economy has
shown strong signs of recovery.
Box 1.1
Food Inflation
and imports in US dollar terms registered growth
rates of 12.3 and 19.8 per cent respectively. Exports
and imports are expected to reach US$ 176.17 billion
and US$ 278.02 billion during the year 2009-10. But
the performance of agriculture sector in terms of its
share in total exports was quite discouraging, with the
share of both exports and imports from agriculture
sector decreasing (Table 1.5).
Table 1.5: Trends in Exports and Imports
(US$ billion)
Year Total Exports Share of agriculture* in Total Imports Share of food & allied
total exports (%) products in total imports (%)
2004-05 83.51 (30.7) 10.1 111.48 (42.6) 4.5
2005-06 103.08 (23.4) 29.9 149.15 (33.8) 3.3
2006-07 126.26 (22.5) 10.0 185.06 (24.1) 3.5
2007-08 162.98 (29.1) 11.3 249.79 (35.0) 3.0
2008-09 183.10 (12.3) 9.6 299.33 (19.8) 2.7
2009-10^ 176.17 (-3.8) -- 278.02 (-7.1) --
*: Agro products ^: Provisional Figures in the parentheses refer to percentage change over the previous year
Source: 1. DGCI &S, Kolkata 2. CMIE, June 2010
21
B. Agriculture & Rural Economy
a. Rainfall situation
1.12 During the South-West monsoon (June-
September) 2009, the country as a whole received
689.3 mm rainfall which was 36 per cent less than the
Long Period Average (LPA). The rainfall received in all
divisions North-West, North East, Central and South
Peninsular - was below the LPA by 36 per cent, 27 per
cent, 20 per cent and 4 per cent, respectively. Out of
the 36 sub-divisions, 23 recorded deficient rainfall and
the remaining 13 recorded excess/normal rainfall during
the South-West monsoon in 2009 (Table 1.6).
1.13 During the post-monsoon season (October-
December), the cumulative rainfall received for the
country as a whole was 135.5 mm, which was 8 per
cent above the LPA. While the cumulative rainfall
received in North-West India and North-East India was
21 per cent and 19 per cent below their previous
monsoon, they were nevertheless above their previous
season rainfall in Central India (51 per cent) and South
Peninsular India (10 per cent). During the north-east
monsoon, 23 sub-divisions recorded excess/normal
rainfall and the remaining 13 sub-divisions recorded
deficient rainfall.
1.14 Total live water storage in 81 major reservoirs
across the country, by the end of March 2010 at
42.87 billion cubic meters was 28.2 per cent of the Full
Reservoir Level of 151.77 billion cubic metres; even so,
it was 10.0 per cent higher than the previous year’s
level of 38.98 billion cubic metres.
b. Crop acreage
1.15 The impact of the delayed and sub-normal
monsoon during kharif season was reflected in
reduced area under crop cultivation. The area sown
under various crops during kharif 2009 was 95.07 million
hectares, which was 5.44 million hectares less than
the area covered during the corresponding period of
kharif 2008. The major decline in area was under
rice (6.1 million hectares), which was mainly in the
states of Andhra Pradesh, Bihar, Jharkhand,
Madhya Pradesh, Uttar Pradesh and West Bengal.
(Table 1.7)
Paddy field
Table 1.6: Trends in the Rainfall and Water Storage
Particulars South-West Monsoon* North-East Monsoon**
2007 2008 2009 2007 2008 2009
A. Cumulative rainfall (% variation from normal) 5 -2 -36 -32 -31 8
B. Number of Sub- Divisions with Normal/Excess 30 32 1 3 9 6 2 3
Deficient/Scanty/No Rain 6 4 23 27 30 13
C. Reservoir status (% of FRL)@ 120.1 113.7 90.4 92.3 77.9 75.8
Normal: +_19%; Excess: +20% or more; Deficient: -20 to -59%; Scanty: 60% or less; No Rain: 100%
*: Cumulative position between 1 June and 30 September; **: Cumulative position between 1 October and 31 December
**: Full Reservoir Level in 81 major reservoirs (accounting for 63% of total reservoir capacity in the country) as at the end of the season
@ : As on 1 October in the case of SW Monsoon and 31st December in the case of NE Monsoon
Source: Department of Agriculture & Cooperation (National Crop Forecasting Centre), Ministry of Agriculture, Government of India
22
1.16 Rabi sowings began late in few regions due to
delayed kharif harvesting. The overall sowings of rabi
crops was satisfactory due to relatively more conducive
weather conditions. The area sown under all rabi crops
is reported at 62.54 million hectares as compared to
62.31 million hectares in the corresponding period of
2008-09. While the crop coverage under rabi season
was higher under wheat and gram, area under rice,
jowar, rapeseed and mustard and sunflower were lower
than those in the previous year.
1.17 When both kharif and rabi crop areas are taken
together, crop coverage during 2009-10 shows a fall
from 162.82 million hectares during 2008-09 to
157.61 million hectares during 2009-10. The major
changes estimated in cropping pattern during 2009-10
over 2008-09 were in rice [(-) 14.3 per cent], cotton
(13.4 per cent), pulses (5.7 per cent) and oilseeds
[(-) 4.6 per cent].
c. Inputs use in agriculture
i. Seeds
1.18 There are 15 State Seed Corporations and 2
National Level Corporations in the country. In order to
develop and strengthen the existing infrastructure for
production and distribution of certified/quality seeds
to farmers, the Ministry of Agriculture has
implemented the scheme for ‘Development and
Strengthening of Infrastructure Facilities for Production
and Distribution of Quality Seeds’ since the year
2005-06. During 2008-09, breeder seed production
and foundation seed production reached 1.0 lakh
quintals and 9.69 lakh quintals, respectively registering
8.7 per cent and 17.9 per cent growth over the previous
year. Certified/quality seed distribution during 2008-09
at 190 lakh quintals was 6.1 per cent higher than the
previous year.
ii. Fertilizers
1.19 The fertiliser consumption (nutrient terms)
increased by 10.4 per cent from 225.70 lakh tonnes
during 2007-08 to 249.09 lakh tonnes during 2008-09.Seed village
Table 1.7: Area Sown under Major Crops
(Million hectares)
Crop Kharif (a) Rabi (b) Total (a+b)
2008 2009 2008-09 2009-10 2008-09 2009-10
Rice 38.92 32.82 4.32 4.24 43.24 37.06
Wheat 0.00 0.00 27.59 27.82 27.59 27.82
Coarse Cereals 20.67 20.74 6.87 6.53 27.54 27.27
Pulses 9.60 10.14 13.70 14.48 23.30 24.62
Total Foodgrains 69.19 63.70 52.48 53.07 121.67 116.76
Oilseeds* 18.44 17.49 9.83 9.47 28.27 26.96
Cotton 8.49 9.63 0.00 0.00 8.49 9.63
Sugarcane 4.39 4.26 0.00 0.00 4.39 4.26
All crops 100.51 95.07 62.31 62.54 162.82 157.61
*: Covers nine oilseeds including rapeseed & mustard, groundnut, safflower, sunflower, sesamum and linseed
Note: Kharif crops as on 23.10.2009 and Rabi crops as on 26.03.2010
Source: Department of Agriculture & Cooperation (National Crop Forecasting Centre), Ministry of Agriculture, Government of India
23
As against the desirable proportion of 4:2:1 of NPK,
the average use has been 5.5:2.1:1, which affects
adversely soil profile, micro-nutrient use and crop
productivity. Current pricing mechanism, unscientific
use of chemical fertilizers and a bias against
micronutrients have resulted in nutrient imbalance with
excessive use of urea (Box 1.2).
iii. Irrigation
1.20 Total irrigation potential created under all
types of irrigation structures has increased from
81.10 million hectares in 1991-92 to 102.77 million
hectares by March 2007. 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 like
Rainwater Harvesting Scheme for SC/ST farmers and
Artificial Groundwater Recharge through Dug wells.
The Rainwater Harvesting Scheme, implemented in all
States and Union Territories during 2004-05 to
2006-07, resulted in installation of 18,016 water
harvesting structures with a total subsidy utilization of
Rs.24.04 crore. This is expected to benefit around
8807 hectare of land of SC/ST farmers.
1.21 For extending assistance for the incomplete
irrigations schemes, the Government of India initiated
the Accelerated Irrigation Benefit Programme (AIBP)
during the year 1996-97. As on March 2009, 268
projects have been covered under the AIBP scheme
and 109 completed. Further, the cumulative Central
Loan Assistance (CLA)/grant of an amount of
Rs.34,783.78 crore has been released under the
scheme as on March 31, 2009. For the year 2009-10,
projected grant requirement of AIBP is Rs.12,285 crore
(i) Union Budget 2010-11: Highlights
a. New fertiliser policy: With a view to promoting balanced
fertilization through new fortified products and focus on
extension services by the fertiliser industry, a Nutrient
Based Subsidy Policy for the fertiliser sector has been
approved by the government and will become effective
from April 1, 2010. The policy is expected to increase
agricultural productivity and consequently better returns
for the farmers and reduce volatility in the demand for
fertiliser subsidy in addition to containing the subsidy
bill. The new system will move towards direct transfer of
subsidies to the farmers.
b. Agricultural production and productivity: With a view to
increasing agricultural production and productivity,
Rs.700 crore, i.e., i) Rs.400 crore for the Eastern region
(Bihar, Chhatisgarh, Jharkhand, Orissa, West Bengal
and Eastern Uttar Pradesh), and (ii) Rs.300 crore for
organizing 60,000 ‘pulses and oilseed villages’ in
rain-fed areas in the country, has been proposed.
c. Availability of credit to farmers: For the year 2010-11,
the target has been raised to Rs.3,75,000 crore from
Rs.3,25,000 crore during 2009-10. The subvention for
timely repayment of crop loans has been raised from
one per cent during 2009-10 to two per cent during
2010-11 so that the effective rate of interest for such
farmers will be five per cent per annum.
d. Financial inclusion: To reach banking services to the
un-banked areas, the Government in 2007-08 had set
up a Financial Inclusion Fund and a Financial Inclusion
Technology Fund in NABARD. To give momentum to
the pace of financial inclusion, Rs.100 crore for each of
these funds has been proposed.
(ii) RBI’s Monetary Policy, 2010-11
a. Financial Inclusion through grass-root co-operatives: In
order to understand the operations of the cooperative
societies and their potential to contribute to financial
inclusion, it is proposed to constitute a Committee
comprising representatives from Reserve Bank of India,
NABARD and a few State Governments.
b. Mobile banking in India: Recently, an inter-ministerial
group constituted by the Government of India has made
important recommendations for financial inclusion
through bank-led model using the infrastructure already
set up by mobile service providers. The Reserve Bank
of India is examining the same.
Box 1.2
Policy Recommendations on Agriculture & Rural Development
24
for creation of an additional irrigation potential of
10.50 lakh hectares.
iv. Credit
1.22 As against the target of Rs.3,25,000 crore of
credit flow to agriculture for 2009-10, the banking
system disbursed Rs.3,66,919 crore (provisional)
surpassing the target by 12.9 per cent. Within the
banking system, Commercial banks, Co-operative
banks and Regional Rural Banks disbursed
Rs.2,74,963 crore, Rs.57,500 crore and Rs.34,456 crore,
respectively sharing 74.9 per cent, 15.7 per cent and
9.4 per cent of the total credit flow during 2009-10
(Table 1.8).
1.23 During the period 2005-10, the GLC flow for
agriculture and allied activities registered a Compound
Annual Growth Rate (CAGR) of 18.5 per cent. The
growth rate in short term credit flow fell to 16.0 per
cent during 2008-09, compared to an annual growth
rate of 26.4 per cent over the five year period ending
2008-09. However, the growth rate in long term credit
flow during 2008-09 at 24.8 per cent was higher than
the growth rate of 3.8 per cent over the five year period
ending 2008-09. Sub sector-wise, hi-tech agriculture
witnessed the highest annual growth rate of 25.1 per
cent, followed by Animal Husbandry (15.1 per cent),
Land Development (13.1 per cent) and Minor Irrigation
(12.0 per cent) in GLC flow during 2008-09 (Table 1.9)
(Box 1.3).
Table 1.8: Agency-wise Ground level Credit Flow
(Rs. crore)
Agency 2005-06 2006-07 2007-08 2008-09 2009-10 (@)Growth Rate (%)
2005-10# 2008-09* 2009-10*
Co-operative Banks 39404 42480 48258 45966 57500 8.7 (-)4.7 25.1
Regional Rural Banks 15223 20435 25312 26765 34456 21.0 5.7 28.7
Commercial Banks 125477 166485 181088 228951 274963 20.8 26.4 20.1
Others 382 0 0 226 0 - - -
Total 180486 229400 254658 301908 366919 18.5 18.6 21.5
@: Provisional; #: Compound Annual Growth Rate; *: Percentage change over previous year.Source: NABARD
Table 1.9: Sub-sector-wise Ground Level Credit Flow for Agriculture & Allied Activities
(Rs.crore)
Sr. Sector/Sub-Sector 2005-06 2006-07 2007-08 2008-09 Growth rate (%)
No.2005-09^ 2008-09*
I. Crop Loan (ST-Production Credit) 105350 138455 181393 210461 26.4 16.0
II. Term Loans (MT & LT Investment Credit) 75136 90945 73265 91447 3.8 24.8
i. Minor Irrigation 8663 8566 2840 3180 (-)33.7 12.0
ii. Land Development 1749 2285 2553 2887 17.5 13.1
iii. Farm Mechanisation 9695 10113 8303 8334 (-)6.3 0.4
iv. Plantation & Horticulture 4481 5266 5910 6045 10.7 2.3
v. Animal Husbandry# 7341 8045 9034 10398 12.3 15.1
vi. Fisheries 1019 1424 1248 1281 5.7 2.6
vii. Hi-tech agriculture 9737 21498 33325 41694 61.6 25.1
viii. Others$ 32451 33748 10052 17628 (-)26.2 75.4
Total (I + II) 180486 229400 254658 301908 17.9 18.6
^: 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.
25
Table 1.10: Production of Major Crops
(Million tonnes)
Year/Crops 2005-06 2006-07 2007-08 2008-09* 2009-10**
Target Estimate
Rice 91.79 93.35 96.69 99.18 100.50 89.31
Wheat 69.35 75.81 78.57 80.68 79.00 80.98
Coarse Cereals 34.06 33.92 40.76 40.03 43.10 33.13
Pulses 13.39 14.20 14.76 14.57 16.50 14.77
Foodgrains 208.59 217.28 230.78 234.46 239.10 218.19
Kharif 109.87 110.57 120.95 118.14 125.15 102.34
Rabi 98.73 106.71 109.83 116.33 113.95 115.85
Oilseeds 27.98 24.29 29.76 27.72 31.60 25.41
Cotton# 18.50 22.63 25.88 22.28 26.00 22.83
Sugarcane 281.17 355.52 348.19 285.03 340.00 274.66
Jute & Mesta## 10.84 11.27 11.21 10.36 11.20 11.10
* Final estimate, ** 3rd Advanced Estimate; # Million bales of 170 kgs each; ## Million bales of 180 kgs each
Source: Agricultural Statistical Division, Ministry of Agriculture, Government of India; Economic Survey 2010-11
d. Agricultural Production
i. Foodgrains & Non-foodgrains
1.24 According to the 3rd Advance Estimates, the
country’s foodgrain production during 2009-10 has
been pegged at 218.19 million tonnes as compared to
234.46 million tonnes (final estimate) during the last
year. During the year, production of all crops, except
wheat, pulses, cotton and jute & mesta, is expected to
be lower compared to the previous year; the reduction
being larger at 17.2 per cent in case of coarse cereals,
followed by rice at 9.9 per cent and sugarcane at 3.6
per cent (Table 1.10).
ii. Plantation Crops
1.25 Although the total area covered by plantation
crops is comparatively less, they play an important role
A recent study on ‘Economic Analysis of Yield Gaps in
Principal Crops in Various Regions in India’ supported by
NABARD through its R & D Fund has evaluated the impact
of credit on fertiliser consumption and that of fertiliser use
on crop yields using State-wise data averaged for the years
2004-05 to 2006-07. For studying relationship between
credit and crop yields, two-stage equations were used, i.e.,
(i) credit supply and fertiliser consumption and (ii) fertiliser
consumption and crop yield, and it was found out that one
per cent increase in credit supply increased fertiliser
consumption by 0.30 per cent and one per cent increase in
fertiliser consumption increased crop yields in the range of
0.14 per cent to 1.13 per cent. Main crops considered for
the analysis were paddy, wheat, maize, bajra, masur, Bengal
gram, rapeseed and mustard, jute, cotton, sunflower, onion
and potato.
When market density, number of villages electrified,
literacy rate and credit supply were regressed on crop
yields, it was found that the role of credit in influencing
crop yield was quite positive and significant. The elasticity
coefficients of credit were 0.28 for paddy and 0.55 for
wheat. When the exercise was conducted at the district
level (Hardoi in Uttar Pradesh, Burdwan in West Bengal,
Chitradurga in Karnataka and Nanded in Maharashtra),
similar relationships between credit supply and crop yields
were observed.
Similar observations presented in Box 1.4
Box 1.3
Impact of Credit on Crop Yields
26
in view of their export potential and employment
generation. Tea production in the country during 2009-10
has been estimated at 8.97 lakh tonnes as against
9.73 lakh tonnes achieved in 2008-09. Further, the
export of tea from India during 2009-10 is estimated at
1.53 lakh tonnes valued at Rs.2,274.74 crore with a
unit price realization of Rs.123.64 per kg as against
1.84 lakh tonnes in 2008-09. The total import of tea
into India during 2008-09 was valued at Rs.181.45 crore,
which was higher by Rs.73.38 crore compared to the
previous year.
1.26 In India, coffee is cultivated in an area of around
3.94 lakh hectares. The estimated coffee production for
the year 2009-10 is 2.90 lakh tonnes, i.e., 0.95 lakh
tonnes of Arabica and 1.95 lakh tones of Robusta.
Despite not having regions geographically best suited to
growing natural rubber, India continued to record the
highest productivity in the world with an average yield
of 1,867 kg/ha. In 2009-10, the estimated export of
natural rubber was 49,926 tonnes against an import of
77,616 tonnes (Table 1.11).
iii. Horticulture Crops
1.27 The horticulture sector, prime mover in
promoting diversification in agriculture sector,
contributes significantly to agriculture. During
2005-06, Government of India launched a Centrally
Sponsored Scheme “National Horticulture Mission
(NHM)” with a view to doubling horticulture
production by 2011-12. At present, the NHM is in
operation in 367 districts spread over 18 States and
3 Union Territories. Under the scheme, a total area of
4.92 lakh hectares was brought under horticulture
crops and the maximum coverage was under
perennial fruits particularly mango, aonla, citrus,
guava and sapota. During 2009-10, while the area
under various horticulture crops increased by 2.5 per
cent from 20.2 million hectares during 2007-08,
production increased by 3.6 per cent from 212.8 million
tonnes during 2007-08. Area and production under
horticulture crops reached a level of 20.7 million
hectares and 220.5 million tonnes, respectively during
2008-09 (Table 1.12).
e. Agriculture and Allied Sector
1.28 Agriculture and allied activities are further
segregated into a few segments such as agriculture,
forestry and logging and fishing. Agriculture is the
largest component of the GDP originating in
agriculture and allied activities, followed by forestry
and logging and fishing. At disaggregated level, the
overall growth during 2008-09 comprised of growth
of 1.1 per cent in agriculture, 2.9 per cent in forestry
and logging and 6.3 per cent in fishing as compared
to a growth of 5.0 per cent in agriculture, 2.2 per
cent in forestry and logging and 6.0 per cent in
fishing. Table 1.13 provides the percentage
distribution of GDP originating from sub-activities of
agriculture and allied sector.
Table 1.11: Production, Consumption and Exports of Major Plantation Crops
(lakh tonnes)
Year Tea Coffee Rubber
Prodn. Cons. Exports Prodn. Cons. Exports Prodn. Cons. Exports
2004-05 9.09 7.35 2.06 2.75 0.75 2.12 7.50 7.55 0.46
2005-06 9.49 7.57 1.97 2.74 0.8 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 9.45 7.86 1.85 2.62 0.90 2.19 8.25 8.61 0.60
2008-09 9.73 8.02 1.84 2.62 0.94 2.04 8.64 8.72 0.47
2009-10^ 8.97 NA 1.53 2.90 NA NA 6.32 6.95 0.49
^: Provisional; NA: Not Available
Source: Ministry of Commerce and Industry, GoI. Coffee Board, Tea Board and Rubber Board
27
i. Livestock and Poultry
1.29 During 2008-09, the livestock sector contributed
3.2 per cent of GDP and 28.0 per cent value of output
from agriculture and allied activities. As per the 17th
Livestock Census, 2003, the livestock and poultry
population in the country were 485 million and 489
million respectively. The per capita availability of milk
increased from 252 grams per day to 258 grams per
day due to increase in milk production in the country
by 3.5 per cent during 2008-09 over 2007-08.
ii. Fisheries
1.30 Fishing, aquaculture and related activities are
reported to have provided livelihood to over 14 million
persons during 2007-08. During 2008-09, the fishery
sector contributed 0.8 per cent of GDP and 5.3 per
cent value of output from agriculture and allied
activities. During the period between 2007-08 and
2008-09, the total fish production in the country
increased by 7.0 per cent and reached 7.6 million
tonnes (2.9 million tonnes of marine fish and
4.7 million tonnes of inland fish). Export earning
from the sector was also on the increase with the
value of marine products export touching
Rs.8,608 crore during 2008-09.
f. Agro and Food Processing Sector
1.31 Food processing is of paramount importance to
the country as it has the potential to transform
subsistence agriculture to remunerative and
environmentally sustainable occupation. Further, due
to changing consumption pattern and consumer
preferences followed by growth of organized agri-food
retailing, it is considered as a promising sector. Vision
Document 2015 by ministry of Food Processing
Industries has set the challenging target of trebling the
size of processed food sector by 2015 through
appropriate enabling policies.
g. Commodity Futures
1.32 Agriculture commodity futures staged a
remarkable recovery during 2009-10 after a steady
decline over the previous two years. While the volume
and value of trade in commodity futures market
decreased by 26.4 per cent and 33.4 per cent
respectively during 2008-09 over the preceding year,
they increased by 26.0 per cent and 43.8 per cent,
respectively, during 2009-10 (Up to December 2009)
over the year 2008-09. The value of agricultural
Table 1.12: Area and Production of major horticulture crops
(Area in million hectares and Production in million tonnes)
Year Area (Million hectares) Production (Million tonnes)
Fruits Vegetables Flower Total Fruits Vegetables Flower Total
Horticulture Horticulture
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
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 38.0 191.8
2007-08^ 5.8 7.8 0.2 20.2 65.6 129.3 44.5 212.8
2008-09* 6.1 8.0 0.2 20.7 69.4 133.1 48.9 220.5
^: Provisional; *: 3rd advance estimates Source: Agricultural Statistics at a glance; various issues
Table 1.13: Gross Domestic Product of Agriculture and
Allied activities by sub-activities
(Percentage distribution)
Year Agriactivities Forestry & Fishing Agriculture and
Logging Allied activities
2004-05 15.9 2.1 0.9 18.9
2005-06 15.3 2.0 0.9 18.2
2006-07 14.5 1.8 0.8 17.1
2007-08 13.9 1.7 0.8 16.4
2008-09 13.2 1.7 0.8 15.7
Central Statistical Organisation, GoI
28
Table 1.15: Agency-wise, Year-wise Kisan Credit Cards Issued
(million)
Year Co-operative Regional Commercial Total
Banks Rural Banks Banks
2005-06 2.60 1.25 4.16 8.01
2006-07 2.30 1.41 4.81 8.51
2007-08 2.09 1.77 4.61 8.47
2008-09 1.34 1.41 5.83 8.59
2009-10* 1.61 1.61 2.75 5.97
Cumulative# 37.76 13.08 39.80 90.64
* : Data for commercial banks available up to 30 September 2009 and
cooperative banks and regional rural banks up to 28 February 2010;
# : Since inception of the Scheme, i.e., August 1998
Table 1.14: Gross Capital Formation in Agriculture
(At 2004-05 prices)
Investment in agriculture and allied sectors Share in total investment
(Rs.crore) (Per cent)
Year Public Private Total Private sector Investment in agriculture Investment in agriculture
to Total to GDP in agriculture to total GDP
2004-05 16183 62665 78848 79.5 14.1 2.7
2005-06 19909 73211 93120 78.6 15.8 2.9
2006-07 22978 71422 94400 75.7 15.4 2.6
2007-08 23039 86967 110006 79.1 17.2 2.8
2008-09 24452 114145 138597 82.4 21.3 3.3
Source: Economic Survey 2009-10
commodities as a proportion to total trade in
commodity futures market decreased from 23.2 per
cent during 2007-08 to 12.0 per cent during 2008-09.
But this share edged up to 16.3 per cent during 2009-10
(Up to December 2009).
h. Capital Formation
1.33 Capital formation is very crucial in determining
the production capacity. Hence, there is a need to step
up capital formation in agriculture to be able to reach
the targeted growth of 4 per cent. Gross Capital
Formation (GCF) in agriculture and allied sectors
increased from Rs.78,848 crore in 2004-05 to
Rs.1,38,597 crore (at 2004-05 prices) in 2008-09. The
GCF in agriculture and allied activities as a proportion
of total GDP stood at 2.7 per cent in 2004-05 and
improved to 3.3 per cent in 2008-09 (Table 1.14).
i. Kisan Credit Card Scheme
1.34 During 2009-10, 5.97 million KCC were issued
by banks with sanctioned credit limit of Rs.34,982 crore.
Of the total 90.64 million credit cards issued as at end-
February 2010, 39.80 million cards (43.9 per cent)
were issued by commercial banks, followed by
37.76 million cards (41.7) per cent) by co-operative
banks and 13.08 million cards (14.4 per cent) by
regional rural banks (Table 1.15).
1.35 State-wise analysis of KCC issued as at
end-February 2010, revealed that Uttar Pradesh
accounted for 18 percent of the total cards issued
followed by Andhra Pradesh (17 per cent), Maharashtra
(9 per cent), Tamil Nadu (7 per cent), and Karnataka,
Madhya Pradesh, Orissa and Rajasthan (6 per cent
each) (Box 1.4).
j. Agricultural Debt Waiver and Debt
Relief Scheme
1.36 The Union Budget 2008-09 had announced
Agricultural Debt Waiver and Debt Relief (ADWDR)
Scheme, 2008 to address the indebtedness of farmers
and difficulties of the farming community, especially
small and marginal farmers (also see Box 1.5).
NABARD implemented the Scheme as the nodal
agency for co-operative banks and RRB. In view of the
recent drought in some states and the severe floods in
some other parts of the country, the period of
29
repayment of the loan amount by farmers under debt
relief was extended from December 31, 2009 to June
30, 2010. About 192.59 lakh farmer borrowers of
co-operative banks and RRBs are estimated to have
benefited under the Scheme, of which small and
marginal farmers, constituting 83.5 per cent were the
major beneficiaries. NABARD, under the ADWDR,
Scheme 2008, disbursed Rs.25,485 crore against the
claims of Rs.25,858 crore. The share of SCB, SCARDB
and RRB stood at Rs.15,681 crore, Rs.3,513 crore and
Rs.6,291 crore, respectively.
k. Agricultural Insurance
1.37 With a view to providing financial support to
farmers in the event of crop failure, as a result of
natural calamities, pests and diseases, the National
Agricultural Insurance Scheme (NAIS) has been in
operation since rabi 1999-2000. This scheme is open to
all farmers irrespective of their size of holding and is
being implemented by 25 States and two Union
Territories. During the period from rabi 1999-2000 to
rabi 2008-09, 1,347 lakh farmers, over an area of
2,109 lakh hectares, have been covered, with an
insured sum of Rs.1,48,250 crore.
1.38 The pilot Weather Based Crop Insurance
Scheme (WBCIS) is under implementation since kharif
2007 to provide insurance to farmers against adverse
weather conditions affecting crop production. Between
kharif 2007 and kharif 2009, 21.77 lakh farmers have
been covered under the pilot scheme and claims to the
tune of about Rs.388 crore have been paid against a
premium of about Rs.444 crore. During 2009-10, the
Coconut Palm Insurance Scheme (CPIS) was launched
on a pilot basis in selected areas of seven States, i.e.,
Andhra Pradesh, Goa, Karnataka, Kerala,
Maharashtra, Orissa and Tamil Nadu. In order to
become eligible for the benefit under the scheme, a
farmer should have been enrolled by the State
Agriculture/Horticulture Department or Coconut
Development Board or any other such agency under a
rehabilitation/development/expansion scheme. Further,
he should have at least 10 healthy nut-bearing
palms in the age group of 4 to 60 years in contiguous
area/plots.
An in-house study on the Impact Evaluation of KCC
Scheme has been conducted. For the study, a multi-stage
stratified sampling design covering 1,876 KCC holders
from 178 bank branches from cooperative banks, regional
rural banks and commercial banks in 14 States has been
adopted.
It was observed that paddy was the major crop cultivated by
the sample KCC holders. The average productivity per
hectare of paddy of the KCC holders was compared with
non-KCC holders and it was found that the per hectare
paddy yield of the KCC holders at 18 to 34 quintals was
higher by 13.3 per cent over the non-KCC holders at 14 to
26 quintals. The increase in the crop yield was partly
attributed to the credit access through KCC. Higher doses of
application of various inputs have resulted in higher yield by
the KCC holders as compared to the non-KCC holders.
To test the significance between estimated mean yield of
KCC holders and non-KCC holders, possession or other wise
of KCC had been regressed on crop yield and the result
corresponding to All India position as depicted below
suggests that the mean yield level of the KCC holders and
non-KCC holders is significantly different:
Yi = 20.30 + 4.69 Di
(t -value) (7.44) R— 2
= 0.76
When the exercise has been performed region-wise, the
mean yield difference is found significant in all regions,
except Western region and Central region. However, the
present model is too simple to answer the influence of credit
on crop yield, especially in view of the cross-sectional data
used in the analysis.
Box 1.4
Yield Effect of Kisan Credit Card (KCC)
30
l. Support Prices, Procurement and
Stock of Foodgrains
1.39 The increases in the Minimum Support Price
(MSP) for common paddy, moong and wheat during
2009-10 over the year 2008-09 were 11.8 per cent,
9.5 per cent and 1.8 per cent respectively. The recent
announcement of the MSP for kharif crops of 2010
season has hiked the MSP for various pulses in the
range of 15 to 30 per cent. While the MSP for arhar has
been hiked by 30 per cent from Rs.2,300 to Rs.3,000
per quintal, the MSPs for moong and urad have been
raised by 15 per cent each. For rice and cotton, the
MSPs have been maintained at the previous year’s
levels and for other commodities they have been raised
in the range of 2-9 per cent.
1.40 Giving due consideration for margins to farmers
on account of risk as well as surplus over cost of
production, including the cost of transportation, the
Government of India has fixed the Fair and Remunerative
Price (FRP) of sugarcane at Rs.129.84 per quintal
during 2009-10, which is over 51 per cent higher than
the Statutory Minimum Price (SMP) for the year
2008-09. For the year 2010-11 also, the Government
has hiked the FRP of sugarcane by 7 per cent at
Rs.139.12 per quintal.
1.41 The overall procurement of rice and wheat at
26.04 million tonnes (rice 25.51 million tonnes and
wheat 0.53 million tonnes) as on April 1, 2010 (kharif
marketing season 2009-10 for rice and rabi marketing
season 2009-10 for wheat) represents a decline of
1.66 per cent compared to the corresponding level last
year. The stock of foodgrains (rice and wheat) held by
Food Corporation of India (FCI) as on April 1, 2010 at
42.84 million tonnes was higher by 22.30 per cent
over the level of 35.03 million tonnes as on April 1, 2009.
The off-take of foodgrains (rice and wheat) under
Targeted Public Distribution System (TPDS) and other
schemes at 48.86 million tonnes during 2009-10 was
23.70 per cent higher than that at 39.50 million
tonnes during 2008-09.
1.42 Food security has always been an area concern.
Attaining sustainable food security become more
complex as economies get globalised and climate
change threatens to make agriculture more uneven. The
pathway to food security is an evergreen revolution
leading to the improvement of productivity of crops in
perpetuity without associated ecological harm. With a
view to enhancing the production of rice, wheat and
pulses by 10 million tonnes, 8 million tonnes and
2 million tonnes, respectively by the end of the
Eleventh Plan, the centrally sponsored National Food
Security Mission (NFSM) has been launched from the rabi
2007-08 season. The main objectives of the NFSM are
to increase production through area expansion and
productivity enhancement, create employment
opportunities and strengthen the farm-level economy to
restore confidence of farmers. Presently, the Mission is
being implemented in 312 select districts of 17 States in
the country.
m. Micro, Small & Medium Enterprises
1.43 The Micro, Small and Medium Enterprises
(MSMEs) play a pivotal role in the overall industrial
economy of the country. In recent years, the MSME
sector has consistently registered higher growth rate
compared to the overall industrial sector. The major
advantage of the sector is its employment potential at
low capital cost. As per available statistics (4thCensus of
MSME Sector, 2006-07), this sector employed an
estimated 59.7 million persons, spread over 26.1 million
enterprises. The MSME sector contributes to about
8 per cent of country’s GDP. It is estimated that in terms
of value, MSME sector accounts for about 45 per cent of
the manufacturing output and around 40 per cent of the
total exports of the country. Skill development has been
accorded high priority in this sector.
31
The Union Finance Minister in his Budget Speech for
2009-10 (paragraph 29) had highlighted the growing
influence of moneylenders and had proposed setting up of a
Task Force. Subsequently, the Government of India (Ministry
of Agriculture) set up a Task Force under the Chairmanship
of Shri. Umesh Chandra Sarangi, Chairman, NABARD vide
its order dated 06 October 2009 to look into the issue of
large number of farmers, who had taken loans from private
money lenders, not being covered under the loan waiver
scheme. The specific Terms of Reference (ToR) are:
i. Overview of the existing legislation in the states for
regulating loans from private money lenders in the country;
ii. Review of existing policy measures for addressing the
issue of indebtedness arising out of loans from private
money lenders and status of its implementation;
iii. To suggest measures for covering all categories of
farmers more particularly small and marginal farmers,
tenant farmers, share croppers and oral lessees within
the institutional credit fold to meet their credit
requirements in order to reduce their dependence on
informal sources;
iv. To examine and suggest measures for improving
effectiveness of Kisan Credit Card (KCC) scheme
including revised operational guidelines for distribution
and sanction of KCC credit limits; and
v. To suggest measures for providing relief to farmers
indebted to private money lenders
The Task Force is to submit its report by 30 June 2010
Box 1.5
Task Force to look into Issues of Private Moneylenders
32
II
Development Initiatives
Watershed Project
A. Watershed Development
2.2 The Watershed Development Fund (WDF),
established with Rs.200 crore during 1999-2000, was
augmented during the year 2009-10, taking the total to
Rs.1,102 crore, as on 31 March 2010. During 2009-10,
59 watershed projects were sanctioned, taking the
cumulative number of projects to 513 in districts in 14
states. With a total commitment (loan and grant) of
Rs.196.07 crore, an area 5.13 lakh ha. is expected to be
covered. The projects continued to be implemented in
Capacity Building Phase (CBP) and Full Implementation
Phase (FIP). During the year, 41 projects graduated to
FIP, taking the number of such projects to 210. A Mid
Course Evaluation of Watershed Projects under WDF was
conducted by the Central Research Institute for Dryland
Agriculture (CRIDA), during the year 2009-10 and the
major findings are given in Box 2.1.
2.3 Under the Prime Minister’s Relief package for 31
distressed districts in the four States of Andhra Pradesh,
NABARD continued to support various innovative
initiatives in addition to the Bank’s conventional on-going
activities. This Chapter details the various initiatives and
programmes of the Bank, efforts made in capacity building
of its clientele, research and development activities funded
during the year. In addition, it reports on various
developmental programmes of the Government of India
and State Governments with which the Bank is associated.
Farm Sector
Karnataka, Kerala and Maharashtra (for developing
15,000 ha. of watershed annually over two years in each
of these districts), 83,000 ha. were taken up for
implementation during the year, taking the cumulative area
and financial commitment to 8.71 lakh ha. and Rs.958 crore,
respectively. The aim of developing such watersheds is to
significantly mitigate the distress of farmers in the area.
The projects are entirely grant based in distressed districts
and a combination of grant and loan is provided for non-
distressed districts. During the year 2009-10, Rs.89.41 crore
and Rs.14.79 crore were disbursed as grants and loans
taking the cumulative disbursements to Rs.197.77 crore
and Rs.30 crore, respectively. With these sanctions under
‘distress’ and ‘non distress’ districts, the total commitment
as on 31 March 2010 was at Rs.1,493 crore. The findings
of a quick study conducted by the Bank in distressed
districts of Maharashtra is provided in Box 2.2.
2.4 The par t icipatory watershed development
programme implemented 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 andBox 2.1
Major findings of Mid-Course Evaluation of
WDF Watershed Projects by CRIDA
• Impact of afforestation on hillocks is evidenced by
visible vegetation, due to control of soil erosion, better
water availability and soil moisture.
• Even during rabi season, there was sufficient water for
irrigation, as reported by farmers, with the result that
more areas have been brought under mango orchards.
• Gross cropped area increased, as fallow land/waste land
was brought under cultivation.
• Significant gains in crop yields were observed due to better
moisture regime in kharif crops like sorghum (33%),
followed by black gram (32%) and green gram (24%).
33
sanitation and cleaner environment. It has also helped
in improving productivity and farm income by imparting
better soil and water conservation techniques, better
agricultural practices and knowledge of improved tools.
In Phase II, the coverage of the programme is being
extended to 1,500 additional villages.
C. Capacity Building for Adoption of
Technology
2.6 The ‘Scheme for Capacity Building for Adoption
of Technology’ (CAT) aims at capacity building through
exposure visits and training to farmers for adopting new/
innovative methods of farming. Financial support for this
purpose is extended from Farmers’ Technology Transfer
Fund (FTTF). During the year, 261 exposure visits for
6,516 farmers were arranged in collaboration with select
research institutes, Krishi Vigyan Kendras and State
Agricultural University. Areas covered pertained to
medicinal plants, tissue culture, vermicompost, poultry
Rohtas districts with an allocation of Rs.60 crore. During
the year, 34 projects graduated to FIP stage. Under
the programme, a total of 79 projects in an area of
83,593 ha have been sanctioned, of which 30 projects
are at CBP stage and 49 at FIP stage. A sum of
Rs.8.37 crore was disbursed and the cumulative
disbursement, as on 31 March 2010, stood at Rs.13.99 crore.
B. Village Development Programme
2.5 The Village Development Programme (VDP),
started in 2007, aimed at developing one village in each
DDM district and five villages in each of the PPID blocks
in an integrated and holistic manner. It is also supported
under FTTF. As on 31 March 2010, the programme was
implemented in 953 villages of 437 districts across
25 States. The VDP has mobilised the villagers and
secured them f inanc ia l inc lus ion, bet ter road
connectivity, good infrastructure in the form of school
buildings and health centers, clean drinking water, good
A quick study was conducted by the bank in November 2009
in all the six distressed districts of Maharashtra, where work
under National Holistic Watershed Development Programme
(NHWDP) is being implemented. Main findings are given
below:
• Of the 141 project villages covered in the study, no
incidence of suicide due to agricultural indebtedness was
reported.
• Water table, in all project villages, had gone up by 2 to 3
metres and availability of drinking water was ensured.
• The land, which was fallow before commencement of
project work, was brought under cultivation. On an
average, 50 ha. of additional land was brought under
cultivation in each village.
• Distress migration was stopped in most of the villages and
employment opportunities (demand for labour ) increased
in project villages
• Yield of soyabean, cotton, gram and jowar had gone up
by 20 to 30 per cent.
• Green fodder was available in plenty, result ing in
increased milk production. Number of milch animals in
many project villages had gone up.
• Majority of the farmers were using compost and the use
of pesticides was decreasing.
• The area under horticulture had also increased.
• Women SHGs had been formed and started small units
of enterprises like flour mills, goatery, back yard poultry,
small dairy units, mandap decorations, etc.
• Farmers having their own wells were growing vegetables
in Rabi and summer seasons.
• Members of Kegaon Pahaphal VWC in Pandharkawada
Taluka of Yeotmal District, reported that the people from
nearby villages have expressed interest for undertaking
similar work by requesting NABARD to extend such projects
in their villages.
• VWC members of Kingaonjattu cluster in Lonar Taluka of
Buldana District informed that agricultural income of the
village had gone up by Rs.5 crore in one year after the
commencement of watershed project.
Box 2.2
Findings of a Quick Study in Distressed Districts
34
Innovative methods of farming under CAT
farming, drip irrigation, off-season hybrid vegetable
cultivation, sericulture, ornamental fish and aquarium
maintenance, etc.
D. Tribal Development
2.7 The Tribal Development Fund (TDF) was created
in 2004 with Rs.50 crore to support integrated tribal
development projects with wadi (a small orchard) as the
core component. The projects provide sustainable
livelihood for tribal families through orchard based
farming along with social welfare measures to improve
their living standards. During the year, Kerala, Sikkim and
Tamil Nadu and Union Territory of Andaman & Nicobar
Islands, were newly covered. GIS-GPS-based monitoring
systems were introduced on a pilot basis in Madhya
Pradesh, to intensify monitoring. Projects focusing on
minor forest produce like tasar silk, lac, gums and bee
keeping, which are traditional tribal occupations and
capable of income generation, were sanctioned during
the year. Apart from supporting projects of traditional wadi
fruit crops such as mango, cashew and aonla, support
was extended to cover new crops like pineapple, kinnow,
mandarins, clove, jackfruit, etc. For upscaling the
programme, projects in collaboration with Commodity
Boards, viz., Coconut Development Board and Central
Silk Board, as also with corporate houses were taken up.
During the year, financial assistance of Rs.236.19 crore
(Rs.224.09 crore as grant and Rs.12.10 crore as loan)
was sanctioned for 79 projects, benefiting 63,113 tribal
families in various states. The cumulative sanction
amounted to Rs.543.62 crore covering 56,330 families in
191 projects across 22 states and two UTs. The cumulative
disbursement was Rs.107 crore. As on 31 March 2010,
balance outstanding in the Fund was Rs.1,150.80 crore after
disbursement of Rs.53.52 crore during the year.
E. Farm Innovation and Promotion Fund
2.8 The Farm Innovation and Promotion Fund (FIPF)
was set up in 2005, with a corpus of Rs.5 crore. The
objective is to promote innovative and viable concepts/
projects in agriculture and allied activities, development
of marketable prototypes, technology, patenting,
extension support, marketing, etc. The corpus under FIPF
has since been enhanced to Rs.50 crore, from 1 April 2009.
During 2009-10, 17 proposals in 11 states were
sanctioned with financial assistance of Rs.155.37 lakh
(Rs.135.37 lakh as grant and Rs.20 lakh as soft loan
assistance). Some of the activities supported were: (i) pilot
plant for extraction of zero calorie white powder sweetener
from stevia; (ii) study and documentation of successful
commercial dairy units; (iii) development of prototype
machinery for f i l l ing feed pits for vermi-compost
production; (iv) rain water harvesting structures and
treadle pump for micro irrigation; (v) promoting System
of Wheat intensification; (vi) demonstrating hand
held device, mobile TV for online technology transfer
(Tata Elxsi); (vii) cost-effective shrimp farming; and
(viii) increasing productivity of sugarcane through trench
planting. Cumulatively, 78 projects were sanctioned
financial support of Rs.618 lakh, of which 25 projects with
financial assistance of Rs.104 lakh have been completed.
Of the completed projects, five were in Maharashtra, three
each in Tamil Nadu and Uttarakhand, two each in
Chhattisgarh, Jharkhand, Karnataka, Orissa and Uttar
Pradesh, and one each in Gujarat, Meghalaya, New Delhi
and West Bengal.
F. Farmers’ Technology Transfer Fund
2.9 The ‘Farmers’ Technology Transfer Fund’ (FTTF)
set up and operationalised from 1 April 2008, with an
initial corpus of Rs.25 crore was enhanced to Rs.50 crore
from 1 April 2009. The Fund is to be used for promoting
35
transfer of technology for enhancing production and
productivity in agriculture and allied activities. During
the year, 151 diverse and innovative proposals in 22
states for transfer of technologies were sanctioned a grant
assistance of Rs.488 lakh. Cumulative disbursement, as
on 31 March 2010, touched Rs.1,460 lakh. Some of the
major proposals sanctioned were: (1) promotion of
organic cotton cultivation; (2) nutrient management in
rice; (3) establishment of Farmers’ Science Museum;
(4) promotion of sustainable organic crop farming
through crop demonstration, production and distribution
of eco-friendly inputs; (5) promotion of transfer of
technology in seed production and certification under
Seed Village Programme; (6) Promotion of indigenous
honey bee deploying fixed bee hives with moveable
frames; (7) project on management of fruit flies in mango
and cucurbits using male annihilation technology and
bait application technique; (8) strengthening of Farmers’
Associat ions by formation of producer groups;
(9) improvement of ser icul ture product ivi ty and
prof i tabi l i ty through technological intervent ion;
(10) livelihood support through vegetable cultivation and
dehydration of vegetables; (11) farm productivity
improvement through comprehensive technology
transfer, training and capacity building initiatives; and
(12) scientific integrated pig-cum-fish farming. An
instance of support extended under FTTF, during the
year, was an ICT initiative for providing information on
market prices, crops and weather to farmers in the states
of Karnataka, Maharashtra and Rajasthan, through SMS
facility of mobile phones. This was extended by provision
of prepaid vouchers of Reuters Market Light (RML) to
Farmers’ Clubs (FCs). The volunteers of FCs have shared
the garnered information with other farmers in a village,
thus benefiting farmers at large.
G. Pilot Project for augmenting
productivity of lead crops/activities
2.10 A “Pilot project for augmenting productivity of lead
crops/activi t ies through adoption of sustainable
agricultural practices” was launched during the year. The
project is to be implemented in 4-6 clusters of 5 villages
each, proliferating to 600-900 villages at the national level.
It is aimed at augmenting income of the farmers through
enhanced production and productivity of lead crops/
activities so as to improve living standards of the rural
farming community.
H. Farmers’ Club Programme
2.11 The Vikas Volunteer Vahini launched by NABARD
in 1982 was changed to “Farmers’ Club” (FC) programme
in 2005. The FC programme aims to organise farmers to
facilitate access to credit, extension services, technology
and markets. Over the years, the scope has been enlarged
to facilitate transfer of technology, propagation and
popularisation of seed vil lage concept, collective
purchasing and distribution of inputs, aggregation and
marketing of produce, capacity building of members to
act as Business Facilitators (BFs)/Business Correspondents
(BCs) of banks, formation of Self-Help Groups (SHGs),
Joint Liabil i ty Groups (JLGs), Producer Groups/
Companies, Federations of Farmers’ Clubs, undertaking
community works, leadership development and
converting to business entities ultimately. During the year,
16,590 clubs were launched taking the total number of
clubs to 54,805 covering 1,04,648 villages in 587 districts.
Agency-wise, NGOs promoted maximum number of clubs
(8,939), followed by RRBs (2,521), co-operative banks
(2,507), commercial banks (2,276) and other agencies
(347). The region-wise distribution of clubs indicate that
the Central region has the major share (29.85%), followed
by the Southern (24.47%), Eastern (18.81%), Western
(13.03%) and Northern (10.82%) regions, while NER
accounts for only 3.02 per cent. Telecasting documentary
on Doordarshan and distributing literature/newsletters &
VCDs to the Farmers’ Clubs helped in technology transfer.
I. Government Projects
2.12 NABARD continued to implement /coordinate the
undermentioned area specific projects of the Government
of India (GoI):
i. Cattle Development Projects
2.13 The projects have been implemented by BAIF,
Pune in 13 districts of Bihar and 17 districts of Uttar
36
Pradesh since 2004-05. The duration of both the projects
has been extended from February 2009 to
30 June 2010 by GoI without any additional financial
assistance. NABARD is the co-ordinating agency and
facilitator for channelling funds, ensuring its utilisation,
project supervision and monitoring. Out of Rs.13.61 crore
allocated for each project, an amount of Rs.10.89 crore
each has been released by GoI till 31 March 2010. During
2009-10, Rs.2.12 crore and Rs.1.64 crore were released
for Uttar Pradesh and Bihar, respectively, taking the
cumulative disbursements to Rs.10.99 crore and
Rs.10.09 crore, respectively, as on 31 March 2010. While
100 Cattle Development Centres have been established
in each state, 16 and 13 District Dairy Farmers’
Associations have been formed, 82,415 & 91,192 families
registered (target : 80,000 families) and 2,50,682 and
1,90,785 pregnancies confirmed (under the Artificial
Insemination component) in UP and Bihar, respectively.
ii. Special Project on Livelihood Based
Development
2.14 The Livelihood - Based Development special
project sanctioned under SGSY by GoI is under
implementation in Sultanpur and Rae Bareli districts of
Uttar Pradesh since 2006-07. The project aims to cover
11,500 BPL (Below Poverty Line) families under Multi-
activity Approach for Poverty Alleviation (MAAPA) and
7,500 financially very needy youth under Demand Driven
Skill Development through Livelihood Advancement
Business School (LABS) in each district at a project cost
of Rs.14.97 crore for Sultanpur and Rs.14.90 crore
for Rae Bareli. NABARD is the project holder, while
BAIF and Dr. Reddy Foundation (DRF) are the
implementing agencies. During 2009-10, Rs.3.86 crore
and Rs.3.12 crore were released for Sultanpur and Rae
Bareli districts, respectively, taking the respective cumulative
disbursements to Rs.8.57 crore and Rs.7.39 crore, as on
31 March 2010. While the physical achievements under
MAAPA for Sultanpur and Rae Bareli districts were
86.69% and 82.79% of the targets, respectively, the
financial achievements were 65.2 per cent and 70.4 per cent
as on 31 March 2010. Under the LABS project in
Sultanpur, out of 2,021 rural youth from BPL families
trained, 1,350 youth were employed, while in Rae Bareli,
the number of youth were 1,147 and 780, respectively.
iii. Dairy and Poultry Venture Capital Fund
2.15 Venture Capital Fund, introduced in 2005-06, was
continued in 2009-10. The Fund has since been bifurcated
into Dairy and Poultry Funds with separate allocations.
As on 31 March 2010, Rs.132.99 crore was received from
the Ministry of Agriculture, GoI, for Dairy Venture Capital
Fund and Rs.16 crore for Poultry Venture Capital Fund.
During the year, Rs.48.16 crore was sanctioned for 4,719
dairy units and Rs.9.04 crore for 76 poultry units. The
cumulative sanctions, as on 31 March 2010, stood at
Rs.146.91 crore for 15,368 dairy units and Rs.19.61 crore
for 291 poultry units.
iv. Rural Slaughter Houses, Integrated
Development of Small Ruminants and Rabbits
and Poultry Estates and Mother Units
2.16 Three new schemes, viz., (i) Establishment of Rural
Slaughter Houses, (ii) Integrated Development of Small
Ruminants and Rabbits, and (iii) Scheme for Poultry
Estates and Mother Units for Rural Backyard Poultry, were
launched in 2009-10. The actual implementation,
however, will commence from 2010-11.
2.17 The Scheme for Rural Slaughter Houses was to be
implemented on a pilot basis in three states, viz., Andhra
Pradesh, Meghalaya and Uttar Pradesh, wherein credit-
linked back-ended subsidy up to a maximum of Rs.2 crore
will be available for establishment/modernisation of rural
slaughter-houses, projects utilising by-products, cold
storage and cold chains and certification of quality.
The emphasis will be on hygiene, pollution control and
value addition.
2.18 The Scheme for Integrated Development of Small
Ruminants and Rabbits is to improve the breed quality,
to promote rearing and breeding on commercial basis.
Interest-free loans from NABARD will be available through
37
the financing banks for setting up units for rearing/
breeding of sheep and goat and rearing of rabbits. NGOs
will act as facilitators for organising the borrowers,
training, coordinating with state Animal Husbandry
Departments and banks, along with arranging for inputs
and marketing of the animals.
2.19 The Scheme for Development of Poultry Estates
aims at establishing poultry estates on the lines of
industrial estates, wherein all common infrastructure
facilities, supply of inputs and marketing arrangements
will be provided. Two pilot projects are proposed under
the scheme and preference will be given to states, which
come forward to provide land and infrastructure for this
purpose. Up to 100 broiler/layer units will be set up in
the Poultry Estates. The units will be eligible for interest-
free loan of 50% of TFO, to be routed through NABARD.
Under the rural backyard poultry component of the
scheme, interest-free loans of 50% of TFO of the project
is available for Mother Units where day-old chicks of low-
input birds are reared for four weeks before distribution
to the BPL borrowers. This component intends to
promote rearing of low-input breeds which will survive
in rural areas.
J. Externally – Aided Projects
2.20 NABARD received Rs.38.70 crore and disbursed
an amount of Rs.41.17 crore as grant assistance during
the year under the KfW – supported externally – aided
projects, which are at various stages of implementation
(Table 2.1).
a. On-going Projects
2.21 The KfW-NABARD-V-Adivasi Development
Programme in Gujarat having an outlay of Rs.62.89 crore
is under implementation through BAIF in Valsad and
Dangs dis t r ic ts s ince 1994-95. The focus is on
development of wadi with other supportive interventions
like development of water resources and agricultural
activities, women development, health and sanitation.
The programme has helped to rehabilitate 13,663
families (target: 10,000 families) by establishing wadis
of cashew and mango along with boundary plantations
of fuel wood and fodder on 12,732 acres of land
belonging to these families and benefited 9,300 farmers
through water resource development. The programme
has also reduced distress migration, changed cropping
pattern in favour of vegetables and pulses, generated
regular income and inculcated habit of savings through
SHGs. The 488 SHGs formed have taken up income
generation activities such as nursery raising, vermi-
compost, leaf cup making, hill brooms, etc. Eleven tribal
co-operatives which facilitate collection and processing
of cashew, mango and karonda, processed 410 MT of
cashew during the year. KfW has also sanctioned Phase II
(2006-2014) of the programme involving grant
assistance of 7 million (about Rs.42.47 crore) to cover
4,700 families from these districts. Under Phase II, as
on 31 March 2010, 5,922 families had been identified
and 5,789.5 acre of wadi established and 253 wadi
tukadis (group of 8-10 wadi holders) formed.
2.22 Under the KfW-NABARD-IX- Adivasi Development
Programme in Maharashtra, the successful wadi model
of Gujarat is replicated in Nasik and Thane districts
through Maharashtra Institute of Technology Transfer for
Rural Areas (MITTRA), Nasik. The programme, which
commenced in 2000 and ends in 2011, aims to support
13,000 tribal families for cultivation of cashew and mango.
The total families supported by the project are 13,848 in
258 villages, covering a wadi area of 12,293.5 acres.
About 23,864 participant families have taken up vegetable
cultivation, viz., tomato, spinach, radish, brinjal, bitter
gourd, ridge gourd, fenugreek, etc., on 3,923 acres of
land. A credit programme called ‘Vikas Arth’ is being
implemented in the project area wherein credit of
Rs.344.72 lakh has been extended, the recovery of which
has been 100 per cent. Five vil lage-level cashew
processing units have been set up. Apart from increasing
farm income through fruit crops, the various measures
have resulted in tribal families taking up irrigated farming,
practising improved methods of irrigation such as drip,
diversifying into vegetable and flower cultivation, taking
up non-farm activities such as, tailoring, masonry, etc.
38
2.23 The Indo-German Watershed Development
Programme (IGWDP) introduced in Maharashtra, is an
integrated programme implemented by Village Watershed
Committees (VWC) in association with NGOs for
regeneration of natural resources. Phase I (1990-2000)
and Phase II (2001-2007) of the programme have been
successfully completed, covering 113 watersheds of 1 lakh ha.,
spread across 25 districts. Under Phase III (2005-12),
109 projects have been sanctioned since January 2005.
Of these, while nine projects were completed, six are
Table 2.1: Externally Aided on-going Projects
(As on 31 March 2010)
(Rs. lakh)
Sr. Name of the Project Effective Closing External Disbursements made Amount received by
No. From Date Assistance by NABARD NABARD
( million)During Cumm. upto During Cumm. upto
2009-10 31.03.2010 2009-10 31.03.2010
1. KfW-NABARD
i. V-Adivasi Development 23 Dec 1994 30 Dec 2010 13.29 1255.00* 6941.98 900.09 6965.36
Programme in Gujarat (+ 1.5 Suppl. Grant)
(Phase I)
Adivasi Development 28 March 2006 31 Dec 2014 7.00
Programme in Gujarat
(Phase II)
ii. IX-Adivasi Development
Programme in Maharashtra 2 June 2000 30 Dec 2010 14.32 1260.00* 5842.64 1241.52 5910.60
iii. Indo-German Watershed
Development Programme
in Andhra Pradesh 15 July 2002 31 Dec 2011 8.69 616.42 1283.55 340.63 1028.15
iv. Indo-German Watershed
Development Programme
in Maharashtra (Phase III) 27 Aug 2005 30 Dec 2009 19.94 2929.12 5397.74 3065.25 5710.50
v. Indo-German Watershed
Development Programme
in Gujarat 17 Feb 2006 31 Dec 2012 9.20 241.80 422.28 213.51 443.85
vi. Indo-German Watershed
Development Programme
in Rajasthan 7 Dec 2006 30 Dec 2014 11.00 330.57 454.00 250.66 411.28
vii. KfW-Sewa Bank Project 28 June 2002 31 Dec 2009 4.09 294.12 687.07 297.09 694.01
2. KfW-NABARD- X- Credit Line for RNFS
i. Grant 20 Oct 2006 30 Dec 2008 1.20 **
ii. Loans 20 Oct 2006 30 Dec 2008 40.00 #
3 KfW-Umbrella Programme for Natural Resources Management (UPNRM)
i Loan 16 Sept 2009 30 Dec 2014 FC Loan : 1121.85 1432.48 672.38 672.38
15.00
ii Grant 16 Sept 2009 30 Dec 2014 FC Grant : 22.11 27.61 14.64 14.64
1.4
iii Grant for Accompanying 16 Sept 2009 30 Dec 2014 FC Grant for 82.10 94.13 86.57 86.57
Measures Accompanying
Measures :
3.00
* : From the year 2009-10, service charge is not included under disbursement.
** : Complementary Measures being implemented.
# : Entire loan amount drawn.
39
• Significant water recharge in almost all dried up wells. The
number of wells increased from 17 to 26.
• Total area under waste land, pasture land and fallow land
in six watersheds reduced by 50 per cent.
• Vegetative cover studied using satellite images indicates
improvement.
• In Asarkheda, Mandwa and Kacchigati watersheds, area
under Rabi increased by five fold, and in rest of the
projects, it increased by 1.5 to 2 times.
• Yields of cereal crops increased by 70 - 80 per cent; pulses
and oil seeds increased two folds.
• Rise in number of cross-breeding (CB) cows by 94 per
cent and reduction in indigenous cows by 60 per cent.
• Two to three fold increase in average annual household
income from agriculture.
• Employment generation to the tune of 1.19 lakh man-
days per watershed.
• Women development - Improvement in drinking water
conditions, drudgery reduction, kitchen sanitation,
community hall, etc.
Box 2.3
Impact Evaluation Study of IGWDP
Watersheds in Maharashtra by Action for
Food Production (AFPRO) : Major Findings
under feasibility report/interim phase (FR/IP) and 93 are
under FIP. Major findings of IGWDP evaluation are
provided in Box 2.3.
2.24 KfW, Germany committed a grant of 8.69 million
(about Rs.48.66 crore) under IGWDP in Andhra Pradesh
for rehabi l i tat ion of watersheds in four dis t r ic ts
(Adilabad, Karimnagar, Medak and Warangal). Thirty
seven projects are being implemented and are in
various stages of progress. KfW has approved an
additional amount of 2 million (about Rs.11 crore)
towards Complementary Measures Programme for
capacity building of stakeholders.
2.25 The IGWDP in Gujarat envisages rehabilitation of
watersheds in four districts (Dahod, Panchmahals,
Sabarkantha and Vadodara) with a commitment of
The first Financial Co-operation between the erstwhile
Agriculture Refinance Development Corporation (ARDC) and
KfW was way back in 1979 with the sanctioning of the Tawa
Command Area Development project in Madhya Pradesh, and
continued with KfW loan of DM 70 million to NABARD Credit
Project – I (1983); Support to natural resource management
programmes 1992 ( 128.22 million); support for rural
non-farm sector 1996 ( 41.2 million); support to SHG bank
linkage programme 1996 ( 4.09 million) and support to
co-operatives reforms 2004 ( 140 million).
Under Natural Resource Management, the programmes
suppor ted are Watershed Development (1992), Tribal
Development Programme (1994) and Umbrella Programme
on NRM (2008). Watershed programme was first started in
Maharashtra (Phase-I) with a support of 6.14 million followed
by Phase II with 9.64 million and Phase -III with 19.94 million.
Later, it was extended to Andhra Pradesh ( 10.69 million),
Gujarat ( 9.2 million) and Rajasthan ( 11 million).
The President of Federal Republic of Germany, Mr. Horst
Kohler, visited Darewadi-Shelkewadi watershed, Dist
Ahmednagar, Maharashtra which was facilitated by Watershed
Organisation Trust (WOTR) in February 2010 where a
presentation was made, highlighting the long standing bilateral
relationship between NABARD and German Development Co-
operation (GDC) through German Bank for Reconstruction and
Development [Kreditanstalt fur Wiederanfran (KfW) as well as
German Agency for Technical Co-operation (GTZ-Deutsche
Gesellschaft fur Technische Insammenarabeit) supported by
German Federal Ministry for Economic Cooperation and
Development (BMZ). The President expressed satisfaction on
the good work done in watershed development.
Box 2.4
German collaboration in Watershed Programmes
9.2 million (approx. Rs.51.52 crore). Thirty-five projects
are being implemented with an assistance of Rs.241 lakh
and are in various stages of progress. A Programme
Management Unit (PMU) has been set up at Dahod to
oversee the implementation from close quarters with the
help of three consultants. SHG federations have been
constituted in two watersheds and provided support for
onlending to women SHGs formed in the project villages
(Box 2.4).
40
1. Tasar Silk Yarn Producers of Bihar and Jharkhand -
MASUTA Producers Company Ltd., of Tribal Women
UPNRM loan-cum-grant assistance of Rs.488 lakh has been
sanctioned to MASUTA Producers Company Ltd. (MASUTA)
to facilitate 2,600 tribal women tasar silk yarn producers in
Bihar and Jharkhand. These women are dependent on cocoons
of tasar silk worm for their livelihood. MASUTA procures tasar
cocoons and provides treatment, storage and handling facilities
to the tribal women guaranteeing them employment and
income throughout the year. This has resulted in better income
to the tribal women. NABARD has also provided funds for
‘Arjun’ tree plantation and rearing of tasar worms under Tribal
Development Fund and watershed development in the area to
facilitate convergence for improved and sustainable livelihoods
to rural poor.
2. Eco-tourism and Biodiversity Conservation in Biligiriranga
(BR) Hills, Karnataka
Vivekananda Girijana Kalyana Kendra (VGKK), Karnataka, an
NGO, was sanctioned an amount of Rs.157 lakh for
implementing eco-tourism project in BR Hills, Chamarajanagar
district, Karnataka. The project aims at taking up eco-tourism
with social goals through partnership with State Forest
Department, State Tourism Department and other funding
agencies. It is a unique experiment attempting to link the best
practices of biodiversity conservation and eco-tourism with local
community, SHGs, youth organizations, etc. The aim of the project
is to serve as a model in forest management and integrating wildlife
enthusiasts, conservationists and tribal communities for their
mutual benefit and to demonstrate that everyone can contribute
to the process of sustainable natural resource management.
Box 2.5
UPNRM Projects - Initiatives
2.26 KfW, Germany had committed grant assistance of
11 million (about Rs.61.60 crore) under the IGWDP in
Rajasthan for watershed development in five districts
(Banswara, Chittorgarh, Dungarpur, Pratapgarh and
Udaipur). Thirty two projects are in various stages of
progress. A PMU has been set up at Udaipur. IGWDP,
Rajasthan, was honoured with Contribution to
Community 2009 Award by Project Management Institute,
India, for its sustained performance and innovations that
improved the livelihood of the rural poor.
b. Umbrella Programme on Natural
Resource Management
2.27 The Umbrella Programme on Natural Resource
Management (UPNRM) is a loan-cum-grant based
programme being implemented since 2007-08 under
Indo-German collaboration. It is a shift from (i) project
based to programme based funding; and (ii) grant based
to loan based funding. The implementation agreement
on technical co-operation with GTZ was already executed
for 3 million during 2008-09 with an additional
component for Public Private Partnership of 5 million
included during the year. The Loan and Financing
Agreement with KfW was also signed during the year. The
total fund envisaged by German Development
Corporation (GDC) for the programme was 30.40 million
( 19.4 million from KfW, 8 million from GTZ and
3 mil l ion from NABARD). During the year, 25
community managed sustainable NRM - based livelihood
projects were sanctioned with assistance of Rs.73.89 crore.
Cumulatively, financial assistance of Rs.79.36 crore was
sanctioned for 30 projects in ten states (Andhra Pradesh,
Bihar, Gujarat, Himachal Pradesh, Jharkhand, Karnataka,
Maharashtra, Orissa, Tamil Nadu and West Bengal)
and in the UT of Andaman and Nicobar Islands, as on
31 March 2010, to be implemented by NGOs, producers’
companies, private limited companies and co-operatives.
During the year, Rs.1,223 lakh (Rs.1,122 lakh as loan
and Rs.101 lakh as grant) were disbursed, taking the
cumulative disbursement to Rs.1,555 lakh (Rs.1,433 lakh
as loan and Rs.122 lakh as grant) as on 31 March 2010.
An amount of Rs.687.03 lakh was received from KfW as
reimbursement. In addition, marketing efforts through
workshops, meetings, publishing marketing flyers and
one-to-one contact among NGOs, corporates, state
governments and mFIs were taken up. During the year,
exposure visit–cum-sensitisation programme and on-site
capacity building workshops for NABARD officers and
potential channel partners were conducted. Two initiatives
under UPNRM projects are detailed in Box 2.5.
41
A. NABARD-SDC Rural Innovation
Fund
2.28 The Rural Innovation Fund (RIF), constituted from
1 October 2005, is meant to support innovative and risk
mitigating experiments in farm, non-farm and micro-finance
sectors. It is also used for projects with potential to
generate employment opportunities. During 2009-10, 155
innovative projects were sanctioned, taking the cumulative
number to 252. An amount of Rs.17.70 crore (including
supplementary assistance to projects sanctioned earlier)
was sanctioned taking the cumulative commitment, upto
31 March 2010, to Rs.38.37 crore (up from Rs.20.67 crore
as on 31.3.2009). An amount of Rs.10.69 crore was
disbursed during the year for 252 projects, taking the
cumulative disbursements to Rs.17.99 crore. As on
31 March 2010, 16 projects have been successfully
completed and 48 projects were in advanced stages of
implementation. A diagnostic study on collection and
marketing of minor forest produce by tribals in the state
of Andhra Pradesh was successfully completed. Various
workshops were arranged/conducted during the year for
capacity building of staff and for dissemination of
information to partner institutions (See Box 2.6 for a
success story).
B. District Rural Industries Project
2.29 The District Rural Industries Project (DRIP),
started as a pilot in 1993-94 for creating sustainable
employment opportunities enhanced credit flow to the
rural non-farm sector (RNFS), was extended to 106
districts by March 2007 and 43 of them phased out by
2007-08, on successful implementation. These districts
will continue to get support from NABARD, based on
merit. During 2009-10, GLC flow in 42 districts under
various phases reached Rs.675.99 crore and refinance
availed of was Rs.11.11 crore. In all, 45,701 units were
Among the difficulties faced by handloom weavers in cluster
villages is the lack of lighting for the weavers during evening.
If only they had adequate and uninterrupted light, their output
would increase by 20 to 30 per cent. It was then thought that
solar lantern would be a good and clean source of lighting.
The Energy Resources Institute (TERI), New Delhi, advised
centralised charging station with 50 Solar lanterns.
A project through Ujjala Nawaz SHG of village Bade Longiyan
was conceived with a grant of Rs.4.65 lakh under Rural
Innovation Fund of NABARD, for setting up of central charging
station with 50 Solar lanterns and back up battery support for
cloudy days.
After sanction in August 2009, Bihar’s first community-based
solar-lantern centralised charging station was installed at Bade
Longiyan, a nondescript village situated on the banks of river
Chaandan in Jagdishpur block of Bhagalpur. The training of
the Ujjala SHG members has been undertaken by TERI
immediately after installation.
The Ujjala SHG implementing the project, levies user charges
for each solar lantern, which will give adequate light for 4 to 5
hours at a cost of Rs.1 per day for SHG with 12 members,
whereas other 38 lanterns are used for augmenting the income
of the SHG. From Sept 2009 till March 2010, the Ujjala SHG
has made additional earnings of more than Rs.11,000.
Maujama didi tells proudly that she is able to get clean light in
her home, at a cost less than the cost of 1 litre of kerosene,
and without health hazards of smoke associated with kerosene.
Tartila didi tells that male members of her family who undertake
weaving would no longer have the fear of any harm to their
eyesight, because of the improved lighting.
When in the initial stage it could not be imagined that one
single project would bring in changes in so many dimensions,
the Ujjala Nawaz SHG is now eager to act as a technical
consultant to other SHGs for similar projects. They also wish
to graduate to a Solar mobile charging unit, which is also in
great demand in their village.
Box 2.6
RIF Success Story - Solar Lanterns for Weavers
Rural Non-Farm Sector
42
set up generating employment for 1.42 lakh persons.
Since inception, GLC flow aggregated Rs.24,295.11 crore,
faci l i tat ing establ ishment of 19.5 lakh units and
generating employment opportunities for 44.48 lakh
persons. The cumulative refinance availed of amounted
to Rs.3,658.46 crore, as on 31 March 2010.
C. Strengthening of Rural Haats
2.30 ‘Scheme for Strengthening of Rural Haats’,
introduced in 1999 in DRIP districts was extended to all
districts, village bazaar boards, SHGs, NGOs and to PRIs/
PACs, during the year. Grant Assistance was increased
to Rs.5 lakh from Rs.3 lakh and coverage extended to
include permanent structure/s as per local requirements.
During 2009-10, grant support of Rs.298.72 lakh was
sanctioned to 87 rural haats. Cumulative grant assistance
of Rs.629.53 lakh has been sanctioned in 188 rural haats
across 22 States.
D. Cluster Development
2.31 NABARD has been implementing the Cluster
Development Programme in 56 clusters under the
National Programme on Rural Industrialisation (NPRI)
from 1999-2000. The programme encompasses a
comprehensive strategy aimed at holistic development
of clusters, raising income levels and living standards
of ar tisans through various planned interventions.
NABARD decided to develop additional 55 clusters
(50 participatory clusters partnering with other agencies
and 5 intensively on its own) in 2005-06, within a
period of 3-5 years. Under the partnership mode, grant
support up to a maximum of Rs.15 lakh per cluster over
3 years wil l be made avai lable, while under the
intensive mode, grant not exceeding Rs.1 crore per
cluster for a maximum of 5 years would be provided.
The broad sectors identified for development on priority
basis were agriculture and al l ied activi t ies, food
processing, rural smal l and medium enterprises,
handicrafts and handlooms, rural tourism, etc. As on
31 March 2010, 107 clusters across 84 districts in 22
States have been approved. During 2009-10, 15
participatory clusters including two rural tourism, were
sanctioned with a total grant support of Rs.225 lakh.
As many as 22 clusters are being supported in the NER
alone and a large number of c lusters are being
developed in backward states l ike Chhatt isgarh,
Jharkhand, Orissa and Madhya Pradesh. For smooth
implementation and monitoring of the init iat ive,
capacity building programmes were organised for the
participants from banks, government departments and
NGOs/VAs. During 2009-10, five on-location cluster
workshops were conducted, taking the total number of
such programmes to 25.
E. Rural Entrepreneurship
Development and Skill
Development Programmes
2.32 Rural Entrepreneurship Development
Programmes (REDP) and Ski l l Development
Programmes (SDP) were supported by NABARD since
the early 1990s as proven tools for generating self-
employment opportunities in rural areas. During 2009-10,
2,627 REDPs/SDPs with an amount of Rs.1,048.38 lakh
were sanctioned, benefiting 0.62 lakh rural youth.
Cumulatively, 14,532 REDPs/SDPs with grant support
of Rs.7,101.53 lakh covering 3.63 lakh persons have
been supported. This includes support extended to
RUDSETI/RUDSETI-l ike inst i tutions for incurring
capital and recurring expenditure. NABARD revised
its policy on assistance for setting up R-SETIs. RSETIs
Rural Haat supported by NABARD.
43
set up under GoI/similar scheme, where lumpsum
capital grant is available, would not be eligible for capital
grant assistance from NABARD. Financial support for
sharing cost of training programmes, where such
support is not forthcoming from Govt./other agencies
would still be extended on merit basis, to enhance
capacity of these institutions.
F. Women Empowerment Programme
2.33 As on 31 March 2010, 116 Women Development
Cells (WDC) were supported in 58 RRBs, 55 co-operative
banks and three SCARDBs, to address gender
discrimination in credit and support services. A sum of
Rs.40.39 lakh was disbursed till 31 March 2010. Under
Marketing of Non-Farm Products of Rural Women
(MAHIMA) and Assistance to Rural Women in Non-Farm
Development (ARWIND) schemes, grant support of
Rs.6.92 lakh and Rs.17.56 lakh, respectively, were
released as on 31 March 2010.
G. Marketing / Other Initiatives
2.34 During 2009-10, 263 market ing events/
exhibitions, were supported with grant assistance of
Rs.146.13 lakh. The Bank continued to co-sponsor
SARAS Mahalaxmi Fair wherein 127 artisans from 26
States participated in the 12-day long exhibition that
helped the artisans to realise sales of over Rs.60 lakh.
To enable rural artisans/craftsmen realise remunerative
prices and to establish marketing linkages, 119 rural
marts in 22 States were sanctioned grant assistance of
Rs.134.04 lakh during 2009-10. Cumulative grant
support of Rs.332.65 lakh have been provided to 321
rural marts across 23 States.
H. Swarojgar Credit Card Scheme
2.35 During the year, 63,198 Swarojgar Credit Cards
(SCC) having credit limit of Rs.240.12 crore were issued
for facilitating hassle-free availability of credit for
investment and working capital requirements of small/
micro-entrepreneurs. The cumulative total of SCC was
10.48 lakh, involving credit limit of Rs.4,254.88 crore.
I. Training and Sensitisation
Programmes
2.36 During the year, NABARD supported 42 training
programmes, conducted by reputed training institutions,
which benefited 1161 officials from client banks.
Financial Inclusion
2.37 The GoI had set up the Rangarajan Committee
on Financial Inclusion (in June 2006) to look into the
issues involved and suggest measures for bringing the
excluded population into the ambit of financial system.
The Committee envisaged that 50 per cent of the
excluded rural households (55.8 million) should have
access to financial services by 2012, and the rest by
2015. Towards this end, two funds recommended by the
Committee, have been set up in NABARD, viz. ,
‘Financial Inclusion Fund’ (FIF) for meeting the cost of
developmental and promotional interventions of
financial inclusion and ‘Financial Inclusion Technology
Fund’ (FITF), for meeting the cost of technology
adoption. Each Fund consists of an overall corpus of
Rs.500 crore, to be contributed by the GoI, RBI and
NABARD in the ratio of 40:40:20 in a phased manner
over five years, depending upon utilisation of funds. GoI
and NABARD made initial upfront contributions of Rs.10
and Rs.5 crore, respectively to each of these funds, for
2007-08. GoI again contributed Rs.10 crore for 2009-10
to each of the funds. Reserve Bank of India has decided
to contribute to the funds on reimbursement basis. As
on 31 March 2010, the total contribution under FIF and
FITF stood at Rs.50 crore each. The guidelines for these
two funds have been formulated and circulated among
stakeholders.
44
gap support in one or two districts per RRB. A model
for such projects has been worked out and workshops
for RRB Chairmen have been conducted for adoption
of such intervention.
iv As backward and underfinanced areas need special
attention, it has been decided to extend financial
support from FIF & FITF at 100 per cent of project
outlay for eligible activities in Andaman and Nicobar
Islands, Chhattisgarh, Himachal Pradesh, Jammu
and Kashmir, Jharkhand and Uttarakhand to CBs/
RRBs/Cooperatives on the lines of support extended
in NER and Sikkim. Ten districts, viz., Khammam
(Andhra Pradesh); Bokaro, East Singhbum, Latehar
and West Singhbum (Jharkhand); Deogarh, Gajapati,
Malkangiri, Rayagada and Sambalpur (Orissa),
which are considered disturbed but don’t figure in
the list of critically excluded 256 districts identified
by the Committee on Financial Inclusion, are to be
given priority as applicable to the 256 districts. As
on 31 March 2010, 50,255 villages have been covered
under financial inclusion through FIF and FITF.
v Workshops and seminars on financial inclusion were
organised at reputed training institutes for the
benefit of NABARD officials, bankers and officials
from other organisations involved in financial
inclusion. A road map has been formulated for
achieving financial inclusion by synergising the
efforts of all stakeholders.
B. Fund Utilisation : Support to Projects
2.39 Out of the corpus of Rs.50 crore each of FIF and
FITF, an amount of Rs.19.47 crore and Rs.21.83 crore,
respectively, have been sanctioned for financial inclusion.
The major projects supported under these funds are
furnished, respectively, in Box 2.7 and 2.8.
C. NABARD-UNDP Collaboration for
Financial Inclusion
2.40 In addition to financial inclusion initiated under
FIF/FITF, NABARD and UNDP have entered into
A. Policy initiatives and events during
the year
2.38 The Advisory Boards, constituted by GoI for each
Fund to tender policy advice and consider proposals, met
three times during the year. A Sub-Committee of Advisory
Board for FITF, which looks into the ICT-based
interventions for extending the financial services met four
times. The following policy initiatives were taken during
the year:
i Scheduled commercial banks and RRBs were advised
by IBA and NABARD to achieve a target of adding
250 rural household accounts every year, at each
of their rural and semi urban branches. The total
number of ‘no frills’ accounts opened by PSU and
private sector banks was around 330 lakh as on
31 March 2009 vis-à-vis 4.89 lakh as on 31 March
2006 as per RBI sources.
ii Business Correspondents/Business Facilitator model
along with technology is intended to extend the
outreach of banks. In order to strengthen the model,
training cost of candidates, who successfully complete
the cer t i f ication programme on Business
Correspondents/Business Facilitators from the Indian
Institute of Banking Finance (IIBF) and get engaged
as BC/BF will be met from the FIF. RRBs were advised
to consider appointing Farmers’ Clubs as BF. This is
expected to have a two-pronged effect, viz . ,
addressing the need of Financial Inclusion and
strengthening FC – a grassroot level local
organisation, leading to far reaching and lasting
impact on agriculture and rural development in the
country. The BC/BF model is also being implemented
for the Government-supported programmes like
National Rural Employment Guarantee Programmes
and Social Security Pension. Nearly 85 BC have been
appointed by the banks for the purpose as reported
by RBI Working Group on BC Model, (2009).
iii In order to facilitate RRBs for undertaking Card-
based ICT project, the FITF would extend viability
45
• Pilot project to establish Farmers’ Service Centres/Village
Knowledge Centres (VKCs), mobile credit counselling
centres, promotion of financial literacy and farmer
education through mass media to promote financial
inclusion in South Malabar district of Kerala for setting
up eight Farmers’ Service Centres/VKCs in eight districts.
• Viability gap funding for the Biometric card project
through BC/BF model in NER for Smart card based
accounts.
• Suppor t for Cer t i f icate Course for Business
Correspondents (BCs) and Business Facilitators (BFs) to
Indian Institute of Banking & Finance (IIBF) to cover
20,000 candidates over a period of 2 years, i.e., 2009-10
and 2010-11.
• Support to Kozhikode DCCB for setting up of Credit
Counselling and Livelihood Promotion Centre.
• Support to Thrissur DCCB for setting up of Information
Dissemination-cum-Human Resource Development
Centre.
• Financial inclusion through BC/BF model in Vidarbha for
comprehensive FI through Financial Literacy training –
Conduct of 10 Training of trainers covering 300 resource
persons drawn from SHG leaders, FCs and retired bank
personnel. Households not covered by the banking sector
to be included under no-frill accounts and SHGs.
• Using post office as Business Correspondent of RRB to
uti l ise branches of postal depar tment for business
expansion in Uttarakhand. Post office to offer two services,
viz., collection of deposits and disbursements of loans and
collection of repayments.
• Micro-credit programme in Nagaland with Vi l lage
Development Boards (VDBs) as intermediaries for
augmenting the corpus of 107 VDBs in Longleng and
Kiphire districts of Nagaland.
• Capacity building programme for RRB and post office for
using Post office as BC of RRB through five training
programmes for staff of post offices/banks in Uttarakhand.
• Project for Financial Resource Centre at RRB to cater to
the capacity building and research needs for upscaling
financial inclusion in four districts, i.e., Murshidabad,
Nadia, North and South 24 Parganas of West Bengal.
• Total financial inclusion project by DCCB through one-day
camp followed by base level survey, covering financial
literacy and actual provision of financial services by
opening savings bank account /KCC/GCC accounts in five
zones, i .e . , Arambagh, Tarakeswar, Chandita la,
Sreerampore and Chinsurah of Hooghly district resulting
in opening of at least 150 account per camp.
• Project for financial inclusion through FC acting as BF of
RRB in Assam. It involves four training programmes for
members of 11 FCs identified by the bank. A total of 100
members of the FC will be trained in Morigaon district.
• Financial literacy by RRB in Assam in Nalbari district.
• Capacity Building Programme for LDMs of banks
conducted by BIRD, Lucknow.
Box 2.7
Projects Sanctioned under FIF during 2009 - 2010
collaboration for financial inclusion in seven focus states,
viz., Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh,
Orissa, Rajasthan and Uttar Pradesh. This collaboration
is part of the Country Programme Action Plan (CPAP)
signed between Government of India (GOI) and UNDP.
A fund for the collaboration, viz., ‘UNDP – NABARD
Financial Inclusion Fund’ has been established in
NABARD with UNDP support. The overall objective of
the collaboration is to provide better access to financial
products and services to reduce risks and enhance
livelihoods for the poor in at least two states, especially
women and men from SC and ST groups, minorities and
the displaced. UNDP will provide the project budget for
Annual Work Plan 2009 to the tune of US$ 2,98,335
equivalent of Rs.1.40 crore. A sensitisation workshop
for the Officers-in-charge of the seven focus state ROs
of NABARD was conducted and projects have been
initiated. Under the NABARD–UNDP collaboration,
Rs.47.5 lakh has been sanctioned and Rs.17.04 lakh
disbursed in these seven states.
46
• Pilot project for extending banking services in ten bank
branches (one Customer Service Points per branch) in
Pali district of Rajasthan through BCs and enabling
technology by RRB and providing financial services to
1,20,512 households through seventy-four branches.
• Financial Inclusion Project for implementing Core
Banking Solution through usage of COIN software
developed by National Informatics Centre (NIC) in
Sikkim by a Co-operative Bank, six branches and 10
Multi Purpose Credit Societies (MPCS) in the first phase
and five MPCS in the immediate second phase.
• Pilot Project for extending financial services to 5000 new
customers through BC and enabling contactless smart
card and biometric finger print scanning technology in
Chamba district of Himachal Pradesh by RRB.
• Introduction of Gramin Bank smart card in Nainital and
Almora districts covering 5000 customers by RRB on
pilot basis in the service area of two of their branches.
• To provide banking services through one lakh new
accounts using BC model and bio-metric enabled mobile
services by a commercial bank for transaction at Village
Customer Service Points in 194 villages in five blocks of
three districts (Mandvi and Nakhtrana blocks of Kutch
district, Kankrej and Bhabhar blocks of Banaskantha
district and Silvassa block of UT of Dadra & Nagar
Haveli).
• Project to provide financial services to 1,25,000 rural
households by implementing ICT solution for Financial
Inclusion in 569 villages of Kanpur Dehat district of
Uttar Pradesh by RRB.
• Installation of four ATMs in Andaman and Nicobar
Islands by a co-operative bank where the services of
banks have not penetrated thereby providing banking
facilities at their doorsteps to local populace.
• Card-based ICT solution by RRB, engaging 30 BCs in
three districts, viz., Papum Pare, West Siang and Upper
Subansiri of Arunachal Pradesh for opening 30,000
card-based accounts in two years.
• Card-based ICT solution by RRB, engaging 104 BCs in
two districts, viz., Sonitpur & Sibsagar districts in
Assam to open minimum 1,04,000 card-based accounts.
• To foster social and economic development of the rural
people by extending banking services in remote rural
areas through 43 bank branches in West Singhbhum and
Gumla districts in Jharkhand to open 1,00,000 accounts.
• Implementation of pilot project through BC model using
card-based ICT solutions by RRB in Gulbarga and Bidar
districts in Karnataka to cover 4,50,000 accounts.
• Card-based ICT solution by RRB, engaging 100 BCs in
the two hilly tribal districts of Karbi Anglong and North
Cachar Hills in Assam to open minimum 1,00,000 card-
based accounts through 50 branches.
• Card-based ICT solution by RRB in Bahraich and
Shrawasti districts in Uttar Pradesh to cover 1,50,000
new accounts.
• Card-based ICT solution by RRB for opening 40,000
new accounts in four blocks of two districts, viz., Aizawal
and Kolasib in Mizoram.
• Implementation of pilot project through BC model using
card-based ICT solution by RRB in Bellary and
Chitradurga districts in Karnataka covering 7,06,000
beneficiaries.
• Card-based ICT solution by RRB for opening of
1,20,000 accounts in two districts, viz, West Tripura and
Dhalai of Tripura.
• Implementation of pilot project through BC model by
RRB using card-based ICT solutions in Hamirpur district
of Uttar Pradesh to cover 64,420 beneficiaries.
• To provide financial services to the unbanked population
in Gopalganj district of Bihar through card-based ICT
solution by RRB to cover 1,90,000 new accounts.
• To provide financial transaction facility in villages by
establishing Point of Transaction with infrastructure and
technical support to cover 60,000 beneficiaries in
Latehar district by RRB in Jharkhand.
Box 2.8
Projects Sanctioned Under FITF during 2009 – 2010
47
Microfinance
2.41 Microfinance has made tremendous strides in India.
It has become a household name, in view of the variety
of benefits reaped by the poor from microfinance services.
Self-Help Groups (SHGs) have become the common
vehicle of development process, converging al l
development programmes. SHG–Bank Linkage
Programme launched by NABARD way back in 1992
synthesising formal financial system and informal sector,
has become a movement throughout the country. It is
considered as the largest microfinance programme in
terms of outreach in the world and many other countries
are keen to replicate this model. At present, a large number
of Self-Help Promoting Institutions (SHPIs), all the
banking agencies and Microfinance Institutions (MFIs) are
pursuing this programme for upliftment of the poor. The
RBI also recognised this as part of priority sector lending
and normal banking business. It has removed the interest
rate cap for the final beneficiaries under the mF
investment. The programme is also the main contributor
towards financial inclusion in the country. As on 31 March
2009, there were more than 61.21 lakh savings-linked
SHGs and more than 42.24 lakh credit-linked SHGs and,
thus, about 8.6 crore poor households have been
covered under the programme. The share of SHG loan
to Ground Level Credit (GLC) increased from 3.8 per cent
in 2007-08 to 4.07 per cent in 2008-09. The overall progress
of the microfinance programme is given in Table 2.2.
A. Micro-finance Development and
Equity Fund (MFDEF)
2.42 The Micro-finance Development and Equity Fund
(MFDEF) is being utilised for promotion of various
microfinance activities such as formation and linkage of
SHGs through SHPIs, training and capacity building of
stake holders, capital and soft loan assistance to MFIs,
livelihood propagation, studies, documentation, etc.
During 2009-10, an amount of Rs.80.91 crore was
released, of which Rs.20.49 crore was grant support for
promotional activities and Rs.60.42 crore was for Capital
Support/Revolving Fund Assistance (RFA) to MFIs, as
against Rs.18.73 crore and Rs.15.93 crore in the previous
year, respectively.
SHG Meeting in progress.
Table 2.2: Progress of the Micro-Finance Programme
(As on 31 March 2009)
(Rs. crore)
Si. Particulars Self-Help Groups Micro-Finance Institutions (MFIs)*
No. 2008 2009 2008 2009
Number Amount Number Amount Number Amount Number Amount
1 Loans disbursed 12,27,770 8,849.26 16,09,586 12,253.51 518 1970.15 581 3732.33
during the year (2,46,649) (1,857.74) (2,64,653) (2,015.22)
2 Loans Outstanding 36,25,941 16,999.90 42,24,338 22,679.84 1109 2748.84 1915 5009.09
(9,16,978) (4,816.87) (9,76,887) (5,861.73)
3 Savings Accounts 50,09,794 3,785.39 61,21,147 5,545.62
with Banks (12,03,070) (809.51) (15,05,581) (1,563.39) – – – –
Figures in parentheses indicate the share of SHGs covered under SGSY
* : Actual Number of MFIs provided with bank loans would be lower, as several MFIs availed loans from more than one bank.
48
B. Support to Partner Agencies
2.43 NABARD continued to extend grant support to
NGOs, RRBs, DCCBs, FCs and Individual Rural
Volunteers (IRVs) for promoting and nurturing quality
SHGs. New SHPIs were identified even while supporting
the existing ones. During 2009-10, grant assistance of
Rs.2,878.17 lakh was sanctioned to various agencies for
promoting 71,268 groups, taking the cumulative
ass i s tance sanct ioned to Rs.10,766.07 lakh for
4,92,746 groups (Table 2.3). As on 31 March 2010,
Rs.4,037.74 lakh was released and 2,36,683 SHGs
credit linked to banks.
C. Capacity Building of Partner
Agencies
2.44 To fine-tune the strategies for up-scaling support
to the microfinance sector, NABARD conducted many
awareness creation and sensitisation programmes and
arranged exposure visits for SHG members, NGOs,
bankers, trainers, Panchayat Raj Institution (PRI)
representatives, NABARD officials, IAS officers and
micro- entrepreneurs throughout the year, entailing an
expenditure of Rs.9.93 crore as against Rs.11.18 crore
in the previous year.
D. Support to Micro-Finance
Institutions
2.45 Micro-Finance Institutions (MFIs), registered in
various legal forms are supplementing the efforts of
the formal banking network in providing credit
support to the unreached clients for inclusive growth.
Recognising their role as a tool for financial inclusion,
NABARD has been supporting them through grant
and soft loan assistance.
(i) Support to Banks and MFIs
2.46 NABARD continued to provide grant assistance
to commercial banks and RRBs for getting the MFIs
rated by accredited rating agencies (CRISIL, M-CRIL,
ICRA, CARE and Planet Finance). Under the scheme,
professional fees charged by the rating agency are
reimbursed to the bank/MFI concerned, subject to a
maximum of Rs.3 lakh. The assistance is available for
the first rating of MFIs with loan outstanding higher
than Rs.50 lakh and less than Rs.10 crore. During
the year, the scheme for providing grant assistance
to MFIs for their rating was revised (Box 2.9). During
the year, rating support amounted to Rs.6.76 lakhs
for five agencies.
(ii) Capital Support and Revolving Fund
Assistance to mFIs
2.47 Capital Support is given to MFIs to leverage
capital, so that commercial and other funds required for
providing financial services at affordable cost to the poor
and achieving sustainability in credit operations over a
period of 3 to 5 years, could be easily accessed from
banks. During the year, capital support of Rs.6.87 crore
was sanctioned to 10 agencies, taking the cumulative
Table 2.3: Grant Assistance Extended to various Partners inSHG-Bank Linkage Programme
(As on 31 March 2010)
(Rs. lakh)
Agency Sanctions during the year Cumulative Sanctions Cumulative Progress
No. Amount No of No. Amount No. of Amount SHGs SHGs
SHGs SHGs released formed linked
Co-operative Banks 7 63.23 5230 102 626.36 59105 252.95 44618 29075
RRB 4 40.14 3395 117 429.44 47985 189.23 54271 36155
NGO 306 2620.10 53393 2624 9025.81 345173 3469.69 244367 157831
Farmers’ Clubs 61.96 14858 7986
IRVs 2 154.70 9250 68 684.46 40483 63.91 9991 5636
Total 319 2878.17 71268 2911 10766.07 492746 4037.74 368105 236683
49
E. Special Initiatives in Backward
Region
(i) Rajiv Gandhi Mahila Vikas Pariyojana
(RGMVP) - Special SHG Initiative in Various
Districts of Uttar Pradesh
2.48 NABARD continued to support the RGMVP, a
special initiative of Rajiv Gandhi Charitable Trust (RGCT),
for promotion, credit linkage and federating of SHGs in
select districts of UP, in association with participating banks
and implementing NGOs. With an implementation period
of eight years (2007 to 2014), the project covers 15 blocks
in Phase I and 29 blocks in Phase II. An amount of
Rs.5.92 crore and Rs.11.33 crore has been sanctioned
for Phase I and Phase II, respectively. Demonstration effect
is given through external Community Resource Persons
(CRPs) from Andhra Pradesh, who are SHG members
coming out of pover ty and wil l ing to share their
experiences with rural women of Uttar Pradesh, for
forming SHGs. As on 31 March 2010, 21,868 SHGs have
been promoted under RGMVP, of which 12,749 have been
credit linked. In addition, 676 Cluster Level Federations
and 15 Block Level Federations have been formed.
(ii) Priyadarshini Project
2.49 A programme for ‘Rural Women Empowerment
and Livel ihood in Mid Gangetic Plains’ cal led
“Priyadarshini” envisaging holistic empowerment of
1,08,000 poor women and adolescent girls through
formation of 7,200 SHGs, was launched with effect from
4 December 2009. It covers four districts (Sultanpur,
Bahraich, Shravasti and Rae Bareily) of Uttar Pradesh
and two districts (Madhubani and Sitamarhi) of Bihar.
The eight-year programme, envisages a project outlay of
US $ 32.73 million and is funded by International Fund
for Agriculture Development (IFAD) through an assistance
of US $ 30 million, with the balance contribution to be
met by the Government of India. The Programme Loan
Agreement (PLA) has been executed with NABARD
designated as the Lead Programme Agency. NABARD has
initiated work on the project at Head Office, Regional
Office and district levels, as mandated in the PLA.
Box 2.9
Grant Assistance for MFI Ratings
a) Scheme of Grant Assistance for Rating of MFIs
1. The scheme has been made operational on an ongoing
basis.
2. Banks can avail of 100% reimbursement of expenses
towards cost of rating of MFIs up to Rs.3 lakh by way
of grant, for the first rating of MFI only.
3. MFIs with minimum loan outstanding of Rs.50 lakh and
maximum loan outstanding of Rs.10 crore would be
eligible for support under the scheme.
4. Regional Offices of NABARD have been delegated
powers to sanction and release grant assistance under
the scheme.
b) Rating/Grading support to MFIs seeking Capital
Support and/or RFA under MFDEF from NABARD
1. Grant assistance scheme continued beyond November
2009 and is operational as a regular scheme, on an
ongoing basis
2. 100% reimbursement of ‘professional fee’ of the Credit
Rating Agency (CRA) for rating of MFIs only, subject to
a ceiling of Rs.3 lakh.
3. The MFI that had been provided with Capital/Equity/RFA
by NABARD under MFDEF will be eligible for assistance
for the second rating on a 50:50 sharing basis, subject
to improved performance of the MFI.
support to Rs.27.87 crore for 33 agencies. Revolving
Fund Assistance (RFA) is provided to mFIs, on selective
basis, for on-lending to the unreached poor. The idea
behind such selective assistance is to experiment with
various mF models for innovating the alternative credit
del ivery systems and for drawing lessons for
sustainability and replicability. During the year, RFA
amounting to Rs.23 crore was sanctioned to 13 agencies,
taking the cumulative credit sanctioned to Rs.74.02 crore
for 42 agencies. During the year, the scheme for Capital/
RFA support to MFIs was thoroughly revised to give more
support to startup MFIs and at a cheaper cost, so as to
make them sustainable over a period of time.
50
F. Scaling-up of Micro-Finance
Programme: Special Initiatives
(i) Support to Activity – Based Groups (ABG)
2.50 NABARD continued to support the scheme for
small-scale activity-based groups wherein capacity
building, credit and market-related support will be
extended. The focus is on forming and nurturing groups
engaged in similar economic activities, i.e., farmers,
handloom weavers, craftsmen, fishermen, etc., to improve
production and realising better price for produce. The
scheme has both grant and loan components. While grant
support would cover group formation, training, extension
services, establishing market linkages, etc., bank loan/s
would cover investment and working capital needs of the
groups. could draw refinance for the loans provided to
activity-based groups like SHGs. In select cases, NABARD
may provide loans directly to registered groups or through
agencies promoting the groups, to establish a few initial
projects where none exists.
(ii) Financing of Joint Liability Groups
2.51 Studies conducted in several states by NABARD
revealed that JLG financing was a good business
proposition on account of the simplified documentation,
group dynamics, good repayment culture and prospects
of credit enhancement to quality clients. To upscale
promotion of JLGs, revised guidelines were issued to
banks, with focus on small and marginal farmers, oral
lessees, tenant farmers for farm and non-farm activities
separately. NABARD will provide yearly promotional
grants to banks for forming, nurturing and financing
JLGs, for the first three years. Banks might use the
services of suitable JLG-promoting agencies for the
interventions, similar to the BF model. NABARD will also
extend support for training, exposure visits, experience-
sharing, etc., for staff of the banks.
(iii) Grant Assistance to Self-Help Promoting
Institutions (SHPIs) for Promotion and
Credit Linkage of SHGs - Revision of
Existing Guidelines
2.52 The promotional grant assistance given to various
agencies for forming, nurturing and linking and stabilising
credit linkage of SHGs has been enhanced with special
focus on hilly/tough districts and resource poor regions.
To ensure that SHGs develop self-expertise in managing
themselves, an additional handholding support for one
year, over and above three years has also been allowed,
subject to certain conditionalities.
(iv) Scheme for Providing Technology Support
to NGOs for Strengthening MIS of SHG
2.53 The scheme of suppor ting NGOs for
computerisation of MIS of the SHG-Bank linkage
programme has been revised. NGOs promoting a
minimum of 250 SHGs would now be eligible for a
maximum grant assistance of Rs.50,000 for hardware
components (one PC unit + LaserJet/dot matrix printer
+ UPS).
(v) Micro-Enterprise Development Programme
2.54 NABARD had launched the Micro-Enterprise
Development Programme (MEDP) during 2005-06 for
skil l upgradation and development of sustainable
livelihoods/venturing into micro-enterprises by matured
SHG members. During the year, 1530 MEDPs were
conducted for 38,313 SHG members on location-
specific farm, non-farm and service sector activities like
bee-keeping, soyabean and mushroom cultivation,
organic farming, horticulture and floriculture, agarbatti-
making, tailoring, beauty parlour, plate making from
areca-nut, jute crafts, screen printing, crochet and
chikanwork, mandap decoration, motor coil rewinding,
lantana basket weaving, etc. Cumulatively, as on
31 March 2010, 2,843 MEDPs had been conducted
covering 71,518 participants.
G. State Specific Support in North
East Region (NER)
2.55 NABARD continued to suppor t the project
sanctioned to Government of Arunachal Pradesh for
implementing ‘Micro-Finance Vision 2011’. Further grant
support was also sanctioned to the Essomi Foundation
51
Trust for setting-up a Resource Centre at Itanagar. An
amount of Rs.5.45 lakh has been released to the Trust
for sett ing up of Micro-Finance Suppor t Centre.
NABARD continued to provide technical support to the
State pro jec t on SHGs being implemented by
Government of Tripura for credit linking of 11,500
existing SHGs, formation and credit linkage of 35,000
new SHGs to promote livelihood activities among three
lakh SHG members.
H. Pilot Projects
2.56 To assess the suitability of various innovative
initiatives and also enhance the sustainability of MF
activities, NABARD continued to extend support for
various pilot projects.
(i) SHG-Post Office Programme
2.57 The results of SHG-Post Office Linkage Programme
in Tamil Nadu has been very encouraging. NABARD
sanctioned additional Rs.200 lakh RFA to India Post for
onward lending to SHGs. The project utilises vast network
of post offices in rural areas in disbursement of credit to
the rural poor, on agency basis. Cumulatively, 2,828 SHGs
have opened zero interest savings accounts, of which
1,195 SHGs have been credit linked by post offices,
with loans amounting to Rs.321.25 lakh, as on 31 March
2010. The project is also being implemented in
Meghalaya. RFA of Rs.5 lakh for on-lending to 50 SHGs
in East Khasi Hills was sanctioned to India Post and
Rs.0.50 lakh released so far.
(ii) Pilot Project for Promotion of Micro-Enterprises
2.58 The pi lot project launched in 2005-06 for
promotion of micro-enterprises, based on 3M (Micro
credit, Micro market, Micro planning) approach, has come
to an end. It was implemented in nine districts in nine
states. A total of 11,714 SHG members were identified,
of which 96 per cent underwent orientation and training
in their chosen enterprise. Out of these, 7,177 members
successfully started micro-enterprises. With a view to
succeeding in their endeavours in the readily available
local markets, the focus of most entrepreneurs was on
traditional, farm related activities. The state-specific
experiences are being evaluated to arrive at strategies for
wider replication.
I. Other Developments
(i) NABARD GTZ Studies
a. MFOs:
2.59 NABARD – GTZ Rural Finance Inst i tut ions
Programme (RFIP) undertook the task of creating a
detailed information base of the NGOs working as
microfinance organisations (MFOs) in 13 priority states.
Its objectives were: (i) to get clear position of MFOs;
(ii) to know the profile and nature of activities of MFOs
and (iii) to understand the capacity development needs
of the MFOs. Accordingly, the inventory of MFOs
included area of operation, client outreach, age of
MFOs, legal status, types of services provided, loan
per client, staff, etc. The inventory survey revealed that
786 MFOs were in operation, with high geographical
concentrat ion (75%) in two states only (Andhra
Pradesh 62% and Tamil Nadu 13%) and the remaining
were scattered over 11 States. Incidentally, it was found
that states with high concentration of MFOs were also
having high concentration of SHGs and substantial
SHG-Bank credit linkage.
b. Remittances:
2.60 The Financial Inc lus ion Pol icy recognises
remittances as one of the key components. An estimated
100 million migrant workers in India regularly need to
remit money to their homes. At present, most of these
micro remittances are sent via informal channels. It is
very important for Indian migrant workers and the
financial sector that micro remittances get included in
the formal systems of the financial sector, through
adequate financial services. Towards this end, NABARD
in association with GTZ conducted a scoping study on
remittance needs. The study confirmed the magnitude
and significance of remittance issue and identified
important points for the way forward. NABARD entered
52
NABARD Consultancy Services
like DPR on embryo transfer technology, awareness
programmes on commodity trading for FMC and Winery
Project in TN, even while continuing with the third phase
of MPLAD monitoring. Nabcons undertook assignments
for APRACA relating to micro finance policy and
regulatory framework in Mongolia and Uzbekistan and
for preparation of technical guide on bank linkage.
Nabcons opened a liaison office in Nairobi, Kenya on
2 October 2009, to garner potential rural development
consultancies in the African continent in the areas of mF,
NRM, development programmes, etc. Nabcons is at
present executing one assignment on impact study on
development of coffee plantations.
B. Progress
2.65 During the year 2009-10, Nabcons contracted
83 assignments with a fee of Rs.1,711 lakh as against
122 assignments for Rs.1,666 lakh last year and
completed 62 assignments involving consultancy fee of
Rs.1,099 lakh. During the year 2009-10, the company
earned an income of Rs.1,278 lakh consisting of
Rs.997 lakh from assignments, Rs.110 lakh from Mutual
Fund Distribution and Rs.168 lakh from income on
investments; Rs.3 lakh was other (miscellaneous) income.
into agreement on joint technical cooperation within the
framework of the on-going RFIP. Remittances and
Payments System will be an additional component of
RFIP. The German Government has committed 5 million
to this new component, subject to the positive outcome
of a joint appraisal that was launched in January 2010
to appraise and identify the concept, deliverables and
impor tan t i n s t i t u t i ona l a r rangemen t s fo r t he
envisaged component.
(ii) KfW-SEWA Bank project:
2.61 The NABARD-KfW SEWA Bank project under
implementation in Gujarat aims at providing access of
rural and urban women to micro credit. KfW has released
a grant assistance of Rs.2.94 crore to SEWA bank during
2009-10, taking the cumulative release to Rs.6.87 crore
The pilot phase of the programme has ended and a
mid-term review was undertaken by KfW, NABARD and
SEWA Bank, on the basis of which, it was decided to
take the project to the full implementation phase.
(iii) Study Visit of an Indonesian Delegation
2.62 A team of the coordinating Ministry for Economic
Affairs of the Republic of Indonesia visited NABARD
from 28 to 30 December 2009 to understand the role
and functions of NABARD in Microfinance. Apart from
NABARD HO, the team also visited Maharashtra RO,
SHG members, NGOs and banks.
2.63 NABARD Consultancy Services Pvt. Ltd.
(Nabcons), a subsidiary of NABARD, established itself as
a professional consultancy service provider in agriculture,
allied activities and rural development. Government of
India, state governments, commercial banks, small
entrepreneurs, APRACA, UPDASP, etc. are its clients.
Nabcons signed Memoranda of Understanding (MoU) with
a number of banks and International Consultancy
Organisations for promotion of business.
A. Important Developments
2.64 Nabcons has procured assignments for third-party
monitoring of infrastructure projects from Arunachal
Pradesh and Jammu and Kashmir Governments. Efforts
are on to obtain similar assignments from other state
governments. Nabcons has started capacity building
programmes for co-operative banks in treasury and
investment management. One such programme was
conducted for Raigad DCCB and six for Maharashtra
State Cooperative Bank. Nabcons has been approved
as a pass- through agency by Minis t ry of Rural
Development, GoI for assisting skill development and
training programme under SGSY package. Further,
during the year, Nabcons made inroads into new areas
53
RESEARCH AND DEVELOPMENT ACTIVITIES
farmers, tenant farmers, sharecroppers and oral lessees
for accessing credit from formal institutions and to evolve
a uniform reporting system for ‘new farmers’. Some of
the suggestions from farmers in the study area included
minimal documentation, lower interest rates, flexibility in
repayments, with rebates in case of crop failure and
creation of awareness about KCC.
2.70 The study on ‘Prospects of Advancing Organic
Farming for Cotton Crop’ by Gokhale Institute of Politics
and Economics, Pune examined some of the issues in
organic cotton farming like inputs use pattern, cost, yield,
net returns, etc., vis-à-vis inorganic cotton farming, in
Yavatmal (Vidarbha) and Dhule (Khandesh) districts of
Maharashtra. A comparative analysis of organic and
inorganic cotton farming revealed the advantages of
organic cotton farming in terms of lower cost, higher
profits and employment and reduced yield risks. The study
recommended and stressed on adequate supply of organic
inputs, role of farmers’ association in organic certification,
creating awareness on the benefits of organic farming,
adequate and timely dissemination of organic market
information of the domestic and export markets, imparting
training to farmers regarding organic practices, etc.
C. Seminars, Conferences and
Workshops
2.71 During the year, grant assistance of Rs.88.71 lakh
was sanctioned to various universities, research institutes
and other agencies for organising 112 seminars,
conferences, symposia and workshops covering subjects/
areas relatedto agriculture and rural development
including the dynamics of banking sector reforms,
Agripreneurship and Rural Development, Agro food
processing, poultry production, biotechnology,
horticultural research, plant pathology, fisheries, agri
marketing, commodities futures, use of Coal Ash in
Agriculture and Forestry, management strategies,food
security, Bio resources, etc. The grant support extended
to the organisers enabled them to document the
proceedings and publish background papers, thus
2.66 The Research and Development (R&D) Fund
was set up in NABARD in 1982-83 as mandated by
NABARD Act 1981. The Fund is to provide financial
support to select agencies for promoting applied
research projects/studies, training and upgrading skills
of personnel of client institutions and disseminating
research findings. The corpus of the Fund has been
kept at Rs.50 crore since 2004-05.
A. Utilisation of the Fund
2.67 During the year, Rs.982.98 lakh was utilised from
the fund for supporting activities like research projects/
studies (Rs.100.03 lakh), seminars (Rs.61.16 lakh),
training/summer placement (Rs.802.84 lakh), and other
activities (Rs.18.95 lakh). As on 31 March 2010, the
cumulative disbursement stood at Rs.118.52 crore.
B. Research Projects/Studies
2.68 During 2009-10, nine research projects involving
a grant assistance of Rs.137.10 lakh were sanctioned.
Further, six projects/studies sanctioned earlier were
completed during the year.
2.69 Studies on the implementation of ‘Doubling of
Agriculture Credit’ for the period 2004-05 to 2006-07 were
conducted in Madhya Pradesh (Xavier Institute of
Development Action and Studies, Jabalpur), Maharashtra
(Gokhale Institute of Politics and Economics, Pune),
Rajasthan (Institute of Development Studies, Jaipur),
Tamil Nadu (TNAU, Coimbatore) and Uttar Pradesh
(Banker’s Institute of Rural Development, Lucknow). The
study revealed inter-agency and inter-district variations
with regard to the year of achievement of doubling of
agricultural credit. In all the states, the commercial banks
fared better than the RRBs and Co-operatives. In the
current Management Information System maintained by
the Rural Financial Institutions (RFI), there was no precise
definition and provision for recording data of new farmers/
new accounts. The study suggested the need to orient
agriculture credit policy towards marginal and small
54
facilitating wider dissemination of the recommendations/
action points and initiate suitable policy interventions by
agencies concerned.
D. Occasional Papers
2.72 NABARD continued its endeavour of publishing
Occasional Papers to generate and disseminate
information on policy issues related to agricultural and
rural development. During the year, two Occasional
Papers on ‘Economics of Cashew in India’ and
‘Economics of Pulses Production & Processing of India’
were published.
E. Training Activities
2.73 Apart from extending grant assistance for various
R&D activities, an amount of Rs.25.65 lakh was utilised
from the R & D fund during the year for capacity building
of the staff of RFIs.
F. Summer Placement Scheme
2.74 The Summer Placement Scheme is implemented
since 2005-06 to enable students selected from reputed
agriculture and management institutes, to be associated
with various projects/studies taken up by NABARD in
agriculture and rural sectors. The students are assigned
tasks/projects of relevance to the Bank to generate new
product and service ideas, that could be introduced for
the benefit of its constituents. During 2009-10, projects
on agriculture and rural development, allied sector,
agri-business and social development were assigned to
57 students by 21 ROs, establishments (TEs) and HO,
entailing expenditure of Rs.15.52 lakh.
Training of Personnel
A. Training and Sensitisation
Programmes
2.75 NABARD continued to provide financial and other
support to training institutions like Bankers Institute of
Rural Development (BIRD), Lucknow, Regional Training
Centres (RTCs) at Mangalore and Bolpur, National
Institute of Rural Banking (NIRB), Bangalore, Manpower
Development and Management Institute (MDMI)-
Shillong and Indian Institute of Bank Management
(IIBM), Guwahati.
B. Training of Personnel of RFI
2.76 Three training establishments (TEs) have been set
up by NABARD, viz., RTC-Bolpur, RTC-Mangalore and
BIRD-Lucknow to provide advanced training to the RFI
personnel and to supplement the efforts of other training
institutions through technical support. During the year,
467 training programmes were conducted by the TEs
covering 11,507 participants (Table 2.5). Out of 261
training programmes conducted by BIRD, 27 programmes
were conducted in collaboration with NBSC, Lucknow
for 547 par ticipants from client insti tutions. The
programmes conducted by RTC, Mangalore included one
exposure programme on microfinance for senior level
officials of SANSA Development Bank, Sri Lanka.
C. Developments in 2009-10
2.77 A Technology park set up in BIRD premises with
the support of technology vendors, for display of
Table 2.5: Training of RFI Personnel
(Nos.)
Institute Programmes Conducted Personnel Trained
2007-08 2008-09 2009-10 2007-08 2008-09 2009-10
BIRD, Lucknow 192 257 261 4311 6616 6139
RTC, Mangalore 103 91 93 2399 2065 2474
RTC, Bolpur 73 86 113 1778 2268 2894
Total 368 434 467 8488 10949 11507
55
equipment and technology relating to financial
inclusion was inaugurated by the Chairman, NABARD
during the year.
2.78 NABARD had established the Centre for
Microfinance Research (CMR) in 2008 at BIRD and four
sub-centres at Guwahati, Patna, Chennai and Jaipur to
conduct research in various themes of micro finance
covering all regions of the country. During the year, a
national seminar on ‘Microfinance – Issues and
Challenges’ was organised by CMR. The CMR also
identified 20 projects for research and brought out the
first issue of its half-yearly journal, ‘The Microfinance
Review’. During the year, grant assistance of Rs.70 lakh
was released by NABARD to CMR taking the cumulative
assistance to Rs.194.18 lakh.
2.79 The Centre for Profess ional Excel lence in
Co-operatives (C-PEC) set up at BIRD, Lucknow
during the year 2008-09 in collaboration with GTZ,
continued to focus its efforts to make the training
system of the co-operative credit structure more
professional. During 2009-10, C-PEC completed the
preliminary work of inventory of training institutions
in the co-operative sector, TNA study of the short-term
co-operative credit structure (STCCS) and conducted
workshops for zonal stakeholders. All the co-operative
credit institutions and the training establishments have
been addressed by C-PEC for seeking accreditation and
to participate in the initiatives for infusing a professional
attitude in the co-operative workforce. It is expected
that C-PEC will begin rolling out certified Training of
Trainers (TOTs) Programme and accreditat ion of
training institutes from 2010-11.
2.80 An APRACA Centre of Excellence (ACE) in
Linkage Banking was set up in CMR. It will act as a
Leading Centre of knowledge in Linkage Banking.
2.81 During the year, NABARD sanctioned grant
assistance of Rs.7.53 lakh to National Institute of Rural
Banking (NIRB), Bangalore for conduct ing 21
programmes. An amount of Rs.4.24 lakh was released
to NIRB, Bangalore for conduct ing 17 t ra ining
programmes under which 196 par t ic ipants were
covered. Further, during the year, NABARD released
Rs.24.92 lakh from its R&D Fund to the Indian Institute
of Bank Management (IIBM), Guwahati towards 15 per
cent share in revenue expenditure.
2.82 NABARD has been extending funding support
under SOFTCOB to Junior Level Training Centres (JLTCs)
of SCARDBs, Agricultural Co-operative Staff Training
Institutes (ACSTIs) of SCBs and Integrated Training
Institutes (ITIs) out of the Co-operative Development Fund
(CDF). During the year 2009-10, the bank provided
technical and financial support to seven JLTC, twelve
ACSTIs and three ITIs set up by SCARDBs and SCBs,
respectively, to enable them to improve their training
system. A total amount of Rs.390.20 lakh was disbursed
to the JLTCs, ACSTIs and ITIs out of the CDF for
conducting 1019 programmes covering 12,088
participants during 2009-10 as against Rs.330.74 lakh
disbursed for conducting 303 programmes covering 6,146
participants during 2008-09. The scheme has been revised
and extended for a period of three years from 1 April
2010 to 31 March 2013. The ACSTIs, JLTCs, and ITIs
will be eligible for additional assistance under the revised
scheme as support from NABARD for linking their
activities with CPEC.
56
III
Business Operations
Production Credit
The business operations of NABARD mainly comprise
(a) providing refinance support to co-operative banks,
commercial banks, regional rural banks, scheduled
primary urban co-operative banks (PUCBs), Agriculture
Development Finance Companies (ADFCs) to
supplement their financial resources for enhancing credit
flow to agriculture and rural sectors, (b) providing loans
to state governments for rural infrastructure projects
under the Rural Infrastructure Development Fund (RIDF),
and (c) co-financing viable projects with commercial
banks. This chapter details the business operations and
achievements of the Bank during the year.
3.2 The to ta l f inanc ia l suppor t ex tended by
NABARD during 2009-10 stood at Rs.57,069 crore,
A. Short-Term Refinance
a. State Co-operative Banks (SCBs)
i. Support for Seasonal Agricultural
Operations
3.3 The refinance assistance to co-operative banks for
Shor t-Term Seasonal Agricultural Operations
(ST-SAO) was linked to net NPA level of the banks.
Consolidated limits were sanctioned to SCBs on behalf
of eligible DCCBs to the extent of 40 per cent, 35 per
cent and 30 per cent of Realistic Lending Programme
(RLP), with net NPA up to 10 per cent, between 10 to
15 per cent and above 15 per cent, respectively. The
limits were further enhanced by 5 per cent of RLP after
the mid-term review in December 2009.
3.4 SCBs in Andaman and Nicobar Is lands,
Himachal Pradesh, Jammu and Kashmir, North Eastern
Region (NER), Sikkim and Uttarakhand were
considered for relaxation in NPA norms and provided
enhanced quantum of refinance between 45 per cent
and 55 per cent. In addition, SCBs in eastern region,
viz., Bihar, Chhattisgarh, Orissa and West Bengal were
made eligible for additional refinance up to 5 per cent
over and above the applicable quantum of refinance,
resulting in increased refinance made available to
them, which ranged between 40 and 50 per cent of
their RLP.
3.5 As an incentive to co-operative banks that
covered maximum number of new farmers during 2008-09
on account of implementation of ADWDR Scheme,
2008, it was decided to provide additional credit limit
of 5 per cent of their RLP for the year 2009-10 to two
DCCB in each state having a three-tier structure. In
states with two-tier structure, SCBs were made eligible
for the incentive, if at least 25 per cent of the total
crop loan had been disbursed to new beneficiaries under
ADWDR Scheme, 2008. In the case of states that
executed MoU and amended their Cooperat ive
Societies Act, as required under the GoI package for
revival of STCCS, it was decided that credit limit
appl icat ions need not be routed through RCS.
Relaxations were also granted to co-operative banks
not complying with section 11(1) of B. R. Act, 1949
(AACS). The stipulation of minimum coverage of SF/
MF, continued to be at 30 per cent.
3.6 The short-term refinance assistance to
co-operative banks and RRBs indicating credit limits and
registering a growth of 13 per cent over 2008-09
(Chart 3.1).
57
Table 3.1: Short term refinance (Production credit) for
the last five years
(Rs. crore)
Year Limit Maximum
sanctioned outstanding
2005-06 12080 10769(89.15)
2006-07 16089 14168(88.06)
2007-08 18291 16352(89.40)
2008-09 19627 17212(87.70)
2009-10 25661 24715(96.31)
Figures in the parentheses refer to percentage share.
maximum outstanding for the last five years are given
in Table 3.1.
3.7 During 2009-10, ST-SAO limits were sanctioned
to 20 SCBs aggregating Rs.18,109 crore as against
Rs.15,448 crore sanctioned during 2008-09. The credit
limits included Rs.1,809.95 crore for the Oilseeds Production
Programme (OPP), Rs.155.62 crore for National Pulses
Development Programme (NPDP) and Rs.592.99 crore for
credit requirements of tribals under the Development of
Tribal Population (DTP). SCBs reached a maximum
outstanding of Rs.17,436.66 crore during 2009-10 with a
utilisation rate of 96 per cent. The utilisation included an
amount of Rs.199.43 crore towards disbursements made
as incentive to co-operative banks that covered maximum
number of new farmers during 2008-09 on account of the
implementation of ADWDR Scheme, 2008.
3.8 While SCBs in northern (Haryana, Himachal
Pradesh, Punjab and Rajasthan) region accounted for
35 per cent, SCBs in southern (Andhra Pradesh,
Karnataka, Kerala, Puducherry and Tamil Nadu), western
(Gujarat and Maharashtra) and central (Madhya Pradesh,
Uttarakhand and Uttar Pradesh) regions accounted for
20, 17 and 16 per cent, respectively, of the aggregate
credit limits sanctioned. Eastern region (Bihar, Chhattisgarh,
Orissa and West Bengal) accounted for 12 per cent. The
share of refinance availed by the co-operative banks in
the NER continued to be low despite relaxations.
Meghalaya, Nagaland and Sikkim SCBs were sanctioned
credit limits aggregating Rs.5.25 crore, against which the
utilisation was Rs.5.21 crore.
ii. Support for Short-term (Others)
3.9 Short-term (Others) included ST-agriculture/allied
activities/marketing of crops/ pisciculture/industrial
co-operative societies (other than weavers)/labour
contract and forest labour co-operative societies
(including collection of minor forest produce)/rural
artisans (including weaver members of PACS/LAMPS/
FSS)/procurement and distribution of agricultural inputs.
ST- Labour Contract Co-operatives engaged in civil work
in rural areas were also made eligible for refinance under
ST (Others) during the year. A consolidated ST (Others)
limit was sanctioned to SCBs on behalf of eligible DCCBs.
SCBs with net NPA not exceeding 10 per cent, as on
31 March 2008, were considered eligible for refinance.
Relaxations in NPA norms extended to Eastern and North
Eastern regions in the case of ST-SAO were made
applicable for ST-Others. The assessment norms,
hitherto followed, for different purposes were continued.
iii. Support to Weavers
3.10 Refinance assistance for weavers credit limit
(short-term) to co-operative banks for working capital
requirements of Primary/Apex/Regional Weavers was
linked to net NPA level. Consolidated limits were
sanctioned to SCBs on behalf of eligible DCCBs.
Relaxations in NPA norms as extended to Eastern and
North Eastern regions in the case of ST-SAO were made
applicable for weavers also. The refinance assistance
for weavers credit limit (short-term) to commercial banks
for working capital requirements of cooperative societies
for production and marketing of handloom products,
Handloom weaving
58
individual weavers, handloom weaver groups and master
weavers was also linked to net NPA level. Scheduled
commercial banks having net NPA of less than 3 per
cent as on 31 March 2008, and making profit in 2007-08,
without accumulated losses, were considered eligible.
Short-term credit was also available to SCBs and
scheduled commercial banks for financing working
capital requirements of State Handloom Development
Corporations for production/procurement and marketing
of handloom products. During 2009-10, ST (weavers)
credit limits aggregating Rs.177.32 crore were sanctioned
to five SCBs (Andhra Pradesh, Karnataka, Puducherry,
Tamil Nadu and West Bengal) for production/
procurement/marketing activities, as against Rs.265.63 crore
during 2008-09. The maximum outstanding was
Rs.180.78 crore as against Rs.166.66 crore in the
previous year.
3.11 During the last three years, 4,172 Handloom
Weavers’ Groups (HWG) were formed by banks in 12
states, viz., Orissa (1,366), Andhra Pradesh (1,220),
Jharkhand (500), Karnataka (498), Assam (272), Madhya
Pradesh (103), West Bengal (88), Bihar (82) and other
States (43). Of these, 1,781 HWG have been credit linked.
b. State Co-operative Agriculture and
Rural Development Banks
3.12 The scheme of extending short-term (ST) refinance
to State Co-operative Agriculture and Rural Development
Banks (SCARDBs) for SAO was continued during the
year. Refinance of Rs.95.92 crore was extended to Kerala
(Rs.74.87 crore) and Rajasthan (Rs.21.05 crore)
SCARDBs at 4.5 per cent interest rate for lending to the
ultimate borrowers at 7 per cent.
c. Regional Rural Banks
3.13 Refinance to RRBs was also linked to net NPA
levels. While RRBs with net NPA up to 5 per cent were
eligible for refinance to the extent of 25 per cent of their
RLPs, RRBs having net NPA between 5 and 10 per cent
were eligible for refinance to the extent of 20 per cent of
RLP. RRBs, net NPA of which exceeded 10 per cent,
were eligible for refinance up to 15 per cent of RLP. This
was further enhanced by 5 per cent, i.e. 30, 25 and
20 per cent of RLP, during the mid-term review.
3.14 The RRBs in Eastern Region (Bihar, Chhattisgarh,
Jharkhand, Orissa, West Bengal), were made eligible
for additional refinance up to 5 per cent over and above
the applicable quantum of refinance, which varied
between 25 and 35 per cent. The RRBs in the Himachal
Pradesh, Jammu & Kashmir, North Eastern Region and
Uttarakhand were granted relaxation in NPA norms and
enhanced quantum of refinance varying between 30
per cent and 40 per cent, to facilitate greater credit flow.
RRBs were advised to increase lending to tenant farmers
and oral lessees through the JLG Scheme or otherwise.
3.15 During 2009-10, limits of Rs.6,832.13 crore were
sanctioned to 80 RRBs under ST-SAO as against
Rs.3,546.81 crore sanctioned to 76 RRBs in 2008-09.
The l imit included Rs.577.85 crore for Oilseeds
Production Programme (OPP), Rs.143.86 crore for
Development of Tribal Population (DTP) and
Rs.4.00 crore for National Pulses Development
Programme (NPDP). Uttar Pradesh with the limit of
Rs.1,079 crore accounted for the largest share of credit
limits sanctioned, followed by Andhra Pradesh (Rs.897
crore), Rajasthan (Rs.823 crore), Kerala (Rs.740 crore)
and Karnataka (Rs.545 crore). The maximum
outstanding was Rs.6,779.79 crore forming 99 per cent
of the limit sanctioned during 2009-10. Five RRBs in
North Eastern Region were sanctioned credit limit of
Rs.27.23 crore, which was utilised fully.Tea Garden
59
3.16 Consolidated limits were sanctioned to RRBs
for ST - Other than SAO (ST-OSAO) to the extent of
60 per cent of their RLP for eligible purposes like
marketing of crops, pisciculture, approved purposes
like production and marketing activities of artisans
(including handloom weavers), village/cottage/tiny
sector industries, financing persons belonging to the
weaker sections engaged in trade/business/service
activities including distribution of inputs for agriculture
and al l ied activit ies. RRBs having net NPA upto
5 per cent were eligible for refinance. The aggregate
limit for ST-OSAO sanctioned during 2009-10 was
Rs.542 crore, against Rs.190.80 crore in the previous
year. The maximum utilisation was Rs.318.24 crore
(59 per cent).
B. Other Initiatives
a. Interest Subvention to Farmers
3.17 The continuance of the interest subvention scheme
was announced in the Union Budget 2009-10. Interest
subvention of 2 per cent per annum was available to
public sector banks, co-operative banks and RRBs for
deploying their own funds for crop loan upto Rs.3 lakh
per farmer, provided the ultimate borrower got such loans
at 7 per cent interest rate per annum. An additional
subvention of 1 per cent was announced during the year,
to those farmers who repaid crop loans promptly within
one year of disbursement. Thus, the interest paid on crop
loans by such farmers was effectively 6 per cent. This
was to reward the prompt payers even while helping the
lending institutions by declogging the line of credit.
Suitable interest subvention was given to NABARD for
Table 3.2: Rates of Interest on Refinance
(Per cent)
Sl. No. Purpose Agency Interest Rate
1 SAO SCB/RRB 4.0/4.5
2 SAO against Pledge of securities SCB 8.0
3 ST (Others – other than weavers) SCB 8.0
4 ST (Weavers – Primary and Apex/ Regional Weavers’ Co-operative Societies.) SCB 7.5
5 ST – Weavers - Financing of Primary Weavers’ Co-operative Societies Scheduled Commercial Banks 7.5
6 ST-Other than SAO loans (ST- OSAO) RRB SCB & Scheduled 8.0
7 ST - Working capital requirements of SHDC 7.5
8 MT (Conversion) loan SCB/RRB 5.5
9 LT loans to State Governments State Governments 8.5
providing concessional refinance to SCBs and RRBs at
4.0 per cent and 4.5 per cent interest rates, respectively.
Aggregate interest subvention of Rs.1,284.56 crore
was provided by GoI to NABARD, co-operative banks
and RRBs for the year 2007-08. An amount of
Rs.1,205.17 crore has been disbursed for 2008-09.
Interest subvention for 2009-10 was estimated at
Rs.2,600 crore.
b. Package for Sugar Industry
3.18 NABARD continued to act as the nodal agency
for the package announced by GoI for loan assistance
to co-operative sugar mills from co-operative banks. Out
of Rs.138.54 crore received from GoI as interest
subvention, Rs.131.22 crore pertaining to 76 co-operative
sugar mills was released to the co-operative banks. An
additional sum of Rs.113.07 crore was estimated as claims
from banks for these years from 2008-09 to 2010-11.
Under the Scheme for ‘Providing Financial Assistance to
Sugar Undertakings – 2007’ for payment of cane dues
for 2006-07 and 2007-08 sugar seasons, GoI placed
Rs.125.71 crore with NABARD for release against interest
subvention claims. An amount of Rs.60.97 crore was
sanctioned to 59 sugar mills operating in Goa, Gujarat,
Karnataka, Maharashtra, Orissa and Uttar Pradesh.
c. Interest Rates on Refinance Assistance
3.19 The rates of interest on ST/MT refinance to
co-operative banks, RRBs and scheduled commercial
banks and long-term (LT) loans to state governments
for contribution to share capital of co-operative credit
institutions during 2009-10 are indicated in Table 3.2.
60
Investment Credit
C. Security Norms
3.22 The release of refinance to SCARDBs as also to
SCBs/DCCBs for farm and non-farm sector activities
was against government guarantee. However, SCBs
that were profi t making during 2007-08 with no
accumulated losses, net NPA of less than 5 per cent,
as on 31 March 2008, and having ‘A’ Audit
c lass i f icat ion were exempted from government
guarantee. Refinance to other SCBs, including Section
11(1) of BR Act (AACS) non-compliant SCBs/DCCBs
and to non-scheduled SCBs was against government
guarantee only. In the event of government guarantee
not forthcoming, alternatives like pledge of government
securities or fixed deposit receipts issued by scheduled
banks were considered.
D. Interest Rates on Refinance
3.23 The changing market conditions and their impact
on the cost of funds for NABARD led to the interest
rates being revised four times during 2009-10. The
interest rates, with effect from 1 March 2010, stood
at 8 per cent for commercial banks, 7.5 for RRBs/
co-operative banks and 6.5 for ADFC/NEDFi. The
rate on interim finance to SCARDB and ADFC was
9.75 and 6.5 per cent, respectively. A special reduction
of 50 basis points was provided to commercial banks
in NER (Assam, Arunachal Pradesh, Manipur,
Meghalaya, Mizoram, Nagaland and Tripura), Hilly
States (Himachal Pradesh, Jammu & Kashmir and
Uttarakhand), Eastern States (Bihar, Jharkahand,
Orissa and West Bengal) , Chhatt isgarh, Sikkim,
Andaman & Nicobar Islands and Lakshadweep, for
all eligible purposes.
E. Refinance Support
3.24 The refinance disbursed (including ST-SAO to
SCARDB) during the year was Rs.12,009.08 crore as
against Rs.10,535.29 crore in the previous year, recording
an increase of 14 per cent.
A. Refinance Policy and Eligibility
Criteria
3.20 The policy of preferential treatment to states in
North-Eastern and Hilly Regions was extended also to
the states in Eastern Region during 2009-10. As a result,
the client financial institutions in Bihar, Jharkhand, Orissa
and West Bengal have benefited. Concessions include
100 per cent refinance, concessional interest rates on
refinance and relaxations in eligibility criteria in respect
of recovery and gross/net NPA. Refinance was also
extended to Section 11(1) of B.R. Act (AACS) non-
compliant SCB/DCCB in states that executed MoU for
implementing the GoI revival package for revival of
STCCS. SCBs, SCARDBs and RRBs continued to be
classified under A/B/C/D categories based on the level
of gross/net NPA against loans and advances
outstanding, recovery performance, net worth and
profitability. However, (i) SCBs with gross NPA of more
than 20 per cent, (ii) SCARDBs with recovery of less
than 30 per cent, (iii) commercial banks/PUCBs with
net NPA of more than 3 per cent, (iv) RRBs with deposit
erosion of more than 30 per cent, and (v) NBFCs with
net NPA of more than 5 per cent were considered
ineligible for availing refinance during the year.
B. Special Package for NER and
Sikkim
3.21 With a view to enhancing the flow of credit to
NER and Sikkim, NABARD continued to grant relaxation
to commercial banks, co-operative banks and RRBs
operating in the area. The initiatives operationalised
during 2009-10 were:
(i) NPA norms were relaxed by 5 and 3 per cent,
respectively, to enable SCB and RRB to avail of
refinance for ST (SAO); and
(ii) the rate of interest on refinance to commercial
banks was reduced by 0.5 per cent. The refinance
support extended was 100 per cent for all purposes
to all agencies.
61
a) Agency-wise Disbursements of
Refinance
3.25 During 2009-10, though commercial banks
availed of the highest refinance at 50.44 per cent, their
share showed a decline from the previous year (55.7%).
The shares of RRBs, SCBs and PUCB/ADFCs increased,
while those of SCARDBs decreased. In absolute terms,
however, all the agencies recorded increases in availment
of refinance (Table 3.3/Chart 3.2).
b) Spatial Distribution of Refinance
3.26 Refinance disbursement across regions varied
widely with the highest share being in the south (50%),
followed by north (20%), central (12%) and others
(18%) (Table 3.4/Chart 3.3). Ninety per cent of the
disbursement to RRBs was in Andhra Pradesh,
Haryana, Karnataka, Kerala, Punjab, Rajasthan, Tamil
Nadu and Uttar Pradesh, while around eighty-eight per
cent of the refinance to SCBs was in Andhra Pradesh,
Gujarat , Himachal Pradesh, Karnataka, Orissa,
Punjab, Uttar Pradesh and West Bengal. Ninety-six per
cent of the refinance to SCARDBs was in Haryana,
Karnataka, Kerala, Punjab, Rajasthan, Uttar Pradesh
and West Bengal.
c) Sector-wise disbursements
3.27 During the year 2009-10, non-farm sector (NFS)
(28.9%) and Self-Help Groups (SHG) (26.4%) were the
major purposes for which banks availed of refinance,
followed by farm mechanisation (14.3%) and dairy
development (6%) (Table 3.5). An analysis of the data
for the latest three years revealed that farm
mechanisation, dairy development, poultry/ SGP/
AH-others, storage/market yard, NFS and SHG have
Table 3.3: Agency-wise disbursement
(Rs. crore)
Agency Disb.2007-08 Share (%) Disb.2008-09 Share (%) Disb.2009-10 Share(%)
SCARDB 1,950.58 21.56 1,986.54 18.86 2221.30 18.50
SCB 826.55 9.14 801.51 7.61 1251.95 10.43
Commercial Banks 3,951.73 43.68 5,867.19 55.69 6057.19 50.44
RRB 2,313.99 25.58 1,879.04 17.83 2457.46 20.46
PUCB/ADFC 3.42 0.04 1.01 0.01 21.18 0.17
Total 9,046.27 100.00 10,535.29 100.00 12,009.08 100.00
62
recorded substantial growth in refinance, while minor
irrigation, land development and fisheries showed
declining trends.
F. Co-financing
3.28 NABARD has executed MoU with 16 commercial
banks, three RRBs, one SCB and an NBFC for supporting
agricultural projects under co-financing arrangement.
During the year, eight projects were sanctioned with total
financial outlay (TFO) of Rs.62.13 crore and total term
loan sanctions amounting to Rs.33.53 crore. The
cumulative number of projects sanctioned since 2003
rose to 48 with cumulative total financial outlay (TFO)
of Rs.807.52 crore. An amount of Rs.11.99 crore was
sanctioned and Rs.26.60 crore was disbursed during the
year. Cumulative sanction and disbursement by
NABARD were Rs.229.44 crore and Rs.136.35 crore,
respectively. As on 31 March 2010, there were 38 on-going
projects under co-financing.
G. Capital Investment Subsidy
Schemes
3.29 Since 2000-01, NABARD is the nodal agency for
various Capital Investment Subsidy Schemes (CISS) of
Table 3.4: Region-wise Disbursement
(Rs. crore)
Region Disb.2007-08 Share(%) Disb.2008-09 Share(%) Disb.2009-10 Share(%)
Northern 1,957.78 21.64 2,636.45 25.02 2419.87 20.15
North-Eastern 178.57 1.97 174.18 1.65 139.85 1.16
Eastern 1,134.73 12.55 1,102.99 10.47 891.07 7.42
Central 1,810.40 20.01 1,526.02 14.49 1478.60 12.31
Western 712.26 7.87 796.74 7.56 1111.79 9.26
Southern 3,252.53 35.96 4,298.91 40.81 5967.90 49.70
Total 9,046.27 100.00 10,535.29 100.00 12,009.08 100.00
Northern: Haryana, Himachal Pradesh, Punjab, Rajasthan, J&K, Delhi and Chandigarh
North-Eastern: Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura. The disbursement in Sikkim has been included under
this region.
Eastern: Bihar, Jharkhand, Orissa, West Bengal and A&N Islands Central: Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Uttarakhand
Western: Gujarat, Goa, Maharashtra, Dadra and Nagar Haveli and Daman &Diu
Southern: Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Puducherry and Lakshwadeep Islands
63
GoI. During 2009-10, four Schemes were implemented,
viz., (i) construction of cold storages and onion godowns,
(ii) construction of rural godowns, (iii) development/
strengthening of agriculture marketing infrastructure,
grading and standardisation, and (iv) establishment of
Agri-clinics and Agri-business Centres (ACABC) by
agriculture graduates. Back-ended subsidy varies for
each scheme, with the NER/weaker sections getting a
higher quantum under each of the schemes.
a. Promotion Scheme for Cold Storages,
Onion Godowns and Rural Godowns
3.30 The scheme, launched in 1999-2000, aimed at
promoting creation of cold storage and scientific storage
facilities to prevent heavy post-harvest losses, wastage,
product deterioration and distress sales.
It was to act as a hedge against wide price fluctuations
of horticultural produce. The number of projects
sanctioned under Cold Storages, Onion Godowns and
Rural Godowns Scheme are detailed in Table 3.6.
b. Agricultural Marketing Infrastructure,
Grading and Standardisation
3.31 The scheme in operation since 2004, aims at
establishing/strengthening infrastructure for marketing,
grading, standardisation and quality certification of
produce. It is to be implemented in only such States
where APMC Act is amended to al low private
participation. During the year, 573 projects with TFO
of Rs.637.90 crore and bank loans of Rs.419.54 crore
were sanctioned and subsidy of Rs.49.89 crore was
released to 21 states and five UTs. Cumulatively, 3,838
units with TFO and bank loans of Rs.1,933.56 crore
and Rs.1,283.13 crore, respectively, were sanctioned
and subsidy of Rs.190.89 crore was released.
Table 3.6: Details of Projects under Cold Storages, Onion Godowns and Rural Godowns
(Rs. crore)
Sl. Facility 2009-10 Cumulative as on 31.03.2010 Cumulative
No. No. of TFO Bank Subsidy No. of TFO Bank Subsidy Capacity*
Projects for the year Loan Projects Loan
1. Cold Storage & 60 129.81 77.77 30.28 1851 2900.59 1634.67 443.58 76.74
Onion Godowns
2. Rural Godowns 963 281.92 196.82 65.44 17556 3798.58 2504.08 578.97 221.45
* Capacity: Lakh Metric Tonnes .
Table 3.5: Sector-wise disbursement
(Rs. crore)
Sector 2007-08 2008-09 2009-10
Minor Irrigation 403.68 545.85 496.73
(4.46) (5.18) (4.14)
Land Development 462.14 949.94 303.67
(5.11) (9.02) (2.53)
Farm Mechanisation 1747.65 1514.03 1714.66
(19.32) (14.37) (14.28)
Plantation & Horticulture 341.82 374.54 377.40
(3.78) (3.56) (3.14)
Poultry Farming / Sheep, 216.29 298.70 349.79
Goat and Piggery /Animal (2.39) (2.84) (2.91)
Husbandry - Others
Fisheries 25.45 77.15 54.62
(0.28) (0.73) (0.46)
Dairy Development 605.87 489.41 725.35
(6.70) (4.65) (6.04)
Forestry 6.39 6.56 6.46
(0.07) (0.06) (0.05)
Storage & Market Yards 136.28 141.01 187.22(1.51) (1.34) (1.56)
SGSY 258.58 201.12 151.50(2.86) (1.91) (1.26)
NFS 2747.95 2706.79 3465.99
(30.38) (25.69) (28.86)
SC/ ST-Action Plan 20.52 28.94 2.30
(0.23) (0.27) (0.02)
SHG 1615.50 2620.03 3173.56
(17.86) (24.87) (26.43)
Others 458.15 581.22 999.83
(5.05) (5.51) (8.33)
Total 9,046.27 10,535.29 12009.08
(100.00) (100.00) (100.00)
Figures in parentheses indicate percentage to total.
64
c. Agri-Clinics and Agri-Business
Centres
3.32 With a view to providing fee-based extension
services to farmers and at the same time providing self-
employment avenues to unemployed agricultural
graduates, a central sector scheme with subsidy
component, was launched by GoI in 2006-07 to promote
the establishment of agri-clinics and agri-business
cent res (ACABCs) . Dur ing the year, subs idy of
Rs.1.61 crore was disbursed for 76 projects involving
TFO of Rs.5.99 crore and bank loan of Rs.4.66 crore. Till
31 March 2010, 280 projects with TFO of Rs.20.87 crore,
bank loan of Rs.15.98 crore and subsidy of Rs.3.90 crore
were sanctioned.
d. Bihar Ground Water Irrigation
Scheme
3.33 The implementation of Bihar Ground Water
Irrigation Scheme (BIGWIS), promoted by the Planning
Commission, GoI, commenced from 2009-10 to provide
irrigation to 9.28 lakh ha. of agricultural land in Bihar
by installing 4.64 lakh units of private shallow tubewells/
dugwells with pumpsets over a period of three years.
The scheme is to be implemented in all districts of Bihar
through commercial banks and RRBs, utilizing the
balance amount of Rs.231.67 crore, under Million
Shallow Tubewell Programme, which was closed on
31 March 2007. The Minor Water Resources Department,
Government of Bihar, is the nodal department for
implementation of the scheme with the active support
of NABARD, banks and other participating agencies.
The back-ended subsidy at 45 per cent of the project
cost, to be released by NABARD through the financing
banks, is available to the beneficiaries under the scheme.
As on 31 March 2010, an amount of Rs.32.02 crore
was released to four RRBs and 13 commercial banks as
subsidy under the scheme.
e. National Project on Organic Farming
NPOF - CISS for Commercial
Production of Organic Inputs
3.34 The GoI launched the National Project of Organic
Farming (NPOF) in 2005 to promote organic farming in
the country and is providing subsidy under the capital
investment subsidy scheme (CISS) for commercial
production of organic inputs like biofertiliser, vermiculture
hatchery and units for composting of fruit and vegetable
wastes. The GoI has since extended the Scheme for
2009-10. An amount of Rs.40.25 crore has been
earmarked as subsidy for bankable projects. The fund is
being operated by both NABARD and NCDC. Since
inception, 612 units (Vermi-hatchery units - 569,
Bio-fertilizer – 32 and Fruit & Vegetable waste compost
unit - 11) have been sanctioned by NABARD with subsidy
of Rs.1,497.89 lakh, as on 31 March 2010. Subsidy of
Rs.1,042.33 lakh has been released.
H. Investment and Scheme
Specific Studies
3.35 NABARD conducts Investment Specific Studies
(ISS) to identify the problems at the field level in
implementation of the schemes, assess the availability and
adequacy of backward and forward linkages, to estimate
the benefits accruing from the investment, and study
repayment performance, etc. During 2009-10, 30 ISS were
conducted by ROs in association with financing banks and
nodal Departments of state governments. The studies
covered investments in farm and rural non-farm sectors.
I. Physical Achievements
3.36 The refinance disbursements supporting varied
economic activities under various types of investmentsProject under agricultural marketing infrastructure
65
during the year are depicted in Table 3.7. Under minor
irrigation (MI) 28,000 tubewells with pumpsets and
33,000 pumpsets on existing wells were financed. Tractor
financing continued to be a major item of investment
under farm mechanisation (FM) with 49,000 units
financed during the year. During 2009-10, under land
developement, an area of 31,000 ha. was developed.
Under the animal husbandry sector, dairy farming and
sheep/goat rearing showed an increase of 2.38 lakh and
2.80 lakh animals, respectively. The poultry sector
showed good growth with 1.35 crore birds being financed
during 2009-10.
Table 3.7: Units Financed and Completed
Sr. Investments Units Units Financed Units Completed
No. (upto 31 March) (upto 31 March)
2009 2010 2009 2010
1. Minor Irrigation
i. Tubewells with pumpsets @ ‘000 1,612 1,640 1,594 1,621
ii. Dugwells with pumpsets * ‘000 2,094 2,096 2,081 2,083
iii. Dugwells with conventional lift ‘000 1,724 1,725 1,723 1,724
iv. Pumpsets on existing wells ‘000 2,467 2,500 2,436 2,469
v. Others ** ‘000 1,886 1,919 1,849 1,882
2. Land Development*** ‘000 ha. 3,351 3,387 3,285 3,319
3. Farm Mechanisation
i. Tractors ‘000 1,427 1,476 1,391 1,440
ii. Power tillers ‘000 164 168 160 163
iii. Other farm equipments ‘000 741 766 733 758
4. Plantation & Horticulture ‘000 ha. 2,323 2,324 2,273 2,274
5. Forestry lakh ETPs 3,216 3,217 2,657 2,658
6. Storage ‘000 tonnes 18,636 18,898 18,449 18,711
7. Market Yards No. 3,080 3,559 3,047 3,526
8. Dairy Development ‘000 animals 16,020 16,261 15,789 16,031
9. Sheep/ Goat Rearing ‘000 animals 38,469 38,758 38,010 38,299
10. Piggery 000 animals 1,702 1,712 1,693 1,703
11. Poultry lakh birds 1,892 2,029 1,860 1,997
12. Fishery
i. Mechanised Boats No. 22,765 22,777 22,082 22,094
ii. Other Boats No. 75,019 75,025 73,799 73,805
iii. Brackish Water Aquaculture ha. 5,371 5,381 5,308 5,318
iv. Fresh Water Aquaculture ‘000 ha. 417 418 412 413
13. Non-Farm Sector ‘000 8,268 8,549 8,088 8,368
14. Miscellaneous$ ‘000 15,330 15,882 14,671 15,224
@ : Includes borewells with pumpsets. * : Includes dug-cum-borewells with pumpsets, ETPs : Entire Trans-Planting.
** : Includes dugwells/ dugwells-cum-borewells, deep tubewells with pumpsets, deepening/ renovation of wells, sprinkler, pipeline, storage/water
harvesting tank, lift irrigation, drip, pump house, shallow tubewells/million shallow tubewell programme, etc.
*** : Includes soil conservation, saline/ alkaline soil, channels/ lining/ under ground pipeline, wasteland and farm development.
$ : Includes bullock pairs, bullock carts, camels, camel carts, 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.
66
J. Rescheduling/Postponement of
Principal Amount Repayment
3.37 On account of implementation of ADWDR Scheme
2008, repayment of principal amount of Rs.30 crore by
Haryana SCARDB was rescheduled. On account of
natural calamity, repayment of Rs.1.14 crore by
Chhattisgarh SCARDB was also postponed.
K. Shortfall in Contribution to
Floatation of Special Development
Debentures
3.38 SCARDBs receive contribution from Central and
State Governments for Special Development
Debentures (SDD). However, during the year, in respect
of five SCARDBs, viz., Himachal Pradesh, Kerala,
Madhya Pradesh, Orissa and Punjab, there was
shortfall in GoI/State Government contribution towards
floatation of SDDs. The respective state governments/
SCARDBs were advised by NABARD to take necessary
steps in this regard.
L. Credit Planning
a. Potential Linked Credit Plans
3.39 In order to provide meaningful link between
development and credit planning to support agriculture
and rural development, NABARD prepared Potential
Linked Credit Plans (PLP) for 623 districts that served
as a guide in credit planning exercise and infrastructure
development for 2010-11. The sector-wise credit flow
projections captured in the PLPs were utilised for arriving
at the credit flow target for agriculture and priority sector.
b. State Focus Paper
3.40 State Focus Papers presenting a comprehensive
picture of potential available in various sectors in the
rural areas along with critical infrastructure gaps to be
fil led and linkage support to be provided by line
departments/banks were prepared by Regional Offices
based on PLPs. State credit seminars were organised
for discussion with various stake holders for bridging the
infrastructure gaps and facilitating targeted credit flow.
c. District Level Offices
3.41 Three new District Development Managers’ offices
were opened, taking the total number of DDM offices to
395. In addition, 100 districts were tagged to specific
DDM districts to focus on developmental activities in
these districts.
d. Integrated District Plans
3.42 NABARD was involved as a Technical Support
Insti tution (TSI) in the preparation of Integrated
Development Plans under the Backward Regions Grants
Fund in 17 districts of five states, viz., Andhra Pradesh,
Jharkhand, Maharashtra, Tripura and Uttar Pradesh.
Rural Infrastructure Development
3.43 Infrastructure plays a key role in stimulating
economic growth by raising factor productivity and
enhancing quality of life through provision of necessary
amenities. Reckoning the imperative need for creation
of economic and social infrastructure on sustainable
basis, which truly reflects the development needs
anticipated of the local community, Rural Infrastructure
Development Fund(RIDF) was created in NABARD as
a follow-up to the announcement made in the Union
Budget, 1995-96. RIDF was created with an initial
allocation of Rs.2,000 crore with the objective of
providing term loans at concessional rates to state
governments for financing rural infrastructure projects.
RIDF Scheme with its localised approach, wider all-
India coverage, operational flexibility, social focus,
community’s involvement in planning, designing,
managing and execution of works, etc., marks a
watershed in the participatory planning process in the
country.
67
A. Funding
3.44 The funds for RIDF were sourced in the form of
deposits from scheduled commercial banks, to the extent
of their respective shortfalls in lending to agriculture
under the priority sector, including agriculture. With its
successful implementation, and annual allocations
since 1995-96, the RIDF has had an aggregate corpus
of Rs.1,00,000 crore, accumulated since RIDF I till
RIDF XV (2009-10). Additionally, a separate window
was introduced in 2006-07 for funding rural roads
component of Bharat Nirman Programme, with
allocation of Rs.18,500 crore, till 2009-10. The total
allocation for RIDF, thus, stood at Rs.1,18,500 crore,
as on 31 March 2010.
B. Eligible Activities:
3.45 The broad categories of projects covered under
RIDF are:
(i) Agriculture and allied sectors:
3.46 These include irrigation projects, soil conservation,
flood protection, watershed, reclamation of water logged
areas; animal husbandry, plantation and horticulture,
seed, agriculture and hort iculture farms, forest
development, fishing harbour/jetties, riverine fisheries;
market yards, godowns, marketing infrastructure; cold
storages; grading/cert i fying mechanisms; test ing
laboratories; hydel projects (upto 10 MW); village
knowledge centres; infrastructure for IT in rural areas;
desalination plants in coastal areas; and setting up of
KVIC industrial estates/centres. The loans are provided
at 95 per cent of project cost for all states.
(ii) Social Sectors:
3.47 Social sector includes drinking water; public health
institutions; construction of toilet blocks in existing schools,
specially for girls and “Pay & Use” toilets in rural areas,
infrastructure for rural education; construction of
anganwadi centres. The loans for the above sectors are
provided at 90 per cent of project cost for NE & Hill States
and at 85 per cent for all other states.
(iii) Rural Connectivity:
3.48 Rural Connectivity includes rural roads & rural
bridges and loans for these sectors are provided at
90 per cent of project cost for NER & Hill States and at
80 per cent for all other states.
C. RIDF XV - Terms and Conditions
3.49 NABARD allocates the Fund among the States
as ‘Normative Allocation’ based on population,
geographical area, rural infrastructure index, rural credit-
deposit (CD) ratio and past performance. Generally, the
implementation phase for projects is spread over 3-5
years. The maximum phasing in the case of major and
medium irrigation projects and other stand-alone projects
involving RIDF loan of Rs.50 crore and above is five
years. The quantum of actual drawal of funds by a state
government, however, depends upon the pace at which
it implements the projects. NABARD provides funds on
‘reimbursement basis’, except for the initial 20 per cent
of the project cost (30 per cent in NER and Sikkim)
given as ‘mobilisation advance’. A state government’s
borrowings under RIDF is also governed by Article 293(3)
of the Constitution under which GoI determines its
borrowing powers from the market and financial
institutions during a year. The rate of interest payable
by NABARD on deposits from commercial banks under
RIDF-XV is the Bank Rate (at present 6 per cent) while
the State Governments have to pay Bank Rate plus
0.5 percentage points, i.e. 6.5 per cent to NABARD.
Each drawal under the sanctioned projects is considered
as a separate loan.
D. RIDF Operations
i. Sanctions
3.50 During the year 2009-10 (RIDF-XV), 39,015
projects were sanctioned involving aggregate loan amount
of Rs.15,629.82 crore. The cumulative number of
projects rose to 4,02,806 involving loan amount of
Rs.1,03,718 crore. The tranche-wise posit ion of
sanctions is given in Chart 3.4.
68
3.51 Of the total amount sanctioned during the year,
rural roads accounted for 29 per cent, irrigation projects
27 per cent, social sector projects 16 per cent, bridges
15 per cent and agri-related 12 per cent (Table 3.8).
Cumulative sanctions according to sectors are indicated
in Chart 3.5.
ii. Disbursements
3.52 Disbursements during 2009-10 under the ongoing
tranches amounted to Rs.12,387.54 crore. Additionally,
an amount of Rs.6,500 crore was disbursed to the
National Rural Roads Development Agency (NRRDA),
taking the total disbursements during the year to
Rs.18,887.54 crore. The cumulative disbursement as
on 31 March 2010 stood at Rs.68,439.74 crore,
(excluding Rs.18,500 crore under Bharat Nirman).
Cumulative sanctions and disbursements are given in
Table 3.9. The position of year-wise disbursements
under RIDF excluding NRRDA under Bharat Nirman is
given in Chart 3.6.
iii. State wise utilisation
3.53 As per phasing of the projects, under various
tranches (RIDF I to XV), state governments had
a total pool of projects of Rs.1,03,718 crore as on
31 March 2010. The state-wise analysis of ratio of
Table 3.8: Sector wise Projects and Amounts Sanctioned
(As on 31 March 2010)
(Rs. crore)
Sector RIDF XV(2009-10) RIDF I to XV (Cumulative)
No. of Share in Amount Share in No Share in Amount Share in
projects total total projects total total
amount(%) amount(%) amount(%) amount(%)
Irrigation 16697 42.80 4145.27 26.52 215718 53.55 33341.83 32.15
Rural Bridge 1110 2.85 2383.39 15.25 13450 3.34 11534.78 11.12
Rural Roads 4907 12.58 4581.90 29.32 73046 18.13 33747.17 32.54
Social Sector 14816 37.97 2513.91 16.08 73142 18.16 13610.76 13.12
Power 12 0.03 149.59 0.96 750 0.19 1980.19 1.91
Agri – Related Sector 1473 3.77 1855.76 11.87 26700 6.63 9503.27 9.16
Total 39015 100.00 15629.82 100.00 402806 100 .00 103718 100 .00
69
disbursements to the sanctions, as per approved phasing,
is given in Table 3.10.
3.54 The amount of loan sanctioned and disbursed to
states in the NER aggregated Rs.5,240.47 crore and
Rs.2,750.62 crore, respectively. Comparatively slow pace
of actual utilisation of loans under RIDF in some states
was mainly due to procedural delays in administrative and
technical approvals by state governments in land
acquisitions, mid-course design changes or cost escalations,
statutory clearances and tendering process. The state
governments are progressively rationalising these procedures.
iv. Tranche-wise
3.55 Disbursement under tranches RIDF I to IX have
been closed. The details of disbursements under the
ongoing tranches RIDF X to XV are given in Table 3.11.
v. Deposits/Repayments
3.56 With the receipt of Rs.16,399.96 crore as deposits
from commercial banks in 2009-10, the cumulative
deposits received under RIDF stood at Rs.82,725.38 crore.
The details of year/Tranche wise disbursements against
deposits received are given in Table 3.12. An amount of
Rs.3,553 crore was received from state governments
towards repayment of RIDF loans during 2009-10. The
total RIDF loan outstanding, as on 31 March 2010, was
Rs.59,869 crore.
E. Monitoring of RIDF Projects
3.57 Monitoring of RIDF projects is an important
responsibility of NABARD to ensure timely completion of
the projects and high quality of the assets created. The
primary responsibility, however, rests with state
governments. NABARD undertakes monitoring of RIDF
projects by exception, through (a) desk reviews, based on
periodical returns and (b) field visits by its officers from
HO/ RO and the consultants. The ongoing dialogue with
state governments after such monitoring studies and the
feedback from field visits help in removing identified
bottlenecks in implementation and in sorting out issues
related to smooth flow of funds. A High Powered
Committee on RIDF, chaired by the Chief Secretary/Finance
Secretary of the State, meets every quarter to review the
progress of RIDF projects. It has proved to be an effective
tool for monitoring and steering the progress of RIDF and
ensuring timely completion of projects. During the year,
NABARD carried out monitoring of 6,670 projects through
Table 3.9: Cumulative Sanctions and Disbursements under various Sectors (I – XV)
(As on 31 March 2010)
(Rs. crore)
Sector Amount Sanctioned Phased Sanctions Amount Disbursed % of disbursement*
Irrigation 33341.83 28629.07 21986.53 76.80
Rural Roads & Bridges 45281.95 37256.94 31419.22 84.33
Social Sector 13610.76 10317.35 7979.30 77.34
Power 1980.19 1,669.56 1301.28 77.94
Agriculture Related 9503.27 7724.46 5753.41 74.48
Total 1,03,718.00 85,597.38 68,439.74 79.96
* with respect to amount phased.
70
state governments and the implementing Departments for
improving the pace and quality of project execution.
Table 3.10: Utilisation Percentage of RIDF (I TO XV) Funds
(As on 31 March 2010)
(Rs. crore)
Sl.No. State Sanctions Phasing Drawn Utilisation (%)*
1 Andhra Pradesh 11749.75 10089.42 8090.34 80.19
2 Bihar 3834.81 2777.55 1784.42 64.24
3 Chhattisgarh 1569.29 1500.33 1195.40 79.68
4 Goa 328.12 198.10 200.29 101.11
5 Gujarat 8210.38 7567.27 6280.94 83.00
6 Harayana 2621.10 2014.68 1815.75 90.13
7 Himachal Pradesh 2691.22 1988.15 1714.95 86.26
8 Jammu & Kashmir 3156.44 2502.12 2082.07 83.21
9 Jharkhand 2480.42 2096.02 1282.81 61.20
10 Karnataka 5555.18 4626.82 3491.45 75.46
11 Kerala 2950.66 2433.68 1910.69 78.51
12 Madhya Pradesh 7531.50 6424.60 4734.18 73.69
13 Maharashtra 6633.59 5546.61 4643.33 83.71
14 Orissa 4870.72 3849.98 2617.13 67.98
15 Puducherry 133.32 21.83 23.43 107.33
16 Punjab 3925.14 3251.58 2914.59 89.64
17 Rajasthan 6331.96 5311.12 4197.40 79.03
18 Tamil Nadu 7194.39 6282.18 5585.10 88.90
19 Uttar Pradesh 8747.44 7627.63 6222.85 81.58
20 Uttarakhand 1702.52 1058.03 1076.02 101.70
21 West Bengal 6259.58 4927.49 3825.98 77.65
Total 98477.53 82095.19 65689.12 80.02
NE States & Sikkim
22 Arunachal Pradesh 734.65 599.89 457.89 76.33
23 Assam 1846.26 1499.26 1163.75 77.62
24 Manipur 57.72 53.94 24.88 46.13
25 Meghalaya 445.30 261.10 261.53 100.16
26 Mizoram 215.76 140.86 160.79 114.15
27 Nagaland 627.19 278.01 255.73 91.99
28 Sikkim 396.76 169.30 154.60 91.32
29 Tripura 916.83 499.83 271.45 54.31
Total for NE Region & Sikkim 5240.47 3502.19 2750.62 78.54
Grand Total 103718.00 85597.38 68439.74 79.96
* with respect to amount phased.
field visits. Based on the feedback, major observations/
issues were taken up with the Finance Departments of
Table 3.11: Tranche-wise sanctions and disbursements - Ongoing tranches – RIDF X to XV
(As on 31 March 2010)
(Rs. crore)
Tranche No. Allocation Sanctioned Phased Disbursed Disbursement (%)
X 8,000 7,671.71 7,671.71 6,489.35 84.59
XI 8,000 8,320.33 8,320.33 6,604.80 79.38
XII 10,000 10,411.15 10,411.15 7,280.43 69.93
XIII 12,000 12,705.64 12705.64 7,600.60 59.82
XIV 14,000 14,708.02 8,935.26 6,652.51 74.45
XV 14,000 15,629.82 3,281.96 3,474.35 105.86
Total 66,000 69,446.67 51,326.05 38,102.04 74.24
71
F. Impact of RIDF
3.58 The RIDF projects, besides creating critical
infrastructure, facilitated expansion of the production base
in rural areas, increased credit-off take and created
additional employment opportunities - recurring and
non-recurring (Table 3.13 & Table 3.14 ).
G. Evaluation Studies of Rural Non-
Farm Sector (RNFS) Programmes:
3.59 During the last two years, NABARD conducted
20 in-house studies, evaluating its rural non-farm
sector (RNFS) promotional programmes. The findings
of the s tudies are summarised in the fo l lowing
paragraphs.
a. District Rural Industries Project
(DRIP)
3.60 Six studies were conducted on DRIP, delving into
the interventions such as training of officers of primary
Table 3.12: Year/Tranche-wise Disbursements and Deposits received under RIDF
(As on 31 March 2010)
(Rs. crore)
Year Deposits Disbursements Tranche Deposits Disbursements
1995-96 350.00 387.34 I 1586.56 1760.87
1996-97 1042.30 1087.08 II 2225.00 2397.95
1997-98 1007.04 1009.03 III 2308.02 2453.50
1998-99 1337.95 1313.12 IV 1412.53 2482.00
1999-00 2306.63 2277.87 V 3051.88 3054.96
2000-01 2653.64 3176.85 VI 4080.54 4070.85
2001-02 3590.72 3790.37 VII 4073.77 4052.59
2002-03 3857.09 4103.42 VIII 5188.08 5148.50
2003-04 2158.69 3922.09 IX 4873.08 4916.48
2004-05 4353.47 4316.85 X 6420.15 6489.35
2005-06 6092.37 5953.32 XI 6421.23 6604.80
2006-07 6966.43 6222.58 XII 7774.50 7280.43
(0.00) * (0.00) * * 3945.95 4000.00
2007-08 7369.46 8033.64 XIII 7834.61 7600.60
(4438.42) * (4500.00) * * 3415.66 4000.00
2008-09 12157.78 10458.64 XIV 6442.49 6652.51
(6647.43) * (7500.00) * * 3817.18 4000.00
2009-10 12677.01 12387.54 XV 4228.15 3474.35
(3718.95) * (6500.00) * * 3626.00 6500.00
Total 82725.38 86939.74 Total 82725.38 86939.74
* figures in parentheses indicate deposits under Bharat Nirman Programme
Check Dam under RIDF
lending institutions (PLIs), awareness programmes,
coordination efforts as also other RNFS promotional
interventions like REDP, ARWIND, Rural Haats, Cluster
Development Programmes, etc., to understand the
implementation of the project. Bargarh district (Orissa)
recorded the highest growth in the number of new
enterprises at 57 per cent, while it was 39 per cent in
Udaipur (Rajasthan), 17 per cent in Medak district
72
Table 3.13: Impact of RIDF - Rural Infrastructure and Employment Generation
S.No. Particulars Additional benefits created
1 Irrigation potential 156.53 lakh hectares
2 Rural Bridges 5,83,637 Mts.
3 Rural Roads 3,04,337 Kms.
4 Recurring Employment 81,16,613 Jobs
5 Non- recurring employment
Irrigation 24,643.94 lakh mandays
Rural Roads & Rural Bridges 32,210.25 lakh mandays
Others 16,022.49 lakh mandays
6 Power Sector 180.45 MW Hydel Power Generation &
(Hydel Power & System Improvement) Saving of T & D Losses - 22315 lakh Units per year
7 Social Sector
A. Health Centres 390.77 lakh persons
B. Primary & Secondary Schools 92.04 lakh students
C. Rural Drinking Water Supply 907.35 lakh persons
(Andhra Pradesh). Ground level credit flow (GLC) also
showed increase across the districts with Bargarh district
recording an annual increase of 55 per cent followed by
Medak district (35 per cent). The growth rates ranged
between 17 and 18 per cent in Ambala (Haryana) and
Udaipur (Rajasthan) districts. The study reports on
Medak and Udaipur districts, therefore, recommended
creation of wider awareness about DRIP. The RNFS units
in the study districts were profitable in general, with a
fairly good rate of return of above 15 per cent in most
cases, barring a few, like shoe-making units and spice
mills (Udaipur district).
b. Cluster Development Programme (CDP)
3.61 Two Studies were conducted on CDP covering
Sisal Fibre cluster in Chamarajanagar district, Karnataka
and Woodcraft cluster in Villupuram district, Tamil Nadu.
In the Sisal Fibre cluster, 150 artisans were trained to
make value added premium products. The training
helped augment the family income by about 67 per cent.
The NGO acting as the Cluster Development Agency
(CDA), coordinated the cluster activities, organised
production and marketing. The study recommended
ensuring fibre availability, highlighting the environmental
benefits of sisal fibre products compared to cheaper
plastic substitutes and encouraging individual initiatives
Rural road under RIDF
to establish sisal-based micro-enterprises. The study on
woodcraft cluster revealed that the number of artisans
in the cluster increased about six times after the
intervention. On an average, the sample artisans
produced 192 idols per annum realising an income of
Rs.1,153 per idol, which yielded a return of 44 per cent
on fixed costs.
c. Rural Entrepreneurship Development
Programme (REDP)
3.62 Seven studies conducted on REDP revealed that
the overall success rate in setting up of new enterprises
worked out to 34 per cent and 58 per cent when wage
73
Table 3.14: Statewise Benefits EstimatedUnder RIDF I to XV
(As on 31 March 2010)
State Potential Value Recurring Non-recurring Emp.
IRRI Bridges Roads Prodn. Employment IRRI RR & RB Others
(ha) (m) (km) (Rs. crore) (Numbers) (lakh Mandays)
Andhra Pradesh 1,633,605 42,505 29,700 2,652 1,906,957 4,979.75 5,355.40 2,934.31
Arunachal Pradesh - 2,473 1,010 - - - 233.14 62.10
Assam 316,747 42,476 749 348 102,400 81.27 751.04 196.80
Bihar 555,058 13,355 2,954 697 230,201 310.36 1,017.53 443.68
Chhattishgarh 824,173 36,619 4,605 1,031 135,210 1,241.39 810.90 359.80
Goa 61,659 706 258 77 9,392 117.60 48.21 7.82
Gujarat 1,179,118 5,050 19,067 1,209 1,321,078 1,438.92 907.81 578.74
Haryana 674,235 5,241 2,927 1,356 140,547 649.37 524.92 374.51
Himachal Pradesh 281,625 15,321 6,692 791 152,668 346.70 526.67 138.22
Jammu & Kashmir 130,340 7,960 9,679 200 258,763 426.49 1,013.75 256.94
Jharkhand 71,325 28,171 5,471 204 85,859 298.77 617.17 342.41
Karnataka 419,447 37,991 32,194 1,083 121,900 1,571.39 2,516.15 737.52
Kerala 180,898 40,039 4,163 467 80,555 273.42 830.38 321.18
Madhya Pradesh 1,152,616 29,677 11,885 2,437 367,061 2,528.59 1,193.72 371.61
Maharashtra 623,888 45,586 21,862 1,219 264,215 2,617.98 1,974.33 34.54
Manipur 57,167 4,990 1,379 528 664,041 325.60 143.17 30.68
Meghalaya 23,712 9,149 2,885 125 8,000 271.21 477.33 48.72
Mizoram 2,990 - 225 3 1,976 11.91 41.78 15.24
Nagaland 8,678 205 1,378 8 3,927 29.97 126.36 248.80
Orissa 749,463 55,968 5,070 1,191 323,681 1,560.49 1,806.05 206.35
Punjab 402,493 8,343 6,579 641 172,106 500.59 757.03 682.98
Rajasthan 486,973 12,188 42,473 965 146,513 1,389.69 2,521.84 1,638.25
Sikkim 2,589 1,814 13,255 2 604 8.27 136.03 43.43
Tamil Nadu 287,363 44,521 31,164 389 272,949 579.53 3,229.28 1,322.01
Tripura 5,015 17,855 2,847 6 2,450 34.88 789.48 649.23
Uttar Pradesh 4,225,908 39,403 23,589 3,263 561,833 1,899.75 1,522.29 702.10
Uttarakhand 90,005 11,476 5,829 167 27,251 169.41 694.04 45.23
UT of Puducherry 12,912 1,922 1,068 24 8,829 33.47 151.54 298.12
West Bengal 1,192,988 22,633 13,380 1,075 745,647 947.17 2,492.91 2,931.17
Total 15,652,990 583,637 304,337 22,158 8,116,613 24,643.94 33,210.25 16,022.49
employment too was considered. The average annual
net incremental income worked out to Rs.18,663 per
trainee. The highest incremental income was observed
in Andhra Pradesh and West Bengal (Rs.22,600) and
minimum in Orissa (Rs.11,292) due to differences in
the level of operation of the units set up by the
trainees. The programme yielded more than 50 per
cent return on the investment in all the states studied.
Banks and SHGs emerged as major sources of credit.
The studies suggested enrichment of the course material
with success stories.
H. Commodity Specific Studies
3.63 A series of commodity specific studies on pulses,
medicinal and aromatic plants were conducted. The
findings of the studies, completed during the year
2009-10, are reported below:
i. Pulses
3.64 Pulses, being the prime source of protein in Indian
diet and the poor man’s only source of protein, have
assumed topical importance in recent years due to rising
74
prices. India is the largest producer as well as the largest
importer of pulses. Stagnant production of around 14
million tonnes, coupled with expansion in demand has
resulted in higher dependence on imports and substantial
rise in domestic prices. Five studies were conducted in
the states of Andhra Pradesh, Haryana, Karnataka,
Orissa and Uttar Pradesh covering 285 farmers, 39
processing units and 57 traders and a few commission
agents. The studies brought out issues of stagnant area
and low productivity at 622 kg per hectare (1908 kg/ha
in Canada/ USA) to the fore. Low yields were attributed
to lack of high-yielding and short duration varieties,
inadequate irrigation, cultivation on marginal lands,
absence of fertilizer use, frequent attack of pests and
diseases, lack of extension services and poor
infrastructure and slow transfer of technology.
Tur farmers of Andhra Pradesh obtained highest net
income of Rs.10,913 per acre followed by Karnataka
(Rs.6,495) and UP (Rs.5,706). In respect of gram,
Andhra Pradesh growers earned a net income per acre
of Rs.16,075, while it was Rs.2,136 in Karnataka and
Rs.1,282 in Haryana. Per acre net income of urad in
Karnataka was Rs.8,163, while it was Rs.7,824 in Andhra
Pradesh. Mung in Karnataka gave a net income of
Rs.4,169 per acre followed by Orissa (Rs.882). Total
processing cost and sales proceeds for milling one MT
of pulses was Rs.24,698 and Rs.26,400, respectively.
The net value addition per MT of raw pulses has been
worked out as Rs.1,702 i.e., 7 per cent of the operating
cost. The input-output ratio was 1:1.06. Dal processing
units could break-even on milling 1648 MT of raw pulses,
the capacity utilisation being 60-70 per cent. Financial
rate of return of the processing units is
25 per cent. The studies emphasised expansion of area,
especially in rabi , development of high-yielding and
short-duration varieties, development of multiple disease/
pest resistance variet ies, use of micro-irr igation,
supplementing micro-nutrients, among others, to
enhance production of pulses. Focus on improving the
yield of pulses has been recommended.
ii. Medicinal and Aromatic Plants
3.65 Mentha, an aromatic herb of temperate region,
is utilised for extracting mentha oil and its principal
aroma compound menthol is used in pharmaceuticals,
food flavouring, confectionery, cosmetics, beverages and
related industries. India produces around 78 per cent
of the world’s mint oil production followed by China
(10 per cent), Brazil (8 per cent) and United States
(4 per cent). Uttar Pradesh, where the study was
conducted during 2008-09, accounts for 80 per cent of
the crop area under mentha (2.27 lakh ha) and the major
mentha producing districts in the State, viz. Barabanki,
Moradabad, Badaun, Sitapur and Jalaun, account for
more than 90 per cent of total area under mentha. The
per acre cost of cultivation of mentha reported by sample
beneficiaries was Rs.18,625 in the case of Jalaun/Jhansi
districts as compared to Rs.14,765 in Moradabad
district. The higher cost in the former was due to longer
duration of crop as the farmers in Jalaun/Jhansi were
undertaking two cutt ings of the crop whereas in
Moradabad it was grown as single cutting crop. The
yield of sucker planted mentha was slightly higher as
compared to transplanted mentha in Moradabad district
and the average yield worked out to 37.6 kg of oil per
acre. The yield per acre in the case of Jalaun/Jhansi
districts was 56.50 kg per acre for both cuttings. The
net income per acre from production of mentha worked
out to Rs.5,099 (Moradabad) and Rs.11,207 (Jhansi/
Jalaun), inclusive of the imputed cost of family labour
at the sample farmer level. The gross value of production
from the sale of menthol crystals/flakes worked out to
Rs.25,87,800 and the net income realised from
processing plant per month worked out to Rs.77,662.
The study report highlighted the rising cost of irrigation
in Sambhal block (Moradabad district) due to depleting
ground water levels, infirmities in the delivery of inputs
especially fertilizer, scarcity of distillation units during
the harvesting season, lack of market research and
market-related information for the farmers. The study
also pointed out to the absence of any kind of regulation
in the market, the dilution in quality control measures
in trading of essential oil, in general, and mint oil in
particular and unhealthy trading practises by traders in
the mint oil market. The study suggests directing R & D
efforts towards development of mechanical harvesters
which can prove effective in obtaining optimum yield
75
from harvests, developing risk mitigation strategies, which
may include insurance to safeguard farmers, bring about
more transparency in the mint oil futures market, apart
from other measures.
I. Other studies
3.66 During 2009-10, an all-India study of Kisan Credit
Card (KCC) scheme in 14 states and a study of rural
godown scheme in Gujarat were completed.
(i) Study on KCC
3.67 A study covering 14 states, viz., Andhra Pradesh,
Assam, Gujarat, Haryana, Himachal Pradesh,
Karnataka, Kerala, Maharashtra, Madhya Pradesh,
Orissa, Punjab, Rajasthan, Uttar Padesh & West Bengal
was conducted covering 1,876 KCC holders from 178
bank branches from co-operatives, RRBs and CBs. The
impact of formal credit in the form of KCC loan on
paddy productivity was attempted. Sample KCC holders
across the states had cultivated paddy by availing of
crop credit from different agencies. Average productivity
per hectare of paddy taken up by KCC holders was
compared with the average yield level of control farmers,
i.e., non-KCC holders. It was found that the overall
productivity of paddy grown by KCC holders was higher
by 13.3 per cent as against the yield level by control
farmers. The per hectare yield of KCC holders was
18 to 34 quintals as against the per hectare yield of
14 to 26 quintals of control farmers. The increase in
yield was partly attributed to the credit access through
KCC. The higher use of inputs such as fertilizer, manure,
pesticide, labour, irrigation, etc., by KCC farmers were
the contributing factors for higher yield.
3.68 The gross value of output for sample KCC holders
per hectare was 13.6 per cent higher for paddy cultivated
by KCC farmers as compared to the control farmers. It
was Rs.17,500 to Rs.31,500 per hectare for KCC farmers,
as against Rs.13,500 to Rs.25,500 per hectare for control
farmers. The corresponding per hectare cost of cultivation
of paddy was Rs.11,100 to Rs.14,500 and Rs.10,500
to Rs.13,000, respectively. The cost of cultivation per
hectare was higher by 7.6 per cent for KCC holders on
account of higher doses of various inputs compared to
the control farmers for paddy crop.
The study clearly indicated that the Management
Information System (MIS) for monitoring the progress
of the Scheme was fraught with shortcomings. The report
identified four types of shortcomings in the MIS (i) family
members having the same operational holding had been
issued multiple cards, (ii) the same person was issued
multiple KCC by various banks, (iii) in certain cases,
KCC lapsed after a period of three years, but such cards
were still counted as active cards, (iv) in certain cases,
cards were renewed after a period of three years, but
such cards were shown to be freshly issued.
3.69 The study suggested that KCC penetration could
be further improved in terms of extending loans such as
crop loan, working capital for allied & NFS activitites
and consumption loan in the ratio of 4:2:1. The study
further suggested that there was need to adopt “mission
mode” approach to make KCC into a farmers’ friendly
efficient instrument for effective credit delivery system
accompanied by appropriate institutional mechanism.
(ii) Rural Godowns
3.70 By 31 March 2009, 20,393 rural godowns with a
capacity of 238.37 lakh metric tonnes were sanctioned
under the scheme, involving a subsidy of Rs.543.02 crore.
New projects were sanctioned to private, Government
and co-operative sectors while co-operatives were
supported for renovation of existing godowns. Of the
16,606 godowns under NABARD component, the
maximum number of godowns were in Gujarat, followed
by West Bengal and Maharashtra. The average capacity
of the godowns was maximum in Uttar Pradesh at
5748.2 metric tonnes followed by Haryana (5731.9
metric tonnes) and Andhra Pradesh (3951.7 metric
tonnes). Although Gujarat tops the l ist with the
maximum number of rural godowns, the average
capacity of godowns in Gujarat was the lowest at
271.7 metric tonnes in the country. The co-operative
banks, followed by the CBs, sanctioned the maximum
number of rural godowns in Gujarat. The average bank
76
loan sanctioned by commercial banks, RRBs and
co-operative banks was Rs.6.00 lakh, Rs.2.89 lakh and
Rs.2.59 lakh, respectively.
3.71 While the guidelines prescribe that the subsidy
may be kept in the Subsidy Reserve Fund Account in
the name of borrower, some of the banks had kept the
subsidy in fixed deposit in the name of the borrower.
Similarly, as per the guidelines, subsidy should be
adjusted after liquidation of bank loan, but it should
not be done before 5 years f rom the date of
disbursement of the first instalment of the term loan.
But, some banks had been allowing the repayment of
loan and pre-closure of accounts before the expiry of
5 years. While co-operative banks, and public sector
commercial banks had fixed the repayment period of
5 years with yearly instalment, private banks had fixed
7-year repayment with half yearly instalments.
3.72 Capacity utilisation in co-operative society
godowns was 67.2 per cent and in individual godowns,
it was 68.8 per cent. Co-operative society godowns
reached the break-even point at 25.6 per cent of the
available storage space, while the individual godowns
reached it at 53.3 per cent. The repayment in respect
of all godowns was regular. The major crops stored in
godowns were cotton, castor, mustard, cumin, tobacco,
paddy and bajra. Due to the addition of the rural godowns,
an addition of 3.4 lakh non-recurring and 1.5 lakh recurring
employment had been generated in sample districts.
77
IV
Capacity Building of Client Institutions
The financial and managerial soundness of rural credit
institutions are critical to a robust rural financial delivery
system. The Regional Rural Banks (RRB) and co-operative
banks, which play a very crucial role in financial
intermediation in agriculture and rural development, are
under increasing pressure from competition from other
agencies. NABARD endeavours to strengthen the
capacity of these inst i tut ions through various
developmental and supervisory initiatives to effectively
face such competition.
Institutional Development
A. Rural Co-operative Credit
Institutions
a. Performance
4.2 The total membership of Primary Agricultural Credit
Societies (PACS) during 2008-09 stood at 13.23 crore,
of which borrowing members were 7.66 crore constituting
58 per cent of total. While there was only a marginal
increase in membership of PACS over the previous year,
the borrowing members decreased by 3.5 per cent during
the period. Both deposits and loans issued (as on
31 March 2009) also showed marginal increase of only
3.1 and 1.8 per cent, respectively, over the previous year.
Similarly borrowings of PACS also registered only a
marginal increase of 2.2 per cent over the previous year
(Table 4.1).
4.3 An analysis of the financial positions of the SCBs
and DCCBs (Table 4.2) as on 31 March 2008 and
31 March 2009 indicate that while their deposits
increased by 24 per cent and 16 per cent, respectively,
over the year, the borrowings of SCBs and DCCBs
decreased by 7 per cent and 6 per cent, respectively.
Loans issued by SCBs increased significantly by 58 per
cent and those of DCCBs decreased by 3.4 per cent.
Loans outstanding of SCBs and DCCBs decreased
marginally by 3.5 per cent and 1.2 per cent, respectively.
4.4 In the Long-Term Co-operative Credit Structure
(LTCCS), borrowings of State Co-operative Agriculture
and Rural Development Banks (SCARDBs) and Primary
Co-operative Agriculture and Rural Development Banks
(PCARDBs) as on 31 March 2009, decreased marginally
by 3.3 per cent and 0.25 per cent, respectively, over the
previous year. While loans issued by SCARDB and
PCARDB increased by 17 and 16 per cent, respectively,
their loans outstanding decreased by 11 and 5 per cent,
respectively, over the previous year (Table 4.3).
Table 4.1: Growth of PACS
(As on 31 March)
(Rs. crore)
Particulars 2007 2008 2009*
Number 97,224 94,950 95,626
Membership (lakh) 1,258 1,315 1,323
Borrowing Members (lakh) 479 794 766
Owned Funds 11,039 10,984 11,906
Deposits 23,484 25,449 26,243
Borrowings 43,714 47,848 48,919
Loans issued 49,613 57,642 58,686
Source: NAFSCOB. * : Data provisional.
Table 4.2: Growth of Short-Term Co-operative Banks
(As on 31 March)
(Rs.crore)
Particulars SCB DCCB
2008 2009 P# 2008 2009 P#
Number 31 31 370 370
Share Capital 1497 1570 6030 6409
Reserves 9898 10104 22575 23255
Deposits 57404 71272 110178 127779
Borrowings 22513 20970 31724 29858
Loans Issued 59205 93833 93270 90105
Loans Outstanding 50208 48471 101458 100198
P : Data provisional.
# : Data for SCB and DCCB in Bihar and DCCB in Jharkhand repeated
from 2007-08.
78
b. Working Results
i. Profitability
4.5 During 2008-09, 26 out of 31 SCBs were in profit
aggregating Rs.395 crore and the remaining 5 SCBs were
in loss (Rs.71 crore), resulting in an aggregate profit of
Rs.324 crore. While 320 out of 370 DCCBs earned
overall profit of Rs.1,611 crore, 50 DCCBs incurred
losses to the extent of Rs.337 crore. Eleven SCARDBs
earned an aggregate of profit of Rs.405 crore, while eight
incurred an aggregate loss of Rs.150 crore. Out of 697
PCARDBs, 326 earned an aggregate profit of Rs.206 crore,
while 365 incurred an aggregate loss of Rs.360 crore
(Table 4.4).
4.6 The aggregate accumulated losses of DCCBs,
SCARDBs and PCARDBs declined in 2008-09 with a
slight increase in respect of SCBs (Table 4.5).
4.7 During 2008-09, the overall profits of SCBs
increased by 37 per cent over the previous year. Profits
of SCBs in all regions improved, but decreased in
Northern region (-9%); Western region slipped into loss
making, while the North Eastern region transformed itself
into profit making (Table 4.6). Kerala SCB in southern
region and Arunachal SCB in North Eastern region had
incurred losses in the previous year and these SCBs
turned around in 2009-10. The Southern region improved
remarkably in reporting profits, of which AP SCB had
earned during the year 9.4 times profit of the previous
year. While 12 SCBs (Delhi, Meghalaya, Haryana,
Karnataka, MP, UP, Punjab, A&N, West Bengal, Andhra
Pradesh, Manipur and Tamil Nadu) improved their profit,
as on 31 March 2009, over the previous year, 11 SCBs
(Chhattisgarh, Uttarakhand, Orissa, Mizoram, Sikkim,
Chandigarh, Himachal Pradesh, Jammu and Kashmir,
Rajasthan, Maharashtra and Goa) showed declining
trend in earning profits over the previous year. Bihar
SCB maintained a status quo. While Nagaland and
Table 4.3: Growth of Long-Term Co-operative Banks
(As on 31 March)
(Rs. crore)
Particulars SCARDB@ PCARDB
2008 2009P 2008 2009P
Number 20 20 697 697
Share Capital 1254 814 1025 1514
Reserves 2810 3158 3409 3444
Deposits 670 710 350 419
Borrowings 16293 15751 12406 12375
Loans Issued 2208 2585 1768 2045
Loans Outstanding 18392 16279 11770 11229
@ : Manipur SCARDB is under orders of liquidation.
P : Data provisional.
Table 4.5: Accumulated Losses
(As on 31 March)
(Rs.crore)
Year SCB# DCCB# SCARDB * PCARDB
2007 389 5667 908 2770
2008 428 6211 1263 3374
2009# 404 5299 1117 3604
Data for 2009 Provisional.
# : Data for the year 2008-09 of SCB and DCCB in Bihar and Jharkhand
repeated from 2008.
* : Manipur SCARDB is under orders of liquidation.
Table 4.4: Working Results of Co-operative Banks
(Rs.crore)
Agency SCB DCCB SCARDB $ PCARDB#
Year 2007-08 2008-09 2007-08 * 2008-09 ** 2007-08 2008-09 @ 2007-08 2008-09
Total (No.) 31 31 370 370 20 20 697 697
In Profit (No.) 26 26 261 320 9 11 283 326
Profit Amount 286 395 868 1611 150 405 210 206
In Loss (No.) 5 5 108 50 10 8 412 365
Loss Amount 49 71 926 337 426 150 588 360
* : 1 DCCB in Gujarat was neither in profit nor in loss for the year 2007-08.
** : The data for SCB and DCCB in Bihar and DCCB in Jharkhand repeated from 2007-08.
$ : Data for Manipur SCARDB is not available as the same is under orders of liquidation.
# : The data for 04 PCARDB in Kerala and 2 in West Bengal for 2008-09 and 2 PCARDB in West Bengal for 2007-08 is not available.
79
Gujarat SCBs, which were in profit in 2007-08, slipped
to loss during 2008-09, SCBs in Assam, Tripura and
Puducherry reduced their losses during 2008-09.
4.8 In the case of DCCB, during 2008-09 the number
of profit making DCCBs increased across all regions.
The extent of profits and number of profit making DCCBs
increased in Chhatt isgarh, MP, UP, Uttarakhand,
Haryana, Himachal Pradesh, Punjab, Rajasthan, West
Bengal, Gujarat, Maharashtra, Andhra Pradesh and
Karnataka while the DCCBs in Bihar, Jharkhand and
Kerala remained static and DCCB in Tamil Nadu showed
decrease in profits by 19.4 per cent. Thus, there has
been overall improvement in all regions. Similarly,
percentage of NPA to loans outstanding reduced in all
regions, except in Northern and Western regions, where
the same had increased marginally (Table 4.7).
4.9 In the LT structure, the loss-making SCARDBs
had reduced their losses by 65 per cent over the previous
year. At aggregate level, SCARDB earned profit of Rs.255
crore and PCARDBs incurred a loss of Rs.154 crore
during 2008-09. The number of profit-making PCARDBs
declined from 412 in 2007-08 to 369 in 2009-10.
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)
2007-08 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 2008-09
Central 65.12 69.17 820.01 607.16 12.50 10.01 82.94 92.99
Northern 116.22 105.39 321.99 347.03 2.87 3.12 97.70 97.29
Eastern 32.15 43.29 533.52 505.64 10.78 10.32 82.23 86.82
Western 31.72 -33.99 2352.32 2268.67 19.75 20.42 67.54 83.26
Southern 10.10 125.77 1718.23 1599.99 11.85 11.34 87.66 95.03
North-Eastern -18.89 14.50 444.60 435.01 41.26 37.39 41.54 49.23
All-India 236.42 324.13 6190.67 5763.50 12.33 11.89 84.59 91.79
Data for the year 2009 is provisional.
Data for SCB in Bihar repeated from the year 2007-08.
Table 4.7: Region-wise Working Results of DCCB
(As on 31 March)
(Rs. crore)
Region 2007-08* 2008-09# Total NPA NPA % to Recovery %
Loans (As on 30
Outstanding June)
DCCB Profit Loss DCCB Profit Loss 2008 2009 2008 2009 2008 2009
No. No. Amt. No. Amt. No. No. Amt. No. Amt.
Central 104 77 179.53 27 188.37 104 90 293.83 14 43.48 3481.67 3357.10 27.85 27.73 46.94 50.62
Northern 73 57 116.60 16 57.95 73 69 148.47 4 27.67 1383.01 1806.62 6.83 9.58 65.18 73.63
Eastern 64 45 51.50 19 105.61 64 48 53.42 16 75.00 1465.06 1136.44 16.01 15.91 52.97 59.17
Western 49 29 180.80 19 337.78 49 41 631.25 8 133.39 6940.32 6501.97 22.32 22.53 44.30 62.96
Southern 80 53 339.70 27 236.60 80 72 484.07 8 77.70 5483.56 5127.01 16.69 15.55 63.80 66.37
All-India 370 261 868.13 108 926.31 370 320 1611.03 50 337.04 18753.62 17929.15 18.48 17.89 55.61 72.17
* : Data for 2009 provisional.
* : 1 DCCB in Gujarat was neither in profit nor in loss for the year 2007-08 and 2008-09.
# : The data for DCCB in Bihar and Jharkhand repeated from 2007-08.
80
4.10 During the year 2008-09, SCARDBs in Central
and Eastern region moved from loss in
2007-08 to profit. While the profits of SCARDB in
Rajasthan, West Bengal and Gujarat increased,
it decreased in the state of Haryana, Punjab and Tamil
Nadu. The loss-making SCARDBs turned around in the
states of Chhattisgarh, Uttar Pradesh, Himachal Pradesh
and Puducherry during the year 2008-09. The SCARDBs
in Assam incurred further losses, while those in Bihar,
Orissa, Maharashtra, Jammu and Kashmir and Tripura
reduced their losses. The SCARDBs in Karnataka and
MP, which were in profit earlier, incurred huge losses
during the year 2008-09. While PCARDBs in Central,
Western and Eastern regions increased their profits, the
PCARDBs in Northern region incurred further losses and
those in eastern, central, western and southern regions
reduced their losses during 2008-09 (Table 4.8). While
the profits of profit making PCARDBs in Madhya
Pradesh, Orissa and Rajasthan increased, the loss-
making PCARDBs in Chhatt isgarh, Haryana and
Karnataka added to their losses substantially. While
those loss-making PCARDBs in Orissa, Punjab, Kerala,
Maharashtra, Rajasthan and Tamil Nadu reduced their
losses over the previous year, a lone PCARDB in
Himachal Pradesh slipped into losses during the year.
ii. Costs and Margins
4.11 During 2008-09, SCBs as a group earned an
overall return of 7.40 per cent on funds, with the cost of
funds at 5.17 per cent, resulting in a financial margin of
2.23 per cent (excluding miscellaneous income of 0.58
per cent). The average transaction cost and risk cost of
SCBs during the year worked out to be 1.36 per cent
and 0.88 per cent respectively. SCBs as a group earned
a positive net margin of 0.57 per cent (including
miscelleanous income) during 2008-09 compared to a
net margin of 0.95 per cent during the previous year.
4.12 In the case of DCCBs, the overall return on
working funds was 7.85 per cent while the cost of funds
was 5.09 per cent, yielding a financial margin of 2.76
per cent (excluding miscellaneous income of 1.68
per cent). The average transaction and risk cost as
percentages to working funds were 2.15 and 1.33
per cent, respectively, during 2008-09. The DCCBs as a
group earned gross and net margins of 2.29 per cent
and 0.96 per cent (including miscelleanous income),
respectively.
4.13 During the year 2008-09, out of 19 SCARDBs,
13 had positive net margins while the remaining six had
negative net margins. Out of reporting PCARDB in 12
states, only four states had positive net margins.
iii. Non-Performing Assets (Gross) and Recovery
Performance
4.14 At the aggregate level, the percentage of gross
NPA to total loans and advances outstanding in respect
Table 4.8: Region-wise Working Results of SCARDB(As on 31 March)
(Rs. crore)
Regions No. of Profit/Loss Impaired NPA % Recovery %
Branches Assets to demand
2009 2008 2009 2008 2009 2008 2009 2008 2009
Central 349 -171.11 207.89 2754.76 1724.69 47.86 39.21 69.48 35.31
Eastern 138 -26.20 0.32 444.67 359.00 45.71 39.17 33.70 28.31
North Eastern 35 -1.04 -2.58 18.21 16.34 58.61 51.96 70.98 53.41
Northern 85 48.88 68.84 723.64 759.77 12.99 13.86 58.47 64.92
Southern 56 57.05 -41.41 924.31 696.12 22.53 18.97 47.55 51.27
Western 181 -183.51 -22.19 1569.08 1381.81 80.08 77.57 9.97 20.06
All India Total 844 -275.93 255.25 6434.67 4937.73 34.99 30.33 49.94 40.00
Manipur SCARDB is defunct.
81
Table 4.9: Region-wise Working Results of PCARDB(As on 31 March)
(Rs. crore)
2008 2009 * Impaired NPA % to Recovery % to
Assets Loans Demand
Outstanding
No. Amt. No. Amt. No. Amt. No. Amt. 2008 2009 2008 2009 2008 2009
Central 17 0.97 33 120.11 23 24.06 27 69.02 744.21 561.08 53.39 47.55 56.81 37.64
Eastern 8 1.99 60 38.28 39 33.57 29 22.44 201.19 129.91 26.97 19.75 75.19 73.72
Northern 95 132.66 50 56.87 98 72.37 47 76.23 2163.82 1849.88 40.20 34.73 41.19 39.14
Southern 162 72.14 241 102.69 162 69.95 237 60.65 1239.49 1237.88 37.08 36.14 46.84 50.15
Western 1 2.02 28 269.79 4 6.08 25 131.88 767.93 614.21 84.90 95.91 4.10 7.97
All-India 283 209.78 412 587.73 326 206.03 365 360.20 5116.64 4392.95 43.47 39.12 42.15 40.3
* : Data for 2009 provisional.
Table 4.10: Composition of NPAs of Co-operative Banks
(As on 31 March 2009)P
(Rs.in crore)
Assets SCB DCCB* SCARDB# PCARDB
Classification
Sub-Standard 1678.39 8029.83 2937.45 2574.16
Doubtful 3843.06 7221.29 1965.28 1793.13
Loss Assets 242.05 2678.03 35.00 25.67
Total NPA 5763.50 17929.15 4937.73 4392.96
Provisions required 2882.87 10225.06 1217.68 790.13
Provisions made 3308.85 11462.72 1536.02 892.45
P : Data Provisional.
# : Manipur SCARDB is under orders of liquidation.
* : Data for SCB and DCCB in Bihar and Jharkhand repeated from
2007-08.
of both SCBs and DCCBs decreased to 11.9 and 17.9
per cent, as on 31 March 2009, from 12.3 and 18.5
per cent as on 31 March 2008, respectively (Tables 4.6
and 4.7). In absolute terms, NPAs were estimated to be
Rs.5,736.50 crore and Rs.17,929.15 crore for SCBs and
DCCBs as on 31 March 2009, registering a decline of 7
and 4 per cent, respectively. The percentage of NPAs to
total loans and advances outstanding in the case of
SCARDBs and PCARDBs decreased to 30.3 and 39.1
per cent as on 31 March 2009, from 35.0 and 43.5
per cent, respectively, during the previous year. The total
NPAs of SCARDBs and PCARDBs were estimated to
be Rs.4,937.73 crore and Rs.4,392.95 crore, showing a
decline of 23 and 14 per cent, respectively (Tables 4.9
and 4.10).
4.15 As on 31 March 2009 vis-à-vis the all-India
average for SCB, NPA was the lowest in Northern region
(3.12%), and was low in Eastern (10.32%) and Central
(10.01%) regions, while it was the highest in North-
eastern region (37.39%), followed by Western (20.42%),
and Southern (11.34%) regions. SCBs in Arunachal
Pradesh, Bihar, Assam, Manipur, Tripura, Nagaland,
Jammu and Kashmir, Kerala and Maharashtra continued
to have high levels of NPAs. In the case of DCCBs, as
compared to the all-India average, NPAs of DCCBs was
the highest in the central region(27.73%), while it was
low for Northern (9.58%) southern (15.55%) and Eastern
(15.91%) regions. While Haryana, Himachal Pradesh,
Orissa and Punjab had low levels of NPAs, DCCBs in
Andhra Pradesh, Chhattisgarh, Gujarat, Jammu and
Kashmir, Jharkhand, Madhya Pradesh, Maharashtra,
Kerala, Tamil Nadu and Uttar Pradesh registered high
NPA levels.
4.16 As on 30 June 2009, the average loan recovery
of SCBs and DCCBs improved marginally to 92 and
72 per cent from 85 and 56 per cent, respectively, as
on 30 June 2008 (Table 4.11). In absolute terms, loan
recovery of SCBs improved by 28.20 per cent from
Rs.26,433.54 crore to Rs.33,893.73 crore. At the
DCCBs level, it increased by 22.4 per cent from
Profit Loss Profit Loss
82
Rs.39,544.40 crore to Rs.57,326.77 crore. The SCBs
in Puducherry and Assam recorded impressive recovery
of 91 and 69 per cent compared to 73 and 55 per cent,
respectively, recorded in the previous year. Tamil Nadu
SCB sustained the previous year recovery performance
of 100 per cent and the same position was maintained
during the year. While SCBs in Orissa, Assam, Mizoram,
Nagaland, Sikkim, Tripura, Delhi, Himachal Pradesh,
Jammu and Kashmir, Rajasthan, Karnataka, Puducherry,
Uttar Pradesh, A&N Islands, West Bengal, Manipur,
Punjab, Andhra Pradesh, Maharashtra and Goa
improved their recovery performance, it was a marginal
improvement in the case of Arunachal SCB. The SCBs
in Chhattisgarh, Meghalaya, UT of Chandigarh, Kerala,
Gujarat and Haryana, however, showed a decline in
recovery. The SCBs in Madhya Pradesh, Uttarakhand,
Kerala, Gujarat and Bihar maintained their recovery
positions of the previous year.
4.17 The average loan recovery of SCARDBs and
PCARDBs, as on 30 June 2009, declined to 40.00 and
40.30 per cent f rom 49.94 and 42.15 per cent,
respectively as on 30 June 2008 (Table 4.11). In
absolute terms, loan recovery of SCARDBs and
PCARDBs decl ined to Rs.3,860.44 crore and
Rs.2,842.47 crore, as on 30 June 2009, f rom
Rs.5,367.81 crore and Rs.3,190.10 crore, as on 30 June
2008. While loan recovery of SCARDBs in Puducherry
and Rajasthan improved considerably, it was only
marginal in the case of SCARDBs in Chhattisgarh,
Punjab and Kerala. Low recovery performance and
declining trend were displayed by SCARDBs in Assam,
Bihar, Haryana, Jammu and Kashmir, Karnataka,
Madhya Pradesh, Orissa, Tamil Nadu and Uttar
Pradesh. While PCARDBs in Chhattisgarh, Himachal
Pradesh, Punjab and Karnataka showed improvement
in recovery, PCARDBs in West Bengal improved their
recovery performance considerably, as on 30 June 2009,
over the previous year. PCARDBs in Haryana, Madhya
Pradesh, Rajasthan, Orissa, Kerala and Tamil Nadu
were on the path of decline, while poor recovery
performance was observed in PCARDBs in Maharashtra.
4.18 The frequency distribution of loan recovery of
banks in the co-operative structure are presented in Table
4.12 to 4.14.
Table 4.11: Percentage of Recovery of loans to Demand
(As on 30 June)
Agency 2007 2008 2009
SCB # 86 85 92
DCCB # 71 56 72
SCARDB* 44 50 40
PCARDB 52 42 40.3
Data Provisional for the year 2009
* : Manipur SCARDB is under orders of liquidation.
# : Data for SCB and DCCB in the states Bihar and Jharkhand
repeated from previous year.
Table 4.12: Frequency Distribution of Co-operative Banks According to Loan Recovery
(As on 30 June)
(Number)
Recovery (%) SCB DCCB SCARDB PCARDB(No.) (No.) (No.) (No.)
2008 2009 2008 2009 2008 2009 2008 2009
<40 3 3 131 69 9 10 382 337
>40 to < 60 6 2 86 85 2 4 173 205
>60 to < 80 11 7 74 115 6 2 98 113
>80 11 18 55 101 2 3 43 42
Total 31 31 346 370 19 19 696 697
Data provisional for the year 2009, Data as on 30 June 2008 for one DCCB in Rajasthan and one DCCB in Punjab are not available.
Data as on 30 June 2009 for SCB and DCCB in Bihar and Jharkhand repeated from previous year, Manipur SCARDB is under orders of liquidation.
83
c. Supersession of Elected Boards
4.19 NABARD, as a matter of policy, continues to
emphasise the need for co-operative banks to be
managed by duly elected Boards of Management. One
of the covenants of MoU executed by the state
governments under the GoI revival package for STCCS
stipulates that the co-operative banks should be managed
by duly elected Boards of Directors. Despite this, the
Haryana (1), Bihar (5), Jharkhand (7), Orissa (4), West Bengal (3), Madhya
Pradesh (3), Uttar Pradesh (17), Gujarat (2), Maharashtra (3), Andhra Pradesh
(21), Karnataka (2), Tamil Nadu (1). (102)
Haryana (9), Jammu and Kashmir (2), Rajasthan (4), Bihar (10), Jharkhand (1),
Orissa (4), West Bengal (5), Madhya Pradesh (14),Chhattisgarh (1), Uttar Pradesh
(16), Uttarakhand (1), Gujarat (2), Maharashtra (9), Andhra Pradesh (1),
Karnataka (1), Kerala (2), Tamil Nadu (3) (85)
Haryana (9), Himachal Pradesh (1), Punjab (3), Rajasthan (15), Bihar (6), Orissa
(4), West Bengal (7), Madhya Pradesh (16), Chhattisgarh (5), Uttar Pradesh (12),
Uttarakhand (4), Gujarat (7), Maharashtra (13), Karnataka (5), Kerala (3), Tamil
Nadu (5) (115)
Himachal Pradesh (1), Jammu and Kashmir (1), Punjab(17), Rajasthan (10), Bihar
(1), Orissa (5),West Bengal (2), Madhya Pradesh (5), Uttar Pradesh (5),
Uttarakhand (5), Gujarat (7), Maharashtra (6), Karnataka (13), Kerala (9), Tamil
Nadu (14) (101)
Table 4.13: Frequency Distribution of States/ UTs According to Level of Loan Recovery of SCBs and DCCBs
(As on 30 June 2009)
Recovery (%) SCB DCCB
<40 Arunachal Pradesh, Bihar,
Manipur and Megahlaya,
>40 and Chhattisgarh, Jammu and Kashmir
<60%
>60 and Chandigarh,Assam,Mizoram,
<80% Nagaland, Andaman and Nicobar,
Sikkim, Uttar Pradesh,
Andhra Pradesh, Tripura
>80% Delhi, Goa, Haryana, Punjab,
Himachal Pradesh, Rajasthan,
Orissa, Madhya Pradesh,
Uttarakhand, Gujarat, Puducherry,
Karnataka, Kerala, Tamil Nadu,
West Bengal and Maharashtra
Total 31 370
DCCB-wise data for Bihar and Jharkhand are repeated from previous year
Table 4.14: Frequency Distribution of States/UTs According to Levels of Loan Recovery of SCARDBs and PCARDBs(As on 30 June 2009)
Recovery SCARDBs PCARDBs
< 40 % Madhya Pradesh, Uttar Pradesh,
Bihar, West Bengal, Assam,
Jammu & Kashmir, Karnataka,
Tamil Nadu, Gujarat and
Maharashtra. (10)
> 40 % and Chhattisgarh, Orissa,
< 60% Himachal Pradesh and
Rajasthan(4)
> 60% and Haryana, Punjab, Kerala and
<80% Tripura(4)
> 80% Puducherry (1)
Haryana (16), Punjab (26) Rajasthan (12), Orissa (2), West Bengal (14),
Chhattisgarh (3), Madhya Pradesh (24), Maharashtra (29), Karnataka (41) and
Tamil Nadu (170) (337)
Haryana (3), Himachal Pradesh (1) Punjab (38), Rajasthan (22), Orissa (2),West
Bengal (6), Chhattisgarh (6), Madhya Pradesh (13), Karnataka (96), Kerala (10)
and Tamil Nadu (8) (205)
Punjab (20), Rajasthan (2), Orissa (14), West Bengal (3), Chhattisgarh (3), Madhya
Pradesh (1), Karnataka (38), Kerala (30) (113)
Punjab (5), Orissa (28), West Bengal (1), Karnataka (2) and Kerala (6) (42)
Total 19* 697
* Data in respect of Manipur SCARDB is not available.
84
practice of superseding elected Boards continued in some
states. As on 31 March 2009, duly elected Boards were
superseded in 9 SCBs and 127 DCCBs in the ST
Structure, and in 9 SCARDBs and in 265 PCARDBs in
the LT Structure (Table 4.15).
d. Development Action Plans /
Memorandum of Understanding
4.20 The process of preparing institution specific
Development Action Plans (DAP) and execution of
Memorandum of Understanding (MoU) began in 1994-95.
It was implemented in three phases, 1994-95 to
1999-2000 (Phase I), 2000-01 to 2003-04 (Phase II)
and 2004-05 to 2006-07 (Phase III). PACS were advised
for the first time to prepare viability action plans under
the guidance of DCCBs and to enter into MoUs with
the respective DCCBs in the third phase. The fourth
phase of DAP/MoU for both ST and LT structures is for
the period April 2007 to March 2012. The policy changes
in Phase IV aim at repositioning NABARD, RBI and
RCS as external facilitators in planning, implementing
and monitoring of DAP. As on 31 March 2009, 21 SCBs
and 9 SCARDBs had executed “DAP/MoU” (Phase IV)
with state governments and NABARD. The DAP are
regularly monitored and reviewed during State Level Task
Force (SLTF)/DLMRC meetings.
e. Co-operative Development Fund
4.21 The Co-operative Development Fund (CDF) was
broad based during the year after a comprehensive review
of various existing schemes of assistance. At present,
11 schemes have been put into operation for strengthening
the co-operatives. During 2009-10, Rs.3.76 crore was
sanctioned and Rs.3.78 crore disbursed (including
sanctions of previous years). As on 31 March 2010,
cumulative sanctions and disbursements under CDF were
Rs.91.74 crore and Rs.81.51 crore, respectively. The CDF
is replenished annually through appropriations from
NABARD’s surplus. The balance in the Fund as on
31 March 2010, stood at Rs.125 crore.
f. Organisation Development
Initiatives (ODIs)
4.22 The design, methodology and objective of ODIs
are now more focused towards enabling financial
inclusion and sustainable viability. Business Revitalisation
and Managing Human Aspirations (BRAMHA), a
recast of Organisation Development Initiative (ODI)
for co-operatives, was launched in 2007-08 to facilitate
changes in the organisational structure, staff composition,
skills, strategic planning and shared values vis-à-vis the
wider external environment to enable an organisation to
fulfil its mission. During the year, ten BRAMHA (Phase I-9,
Phase II-1) and 2 ODI (Phase I & II) were conducted.
g. Other Developments
(i) Human Resource Policy for Short-Term Co-
operative Credit Structure
4.23 A Working Group (Chairman: Shri S.K. Mitra,
Executive Director, NABARD) was constituted to
formulate a comprehensive human resource policy for
the STCCS. Based on the recommendations of the
Working Group, NABARD issued guidelines on staffing,
recruitment, transfer and promotion policy to all SCBs
and DCCBs for consideration and adoption by them.
Separate guidelines were issued to SCBs in NER. The
SCBs would constitute a separate State Level Steering
Group in each State, comprising HR professionals,
representatives of NABARD, NAFSCOB, Co-operation
Department of State Governments, BIRD and other
Training Establishments of NABARD and select CCBs,
for preparation of road map for implementation,
monitoring and review of the recommendations of the
Working Group. The ROs of NABARD would conduct a
one-day workshop for the benefit of officials of SCBs,
Table 4.15: Elected Boards under Supersession(As on 31 March 2009)
Particulars SCB* DCCB* SCARDB* PCARDB*
Total Institutions (No.) 31 370 20 697
Boards under 9 127 9 265
Supersession (No.)
Boards under 29 34 45 38
Supersession (%)
* Data provisional
85
CCBs, RCS, Department of Co-operation of respective
State Governments for familiarising with the Working
Group’s recommendations and faci l i tat ing
implementation.
(ii) Working Group for Computerisation in SCBs/
DCCBs
4.24 In the wake of Revival Package for strengthening
co-operative credit structure at grass-roots level and
growing competitive banking environment, it has become
imperative to introduce advanced technology to stimulate
the working and functions of co-operatives. With this in
view, a Working Group has been constituted under the
chairmanship of Dr. Prakash Bakshi, Executive Director,
NABARD. The first meeting of the Working Group was
held during the year. The Working Group, apart from
giving a comprehensive solution to the co-operatives,
will focus on the following areas :
(a) Assess the status of front and back-off ice
computerisation requirements in CCBs and SCBs to
remain competitive by 2012 and beyond based on their
business growth, (b) assess the gap in computerisation
vis-à-vis the above expectation, (c) suggest a road map
for different categories of co-operative banks with
reference to available infrastructure and operational
costs and (d) to design an implementable plan for bank
specific computerisation and operationalisation aspects
such as funding, training, maintenance of hardware/
software upgradation, etc. The report of the Working
Group is expected to be finalised shortly.
h. Package for Short-Term Rural Co-
operative Credit Structure
4.25 The Government of India (GoI) announced a
Revival Package in 2006 for the STCCS, based on
recommendations of the Task Force appointed by it for
making the STCCS a well-managed and vibrant medium
to serve the credit needs of rural India. The integrated
package envisages (a) provision of liberal financial
assistance to bring the system to an acceptable level of
health, through cleansing of balance sheet, (b) introduction
of legal and institutional reforms essential for their
democratic, self-reliant and efficient functioning and
(c) init iating measures to improve the quality of
management. Keeping in view the financial health of
the institutions in the NER, the GoI in November 2008,
announced a special dispensation for the STCCS in NER,
including Sikkim. So far, twenty-five States (covering
96 per cent of the STCCS in the country), have executed
the MoU with GoI and NABARD for implementing the
revival package.
i. Special Audit and Release of Funds
4.26 Financial assistance is provided both for cleansing
of balance sheets of STCCS (as on 31 March 2004)
and capital infusion to ensure a minimum Capital to
Risk-Weighted Assets Ratio (CRAR) of 7 per cent, subject
to legal and institutional reforms. Bottom up approach
is adopted with financial assistance provided to PACS
first, followed by CCBs and then SCBs. Eligibility of
PACS is determined on their recovery position as on 30
June 2004. Capitalisation of ineligible PACS would take
place by settling their dues to the higher tier, with the
State Government having to decide the future set-up of
ineligible PACS. The funding of the package is shared
by the GoI, State Governments and the STCCS, based
on origin of losses and existing commitments. The
special audits of STCCS, as on 31 March 2004, to arrive
at the precise amount of losses after factoring in
prudential provisioning norms and the sharing pattern,
is complete in 79,530 PACS out of 95,626 PACS across
25 States. The special audit of CCB has been completed
in twelve states and is in progress in the remaining States.
An amount of Rs.7,972.22 crore has been released till
31 March 2010 by NABARD as GoI share for
recapitalisation of 49,764 PACS in fourteen states, while
the State Governments have released Rs.755.80 crore
as their share.
ii. Legal Reforms
4.27 The participating states are required to amend
their Co-operative Societies Acts (CSAs) for securing
the democratic character and autonomy of co-operatives
and for their regulatory control by RBI. So far, fourteen
States have amended their CSAs. The draft amendments
86
proposed by the remaining eleven States have been
vetted by NABARD, even as previous amendments in
three of these States are awaiting Presidential assent.
Based on the amendments, the rules and bye-laws of
the societies are being revised by the states.
iii. Common Accounting System and
Management Information System
4.28 The Common Accounting System (CAS) and
Management Information System (MIS) formulated for
PACS are being put in place to standardise accounting
systems and decision-making process. Books of
accounts, as per the CAS, have been printed and
distributed in 11 States. Training on CAS/MIS has also
been initiated. Once operationalisation of CAS/MIS is
complete and strengthening of capacities to manually
maintain the new system is achieved, computerisation
of CAS/MIS would commence.
iv. HRD Initiatives
4.29 The Package lays emphasis on training and
capacity building of Board Members and functionaries
of STCCS. Training modules along with training material
in vernacular, elaborate Trainers’ Manual and Guide
have been developed for Secretaries of PACS,
Departmental Auditors and Supervisors of co-operative
banks and Board of Directors of PACS, CCB and SCB
and branch managers and CEOs of CCBs. The thrust
of training is on resource mobilisation, loan products,
housekeeping and accounting (CAS and MIS), business
diversif ication, best practices in governance and
management and changes in the post reforms scenario.
Till date, training has been imparted to 226 master
trainers from sixteen States, who in turn have trained
1,896 district level trainers. As on 31 March 2010,
training has been imparted to 72,127 Secretaries of
PACS from fourteen States, 99,219 elected Board
Members of PACS from eleven States, 369 CEOs of
CCBs and 1,671 Directors of CCBs/SCBs. In addition,
training on CAS/MIS has been provided to 61,619 PACS
functionaries and 3,471 bank supervisors/ departmental
auditors. A five-day module for branch managers of
CCBs for providing hand-holding support to PACS on a
continuous basis and a Business Development
programme for PACS in North Eastern States, keeping
in view the special conditions in the region, are proposed
to be launched in the next financial year.
v. Impact of the Revival Package
4.30 Implementation of the Revival Package has
brought about many positive changes in the functioning
of the STCCS institutions. With the amendment of the
CSAs, the STCCS has been enabled to become member
driven and autonomous, affording them freedom in all
financial and internal administrative matters. The
statutory audits of CCBs and SCBs are being conducted
by Chartered Accountants, from a panel supplied by
NABARD, as opposed to departmental auditors earlier.
The appointment of CEOs and Professional Directors
on Boards of CCBs as per ‘fit and proper’ criteria
specified by the Reserve Bank of India (RBI) will ensure
that the STCCS is run in a professional manner. PACS
have started preparing Business Development Plans for
prudent funds utilisation and for diversification of
business activities. The preparation of balance sheets
of PACS as per Common Accounting System (CAS),
generation of information as per prescribed MIS formats
and computerisation will ensure uniform accounting
procedure, minimise misappropriation/frauds and bring
in transparency. As on 31 March 2010, 49,764 PACS
have been fully recapitalised, substantially improving
their net worth and financial position.
vi. Revival of Long-Term Rural Co-operative
Credit Structure
4.31 Based on the report of the Task Force (II) under
the Chairmanship of Prof. A. Vaidyanathan, GoI had
earlier considered a separate Revival Package for the
Long-Term Co-operative Credit Structure (LTCCS).
However, it has now constituted a Task Force under the
Chairmanship of Shri G. C. Chaturvedi, IAS, Addl.
Secretary (FS), Ministry of Finance, Government of India
to review the need for a separate package for Revival of
LTCCS. The Task Force submitted its report to the
Government of India on 25 February 2010.
87
B. Regional Rural Banks
a. Development Initiatives
i. Amalgamation
4.32 The structural consolidation of RRBs initiated by
GoI in September 2005 through amalgamation of
Sponsor Bank-wise RRBs in a State, continued and four
new amalgamated entities were formed in 2009-10, by
amalgamating five stand-alone and three previously
amalgamated RRBs. With this, the total number of RRBs
as on 31 March 2010 stood at 82 (46 amalgamated
and 36 stand alone).
ii. Capital Infusion
4.33 As part of financial strengthening of RRBs, the
Hon’ble Union Finance Minister, in the Budget 2007-08,
had announced recapitalisation support to 27 RRBs
having negative net worth, as on 31 March 2007. The entire
amount of recapitalisation support of Rs.1,795.97 crore
stand released to the RRBs by GoI, the State
Governments and Sponsor Banks concerned, in the ratio
of 50:15:35, respectively.
iii. Village Adoption and Debt Swap
4.34 RRBs were given the target of adopting at least
one village per branch, for financing the indebted farmers
to swap the debt taken from money lenders. Against
the target, RRBs had adopted 17,490 and 24,341 villages
as on 31 March 2008 and 31 March 2009, respectively.
As on 31 December 2009, 24,531 villages had been
adopted by the RRBs of which 13,221 villages had been
freed of debt from money lenders.
iv. Branch Expansion Programme
4.35 As announced in the Union Budget 2007-08, RRBs
had opened 474 branches during 2008-09, taking the
cumulative number of branches of all RRBs to 15,181, as
on 31 March 2009. Further, GoI has fixed a target of opening
of 2,000 branches of RRBs in the next two years, for facilitating
financial inclusion. During the year 2009-10, RRBs opened
263 branches as per information available, which would take
the total number of RRB branches to 15,444.
v. ICT solution for Financial Inclusion
4.36 The Committee on Financial Inclusion (Dr. C.
Rangarajan) had identified 256 districts in the country as
‘most excluded’ and had recommended RRBs taking up
ten pilot projects with ICT (Information and Communication
Technologies) solutions. Accordingly, fifteen RRBs were
identified from fourteen States for an R and D project on
Financial Inclusion, with ICT based solutions, through use
of smart cards, Point of Service (PoS) devices and mobile
technology, in different regions and client groups in the
country. The project, a PPP model, is partly funded by the
World Bank, with back-ended incentive provided by
NABARD from its Financial Inclusion Fund (FIF).
vi. Financial Inclusion
4.37 As envisaged by GoI, RRBs, as a group, have
become a strong intermediary for Financial Inclusion in
rural areas by opening a large number of “No Frills’
accounts and by financing under General Credit Card
(GCC), as per RBI guidelines. The total number of
accounts covered under both deposits and loans was
1,106.20 lakh, as on 31 March 2009 (Table 4.16).
Table 4.16: Status of Financial Inclusion - RRB
(As on 31 March)
(No. in lakh)
Of total Loan Accounts, major areas ofFinancial Inclusion
Year No. of Of which, No. of SSI, artisans, Deposit ‘No-Frills’ Loan SCC & retail
Accounts Accounts Accounts GCC SHGs KCC Tenants trades
2006-07 669.88 34.54 164.97 1.083 6.52 82.84 1.08 35.74
2007-08 758.02 81.17 171.20 2.35 7.20 93.14 1.03 33.53
2008-09 935.54 153.81 170.66 3.22 8.04 114.71 0.95 33.00
88
b. Performance Review
4.38 The performance of RRBs is being reviewed by
GoI under the Chairmanship of Union Finance Minister,
since January 2007, and the decisions taken in the
meet ing are in turn being reviewed by Finance
Secretary, GoI on half-yearly basis or as and when
needed. During the year, two such review meetings
were held, one chaired by Finance Minister and the
other by Finance Secretary, GoI.
Financial Performance
4.39 Post amalgamation, the number of RRB in the
country, as on 31 March 2010, stood at 82, with a
network of 15,444 branches covering 618 notified
districts in twenty-six States and one UT (Puducherry).
Over a period of three years (2008-10), aggregate reserves
of RRB increased significantly (38.7%), while deposits
and investments increased by 44.3 and 56.9 per cent,
respectively. Borrowings also increased by 61.4 per cent,
while loans and advances (outstanding) increased by
39.40 per cent in 2009-10 (Table 4.17).
4.40 Financial results of RRBs for the year 2009-10
indicate that they have improved their performance with
78 out of 82 RRBs showing pre-tax profit to the extent
of Rs.2,550.51 crore as compared to Rs.1,823.55 crore
in 2008-09. The remaining four RRBs incurred losses of
Rs.8.44 crore as compared to Rs.35.91 crore posted by
six RRBs in 2008-09. The status of RRBs that can be
considered as sustainably viable (with no accumulated
losses) is also expected to have improved, as on
31 March 2010 as compared to the previous year. The
aggregate reserves of RRBs increased to Rs.7,912.39 crore
while their networth increased to Rs.10,256.13 crore as
on 31 March 2010. The accumulated losses of RRBs
have decreased by 30.9 per cent over the previous year.
The performance of RRBs varied widely across the regions
in 2009-10. While all RRBs in the Eastern, Northern
and Western region were in profit, a few in the Central,
North-Eastern and Southern regions were incurring losses
(Table 4.18).
Table 4.17: RRBs: Indicators of Performance(As on 31 March)
(Rs. crore)
Particulars 2008 2009 2010 @
No .of RRB (No.) 91 * 86 * 82 *
Branch Network (No.) 14761 15181 15444
Share Capital 197.00 197.00 197.00
Share Capital Deposit 2832.53 3959.30 3959.77
Reserves 5703.06 6753.99 7912.39
Deposits 99093.46 120189.90 142980.48
Borrowings 11494.00 12734.65 18555.84
Investments 48559.54 65909.92 76167.29
Loans & Advances 58984.27 67802.10 82221.59
(Outstanding)
Loans Issued 38581.97 43367.13 55727.75
RRB earning Profit (No.) 82 80 78
Amount of Profit (A)$ 1383.69 1823.55 2550.51
RRB incurring Losses (No.) 8 6 4
Amount of Losses (B) 55.58 35.91 8.44
Net Profit (A – B)$ 1328.11 1787.64 2542.07
Accumulated Losses 2624.22 2299.98 1813.03
RRB with 36 31 30
accumulated losses (No.)
Recovery (%) 80.84 77.85 79.12
NPAs to loans 6.05 4.14 3.66
outstanding (%)
Net worth 6107.37 8610.31 10256.13
* : Number reduced due to amalgamation.
@ : Estimated. $ : Before Tax.
c. Recovery Performance
4.41 The recovery performance of RRBs was estimated
at 79.1 per cent as on 30 June 2009, compared to 77.9
per cent as on 30 June 2008 (Table 4.18). All RRBs in
the Northern, three in Western and ten in the Southern
region had registered a recovery performance above the
national average (Table 4.19). Six RRBs in the country
had achieved a recovery percentage of above 90, while
five had a lower recovery percentage ranging between
40 and 60 per cent.
89
d. Non-Performing Assets
4.42 The aggregate gross NPAs of all RRBs declined
from 4.1 per cent, as at 31 March 2009, to 3.7 per cent
as on 31 March 2010 (provisional).
e. Other Developments
i. Committee on capitalisation of RRBs for
Maintaining Higher CRAR
4.43 The GoI had constituted a Committee in September
2009, under the Chairmanship of Dr. K.C. Chakrabarty,
Deputy Governor, Reserve Bank of India, to examine
the financials of RRBs with capital to risk-weighted
assets ratio (CRAR) of less than 7 per cent and suggest
measures to bring it to at least 9 per cent in a phased
manner. The Committee had const i tuted a Sub-
committee to analyse the financials of RRBs in detail
for assessing capital required to attain 7 per cent CRAR
by March 2011 and 9 per cent by March 2012 and for
suggesting measures for maintaining sustainability in
the long run. The Committee submitted its Report on
30 April 2010.
Table 4.19: Frequency Distribution of States According to Levels of Recovery of RRBs(As on 30 June 2009)
Recovery (%) States
< 40 0
> 40 and < 60 5
> 60 and < 80 40
>80 38
Nil
Bihar (1), Madhya Pradesh (1), Manipur (1), Orissa (1), Uttar Pradesh (1)
Andhra Pradesh (3), Arunachal Pradesh (1), Assam (1), Bihar (3), Chhattisgarh (3), Gujarat (1), Jammu &
Kashmir (1), Jharkhand (2), Karnataka (2), Madhya Pradesh (4), Maharashtra (2), Meghalaya (1), Nagaland
(1), Orissa (4), Tripura (1), Uttar Pradesh (6), Uttarakhand (1), West Bengal (3)
Andhra Pradesh (2), Assam (1), Gujarat (2), Haryana (2), Himachal Pradesh (2), Jammu & Kashmir (1),
Karnataka (4), Kerala (2), Madhya Pradesh (3), Maharashtra (1), Mizoram (1), Punjab (3), Rajasthan (6),
Tamil Nadu (2), Uttar Pradesh (4), Uttarakhand (1), Puducherry (1)
* : No. of RRB as on 31 March 2010 was 82 after amalgamation. Data provided for 83 RRBs as on 30 June 2009.
Table 4.18: Region-wise Working Results of RRB
(As on 31 March 2010)
(Rs. crore)
Region RRBs Profit Loss Net Accumu Loans & NPAs Recovery (%)(No.) Earning Incurring Profit lated Advances (As on
Losses O/S 30 June 2009)
No. Amt. No. Amt. Amount % 2008 2009
North-Eastern 8 7 107.14 1 3.33 103.81 192.68 3259.19 212.34 6.52 65.51 70.29
Eastern 14 14 439.63 0 0.00 439.63 1239.58 13817.77 932.19 6.75 68.10 71.72
Northern 15 15 379.67 0 0.00 379.67 208.11 13680.12 268.05 1.96 85.01 86.95
Central 23 21 841.51 2 4.89 836.62 99.62 20581.21 856.09 4.16 76.24 75.14
Western 6 6 92.40 0 0.00 92.40 72.75 3904.31 178.26 4.57 77.85 78.75
Southern 16 15 690.16 1 0.27 689.94 0.29 26978.99 564.42 2.09 81.51 81.97
All India 82 78 2550.51 4 8.44 2542.07 1813.03 82221.59 3011.35 3.66 77.85 79.12
90
4.44 NABARD inspects SCBs and DCCBs in terms of
the powers vested under Section 35(6) of the Banking
Regulation Act, 1949 (AACS), and RRBs under Section
35(6) of the Banking Regulation Act, 1949. NABARD
also conducts voluntary inspection of SCARDBs, Apex
level Co-operative Societies and Federations. Considering
the unique nature of all these institutions, the supervisory
role of NABARD, apart from ensuring conformity with
banking regulations and prudential norms, is very
comprehensive and holistic, encompassing inspections
(on-site and off-site), portfolio studies, monitoring,
guiding and facilitating functions. The periodicity of
statutory inspections of all SCBs and those DCCBs and
RRBs not complying with minimum capital requirements
as stipulated under Banking Regulation Act, 1949
(AACS) / RBI Act 1934 and voluntary inspections of all
SCARDBs continues to be annual. The statutory
inspections of those DCCBs and RRBs with positive
networth and voluntary inspections of Apex
Co-operative Societies/Federations are conducted
biennially.
A. Operational Matters
a. Inspection of Banks
4.45 During 2009-10, statutory inspections of 343
banks (30 SCBs, 252 DCCBs and 61 RRBs) and
voluntary inspections of 16 SCARDBs and one apex
society, viz., Gujarat Rajya Handloom, Handicraft and
Audhyogic Sahakari Federation Ltd. (GUSICA), were
conducted. Some of the supervisory concerns relating
to these institutions, as brought out by the inspection
reports are (i) non-compliance with statutory provisions;
(ii) improper application of Income Recognition and
Asset Classification (IRAC) norms resulting in inflated
profit/reduced losses, shortfall in provisions, etc.;
(iii) high level of NPAs/erosion of assets; (iv) deficiencies
in sanction, appraisal of loans/advances and follow-up
of post disbursements; (v) inadequate financial margin/
high cost of management/ adverse working results,
(vi) ineffective funds management, (vii) inadequate risk
management systems, (viii) delay in submission of
statutory returns and compliance to inspection
observations; ( ix) lack of corporate governance;
(x) weaknesses in internal checks and control system;
(xi) incidence of frauds; (xii) improper valuation of
securities and irregularities in investment portfolio;
(xiii) violation of Credit Monitoring Arrangement (CMA)/
exposure norms and (xiv) non-compliance with KYC/
AML standards, etc.
4.46 These concerns were communicated to the banks,
the Registrars of Co-operative Societies (RCS), State
Governments and Sponsor Banks for corrective action.
NABARD also held discussions with the Boards of
Directors of SCBs/ DCCBs/ RRBs, and with the CEOs
for core area compliance and then rated the compliance
reports. NABARD also conveyed the supervisory ratings
to the top management of the concerned banks.
b. Board of Supervision
4.47 The Board of Supervision (BoS) constituted by
the Board of Directors of NABARD in 1999, met four
times during the year 2009-10. It reviewed: (i) the
functioning of SCBs, DCCBs and SCARDBs in the
previous years, (ii) functioning of co-operative credit
institutions and RRBs in MP, Assam, West Bengal and
Tamil Nadu, (iii) reports of frauds in the supervised
banks, (iv) functioning of weak DCCBs and RRBs,
(v) adherence to CMA norms by the co-operative banks
for the year 2008-09, (vi) scheduling of amalgamated
RRBs (vii) migratory analysis of supervisory rating of
SCBs, DCCBs and RRBs (viii) compliance of the banks
to various important statutory provisions, (ix) disposal
of complaints against supervised banks, (x) concept
paper on the action required in case of slippage in the
key parameters for judging the financial position of
banks, (xi) the working of RRBs sponsored by some of
the commercial banks, and (xii) major observations
Supervision of Banks
91
noticed during the investment portfolio studies taken
up in some of the banks.
c. Health of Supervised Banks
i. Compliance to Minimum Share Capital
Requirement
4.48 During the year 2009-10, 25 DCCBs had
improved their financial position and recomplied with
the provisions of Section 11(1) of Banking Regulation
Act, 1949 (AACS). As on 31 March 2010, 88 banks
(5 SCBs and 83 DCCBs) were not complying with the
provisions of Section 11(1) of the B.R. Act, 1949
(AACS). The total erosion in the value of assets of these
88 non-compliant banks aggregated Rs.12,055.00 crore,
which had affected deposits to the extent of Rs.3,780.6
crore (22.6% of their total deposits) in addition to their
entire share capital. Sixty seven DCCBs and three SCBs
were granted exemption from the provisions of Section
11(1) of the Act, ibid, by GoI, upto 31 March 2010,
while applications for grant of exemption in respect of
17 banks (one SCB & 16 DCCBs) were under the
consideration of RBI/GoI.
ii. Grant of License/Scheduling of Banks
4.49 Pursuant to the recommendations of Dr. Rakesh
Mohan Committee on Financial Sector Assessment
(CFSA), RBI has since revised the licensing norms for
co-operative banks (Box 4.1). As a one-time measure,
RBI, RPCD has delegated to its Regional units the powers
to grant licenses to co-operative banks. Consequent upon
revision of the licensing norms, RBI has issued licenses
to eight SCBs and 98 DCCBs during the year, thus
increasing the number of licensed banks to 195 (22 SCBs
and 173 DCCBs) as on 31 March 2010. During the year,
no SCB was included in the Second Schedule to the
Reserve Bank of India Act, 1934. Thus, the number of
scheduled SCBs remains unchanged at 16.
4.50 All RRBs were from inception, included in the
Second Schedule to the RBI Act 1934. However,
amalgamated RRBs could become Scheduled Banks
only with the approval of RBI, on the basis of
recommendations given by NABARD, after conducting
statutory inspection. Thirty nine amalgamated RRB were
included by the RBI in the Second Schedule of the
Reserve Bank of India Act, 1934, after they were found
complying with Section 42(6)(a)(i) &(ii) of the Act, ibid.
With this, the number of scheduled RRB stood at 75 as
on 31 March 2010.
iii. Provision Coverage Ratio (PCR) of RRBs
4.51 In order to ascertain the PCR of RRBs an exercise
was carried out by NABARD based on the available data
and the position is given in Table 4.20.
iv. Compliance with various Statutory Provisions
4.52 As on 31 March 2010, 5 SCBs and 83 DCCBs
did not comply with Section 22(3)(a) of the B.R. Act,
1949 (AACS), as regards their capacity to pay their
depositors in full and nine SCBs and 214 DCCBs did
not comply with Section 22(3)(b) of the Act, ibid, as the
affairs of these banks were conducted in a manner
detrimental to the interests of their depositors. Similarly,
out of the 16 scheduled SCBs, two were not complying
Box 4.1
Revised Licensing norms for Co-operative Banks
• The banks should have CRAR of 4% and above as per
the last inspection report of NABARD;
• The banks should have complied with the CRR and SLR
requirements during the last one year; and
• Stray/default in CRR/SLR requirement up to two
occasions during the last one year may be ignored for the
purpose.
Table 4.20: Provision Coverage Ratio for RRBs
(As on 31 March 2009)
Provision Coverage Ratio (%) Number of RRB
<50 39
50-70 29
>70 18
Total 86
92
with Section 42(6)(a)(i) of RBI Act, 1934 in regard to
minimum capital requirement of Rs.5 lakh, and three
were not complying with Section 42(6)(a)(ii) of the Act
ibid, as the affairs of these banks were conducted in a
manner detrimental to the interests of their depositors.
As on 31 March 2010, out of 82 RRB, 70 complied with
Section 42(6)(a)(i) of the RBI Act, 1934 and 49 complied
with Section 42(6)(a)(ii) of the Act ibid. The erosion in
the value of assets of the eight RRBs not complying with
Section 42 (6)(a)(i) of the Act, ibid stood at Rs.785.38
crore as on 31 March 2010 and their deposits were eroded
to the extent of Rs.111.02 crore, forming 2.27 per cent
of the total deposits held by these banks.
B. Policy Decisions/ Guidelines
a. SCB/CCB
4.53 During the year, (i) detailed guidelines were issued
to supervised banks on prevention/monitoring of frauds;
(ii) guidelines were issued to the RCS of all States to
implement prudential norms on Asset Classification,
Provisioning and Income Recognition in PACS ; (iii) in
keeping with the decision not to grant extension of time
for publication of annual accounts of co-operative banks,
RCS/Director of Audit were impressed upon the need
for timely completion of audit; (iv) in view of the sizeable
inflow of funds into the STCCS by way of recapitalisation
assistance under Vaidyanathan Committee – I (VC-I)
and under the ADWDR Scheme 2008, banks were
cautioned to utilise the funds judiciously; (v) as CRAR
norms have been made applicable to PACS following
VC-I recommendations, the RCS of all states were
advised to instruct the PACS to work out CRAR and
disclose it as ‘Notes on accounts’ in the balance sheet;
(vi) a circular on ‘Fraud Risk Management System in
banks - Role of Chairmen/Chief Executive Officers’ was
issued; (vii) a circular under Section 19 of the Banking
Regulation Act 1949 (AACS) - Restriction on holding of
shares, was issued to all co-operative banks. (viii)
guidance note on Credit Risk Management (CRM) was
issued to all SCBs and CCBs, and (ix) guidelines on
Business Continuity Plan (BCP) was also issued to all
co-operative banks.
b. SCARDBs
4.54 In the case of SCARDBs, (i) instructions on
prudential norms in respect of advances covered by
ADWDR Scheme, 2008 were issued, (i i) detailed
guidelines on prevention/monitoring of frauds in banks
were issued and (iii) as directed by BoS, SCARDBs were
advised to expeditiously complete balancing of books
and reconciliation of inter-branch accounts.
c. RRBs
4.55 For RRBs, (i) detailed guidelines on prevention/
monitoring of frauds, (ii) a Master circular on Disclosure
norms and (iii) revised Long Form Audit Report (LFAR)
guidelines, (iv) guidance note on Credit Risk and
Operational Risk Management, and (v) guidelines on
Business Continuity Plan (BCP), were issued.
C. Supervisory Interventions
(i) ROs were advised to take necessary steps in case of
non-compliance with the provisions of Section 42(6)(a)(i)
of the RBI Act, 1934 by RRBs; (ii) clarifications were
issued to ROs in respect of compliance to Section 6 of
Banking Regulation Act 1949 (AACS) by co-operative
banks; (iii) inspection of SCBs, DCCBs and RRBs; and
(iv) procedure for valuation of unquoted securities was
advised to all ROs.
D. Other Developments
4.56 To improve the quality and effectiveness of
inspections, three Seminars on Regional Supervision
were held for officers of NABARD stationed in DoS.
Regional Seminars on Internal Checks and Control
Systems were conducted for the Chiefs of Audit and
Inspection Departments of both RRBs and co-operative
banks. At the instance of Financial Intelligence Unit-
India (FIU-IND), two meetings of Chairmen of RRBs
and three state-level meetings of co-operative banks and
RRBs were held in MP and UP to review the status of
implementations of Anti-Money Laundering (AML)/
Combating Financing of Terrorism (CFT) guidelines. The
93
Bank associated i tself with NABARD-GTZ Rural
Financial Institutions Programme (RFIP) review meetings
and study on Audit structure in CCS. HO officials
attended meetings of Mutual Evaluation Team from
Financial Action Task Force (FATF) held at RBI, on the
init iat ives taken on AML/CFT. RO conducted
sensitisation workshops on KYC (Know Your Customer)/
AML, CMA (Credit Monitoring Arrangement), Statutory
Audit, Frauds, Investments, Internal Checks and
Controls, Corporate Governance, etc. In addition,
NABARD, through its Regional Offices and Training
Establishments, conducted training/sensit isat ion
programmes and workshops on Investment
Management, Asset Liability Management (ALM), AML,
KYC, monitoring of frauds, prudential norms and CMA
for the auditors and other personnel of SCBs, DCCBs
and RRBs.
4.57 For a holistic and more effective approach
towards supervision, NABARD had forged partnerships
with other related agencies, especially in strengthening
the internal checks and control systems in the supervised
banks. In this regard, the Bank associated with the study
on enhancing the audit capacity in the Co-operative
Credit Structure during the year. The Bank also
associated with GTZ in preparation of Training Needs
Analysis (TNA) of Credit Cooperatives and Corporate
Governance during the year. NABARD, for the first time,
also associated with the Conferences of Principal Officers
of RRBs and the Trainers’ Training Programme (TTP)
on AML convened by the FIU-IND. Inputs and feedback
on many policy issues were obtained from the National
Federation of State Cooperative Banks (NAFSCOB)
resulting in the preparation of Operational Manual for
co-operative banks.
94
V
Organisation and Management
Ministry of Finance, Government of India was
appointed as Director with effect from 9 December
2009 vice Shri Amitabh Verma.
(g) Shri Roshan Lal, Financial Commissioner and
Principal Secretary, Agriculture Department,
Government of Haryana was appointed as
Director with effect from 3 May 2009 vice Smt.
Shakuntala Jhaku.
(h) Shri Letkhogin Haokip, Commissioner (Social
Welfare, Agriculture), Government of Manipur
was appointed as Director with effect from
19 November 2009 vice Shri O. Nabakishore Singh.
(i) Shri Pankaj Dwivedi, Agriculture Production
Commissioner and Special Chief Secretary,
Government of Andhra Pradesh, was appointed
as Director with effect from 17 June 2009 vice
Dr. S. Chellappa. On completion of the tenure
of the State Government’s representation on the
Board of Directors, he ceased to be a Director
on the Board with effect from 13 December
2009.
(j) Shri A. P. Singh, Secretary, Agriculture and
Sugarcane Development, Government of
Jharkhand ceased to be a Director on the Board
with effect from 13 December 2009 on completion
of the tenure of the State Government’s
representation on the Board of Directors.
(k) Shri Mohd. Iqbal Khandey, Principal Secretary,
Agricultural Production Department, Government
of Jammu and Kashmir was appointed as
Director with effect from 18 March 2010.
Management and human resources are crucial
aspects for effective functioning of any
organisation. Recognising this, NABARD has
initiated steps to reposition itself (Box 5.1) in the
context of the changes in the economy. The Bank
continues to lay emphasis on capacity building of
its staff through honing their skills and developing
expertise.
Management
A. Board of Directors
5.2 The Board of Directors met five times during
the year, while the Executive Committee and the
Sanctioning Committee for Loans under RIDF, met six
and seven times, respectively. The Audit Committee
of the Board (ACB) met four times, while the Risk
Management Committee of the Board (RMCB) met
thrice during the year.
5.3 The following changes took place in the
composition of the Board of Directors during the year:
(a) Dr. Ram S. Tarneja and Dr. Anup Kumar Sinha
ceased to be Directors on the Board, with effect
from 29 May 2009, after completing their terms.
(b) Dr. K. C. Chakrabarty, Deputy Governor, Reserve
Bank of India was appointed as Director with
effect from 26 August 2009 vice Smt. Usha
Thorat, Deputy Governor, RBI.
(c) Shri Lakshmi Chand and Smt. Shashi Rekha
Rajagopalan were re-appointed on the Board
with effect from 16 October 2009.
(d) Shri Prabeer Kumar Basu, Secretary, Ministry of
Agriculture, GoI was appointed as a Director
wi th e f fec t f rom 28 February 2010 vice
Shri T. Nandakumar.
(e) Shri B.K. Sinha, Secretary, Ministry of Rural
Development, Govt. of India was appointed on
the Board with effect from 3 February 2010 vice
Dr. Rita Sharma .
(f) Shri Alok Nigam, Joint Secretary (Banking
Operations), Department of Financial Services,
95
(l) Shri L.C. Goyal, Agricultural Production
Commissioner, Government of Kerala, was appointed
as Director with effect from 18 March 2010.
B. Inspection of NABARD
5.4 Reserve Bank of India conducted the twelfth
financial inspection of NABARD (with reference to its
financial position of 31 March 2009) from 27 January
2010 to 26 February 2010.
C. Right to Information
5.5 The Right to Information (RTI) Cell has been
complying with the statutory requirements with
regard to RTI Act, 2005. During the year, the CGM/
O-i-C of Regional Offices were designated as Central
Public Information Officer to expedite furnishing of
information at the state level in compliance with
the provisions of the RTI Act. Information on
NABARD website is updated periodically as required
under the Act.
While addressing the Board of Directors of NABARD on the
occasion of its Silver Jubilee Celebrations in 2007, the Union
Ministers of Finance and Agriculture expressed satisfaction
over the functioning of NABARD for the last 25 years. While
echoing the confidence and goodwill enjoyed by NABARD with
its stakeholders, they also shared their vision regarding the
need for NABARD to ‘reposition’ itself, in terms of networking
resources, building of capabilities and partnering institutions
to bring about integrated rural development across the country
more effectively. The major concerns flagged were, the
declining influence of NABARD in expanding credit coverage
and directing credit flow to desired sectors, sub-sectors and
regions; NABARD’s limitation in raising cost effective
resources, progressively interfering with performance of its
mandated role. Considering these aspects as also other
relevant factors, the Board of Directors decided to examine the
present and future roles of NABARD, and to initiate a
repositioning of the institution for enabling it to effectively
address emerging and future challenges. The objectives of this
initiative are:
(i) to focus on measures to expand and improve the existing
financial and developmental interventions of NABARD so
as to enhance agricultural credit flow;
(ii) to analyse the financial, developmental and supervisory roles
of NABARD and to explore new and innovative areas;
(iii) to access adequate and cost effective resources to enable
NABARD to provide higher levels of development support
to the rural people;
(iv) to redesign the organizational structure with an
implementable time-bound framework to achieve the
above; and
(v) to strengthen rural financial institutions and provide
quality training to its staff and improve operational
systems.
The “Project Reposition” was approved by the Board of Directors
and the Bank has engaged Boston Consulting Group (BCG), for a
period of 18 months with effect from 03 March 2010.
Box 5.1
‘Repositioning initiative of NABARD’
Human Resources Management
A. Training and Skill Upgradation
5.6 During 2009-10, National Bank Staff College
(NBSC), Lucknow conducted 85 programmes for 1675
officers on various subjects. Stress Management
Programme was conducted for both officers and
employees. Further, 54 officers were deputed for tailor-
made programmes on Post-Harvest Management,
Disaster Management, etc., designed to meet their
specialised training needs, while 424 officers were
deputed for 153 off-the-shelf programmes, workshops,
seminars and conferences organised by various
institutions of repute. Some of the areas covered in these
programmes were strategic HRM, information systems
audit, risk management and treasury management.
96
5.7 During 2009-10, National Bank Training Centre
(NBTC), Lucknow and Zonal Training Centre (ZTC),
Hyderabad conducted 45 training programmes for
663 Group ‘B’ and ‘C’ Staff. It also conducted pre-
promotional training programmes for 47 Group ‘B’
staff for promotion to next higher grade in the officers
cadre and one pre-retirement programme for five
Group ‘B’ and ‘C’ staff.
Overseas Training/Visits by Top Management
5.8 During the year, 120 officers from NABARD and
four from Client Institutions were deputed for various
overseas training programmes, exposure visits,
seminars, etc. This included five teams comprising 63
officers, who were deputed to Germany, Mauritius and
Israel for study of co-operatives, consultancy, etc. The
Chairman, Shri Umesh Chandra Sarangi attended the
57 EXCOM of APRACA held in Chiang Mai,
Thailand from 27 to 31 March 2010. He was part of
the selection team for appointment of new APRACA
Secretary General. The MoU between NABARD and
APRACA for setting up of APRACA Centre of
Excellence (ACE) in Linkage Banking was signed
during this period. Dr. K.G. Karmakar, Managing
Director presented a paper in the Forum on Policy and
Regulation of Financial Inclusion in Malaysia in May
2009 and also led a delegation of senior officers of
NABARD on a study tour on Rural Development and
Natural Resources Management in Germany. He also
presented a paper on “Review of the Development of
micro-Finance Services for Coastal Small-scale
Fisheries and Aquaculture in South Asian Countries
with Special Attention to Women”, in the Regional
Workshop of FAO in Manila, Philippines in October
2009. He attended the Expert Group meeting on
‘Supportive Financial System and Green Growth for
Achieving the Millennium Development Goals in the
Asia Pacific Region’ in Bangkok from 14 to 17
February 2010.
Support for Higher Studies
5.9 Under the Incentive Scheme, introduced in
April 2007, to encourage staff members to pursue
courses of relevance through distance education, 51
staff members availed of the facility during the year.
Four officers were granted study leave during the year
under the Scheme of enabling officers to pursue
higher studies in well-known Universities/Institutions in
India and abroad.
B. Staff Matters
a. Recruitment and Promotion
5.10 Out of 120 officers identified for recruitment in
Grade ‘A’ in the Rural Development Banking Service
of the Bank, 108 officers were appointed during the
year. A total of 695 promotions were effected during
the year, of which 8, 34 and 92 were promoted to
Grade ’F’, ‘E’ and ‘D’, respectively. Details of other
promotions effected are given in Table 5.1.
b. Staff Strength
5.11 The total staff strength of the Bank, as on 31
March 2010, stood at 4,770 of which 849 belonged to
Scheduled Castes (18%) and 398 to Scheduled Tribes
(8%) (Table 5.2). The staff strength of ex-servicemen
and physically challenged employees stood at 101 and
99, respectively, each constituting 2 per cent of the
total staff strength.
Table 5.1: Promotions Effected During the Year
Particulars Total of which
SC ST
Officers from Grade ‘B’ to ‘C’ 242 55 37
Officers from Grade ‘A’ to ‘B’ 261 42 26
Group ‘B’ to officers’ cadre (Grade A) 54 15 2
Group ‘C’ to Group ‘B’ 4 - -
Total 561 112 65
Table 5.2: Total Staff Strength
Cadre Total of which
SC ST
Group ‘A’ 2833 409 197
Group ‘B’ 1065 134 96
Group ‘C’ 872 306 105
Total 4770 849 398
97
A. Industrial Relations
5.12 Industrial relations in the Bank continued to be
harmonious during the year. Periodic discussions were
held between the Management and the All-India
National Bank Officers’ Association/All-India NABARD
Employees’ Association.
B. Transparency / Consultative
Approach
i. Grievances Redressal System
5.13 The Bank introduced a Grievances Redressal
System for the benefit of its staff members from 30
June 2009 with the objective of having an
independent mechanism for redressal of grievances of
individual officer/employee on the decisions of the
Bank on various service matters. A Grievances
Redressal Committee [GRC] and an Appellate
Committee have been set up in this regard. Five
meetings of the GRC were held and 13 representations
were considered.
ii. Joint Consultation Scheme for Officer Staff
5.14 The Joint Consultation Scheme (JCS) was
revived in June 2009 by setting up the Joint
Consultative Committee [JCC] at HO comprising
representatives of the Officers’ Association and
Human Resources Management Department, for
discussing issues of common interest in HR areas.
The first meeting of the JCC took place on 18
January 2010.
C. Welfare Measures for SC/ST
Employees
5.15 The Bank continued to adhere to instructions
issued by GoI on reservation for SC/ST employees in
recruitment and promotions. Prof. N. M. Kamble,
Hon’ble Vice-Chairman, National Commission for
Scheduled Castes reviewed the Reservation Policy
implemented by the Bank. The Board of Directors of
NABARD also reviewed the implementation of
Reservation Policy in the Bank, during its meeting held
on 23 November 2009. Quarterly meetings of the
Senior Executives and Chief Liaison Officer with
representatives of the Welfare Association of SC/ST
employees were held at Head Office (HO) and
Regional Office (RO). A two-day workshop on
implementation of Reservation Policy was conducted
for the benefit of staff members attached to various
administrative units. Nine pre-promotional training
programmes for 168 SC/ST staff members were
conducted in addition to pre-recruitment training for
1,165 SC/ST candidates at various centres. Other
benefits extended included granting scholarship to 86
wards of SC/ST employees and providing
compassionate appointment to dependents of thirteen
deceased employees.
D. Other Welfare Measures for the
Staff
5.16 During the year, housing loans aggregating
Rs.4,610.50 lakh were sanctioned to 400 employees.
Disbursements against the sanctions, including
sanctions of previous year, amounted to Rs.4,273.59
lakh.
5.17 The thirteenth Annual Sports and Cultural
Festival of the Bank, NABOTSAV, was held in
Bengaluru between 1 and 5 February 2010, in which
318 staff members from all over India participated.
5.18 The Central Complaints Committee in HO and
Committees in RO functioned effectively for
prevention of sexual harassment of women at
workplace.
5.19 NABARD Employees’ Group Gratuity Trust was
set up during the year with Shri S.K. Mitra, Executive
Director, NABARD as the Chairman.
Administrative and Other Matters
98
E. Other Developments
5.20 During the year, two sensitisation seminars on
administrative matters including disciplinary and RTI
cases were organised for 100 officers from HO and
various RO/TE.
5.21 The Committee set up to review and
recommend the existing/new facilities/amenities
enjoyed by DDMs along with assessing the workloads
of DDMs has submitted its report. The
recommendations are under examination.
F. Library
5.22 The Central Library at HO houses 28,902
English and 5,554 Hindi books, respectively. Apart
from subscribing to 120 journals and magazines on
agriculture and allied activities, banking, rural
development, information technology, etc., the
Library also subscribes to institutional membership of
the British Library. It also networks with other major
libraries in Mumbai. Further, on-line access to the
Library Catalogue and relevant articles are made
available. An exhibition of books was arranged at
HO, Mumbai during the year
G. Data Management
5.23 During 2009-10, district profile data were
further refined and widened to include 19 parameters
relating to agriculture and rural development. Further,
a Banking Profile was also developed, covering nine
important banking parameters, viz., Network and
Outreach, Deposits, Loans and Advances
Outstandings, CD Ratio, Performance under Financial
Inclusion, Achievement of National Goals, Agency-
wise performance under Annual Credit Plans and
Recovery Position. The revised and updated District
Data Profile and Banking Profile have been included
in the PLP for 2010-11. In addition, MIS for Top
Management giving the latest achievements in all
major business and development areas is continued to
be made available on NABNET, the internal website
of NABARD and updated every month. Star
Performance Indicators showing the comparative
position of achievements by ROs in important
functional areas is also made available on NABNET
every month for monitoring the performance by the
top management. An innovative indexation model
called the “District Agricultural Development Index”
was developed for analysing the comparative position
of Districts of various states in respect of overall
Agricultural Development. This year, the model was
prepared for Uttar Pradesh. The internal and external
circulars of the Bank and an e-journal called “Issues
in Agriculture and Rural Development” are also made
available on NABNET. “NABSTATS” – a quarterly
bulletin of statistical information in the domain of
Agriculture and Rural Development – is also being
published and made available on the website of the
Bank for wider dissemination.
H. Information Technology
5.24 During the year, the Bank’s intranet was
expanded to collect data/returns from RO/TE by
means of an Online Returns Management System
(ORMS), developed in-house, to help HO
Departments generate MIS reports quickly and
accurately. The accounting software was made
bilingual and upgraded with additional features to
include preparation of e-TDS and other monitoring
reports. Speech Recognition Software was provided to
RO/DDM to improve efficiency. A dedicated software
for providing computer support from a remote
location was introduced on a pilot basis. With a view
to saving executive time and facilitating direct
interaction and to effectively control travel and related
costs, a video conferencing facility was set up in the
Bank in the last week of March 2010. Performance
Appraisal Reports (PAR) of officers (through in-house
Human Resources Management System Software)
were submitted online, for the first time in NABARD.
This is another step of the Bank towards
transparency, optimum use of technology and saving
precious time for fruitful pursuits.
99
I. Office Premises / Residential
Quarters
5.25 At present, apart from the own-office premises at
HO Mumbai and at the Training Complex, Lucknow, the
Bank has its own premises in sixteen out of twenty-nine
cities where the Regional Offices are located.
Construction of Regional Office Buildings at Bengaluru,
Itanagar, Port Blair and Regional Training College (RTC),
Mangalore is in progress. The premises for Jammu RO,
RTC Bolpur and Natural Resource Management Centre
(NRMC), Kolkata, will enter construction phase during
2010-11. Purchase of plots for office buildings/residential
quarters is in process in Imphal, Dimapur, Gangtok and
Agartala. Construction of residential flats is in progress in
Raipur and Ranchi.
J. Vigilance
5.26 Eight Preventive Vigilance Inspections of
Regional Offices/BIRD/RTC were conducted by Central
Vigilance Cell (CVC), HO, to ensure that the systems
and procedures were duly followed. A workshop was
also conducted at NBSC, Lucknow for officers posted
in Vigilance Cell of RO/TE, to create awareness and
equip officers to function effectively as Vigilance
Officers, Enquiry Officers and for Presenting Officers.
A ‘Vigilance Awareness Week’ was observed in the
Bank in the first week of November 2009.
K. Inspections, Concurrent Audits
and Committee Meetings
5.27 During the year 2009-10, in accordance with
the Annual Inspection Programme approved by Audit
Committee of the Board (ACB), the Inspection
Department of the Bank carried out inspection of 19
HO Departments, 16 Regional Offices and Bolpur
Regional Training Centre. On conclusion of the
inspections and issue of Inspection Reports (IR), Flash
Reports (FR), citing major areas of concern were
submitted to Top Management. Memorandum and
Synopsis of the IR issued together with compliance
were also placed before the Management Committee
(MC) and ACB for deliberation and guidance.
5.28 The Concurrent Audit of Head Office
Departments, viz., Finance Department, Accounts
Department, GAD, Premises Department and Co-
Financing Cell of ICD, Treasury Operations,
Information System Audit, etc., continued to be
outsourced to external auditors. During the year, the
audit of Library and HRMD-Leave Section was also
done by external auditors. The concurrent audit of all
RO/TE continued to be undertaken by Concurrent
Audit Cells (CAC) set up in the respective RO/TE. In
order to improve the efficiency and effectiveness of
the CAC in RO/TE, two workshops were held, one at
RTC, Mangalore and the other at NBSC, Lucknow.
L. Public Relations
5.29 In its endeavour to build strong corporate image
and to disseminate information on rural development
programmes/schemes, NABARD initiated a number of
steps, which resulted in wide coverage of its activities,
particularly in the print media. New areas like
Co-financing, Rural Innovation Fund, Village
Development Programme and Financial Inclusion
were highlighted in the print media. An application
status tracking system has been activated to enable
the public and other stakeholders to know the status
of their applications with NABARD. A Coffee Table
Book ‘Nurturing Dreams, Harvesting Happiness’,
brought out by the Bank won the Gold in the Prestige
Publications category of the Association of Business
Communicators of India (ABCI) Awards 2010.
Similarly, NABARD Parivar, the Bank’s quarterly
house journal, won the Silver in the Internal
Magazines category, placing it second among all
house journals published in India.
M. Visit of Parliamentary Committee
5.30 During the year 2009-10, following three
Parliamentary Committees visited the Bank.
1. The Committee on Subordinate Legislation
(Rajya Sabha) visited Shimla and Manali for
discussions on Regional Rural Bank (Officers and
Employees) Service Regulations, 2002 from
11 June 2009 to 17 June 2009.
2. Drafting and Evidence Sub-Committee of Parliament
on Official Language visited Hyderabad from
21 October 2009 to 22 October 2009.
3. Drafting and Evidence Sub-Committee of
Parliament on Official Language visited Raipur
on 19 March 2010.
N. Promotion of Hindi
5.31 In addition to using Hindi in its day-to-day
functioning in order to comply with the statutory
provisions relating to Rajbhasha, NABARD also
continued to promote use of Hindi as an effective tool
of mass communication for its business development.
Official Language Implementation Committees
constituted in all offices, including Head Office,
monitored implementation of the Rajbhasha Policy of
the Govt. of India. Monitoring was also done through
quarterly progress reports received from Regional
Offices/Training Establishments. On-site inspection of
8 Regional Offices and 6 Head Office Departments
was also conducted during the year with a view to
ensuring strict compliance with the Rajbhasha Policy.
5.32 As part of its efforts towards capacity building
of the staff in order to enable them to use Hindi in
their official work, workshops including the newly
introduced 3-level innovative workshops, were conducted
during the year. Special efforts were made to
popularise the use of unicode Hindi fonts through
special workshops conducted for training on use of
APS Saral, the unicode-compliant version of the
Bank’s official bilingual software. A Rajbhasha
orientation programme for senior officers was also
conducted at NBSC, Lucknow. With a view to making
Rajbhasha staff capable of using state-of-the-art
computer technology in use of Hindi in computerised
work environment, a five-day IT-oriented technical
skill enhancement programme was conducted at
NBSC, Lucknow. A five-day programme for
Rajbhasha officers was also conducted during the year
in order to improve their translation skills.
‘DoS Glossary’ was prepared in consultation with the
Department of Supervision and made available to the
offices in Region ‘A’, to be used by the inspecting
officers and by those scrutinising the reports for
encouraging issuance of inspection reports in Hindi in
this region. During the year, these offices prepared
102 Potential-linked Credit Plans and issued 54
inspection reports in Hindi.
5.33 Under the Cash Award Scheme launched to
motivate the staff to do their office work originally
in Hindi, cash award was given to eligible staff
during the year. Rajbhasha Shield for excellent work
in Hindi during 2008-09 was awarded to the best
RO in the Regions ‘A’, ‘B’ & ‘C’, respectively and to
one Training Establishment and to two HO
Departments.
101
VI
Financial Performance & Management of Resources
Table 6.1: Sources of Funds
(Rs. in crore)
Particulars 31.03.2009 31.03.2010
Amount Share Amount Share
(%) (%)
Capital, Reserves & Surplus 11,535 9.8 12,675 9.3
NRC (LTO) and 15,571 13.2 15,983 11.7
(Stab.) Funds
Deposits 482 0.4 505 0.4
Bonds & Debentures 23,699 20.1 20,004 14.7
STCRC Fund 4,622 3.9 9,622 7.1
Borrowings from GoI 354 0.3 147 0.1
Borrowings from 500 0.4 500 0.4
Commercial Banks
Certificate of deposits 1,816 1.5 379 0.3
Commercial Paper 181 0.2 2,680 1.9
Term Money Borrowings 244 0.2 763 0.5
RIDF Deposits 47,023 39.8 59,869 43.9
Foreign Currency Loan 498 0.4 494 0.4
Borrowing under CBLO 0 0 215 0.2
Other Liabilities/Funds 11,651 9.8 12,456 9.1
Total 1,18,176 100 1,36,292 100.00
Resource Management is an important aspect of
NABARD’s overall management. NABARD, like any
other financial organisation, has put in place a sound
resource management system.
6.2 The financial resources of NABARD increased
by Rs.18,116 crore to Rs.1,36,292 crore during 2009-10
against Rs.1,18,176 crore during 2008-09. The
increase in resources was by way of net inflow of
Rural Infrastructure Development Fund Deposits,
Short Term Co-operative Rural Credit Fund,
Commercial Papers and internal accruals. The funds
deployed for investment operations (including rural
infrastructure development) and loans to state
governments for contributing to the share capital of
co-operative credit institutions increased by
Rs.16,993 crore as on 31 March 2010, while those
deployed for production and marketing activities
(including conversion and liquidity support) decreased
by Rs.4,586 crore during 2009-10. The sources and
uses of funds are as under:
Sources of Funds
A. Capital, Reserves & Surplus
6.3 The paid-up capital remained at Rs.2,000 crore
(Rs.550 crore subscribed by GoI and Rs.1,450 crore
by RBI) since 2001-02 against the authorised capital
of Rs.5,000 crore. The amount of reserves and surplus
increased by Rs.1,140 crore from Rs.9,535 crore to
Rs.10,675 crore as at the end of current year.
B. NRC (LTO) & NRC (Stabilisation)
Funds
6.4 The National Rural Credit (Long Term
Operations) and National Rural Credit (Stabilisation)
Funds are utilised for investment operations and for
conversion/reschedulement of short-term credit,
respectively. These funds are augmented by internal
accruals and contributions made by RBI. During the
year, an amount of Rs. 412 crore was contributed to
these Funds.
Deposits
6.5 The amount of term deposits and the deposits
received from tea, coffee and rubber companies
aggregated Rs.505 crore, as on 31 March 2010 as
against Rs.482 crore at the end of previous year,
reflecting an increase of Rs.23 crore in the current year.
6.6 During the year, RIDF deposits from
commercial banks under RIDF VIII to XV aggregated
Rs.16,399 crore, with repayments being Rs.3,553 crore
under RIDF V to XIV. As on 31 March 2010, RIDF
deposits outstanding stood at Rs.59,869 crore, as
against Rs.47,023 crore at the end of previous year,
resulting in a net inflow of Rs.12,846 crore .
6.7 To augment NABARD’s resources for ST credit
facilities to Co-operative Institutions, the Short-Term
102
Cooperative Rural Credit (Refinance) Fund was set up
in 2008-09 with a corpus of Rs.4,622 crore contributed
by scheduled commercial banks and strengthened with
an additional allocation of Rs.5,000 crore for 2009-10.
The outstanding under STCRC – I & II at the end of
the current year were Rs.9,622 crore.
Borrowings
6.8 In order to meet the increasing credit demand,
NABARD has been augmenting its resources from
market borrowings in the form of bonds, commercial
papers, certificates of deposits, term money borrowings,
corporate borrowings, borrowings from Government of
India and bor rowings in foreign cur rency. The
borrowings of NABARD constituted 18.5 per cent of
i ts working funds as on 31 March 2010. The
developments relating to the market borrowings of the
bank is given below.
i. Capital Gains Bonds
6.9 Capital Gains Bonds aggregating Rs.329.30 crore
were redeemed and the outstanding at the end of the
year stood at Rs.361.64 crore.
ii. Corporate Bonds
6.10 No fresh Corporate Bonds were issued during
the year; but Rs.3,280.50 crore were redeemed. The
amount outstanding at the end of the year 2009-10
was Rs.14,876 crore.
iii. Statutory Liquidity Ratio (SLR) Bonds
6.11 During the year, SLR Bonds worth Rs.89.35 crore
were redeemed and the outstanding was Rs.188.63 crore,
as on 31 March 2010.
iv. Bhavishya Nirman Bonds (BNBs)
6.12 The approval to issue BNBs was obtained from
GoI in the last quarter of 2009-10. The issue was
opened in March 2010 and Rs.15.63 crore were
mobilised. The outstanding under BNBs stood at
Rs.4,554.11 crore as on 31 March 2010.
v. NABARD Rural Bonds
6.13 No fresh bonds were issued during the year. The
outstanding at the end of the year was Rs.24 crore.
Certificates of Deposit
6.14 Certificates of Deposits of Rs.379.46 crore were
raised during the year while the redemption was
Rs.1,995 (face value) crore resulting in a net outflow
of resources. The outstanding amount was Rs.379 crore,
as on 31 March 2010 as compared to Rs.1,816 crore
as on 31 March 2009.
Term Money Borrowings
6.15 Term Money Borrowings (TMB) of three to six
months tenor were resorted to meet short term
requirements. TMBs of Rs.921.52 crore were raised
and Rs.403.09 crore repaid during the year, leaving an
outstanding of Rs.763 crore, as on 31 March 2010, as
against Rs.244 crore at the end of previous year.
GoI Borrowings
6.16 There were no borrowings from the Government
of India during the year 2009-10 but only repayment of
Rs.207 crore on maturity of loans drawn under various
externally-aided projects. The outstanding borrowing
stood at Rs.147 crore, as on 31 March 2010, while
Rs.354 crore was the outstanding as on 31 March 2009.
Corporate Borrowings
6.17 There were no fresh borrowings or repayments
during the year. The outstanding Corporate
Borrowings stood at the previous year’s level of
Rs.500 crore as on 31 March 2010.
Borrowings in Foreign Currency
6.18 An amount of Rs.6.1 crore was drawn under KfW
(XI) (UPNRM) which resulted in borrowings in foreign
currency from KfW, Germany, aggregating Rs.494 crore,
as on 31 March 2010. 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.
103
Uses of Funds
A. Loans and Advances
a. ST Loans, MT (Conversion) Loans
and Liquidity support
6.19 The ST (SAO) loans advanced to the SCBs at
Rs.17,002 crore and to RRBs at Rs.6,699 crore
together with ST (OSAO) loans to SCBs at Rs.167 crore
and RRBs at Rs.205 crore increased to Rs.24,073
crore, as on 31 March 2010, from Rs.16,896 crore at
the end of previous year. The liquidity support
extended to the co-operative banks and RRBs for
providing short-term credit had come down from
Rs.2,591 crore as on 31 March 2009 to Rs.20 crore
at the end of the current year.
b. Loans to State Governments
i. Project Loans under RIDF
6.20 RIDF loans to State Governments stood at
Rs.60,255 crore as on 31 March 2010 compared to
Rs.45,616 crore at the end of previous year,
recording a net outflow of Rs.14,639 crore during
the year.
ii. Non-Project Loans
6.21 The amount outstanding under the non-project
long-term (LT) loans granted to state governments
for contributing to the share capital of co-operative
credit institutions, amounted to Rs.199 crore, at the
end of the year, compared to Rs.252 crore as on
31 March 2009.
Investment Credit
6.22 Refinance assistance of Rs.35,742 crore, as on
31 March 2010, was extended to banks for medium and
long-term investment credit as against Rs.33,335 crore at
the end of previous year.
Table 6.2: Uses of Funds
(Rs. crore)
Particulars 31.03.2009 31.03.2010
Amount Share (%) Amount Share (%)
Cash and Bank Balance 13,975 11.8 9,628 7.1
Government Securities and other Investments 2,995 2.5 3,785 2.8
Production and Marketing Credit 16,896 14.3 24,073 17.7
Conversion of Production Credit into MT Loans 20 0.0 0 0
Liquidity Support 2,591 2.2 20 0.1
MT and LT Project Loans 33,335 28.2 35,742 26.2
LT Non Project Loans 252 0.2 199 0.1
Loans out of RIDF 45,616 38.6 60,255 44.2
Co-Finance Loans (net of provision) 95 0.1 84 0.0
Other Loans (including MT Investment Credit) 48 0.1 133 0.1
Fixed Assets and Other Assets 2,353 2.0 2,373 1.7
Total 1,18,176 100.0 1,36,292 100.00
104
Co-finance
6.23 Projects with large outlay, unproven technology
and having long-gestation period were co-financed
(net of provisions) in association with other banks to
the tune of Rs.84 crore as on 31 March 2010 as
against Rs.95 crore at the end of previous year.
Investment of Surplus Funds
Other Loans
6.24 Other loans extended out of different Funds
(CDF, MFDEF, WDF and TDF) stood at Rs.133 crore,
as on 31 March 2010, compared to Rs.24 crore in the
previous year.
6.25 The amount of surplus funds deployed by
NABARD in various financial instruments stood at
Rs.12,785 crore at the end of the year.
Income and Expenditure
6.26 The total income of NABARD during the
current year amounted to Rs.7,964.80 crore as
against Rs.7,050.68 crore during the previous year.
After meeting an expenditure of Rs.5,692.34 crore
interest/financial charges, establishment/other expenses,
provisions and depreciation, the profit before tax for the
year amounted to Rs.2,272.45 crore. After providing
for provision/adjustment for taxes, the profit after tax
during the current year amounted to Rs.1,558.26 crore
as against Rs.1,390.13 crore for the previous year.
Amounts of Rs.350 crore, Rs.400 crore, Rs.10 crore
and Rs.679 crore were transferred to Special Reserve
u/s 36(1) (viii) of IT Act 1961, NRC (LTO) Fund,
NRC (Stabilisation) Fund and Reserve Fund,
respectively. Further, an aggregate amount of Rs.190 crore
was transferred to various Funds, viz., Cooperative
Development Fund, Research and Development
Fund, Investment Fluctuation Reserve, FIF, FITF,
FTTF and FIPF.
105
Annual
Accounts
2009-2010
106
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, 2010 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 10 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 03, 2010 issued by Ministry of Finance, Department of Financial services. Also incorporated in the Balance Sheet,
Profit and Loss Account and Cash Flow Statement are the returns from 19 Regional Offices and 2 Training Centers which
have not been subjected to audit. These unaudited offices account for 33.46% of advances, 0.23% of deposits and term
money borrowings, 31.08% of interest income and 0.05% 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, 2010; 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: May 26, 2010
For and on behalf of
Khimji Kunverji & Co.
Chartered Accountants
Firm Registration No. 105146W
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
107
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
BALANCE SHEET AS ON 31 MARCH 2010 (Rupees)
Sr. FUNDS AND LIABILITIES SCHEDULE As on As on
No. 31.03.2010 31.03.2009
1. Capital
(Under Section 4 of the NABARD Act, 1981) 2000,00,00,000 2000,00,00,000
2. Reserve Fund and Other Reserves 1 10674,59,96,115 9535,20,60,005
3. National Rural Credit Funds 2 15983,00,00,000 15571,00,00,000
4. Funds out of grants received from International Agencies 3 149,87,64,124 154,81,78,661
5. Gifts, Grants, Donations and Benefactions 4 4708,08,54,379 5111,01,92,515
6. Other Funds 5 2735,06,35,346 2101,80,68,588
7. Deposits 6 69996,02,02,581 52127,12,34,628
8. Bonds and Debentures 7 20004,38,12,150 23699,43,69,900
9. Borrowings 8 5177,79,67,741 3592,94,14,312
10. Current Liabilities and Provisions 9 4863,30,88,915 4282,76,12,962
Total 136292,13,21,351 118176,11,31,571
Forward Foreign Exchange Contracts 563,65,53,807 634,56,79,356
(Hedging) as per contra
(Rupees)
Sr. PROPERTY AND ASSETS SCHEDULE As on As on
No. 31.03.2010 31.03.2009
1. Cash and Bank Balances 10 9628,33,75,484 13975,21,04,689
2. Investments 11 3785,49,64,266 2994,68,29,886
3. Advances 12 120505,84,57,361 98852,67,05,981
4. Fixed Assets 13 234,71,83,481 247,17,14,222
5. Other Assets 14 2137,73,40,759 2106,37,76,793
Total 136292,13,21,351 118176,11,31,571
Forward Foreign Exchange Contracts (Hedging) as per contra 563,65,53,807 634,56,79,356
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 S. Akbar
Partner Chief General Manager
Mumbai Accounts Department
Date : May 26, 2010 Mumbai : May 25, 2010
Umesh Chandra Sarangi Dr. K.G. Karmakar Dr. K. C. Chakrabarty Shashi Rekha Rajagopalan
Chairman Managing Director Director Director
108
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2010 (Rupees)
Sr.No. INCOME SCHEDULE 2009-10 2008-09
1. Interest received on Loans and Advances(Refer Note B-4 of Schedule 18) 6653,31,46,297 5693,02,22,426
2. Income from Investment Operations / Deposits 1212,73,43,457 1214,81,25,5863. Discount and Commission 42,95,49,641 92,55,15,6724. Other Receipts (Refer Note B-6 of Schedule 18) 55,79,61,620 50,29,52,260
Total “A” 7964,80,01,015 7050,68,15,944
Sr.No. EXPENDITURE SCHEDULE 2009-10 2008-09
1. Interest and Financial Charges 15 4988,45,57,914 4255,90,25,2202. Establishment and Other Expenses 16 A 547,97,73,568 693,38,57,4873. Provisions 16 B 132,62,06,480 92,49,80,5874. Depreciation (Refer Note B-15 of Schedule 18) 23,29,35,835 21,36,41,786
Total “B” 5692,34,73,797 5063,15,05,080
5. Profit before Tax (A - B) 2272,45,27,218 1987,53,10,8646. a) Provision for Income Tax 647,00,00,000 674,00,00,000
b) Provision for Deferred Tax - (Asset) (Refer Note B-11 of Schedule 18) 67,19,00,000 (-) 80,20,00,000c) Provision for Fringe Benefit Tax 0 3,60,00,000
7. Profit after Tax 1558,26,27,218 1390,13,10,864
Significant Accounting Policies and Notes on Accounts 18
Schedules referred to above form an integral part of accounts.
PROFIT AND LOSS APPROPRIATION ACCOUNT (Rupees)
Sr.No. APPROPRIATIONS / WITHDRAWALS 2009-10 2008-09
1. Profit for the year brought down 1558,26,27,218 1390,13,10,864
2. Add: Withdrawals from Funds against
expenditure debited to Profit & Loss A/ca) Co-operative Development Fund (Refer Schedule 1) 3,83,03,657 3,81,14,043b) Research and Development Fund (Refer Schedule 1) 9,82,98,599 8,76,10,683c) Watershed Development Fund (Refer Schedule 5) 44,70,44,367 24,91,45,824d) Micro Finance Development and Equity Fund (Refer Schedule 5) 10,01,05,309 9,92,70,242e) Farm Innovation & Promotion Fund (Refer Schedule 1) 96,93,544 73,40,088
3. Financial Inclusion Technology Fund 1,00,00,000 0(Refer note B-8(b) of Schedule 18)
4. Profit available for Appropriation 1628,60,72,694 1438,27,91,744
Less: Transferred to:a) Special Reserve u/s 36(1) (viii) of IT Act, 1961 350,00,00,000 340,00,00,000b) National Rural Credit (Long Term Operations) Fund 400,00,00,000 400,00,00,000c) National Rural Credit (Stabilisation) Fund 10,00,00,000 10,00,00,000d) Co-operative Development Fund 3,83,03,657 3,81,14,043e) Research and Development Fund 9,82,98,599 8,76,10,683f) Investment Fluctuation Reserve (Refer Schedule 1) 30,00,00,000 42,00,00,000g) Financial Inclusion Fund 0 18,50,00,000h) Financial Inclusion Technology Fund 0 32,50,00,000i) Farmers Technology Transfer Fund 64,58,40,784 31,61,42,310j) Farm Innovation & Promotion Fund (Refer Schedule 1) 96,93,544 46,55,57,504k) MFDEF Reserve Fund 80,00,00,000 0l) Reserve Fund 679,39,36,110 504,53,67,204
Total 1628,60,72,694 1438,27,91,744
Refer Schedule 18 for Significant Accounting Policies and Notes on Accounts.
As per our attached report of even dateKhimji Kunverji & Co.Chartered Accountants
Hasmukh B. Dedhia S. AkbarPartner Chief General ManagerMumbai Accounts DepartmentDate : May 26, 2010 Mumbai : May 25, 2010
Umesh Chandra Sarangi Dr. K.G. Karmakar Dr. K. C. Chakrabarty Shashi Rekha RajagopalanChairman Managing Director Director Director
109
SCHEDULES TO BALANCE SHEET
Schedule 1 – Reserve Fund and Other Reserves (Rupees)
Sr. Particulars Opening Transferred Transferred Balance as on
No. Balance From P&L to P&L 31.03.2010
as on 01.04.2009 Appropriation Appropriation
1. Reserve Fund 5223,34,02,861 679,39,36,110 0 5902,73,38,971
2. Research and Development Fund 50,00,00,000 9,82,98,599 9,82,98,599 50,00,00,000
3. Capital Reserve 74,80,53,208 0 0 74,80,53,208
4. Investment Fluctuation Reserve 115,00,00,000 30,00,00,000 0 145,00,00,000
5. Co-operative Development Fund 125,00,00,000 3,83,03,657 3,83,03,657 125,00,00,000
6. Soft Loan Assistance Fund for Margin Money 10,00,00,000 0 0 10,00,00,000
7. Agriculture & Rural Enterprise Incubation Fund 5,00,00,000 0 0 5,00,00,000
8. Foreign Currency Risk Fund 147,06,03,936 0 0 147,06,03,936
9. Special Reserve Created & Maintained
u/s 36(1)(viii) of Income Tax Act, 1961 3735,00,00,000 350,00,00,000 0 4085,00,00,000
10. MFDEF - Reserve Fund 0 80,00,00,000 0 80,00,00,000
11. Farm Innovation & Promotion Fund 50,00,00,000 96,93,544 96,93,544 50,00,00,000
Total 9535,20,60,005 1154,02,31,910 14,62,95,800 10674,59,96,115
Previous year 8602,84,75,385 945,66,49,434 13,30,64,814 9535,20,60,005
Schedule 2 – National Rural Credit Funds
(Rupees)
Sr. Particulars Opening Balance Contribution by Transferred from Balance as on
No. as on 01.04.2009 RBI P&L 31.03.2010
Appropriation
1. National Rural Credit
(Long Term Operations) Fund 14016,00,00,000 1,00,00,000 400,00,00,000 14417,00,00,000
2. National Rural Credit (Stabilisation) Fund 1555,00,00,000 1,00,00,000 10,00,00,000 1566,00,00,000
Total 15571,00,00,000 2,00,00,000 410,00,00,000 15983,00,00,000
Previous year 15159,00,00,000 2,00,00,000 410,00,00,000 15571,00,00,000
Schedule 3 – Funds out of Grants received from International Agencies
(Rupees)
Sr. Particulars Opening Grants received/ Interest Exp./Disb./adjusted Balance
No. Balance as on adjusted during credited to during the as on
01.04.2009 the year the Fund year 31.03.2010
1. National Bank - Swiss
Development Coop. Project 55,61,77,174 0 0 0 55,61,77,174
2. Rural Innovation Fund (RIF)
(Refer Note B-2 & 8(a) of Schedule 18) 89,28,89,998 0 4,71,54,118 10,69,88,027 83,30,56,089
3. Rural Promotion Fund (RPF)
(Refer Note B-2 & 8(a) of Schedule 18) 7,25,30,324 77,84,111 2,14,711 0 8,05,29,146
4. KfW - NABARD V Fund for
Adivasi Programme 2,65,81,165 15,53,84,211 0 15,29,63,661 2,90,01,715
Total 154,81,78,661 16,31,68,322 4,73,68,829 25,99,51,688 149,87,64,124
Previous year 170,38,44,460 7,76,09,944 5,05,40,943 28,38,16,686 154,81,78,661
110
Schedule 4 – Gifts, Grants, Donations and Benefactions
(Rupees)
Sr. Particulars Opening Grant received Interest Adjusted Balance as onNo. Balance as on during Credited to against the 31.03.2010
01.04.2009 the year the Fund expenditure
A.1. KfW - NB - IX Adivasi Development Programme -
Maharashtra (Refer Note B-8(a) of Schedule 18) 39,85,661 13,43,01,826 5,24,203 13,81,43,080 6,68,610
2. KfW UPNRM - Accompanying Measures 0 86,57,339 24,999 94,12,603 (-) 7,30,265
3. KfW NB UPNRM - Financial Contribution 0 14,63,807 0 6,80,050 7,83,757
4. KfW UPNRM - Risk Mitigation Fund 0 11,74,196 0 0 11,74,196
5. International Fund for Agriculture Development(IFAD) Priyadarshini 0 0 0 19,11,339 (-) 19,11,339
6. GTZ - Uttarakhand Regional Economic Development 0 86,38,750 0 0 86,38,750
7. KfW-NB-Indo German Watershed DevelopmentProgramme - Phase III - Maharashtra(Refer Note B-8(a) of Schedule 18) 2,01,20,591 30,65,24,891 15,73,767 29,29,12,457 3,53,06,792
8. Indo German Watershed Development Programme -Andhra Pradesh (Refer Note B-8(a) of Schedule 18) 36,84,644 3,40,62,570 1,50,063 3,78,97,277 0
9. Indo German Watershed Development Programme -Gujarat (Refer Note B-8(a) of Schedule 18) 54,47,684 2,13,50,924 1,35,155 2,41,80,034 27,53,729
10. Indo German Watershed Development Programme -Rajasthan (Refer Note B-8(a) of Schedule 18) 42,14,143 2,50,65,838 67,735 2,93,47,716 0
11. KfW Umbrella Programme on Natural ResourceManagement Fund (Refer Note B-3 of Schedule 18) 7,15,04,962 (-) 53,31,155 0 (-) 2,57,22,540 9,18,96,347
12. NABARD Grant for Fixed Assets underNB-SDC HID Project 6,60,066 0 0 0 6,60,066
13. NE Council Fund for MiscellaneousTraining Programme (-) 7,36,696 20,00,000 0 10,65,647 1,97,657
14. KfW NB SEWA Bank Capitalisationof Rural Financial Institutions (RFIs) 0 2,97,08,678 0 2,97,08,678 0
15. GTZ Rural Financial Institutions Program (RFIP) 0 1,04,33,000 0 62,15,187 42,17,813
B.1. Capital Investment Subsidy for
Cold Storage Projects - NHB 98,89,910 47,51,84,646 0 28,91,57,100 19,59,17,456
2. Capital Subsidy for Cold Storage - NHM 27,84,090 0 0 18,17,600 9,66,490
3. Capital Subsidy for Cold Storage -TM North East 1,54,42,626 4,91,43,864 0 2,14,42,626 4,31,43,864
4. Credit Linked Capital Subsidy forTechnology Upgradation of SSIs 63,90,352 3,95,15,000 0 4,47,04,972 12,00,380
5. Subsidy Reserve Co-Finance 0 40,16,350 0 0 40,16,350
6. Capital Investment Subsidy for Rural Godowns 23,76,77,452 55,90,00,000 0 65,44,81,505 14,21,95,947
7. On-farm Water Management for Crop Production 1,91,818 0 0 0 1,91,818
8. Million Shallow Tubewell Programme - Bihar 231,67,29,889 0 0 229,04,14,615 2,63,15,274
9. Bihar Ground Water Irrigation Scheme (BIGWIS) 0 231,67,29,889 0 32,01,88,625 199,65,41,264
10. Cattle Development Programme - Uttar Pradesh(Refer Note B-8(a) of Schedule 18) 2,22,73,308 0 3,71,038 2,22,60,000 3,84,346
11. Cattle Development Programme - Bihar(Refer Note B-8(a) of Schedule 18) 2,71,77,680 0 10,47,619 1,72,76,000 1,09,49,299
12. National Project on Organic Farming 4,63,11,838 0 0 2,38,37,375 2,24,74,463
13. Integrated Watershed Development Programme -Rashtriya Sam Vikas Yojana 18,62,95,492 0 0 8,61,77,136 10,01,18,356
14. Centrally Sponsored Scheme on IntegratedDevelopment of Small Ruminants and Rabbits 0 3,00,00,000 0 0 3,00,00,000
15. Rain Water Harvesting Scheme 82,81,344 0 0 (-) 30,000 83,11,344
111
Schedule 4 – Gifts, Grants, Donations and Benefactions
E As on 31.03.2010 As on 31.03.2009
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
Total 0 0
(Rupees)
Sr. Particulars Opening Grant received Interest Adjusted Balance as onNo. Balance as on during Credited to against the 31.03.2010
01.04.2009 the year the Fund expenditure
16. Kutch Drought Proofing Project 64,47,219 0 0 0 64,47,219
17. Dairy and Poultry Venture Capital Fund 24,09,73,069 20,00,00,000 0 27,75,12,404 16,34,60,665
18. Poultry Venture Capital Fund 0 7,64,01,683 0 5,51,446 7,58,50,237
19. Scheme for providing Financial Assistance toSugar Undertakings - 2007 (SEFASU - 2007) 0 125,71,09,032 0 48,63,17,129 77,07,91,903
20. Capital Subsidy for Agriculture MarketingInfrastructure, Grading and Standardisation 16,15,00,220 38,74,12,000 0 49,88,59,117 5,00,53,103
21. Centrally Sponsored Scheme forestablishing Poultry Estate 0 2,21,27,000 0 0 2,21,27,000
22. Livelihood Advancement Business School - Sultanpur,Uttar Pradesh (Refer Note B-8(a) of Schedule 18) 75,26,115 0 3,62,292 36,90,000 41,98,407
23. Livelihood AdvancementBusiness School - Rae - Bareli, Uttar Pradesh(Refer Note B-8(a) of Schedule 18) 1,07,57,683 0 6,35,617 32,40,000 81,53,300
24. Multi Activity Approach for Poverty Alleviation -Sultanpur, Uttar Pradesh(Refer Note B-8(a) of Schedule 18) 9,15,615 3,93,24,000 3,34,934 3,58,75,000 46,99,549
25. Multi Activity Approach for PovertyAlleviation - BAIF - Rae Bareli, Uttar Pradesh(Refer Note B-8(a) of Schedule 18) 21,88,848 3,84,78,000 6,26,426 2,87,00,000 1,25,93,274
26. Capital Subsidy Scheme -Agri Clinics Agri Business Centres 70,91,695 2,00,00,000 0 1,60,87,038 1,10,04,657
27. Artificial Recharge of Groundwater inHard Rock Area 1393,40,91,600 0 0 137,24,91,547 1256,16,00,053
28. Subsidy Reserve - Central Sector Scheme forAgriMarketing Infrastructure (CSAMI) under RIDF 69,47,300 0 0 (-) 22,32,700 91,80,000
29. Comprehensive District Plan 0 0 0 0 0
30. United Nation Development Programme (UNDP) -NABARD - Financial Inclusion Fund 0 17,04,000 0 28,36,293 (-) 11,32,293
31. Debt Waiver and Debt Relief Scheme(DWDR) 2008 888,98,76,325 10822,30,71,849 0 8781,04,66,593 2930,24,81,581
32. Interest Subvention (Sugar Term Loan) 22,35,28,920 0 0 15,03,91,929 7,31,36,991
C. Revival Package of Short Term CooperativeCredit Structure
1. Cost of Special Audit 15,81,79,625 0 0 (-) 18,67,381 16,00,47,006
2. Recapitalisation Assistance to Credit CooperativeSocieties 2319,66,19,073 780,00,00,000 0 3097,74,84,520 1,91,34,553
3. Technical Assistance 41,63,03,412 0 0 9,53,24,009 32,09,79,403
4. Human Resources Development 51,36,24,558 5,00,00,000 0 3,80,85,442 52,55,39,116
5. Implementation Cost 14,52,94,384 15,00,00,000 0 24,11,68,493 5,41,25,891
D. Long Term Co-operative Credit Structure (LTCCS) 20,00,00,000 0 0 0 20,00,00,000
Total 5111,01,92,515 12231,72,67,977 58,53,848 12635,24,59,961 4708,08,54,379
Previous year 3967,49,29,810 21902,90,60,391 89,23,079 20760,27,20,765 5111,01,92,515
112
Schedule 5 – Other Funds(Rupees)
Sr. Particulars Opening Additions/ Transferred Interest Expenditure/ Transferred Balance as onNo. Balance as on Adjustments from P & L Credited Disb.during to P&L 31.03.2010
01.04.2009 during the year Appropriation the year Appropriation
1. Watershed DevelopmentFund (Refer Note B-8(a)of Schedule 18) 1125,20,82,053 4,88,98,759 0 62,14,79,659 44,70,43,368 44,70,44,367 1102,83,72,736
2. Micro Finance Developmentand Equity Fund (ReferNote B-8(a) of Schedule 18) 133,92,26,272 20,00,00,000 0 5,10,57,237 10,48,37,639 10,01,05,309 138,53,40,561
3. Interest Differential Fund -(Forex Risk) 131,72,59,945 13,50,96,743 0 0 0 0 145,23,56,688
4. Interest Differential Fund -(Tawa) (Refer Note B- 1 ofSchedule 18) 11,55,448 0 0 0 0 0 11,55,448
5. Adivasi Development Fund 3,39,55,294 4,35,97,724 0 0 7,55,25,000 0 20,28,018
6. Tribal Development Fund 574,98,34,187 628,85,46,109 0 0 53,01,13,090 0 1150,82,67,206
7. Financial Inclusion Fund(Refer Note B-8 (a) &8(b) of Schedule 18) 34,08,56,423 16,50,00,000 0 2,50,37,352 7,98,49,235 0 45,10,44,540
8. Financial InclusionTechnology Fund(Refer Note B-8 (a) &(b) of Schedule 18) 48,36,98,966 3,50,00,000 0 3,01,03,072 1,67,31,889 1,00,00,000 52,20,70,149
9. Farmers TechnologyTransfer Fund 50,00,00,000 0 64,58,40,784 0 14,58,40,784 0 100,00,00,000
Total 2101,80,68,588 691,61,39,335 64,58,40,784 72,76,77,320 139,99,41,005 55,71,49,676 2735,06,35,346
Previous year 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
Schedule 6 – Deposits(Rupees)
Sr. Particulars As on As on
No. 31.03.2010 31.03.2009
1. From Central Government 0 0
2. From State Governments 0 0
3. From Others
a) Tea / Rubber / Coffee Deposits 123,73,69,028 60,45,95,645
b) Term Deposits 381,35,32,000 421,63,02,000
c) Commercial Banks (Deposits under RIDF) 59868,64,76,553 47022,75,11,983
d) Short Term Cooperative Rural Credit Fund 9622,28,25,000 4622,28,25,000
Total 69996,02,02,581 52127,12,34,628
Schedule 7 – Bonds and Debentures(Rupees)
Sr. Particulars As on As on
No. 31.03.2010 31.03.2009
1. SLR Bonds 188,63,09,000 277,98,11,000
2. Non Priority Sector Bonds 14876,00,00,000 18156,50,00,000
3. Capital Gains Bonds 361,64,40,000 690,93,90,000
4. Bhavishya Nirman Bonds 4554,11,06,150 4550,02,81,900
5. NABARD Rural Bond 23,99,57,000 23,98,87,000
Total 20004,38,12,150 23699,43,69,900
113
Schedule 8 – Borrowings(Rupees)
Sr. Particulars As on As onNo. 31.03.2010 31.03.2009
1. From Central Government 146,76,06,717 353,80,83,226
2. Reserve Bank of India 0 0
3. From Others :
(a) In India
(i) Certificate of Deposits 379,45,90,000 1816,15,33,900
(ii) Commercial Paper 2679,71,76,000 180,61,86,000
(iii) Borrowing under Collateralised Borrowing Lending Obligation 214,82,34,328 0
(iv) Term Money Borrowings 762,50,00,000 244,07,00,000
(v) Commercial Banks 500,00,00,000 500,00,00,000
(b) Outside India
(i) From International Agencies 494,53,60,696 498,29,11,186
Total 5177,79,67,741 3592,94,14,312
Schedule 9 – Current Liabilities and Provisions(Rupees)
Sr. Particulars As on As on
No. 31.03.2010 31.03.2009
1. Interest / Discount Accrued 2489,39,45,807 2012,53,59,327
2. Sundry Creditors 972,40,00,623 596,61,60,450
3. Provision for Gratuity (Refer Note B-16 of Schedule 18) 1,62,24,627 261,52,90,025
4. Provision for Pension (Refer Note B-16) 690,04,64,685 637,35,36,151
5. Provision for Encashment of Ordinary Leave (-) 9,91,64,455 24,52,09,592
(Refer Note B-16 of Schedule 18)
6. Unclaimed Interest on Bonds with RBI 6,54,086 6,54,086
7. Unclaimed Interest on Bonds 4,37,40,749 9,36,66,167
8. Unclaimed Interest on Term Deposits 8,283 27,913
9. Bonds matured but not claimed (Refer Note B-10 of Schedule 18) 12,32,18,250 69,11,50,000
10. Application money received pending allotment of Bonds 15,64,32,250 4,19,36,006
11. Provisions and Contingencies
(a) Amortisation of G. Sec. - HTM 90,90,79,760 72,72,63,808
(b) For Standard Assets 594,57,00,000 493,07,00,000
(c) Depreciation in value of investments - Equity 1,44,36,000 2,12,28,000
(d) Sacrifice in interest element of restructured loans 8,00,000 4,54,00,000
(e) Provision for Other Assets & Receivables 35,48,250 35,48,250
(f) Provision for Income Tax [Net of Advance Tax] 0 94,64,83,187
Total 4863,30,88,915 4282,76,12,962
Schedule 10 – Cash and Bank Balances(Rupees)
Sr. Particulars As on As on
No. 31.03.2010 31.03.2009
1. Cash in hand 11,720 21,579
2. Balances with :
a) Reserve Bank of India 25,45,41,784 169,67,65,931
b) Others
(I) In India
(i) Other Banks in India
a) On Current Account 533,94,81,680 420,21,61,811
b) Deposit with Banks 9000,00,00,000 13067,10,00,000
(ii) Remittances in Transit 68,93,40,300 185,25,16,092
(iii) Collateralised Borrowing and Lending Obligations 0 132,96,39,276
(II) Outside India 0 0
Total 9628,33,75,484 13975,21,04,689
114
Schedule 11 – Investments
Schedule 12 – Advances
(Rupees)
Sr. Particulars as on as on
No. 31.03.2010 31.03.2009
1. Government Securities
a) Securities of Central Government (Refer Note B-7 of Schedule 18) 1991,50,08,966 1555,21,24,186
[Face Value Rs.1979,65,70,000 (Rs.1530,30,50,000)]
[Market Value Rs.1971,99,03,930 (Rs.1602,95,63,114)]
b) Treasury Bills 0 156,51,75,000
2. Other Approved Securities 0 0
3. Equity Shares in :
(a) Agri-Development Finance Company Ltd.
(i) NABARD Financial Services Ltd. - Rs. 5,20,00,000
[52,00,000 (52,00,000) - Equity shares of Rs.10 each]
(ii) Agri-Business Finance [Andhra Pradesh] Ltd. - Rs. 5,20,00,000
[52,00,000 (52,00,000) - Equity shares of Rs.10 each]
(iii) Agri Development Finance [Tamil Nadu] Ltd. - Rs. 5,20,00,000
[52,00,000 (52,00,000) - Equity shares of Rs.10 each] 15,60,00,000 15,60,00,000
(b) Agricultural Finance Corporation Ltd. 1,00,00,000 1,00,00,000
[1,000 (1,000) - Equity shares of Rs.10,000 each]
(c) Small Industries Development Bank of India 48,00,00,000 48,00,00,000
[1,60,00,000 (1,60,00,000) - Equity shares of Rs.10 each]
(d) Agriculture Insurance Company of India Ltd. 60,00,00,000 60,00,00,000
[6,00,00,000 (6,00,00,000) - Equity shares of Rs.10 each]
(e) NABARD Consultancy Services Pvt. Ltd. 5,00,00,000 5,00,00,000
[50,00,000 (50,00,000) - Equity shares of Rs.10 each]
(f) National Commodity and Derivatives Exchange Ltd. 13,98,03,500 4,50,00,000
[53,61,850 (45,00,000) - Equity shares of Rs.10 each]
(g) Multi Commodity Exchange of India Ltd. 1,25,00,000 1,25,00,000
[25,00,000 (25,00,000) - Equity shares of Rs.5 each]
4. Others
(a) Units of Liquid Mutual Funds 900,00,00,000 1000,00,00,000
(Refer Note B-22 of Schedule 18)
(b) BVF (Bio-Tech Venture Fund) - APIDC-V Investment 5,00,00,000 5,00,00,000
[50,000 (50,000) Class A Units of Rs.1,000 each]
(d) Commercial Paper 744,16,51,800 142,60,30,700
[Face Value Rs.7,85,00,00,000 (Rs.150,00,00,000)]
Total 3785,49,64,266 2994,68,29,886
(Rupees)
Sr. Particulars as on as on
No. 31.03.2010 31.03.2009
1. Refinance Loans
a) Production & Marketing Credit 24073,45,35,625 16896,23,31,000
b) Conversion Loans for Production Credit 0 20,06,77,000c) Medium Term Investment Credit- Non-Project loans 0 4,80,000
d) Liquidity Support 20,00,00,000 2590,91,89,000e) Other Investment Credit :
i) Medium Term and Long Term Project Loans 35741,82,79,036 33334,81,37,417(Refer Note B-14 of Schedule 18)
ii) Long Term Non-Project Loans 198,66,92,820 251,92,69,717iii) Interim Finance 1,43,00,000 0
2. Direct Loans
a) Loans under Rural Infrastructure Development Fund 60255,45,14,730 45616,21,10,206
b) Other Loans:
i) Co-operative Development Fund 3,13,04,999 3,27,78,368ii) Micro Finance Development Equity Fund 85,76,60,284 29,74,13,365
iii) Watershed Development Fund 29,35,54,012 14,72,11,100iv) Tribal Development Fund 1,01,84,000 23,52,000
v) KfW UPNRM 11,74,19,600 0vi) Farm Innovation & Promotion Fund 39,80,000 0
c) Co-Finance Loans (Net of provision) 83,60,32,255 94,47,56,808
Total 120505,84,57,361 98852,67,05,981
115
Schedule 13 – Fixed Assets
Schedule 14 – Other Assets
(Rupees)
Sr. Particulars as on as on
No. 31.03.2010 31.03.2009
1. LAND : Freehold & Leasehold
(Refer Note B-13 of Schedule 18)
Opening Balance 144,51,35,867 144,16,62,113
Additions/adjustments during the year 1,60,76,990 34,73,754
Closing Balance (at cost) 146,12,12,857 144,51,35,867
Less: Amortisation of Lease Premia 38,60,33,256 32,37,09,461
Book Value 107,51,79,601 112,14,26,406
2. PREMISES
(Refer Note B-13 of Schedule 18)
Opening Balance 258,02,09,415 256,05,62,671
Additions/adjustments during the year 1,06,01,520 1,96,46,744
Closing Balance (at cost) 259,08,10,935 258,02,09,415
Less: Depreciation to date 144,81,04,467 135,58,29,200
Book Value 114,27,06,468 122,43,80,215
3. FURNITURE & FIXTURES
Opening Balance 56,27,20,774 54,85,48,549
Additions/adjustments during the year 1,17,83,139 1,57,37,977
Sub-Total 57,45,03,913 56,42,86,526
Less: Cost of assets sold/written off 20,56,856 15,65,752
Closing Balance (at cost) 57,24,47,057 56,27,20,774
Less: Depreciation to date 54,29,22,820 52,71,25,392
Book Value 2,95,24,237 3,55,95,382
4. COMPUTER INSTALLATIONS & OFFICE EQUIPMENTS
Opening Balance 66,14,02,398 61,87,59,611
Additions/adjustments during the year 6,64,48,045 6,26,97,833
Sub-Total 72,78,50,443 68,14,57,444
Less: Cost of assets sold/written off 4,55,82,864 2,00,55,046
Closing Balance (at cost) 68,22,67,579 66,14,02,398
Less: Depreciation to date 60,00,70,293 59,23,72,621
Book Value 8,21,97,286 6,90,29,777
5. VEHICLES
Opening Balance 4,76,03,062 4,19,68,259
Additions/adjustments during the year 71,75,150 1,63,83,824
Sub-Total 5,47,78,212 5,83,52,083
Less: Cost of assets sold/written off 1,08,30,151 1,07,49,021
Closing Balance (at cost) 4,39,48,061 4,76,03,062
Less: Depreciation to date 2,63,72,172 2,63,20,620
Book Value 1,75,75,889 2,12,82,442
Total 234,71,83,481 247,17,14,222
(Rupees)
Sr. Particulars as on as on
No. 31.03.2010 31.03.2009
1. Accrued Interest 1496,44,47,110 1501,44,94,051
2. Deposits with Landlords 1,25,45,727 1,23,85,912
3. Deposits with Government Departments and Other Institutions 2,82,21,123 2,28,58,811
4. Housing loan to staff 124,06,19,359 103,55,76,565
5. Other Advances to staff 61,30,38,906 64,33,12,331
6. Advances to Landlords 60,000 1,54,000
7. Capital Work in Progress [Purchase of Staff Quarters & Office Premises] 29,76,18,676 9,84,29,348
8. Sundry Advances 34,45,05,693 26,19,12,331
9. Advance Tax (Net of Provision for Income Tax) 51,56,46,745 0
10. Deferred Tax Assets [Refer Note B-11 of Schedule 18] 317,80,00,000 384,99,00,000
11. Expenditure recoverable from Government of India/International Agencies 2,80,77,071 4,37,219
12. Discount Receivable 15,45,60,349 12,43,16,225
Total 2137,73,40,759 2106,37,76,793
116
Schedule 15 – Interest & Financial Charges
(Rupees)
Sr. Particulars 2009-10 2008-09
No.
1. Interest Paid on
a) Loans from Central Government 24,32,78,029 25,76,35,682
b) Borrowings from Reserve Bank of India 0 5,99,45,694
c) Bonds (Refer Note B-5 of Schedule 18) 1623,91,44,305 1581,54,51,596
d) Tea / Coffee / Rubber Deposits 5,74,19,047 3,24,31,169
e) Term Money Borrowings 8,24,28,299 38,26,30,457
f) Term Deposits 37,67,21,717 8,95,97,323
g) Borrowings from International Agencies 23,28,38,957 27,70,71,578
h) Commercial Paper (Refer Note B-5 of Schedule 18) 128,50,30,515 7,18,81,566
i) Deposits under RIDF 2872,36,35,671 2157,00,88,384
j) Cattle Development Programme (UP & Bihar) 14,18,657 37,11,391
k) Watershed Development Fund 62,14,79,659 33,83,13,420
l) Financial Inclusion Fund 2,50,37,352 94,71,129
m) Financial Inclusion Technology Fund 3,01,03,072 96,43,865
n) KfW UPNRM - Accompanying measures 24,999 0
o) Short Term Cooperative Rural Credit Fund 76,52,82,445 27,69,81,135
p) Micro Finance Development and Equity Fund 5,10,57,237 6,04,41,953
q) Indo German Watershed Development Programme -
Andhra Pradesh 1,50,063 1,76,130
r) Indo German Watershed Development Programme - Rajasthan 67,735 3,25,906
s) KfW - NB Indo German Watershed Development Programme -
Phase III - Maharashtra 15,73,767 2,28,182
t) KfW - NB - IX Adivasi Development Programme 5,24,203 4,42,023
u) Indo German Watershed Development Programme - Gujarat 1,35,155 2,43,625
v) Corporate Borrowings from Banks and FIs in India 44,28,77,218 130,08,45,106
w) Rural Innovation Fund 4,71,54,118 5,05,40,943
x) Livelihood Advancement Business School RF Project -
Sultanpur, Uttar Pradesh 3,62,292 4,57,349
y) Multi Activity Approach for Poverty Alleviation BAIF Project -
Sultanpur, Uttar Pradesh 3,34,934 4,70,663
z) Livelihood Advancement Business School RF Project -
Rae Bareli, Uttar Pradesh 6,35,617 6,53,726
aa) Multi Activity Approach for Poverty Alleviation BAIF Project -
Rae Bareli, Uttar Pradesh 6,26,426 12,22,446
ab) Deposits / Borrowings 7,47,863 12,83,178
ac) Discount Cost Paid on Certificate of Deposits 45,05,21,990 175,19,07,902
2. Discount on Collateralised Borrowing and Lending Obligations 9,50,04,320 3,17,86,414
3. Swap Charges 6,69,26,382 3,14,00,171
4. Discount, Brokerage, Commission & issue exp. on Bonds and Securities 4,20,15,870 13,17,45,114
Total 4988,45,57,914 4255,90,25,220
117
Schedule 16 A – Establishment and Other Expenses
Schedule 16 B – Provisions
Schedule 17 – Commitments and Contingent Liabilities (Rupees)
Sr. Particulars As on As on
No. 31.03.2010 31.03.2009
1 Commitments on account of capital contracts remaining to be executed 60,44,33,000 16,80,39,000
Sub Total “A” 60,44,33,000 16,80,39,000
2 Contingent Liabilities
(i) Claims against the Bank not acknowledged as debt. 3,36,60,000 3,36,60,000
(Refer Note B-18 of Schedule 18)
Sub Total “B” 3,36,60,000 3,36,60,000
Total (A + B) 63,80,93,000 20,16,99,000
(Rupees)
Sr. Particulars 2009-10 2008-09
No.
Provisions for :
1 Amortisation of G. Sec 18,18,15,952 18,18,15,952
2 Standard Assets 101,50,00,000 73,70,00,000
3 Non Performing Assets 17,60,23,540 8,88,11,531
4 Depreciation in Value of Investment Account - Equity (-) 67,92,000 46,20,000
5 Sacrifice in interest element of restructured Accounts (-) 4,46,00,000 (-) 8,62,00,000
6 Other Assets / Receivable 47,58,988 (-) 10,66,896
Total 132,62,06,480 92,49,80,587
(Rupees)
Sr. Particulars 2009-10 2008-09
No.
1. Salaries and Allowances 250,33,22,223 251,39,90,425
2. Contribution to / Provision for Staff Superannuation Funds 84,86,65,360 266,79,98,747
3. Other Perquisites & Allowances 19,06,50,477 18,34,27,844
4. Travelling & Other allowances in connection with Directors’ & 19,77,322 34,35,966
Committee Members’ Meetings
5. Directors’ & Committee Members’ Fees 1,46,125 1,49,375
6. Rent, Rates, Insurance, Lighting, etc. 19,62,09,673 19,14,09,388
7. Travelling Expenses 23,38,96,324 23,59,04,413
8. Printing & Stationery 2,80,42,431 2,52,26,434
9. Postage, Telegrams & Telephones 6,06,28,395 6,58,96,399
10. Repairs 4,71,57,806 5,85,61,031
11. Auditors’ Fees 7,66,640 7,11,496
12. Legal Charges 29,69,367 11,55,909
13. Miscellaneous Expenses 25,57,96,452 31,93,55,407
14. Expenditure on Miscellaneous Assets 41,63,331 55,30,410
15. Expenditure on Study & Training 24,80,27,436 25,00,60,356
[Including Rs.5,97,79,097(Rs. 5,52,86,037) pertaining to
establishment expenses of Regional Training Colleges]
16. Expenditure on promotional activities under
(i) Cooperative Development Fund 3,83,03,657 3,81,14,043
(ii) Micro Finance Development and Equity Fund 10,01,05,309 9,92,70,242
(iii) Watershed Development Fund 44,70,44,367 24,91,45,824
(iv) Farm Innovation and Promotion Fund 96,93,544 73,40,088
(v) Exp. for NFS Promotional Measures/ Activities 23,40,85,839 0
17. Wealth Tax 2,81,21,490 1,71,73,690
Total 547,97,73,568 693,38,57,487
118
Schedule 18
SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS
FOR THE YEAR ENDED MARCH 31, 2010
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 f inancial statements as per
Generally Accepted Accounting Policies (GAAP) requires
the management to make several assumptions and
estimates that affect reported results and the reported state
of affairs of the Bank; the example of such cases include
the estimated life of fixed assets, liability on account of
employee retirement benefits, provision for anticipated
losses, etc. Actual results could differ from such estimates.
Such differences are recognized in the year of outcome
of such results.
2. Income and expenditure
2.1 Income and expenditure are accounted on accrual
basis except the following, which are accounted on cash
basis:
a. Interest on non-performing assets identified as per
RBI guidelines.
b. Income by way of penal interest charged due to
delayed receipt of loan dues or non– compliance with
terms of loan.
c. Service Charges on loans given out of Micro Finance
Development and Equity Fund, Watershed
Development Fund.
d. Expenses not exceeding 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
instal lat ion of the respect ive assets. Subsequent
expenditure incurred on existing assets is capitalised only
when it increases the future benefit from the existing
assets beyond i ts 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 Depreciation Rate
Furniture and Fixtures 20%
Computer Installations 32%
Office Equipments 20%
Vehicles 20%
119
Depreciation is charged for the full year irrespective of
the date of purchase of asset. No depreciation is charged
on assets sold during the year.
4. Intangible Assets and Amortisation
Intangible assets are recognized/amortised as per the
criteria specified in AS 26 “Intangible Assets”.
5. Investments
5.1 In accordance with the RBI guidel ines,
Investments are classified into “Held for Trading” (HFT),
“Available for Sale” (AFS) and “Held to Maturity” (HTM)
categories (hereinafter called “categories”). Under each
of these categories, investments are further classified
under (i) Government Securities (ii) Other Approved
Securities (iii) Shares and (iv)Others.
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.
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.
5.9 Brokerage, commission, etc. paid at the time of
acquisition, are charged to revenue.
5.10 Broken period interest on debt investment is
treated as a revenue item.
5.11 Transfer of a security between the categories is
accounted for at lower of the acquisition cost/book value/
market value on the date of transfer and depreciation, if
any, on such transfer is fully provided for.
6. Advances and Provisions thereon
6.1 Advances are classified as per RBI guidelines.
Provision for standard assets and non– performing assets
is made in respect of identified advances based on a
periodic review and in conformity with the provisioning
norms prescribed by RBI.
6.2 In case of restructur ing/reschedul ing 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
sett lement of agreement; however, loss on such
transactions is provided at the market rates as on the date
of Balance Sheet.
120
8. Retirement Benefits
8.1 The Bank has a Provident Fund Scheme managed
by RBI. Contribution to the Fund is made on actual basis.
8.2 Provision for gratuity is made based on actuarial
valuation, in respect of all employees including employees
transferred from RBI. The amount of gratuity due from
RBI, in respect of employees transferred from RBI, is
accounted on cash basis.
8.3 Provision for Pension is made based on actuarial
valuation.
8.4 Employer’s contribution to Provident Fund
relating to the pension optees (part of Pension Fund) is
maintained with RBI.
8.5 Provision for Encashment of Ordinary Leave is
made on the basis of actuarial valuation.
9. Taxes on Income
9.1 Tax on income for the current period is
determined on the basis of taxable income and tax credits
computed in accordance with the provisions of Income
Tax Act, 1961 and based on expected outcome of
assessments/appeals.
9.2 Deferred tax is recognized, on timing difference,
being the difference between taxable income and
accounting income for the year and quantified using the
tax rates and laws that have been enacted or substantively
enacted as on Balance Sheet date.
9.3 Deferred tax assets relating to unabsorbed
depreciation/business losses are recognised and carried
forward to the extent that there is virtual certainty that
sufficient future taxable income will be available against
which such deferred tax assets can be realized.
9.4 Other deferred tax assets are recognised and carried
forward to the extent that there is a reasonable certainty
that sufficient future taxable income will be available against
which such deferred tax assets can be realized.
9.5 Provision for Wealth Tax is made in accordance
with the provisions of Wealth tax Act, 1956.
10. Segment Reporting
10.1 Segment revenue includes interest and other
income directly identifiable with / allocable to the segment.
10.2 Expenses that are directly identifiable with/
allocable to segments are considered for determining the
segment result. The expenses, which relate to the Bank
as a whole and not allocable to segments, are included
under “Other Unallocable Expenditure”.
10.3 Income, which relates to Bank as a whole and
not allocable to segments is included under “Other
unallocable bank income”.
10.4 Segment assets and liabilities include those
directly identifiable with the respective segments.
Unallocable assets and liabilities include those that
relate to the Bank as a whole and not allocable to any
segment.
11. Impairment of Assets
11.1 As at each Balance Sheet date, the carrying
amount of assets is tested for impairment so as to
determine:
a) the provision for impairment loss, if any required;or
b) The reversal, if any, required for impairment loss
recognized in the previous periods.
11.2 Impairment loss is recognized when the carrying
amount of an asset exceeds recoverable amount.
12 Provisions, Contingent Liabilities
and Contingent Assets
12.1 Provisions are recognised for liabilities that can
be measured only by using substantial degree of
estimation if:
a) the Bank has a present obligation as a result of a
past event;
b) a probable outflow of resources is expected to settle
the obligation; and
c) the amount of the obligation can be reliably
estimated.
12.2 Reimbursement, expected in respect of
expenditure, which require a provision, is recognised only
when it is virtually certain that the reimbursement will be
received.
121
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, the “Interest Differential Fund” is to
be utilized for certain specified purposes .
2. In accordance with the Memorandum of
Understanding entered into with the Swiss Agency for
Development Cooperation, repayment of loan, service
charges and other receipts made out of Rural Innovation
Fund (RIF) are being credited to the Rural Promotion Fund
(RPF).
3. In terms of the agreement with KfW accretion/
income and certain expenditure under UPNRM have been
charged to the fund. The loans granted out of the fund
have been adjusted with direct loans.
4. Interest Received on Loans and Advances
includes Rs.23.80 crore (Rs.10.70 crore) 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.
5. Subvention received/receivable from GOI
amounting to Rs. 794.67 crore (Rs.874.44 crore) being
the difference between the cost of borrowing by NABARD
and the refinance rate, has been reduced from interest
and financial charges.
6. Other receipts includes Rs. 35.15 crore
(Rs.32.02 crore) received/receivable from GoI towards
administration charges on providing refinance under
interest subvention scheme to SCBs and RRBs for
financing Seasonal Agricultural Operations.
7. Investments in Government securities include
the fol lowing secur i t ies pledged with Clear ing
Corporation of India Limited as collateral security for
Business segments:
(Rs. crore)
Particulars Face Value Book Value
Pledged for Business 50.00 (10.00) 49.76 (9.25)
Segment (Securities)
Pledged for Business Segment 1922.00 (1212.00) 1933.87 (1,220.97)
(Collateralised Borrowing and
Lending Obligation)
8 (a) Interest at the rate of 6.00% (6.00%) per annum
on unuti l ised balances of RIF,RPF, Watershed
Development Fund, KfW NB IGWDP–(Andhra Pradesh,
Gujarat, Maharashtra and Rajasthan) and KfW NB IX
Adivasi Development Programme has been credited to
respective fund based on respective agreements. Further,
interest at the rate of 7.68% (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.
8 (b) The Banks contribution to FITF was excess by
Rs.7.50 crore and short to FIF by Rs.6.50 crore. Out of
the excess contribution in FITF an amount of Rs.6.50 crore
was transferred to FIF and Rs.1.00 crore to profit & loss
appropriation account.
9. Pending receipt of confirmation of balance of
Provident Fund Account in respect of employer’s
contribution as on March 31, 2010 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.
10. Outstanding balance payable on account of
‘bonds matured but not c la imed’ amount ing to
Rs.12.32 crore (Rs.69.12 crore) includes Rs.1.53 crore
(Rs.1.53 crore) on account of SLR Bonds issued by the
122
Bank which were earlier serviced/managed by RBI. From
October 1, 2003, servicing of these bonds was taken over
by the Bank.
11. The Bank has, during the year, in accordance with
AS 22 “Accounting for taxes on Income”, recognized in
the Profit and Loss account the difference of Rs.67.19
crore between net deferred tax assets of Rs.317.80 crore
and Rs.384.99 crore as at March 31, 2010 and March 31,
2009 respectively; as detailed below:
(Rs. crore)
Sr. Deferred Tax Assets 31 March 31 MarchNo. 2010 2009
1 Provision for Retirement Benefits 274.85 344.80made in the books but allowable fortax purposes on payment basis
2 Depreciation on Fixed Assets 22.35 23.71
3 Amortisation of G Sec 20.60 16.48
Total 317.80 384.99
12. Provision for Deferred Tax on account of Special
Reserve created u/s 36(1)(viii) of the Income Tax Act,
1961, is not considered necessary, as the Bank has
decided not to withdraw the said reserve.
13. ‘Land’ and ‘Premises’ include Rs. 33.82 crore
(Rs.34.77 crore) paid towards Office Premises and Staff
Quarters for which conveyance is yet to be completed.
14. 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. 30.12
crore (Rs.195.33 crore).
15. Depreciation charged in Profit & Loss Account is
net of Swiss Development Corporation share of
depreciation amounting to Rs. Nil (Rs. 42,503) on assets
purchased under SDC– HID project.
16. Disclosure required under AS 15
(Revised) on “Employee Benefits” is
as under:
16.1 Defined Benefit Plans
Employees Retirement Benefit plans of the bank include
Pension, Gratuity and Leave Encashment, which are
defined benefit plans. The present value of obligation is
determined based on actuarial valuation using the
Projected Unit Cost Method, which recognizes each period
of services as giving rise to additional unit of employee
benefit entitlement and measures each unit separately to
build up the final obligation.
a. Reconciliation of opening and closing balances
of defined benefit obligations:
(Rs. crore)
Particulars Pension Gratuity LeaveEncashment
Present value of defined 892.01 250.53 115.51benefit obligation at the (705.11) (232.66) (92.18)beginning of yearCurrent Service Cost 20.65 15.27 3.73
(20.90) (17.26) (9.10)Interest Cost 66.90 18.79 8.66
(56.41) (18.62) (7.37)
Actuarial (gain)/ loss -10.01 -25.60 2.19(127.38) (-9.84) (10.64)
Benefits paid -10.79 -37.79 -12.47(-17.79) (-8.17) (-3.78)
Present value of defined 958.76 221.20 117.63benefits obligations (892.01)@ (250.53) $ (115.51)at the year end
@ Excludes incremental pension of Rs.0.67 crore to be credited to fund
$ Excludes incremental gratuity of Rs.2.54 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 2010:
(Rs. crore)
Particulars Pension Gratuity Leave(Partly (Funded) Encashment
Funded) (Funded)
Present value of defined 958.76 221.20 117.63benefits obligations as (892.01) (250.53) (115.51)at the year endFair value of plan 268.77 220.00 127.55assets as (254.66) @ (0.00)* (90.99) $at the year endLiability recognized in 689.99 1.20 -9.91the Balance sheet as (637.35) (250.53) (24.52)at the year end
@ Represents the Bank’s contribution towards PF for pension optees
available with RBI.
* The bank has set up “NABARD Employees’ Group Gratuity Trust” duly
approved by the Commissioner of Income Tax to manage the Gratuity
Fund of NABARD. During the year an amount of Rs.220 crore has been
contributed to the Gratuity Fund managed by the said Trust.
$ Represents the amount invested with Insurance companies towards the
Liability for Leave Encashment.
123
c. Expenses recognized in the Profit and Loss
Account during the year:
(Rs. crore)
Particulars Pension Gratuity Leave
Encashment
Current Service Cost 20.65 15.27 3.73(20.90) (17.26) (9.10)
Interest Cost 66.90 18.79 8.66(56.41) (18.62) (7.37)
Actuarial (gain)/ loss -10.01 -25.60 2.19(127.38) (-9.84) (11.21)
Expected return on - 0.00 -14.20Plan Assets (0.00) (-2.69)
Expense recognized in the 77.54 8.46 -0.38statement of Profit & Loss (188.06) (26.04) (24.99)
d. Actuarial assumptions:
Particulars Pension Gratuity LeaveEncashment
Mortality Table (LIC) 1994-96 1994-96 1994-96(Ultimate) (Ultimate) (Ultimate)
Discount rate (per annum) 8.25% 8.25% 8.25%
Salary growth (per annum) 4% 7% 7%
Withdrawal rate 1% 1% 1%
16.2 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.
16.3 The aforesaid liabilities include liabilities of
employees deputed to subsidiaries.
16.4 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.
16.5 Defined Contribution Plan:
The bank contributes a defined sum of 10% on the basic
salary for both pension optees and non pension optees
every month towards Provident Fund. The contribution
made for the pension optees forms part of the plan assets
of pension scheme. The total contribution charged to
Profit and Loss account during the year is Rs.11.69 crore
(Rs.12.29 crore)
17. 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.
18. The movement in Contingent Liability as required
in AS 29 “Provisions, Contingent Liabil i t ies and
Contingent Assets” is as under:
(Rs. crore)
Particulars 2009-10 2008-09
Opening Balance 3.37 9.11
Addition during the year 0.00 0.01
Deletion during the year 0.00 5.75
Closing Balance 3.37 3.37
19. Prior period items included in the Profit and Loss
account are as follows:
(Rs. crore)
Sr. No. Particulars 2009-10 2008-09
1 Depreciation 4.038 0.032
2 Other Expenses 0.000 0.041
Total 4.038 0.073
20. Capital adequacy ratio of the Bank as on 31
March 2010 is 24.95% (25.85%) as against a minimum
of 9% as stipulated by RBI.
21. NPA on staff loans:
(Rs. crore)
Particulars 2009-10 2008-09
Opening Balance 0.07 0.10
Addition during the year 0.03 0.00
Written Back during the year 0.02 0.03
Closing Balance 0.08 0.07
124
22. Investments in Mutual Funds are as under:(Rs. in crore)
S. Name of the As at March 31, 2010 As at March 31, 2009No. Mutual Fund No. of units Book Value Market Value No. of units Book Value Market Value
1. Birla Sun life 2,86,07,635.3200 50.00 50.01 7,11,18,191.3220 100.00 100.042. Tata 2,94,404.7780 50.00 50.00 3,07,437.3330 50.00 50.023. Kotak Mahindra 4,41,48,228.8210 50.00 50.01 2,80,52,064.6320 50.00 50.024. UTI - Money Market 9,69,829.4780 100.00 100.03 3,04,71,537.1780 75.00 75.035. UTI - Treasury advantage 8,09,238.4970 100.00 100.09 0.0000 0.00 0.006. ICICI Prudential 29,19,994.9850 50.00 50.01 7,70,01,262.8210 100.00 100.027. Canara Robeco 7,19,88,360.6304 100.00 100.05 3,11,04,973.0630 50.00 50.008. Life Insurance Corporation 8,08,88,127.7770 100.00 100.01 6,22,28,915.2880 100.00 100.059. IDFC 4,57,99,983.5330 50.00 50.01 4,66,88,828.2970 50.00 50.0110. Baroda Pioneer 9,64,20,619.9960 100.00 100.02 4,95,42,229.7970 50.00 50.0111. PRINCIPAL 3,43,10,340.1970 50.00 50.01 0.0000 0.00 0.0012. Deutsche 4,61,91,646.2350 50.00 50.01 4,38,04,701.1210 50.00 50.0213. L&T 3,37,27,478.7790 50.00 50.01 0.0000 0.00 0.0014. HDFC 0.0000 0.00 0.00 4,08,04,335.0530 75.00 75.0215. SBI 0.0000 0.00 0.00 2,54,54,489.9180 50.00 50.0116. Reliance 0.0000 0.00 0.00 3,77,51,804.9860 50.00 50.0117. ING 0.0000 0.00 0.00 3,80,30,332.9940 50.00 50.1118. Franklin Templeton 0.0000 0.00 0.00 3,82,684.1840 50.00 50.0119. Religare 0.0000 0.00 0.00 4,13,70,522.6750 50.00 49.93
Total 900.00 900.27 1,000.00 1,000.31
(c) Risk weighted assets
(Rs. crore)
Particulars 31 March 2010 31 March 2009
On – Balance Sheet Items 49,921.32 43,436.86
Off – Balance Sheet Items 25.18 27.61
(d) Pattern of Capital contribution as on the
date of the balance sheet(Rs. crore)
Contributor 31 March 2010 31 March 2009
Reserve Bank of India 1,450 1,450Government of India 550 550Total 2,000 2,000
26.2 Asset Quality and Credit Concentration
(a) Net NPA position
Particulars 31 March 2010 31 March 2009
Percentage of Net NPAs to 0.01559 0.03062Net Loans & Advances
(b) Asset classification
(Rs. crore)
Classification 2009-10 2008-09Amount (%) Amount (%)
Standard 120672.40 99.958 98822.36 99.969Sub–standard 6.71 0.006 6.86 0.007Doubtful 44.02 0.036 23.45 0.024Loss 0.00 0.000 0.00 0.000
Total 120723.13 100.000 98852.67 100.00
23. As per the information available with the Bank,
there are no dues payable under Micro, Small and Medium
Enterprises Development Act 2006.
24. Previous year’s figures have been regrouped /
rearranged wherever necessary.
25. Figures in brackets pertain to previous year.
26. The following additional information is disclosed
in terms of RBI circulars No. RBI/2009–2010/49
(DBOD.FID.FIC.2/01.02.00/2009–10) dated
01 July 2009 and No. RBI/2009–2010/347
(DBOD.BP.BC.No.79/21.04.018/2009–10) dated
15 March 2010.
26.1 Capital
(a) Capital to Risk–weighted Assets Ratio (CRAR)(Percent)
Particulars 31 March 2010 31 March 2009
CRAR 24.95 25.85Core CRAR 23.47 24.45Supplementary CRAR 1.48 1.40
(b) Subordinated Debt(Rs. crore)
Particulars 31 March 2010 31 March 2009
Amount of subordinated Nil Nildebt raised and outstandingas Tier II Capital
125
(c) Provisions made during the year
(Rs. crore)
Provisions against 2009-10 2008-09
Standard Assets 101.50 73.70
Non Performing Assets 17.60 8.88
Investments (Net) -0.68 -35.28
Income Tax 647.00 677.60*
Total 765.42 724.90
* includes Rs. 3.60 crore towards Fringe Benefit Tax
(d) Movement in Net NPAs(Rs. crore)
Particulars 2009-10 2008-09
(A) Net NPAs as at beginning of the year 30.31 19.28
(B) Add: Additions during the year 8.35 11.03
(C) Sub–total (A+B) 38.66 30.31
(D) Less: Reductions during the year 5.93 0.00
(E) Net NPAs before provision for PCR (C–D) 32.72 30.31
(F) Additional Provision for PCR 13.96 0.00
(G) Net NPAs as at the end of the year (E–F) 18.76 30.31
The Provision Coverage Ratio (PCR) of the Bank as on 31 March 2010 stood at
62.98%
(e) Credit exposure as percentage to Capital
Funds and as percentage to Total Assets
2009-10 2008-09Category Credit Exposure Credit Exposure
as % to as % to
Capital Total Capital TotalFunds Assets Funds Assets
I Largest Single 145.41 13.57 106.32 10.15Borrower
II Largest Borrower Group Not Applicable Not Applicable
III Ten Largest 379.27 35.40 333.06 31.81Single Borrowersfor the year
IV Ten Largest Not Applicable Not ApplicableBorrower Groups
(f) Credit exposure to the five largest
industrial sectors as percentage to total
loan assets: Not Applicable
26.3 Liquidity
(k) Maturity pattern of Rupee Assets and
Liabilities
(l) Maturity pattern of Foreign Currency
Assets and Liabilities
Sr. Item Less than More than More than More than More than Total #
No. or equal to 1 year upto 3 years upto 5 years upto 7 years
1 year 3 years 5 years 7 years
1 Rupee Assets 51280.08 35053.14 28992.26 15363.61 5007.03 135696.12(48326.90) (28354.64) (23204.68) (14243.36) (3551.34) (117680.92)
2 Foreign currency 0.00 0.00 0.00 0.00 0.00 0.00assets (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Total Assets 51280.08 35053.14 28992.26 15363.61 5007.03 135696.12(48326.90) (28354.64) (23204.68) (14243.36) (3551.34) (117680.92)
3 Rupee Liabilities 22607.89 35939.57 24755.17 18416.73 33482.22 135201.58(16553.97) (22015.52) (24003.42) (17404.61) (37205.11) (117182.63)
4 Foreign currency 10.15 64.71 109.06 109.07 201.55 494.54liabilities (9.94) (64.33) (108.68) (108.69) (206.64) (498.29)
Total Liabilities 22618.04 36004.28 24864.23 18525.80 33683.77 135696.12(16563.91) (22079.85) (24112.10) (17513.3) (37411.75) (117680.92)
# Net of provision made as per RBI directives on Standard Assets as well as for diminution in value of Investments aggregating to Rs.596.01 crore(Rs.495.19 crore).
26.4 Operating results
Particulars 2009-10 2008-09
(a) Interest income as a percentage to average working funds 6.19 6.47
(b) Non interest income as a percentage to average working funds 0.10 0.13
(c) Operating profit as a percentage to average working funds 1.80 1.86
(d) Return on average Assets (%) 1.23 1.30
(e) Net Profit per Employee (Rs. in crore) 0.33 0.28
126
26.5 Movement in the provisions
(a) Provision for Non Performing
Assets (Loan Assets)
(Rs. in crore)
Particulars 2009–10 2008–09
Opening balance as at the beginning offinancial year 14.40 5.52
Add: Provision made during the year(Incl. provision for PCR) 18.68 8.88
Less: Write off, write back of excess provision 1.08 0.00
Closing balance at the close of financial year 32.00 14.40
(b) Provision for depreciation in investments
(Rs. in crore)
Particulars 2009–10
A Opening balance as at 2.12the beginning of the financial year (37.40)
B Add
(i) Provisions made during the year 0.00(0.63)
(ii) Appropriation, if any, from 0.00Investment Fluctuation Reserve (0.00)Account during the year
C Sub Total [A+B(i)+B (ii)] 2.12(38.03)
D Less
(i) Write off, Write Backs of 0.68excess provision (35.91)
(ii) Transfer, if any, to Investment 0.00Fluctuation Reserve Account (0.00)Sub Total [D] 0.68
(35.91)
E Closing balance as at the close of 1.44financial year (C–D) (2.12)
26.6 Restructured accounts
During the current financial year eight loan accounts
outstanding to the extent of Rs.50.60 crore (Rs.51.63
crore) have been rescheduled. Out of the above, four loan
accounts outstanding of Rs.30.84 crore (Rs.26.47 crore)
is classified as Standard asset and four loan accounts
outstanding of Rs.19.77 crore (Rs.25.16 crore) has been
classified as Sub Standard 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.4.46 crore
(Rs.8.62 crore) was written back during the current
financial year.
26.7 Assets sold to securitisationcompany / reconstruction company:NIL (NIL)
26.8 Forward Rate Agreements andInterest Rate Swaps : NIL (NIL)
26.9 Interest Rate Derivatives : NIL (NIL)
26.10 Investments in Non GovernmentDebt Securities : NIL (NIL)
26.11 Corporate Debt Restructuring (CDR)
During the year one loan account classified as Standard
Asset with outstanding of Rs.24.25 crore has been
subjected to restructuring under CDR.
26.12 Disclosure on risk exposure in
Derivatives
The Bank does not trade in derivatives. However, it has
hedged its liability towards borrowings from KfW Germany
to the extent of 93.07 million Euro and interest thereon
for the entire loan period. Consequent upon hedging of
foreign currency borrowings the same is shown at
contracted value as per the Swap agreement. The Bank
does not have any open exposure in foreign currency.
The value of outstanding principal amount of hedge
contract at the year–end exchange rate stood at
Rs.563.66 crore and the value of outstanding principal
liability in the books of account stood at contracted
value i.e. Rs.494.54 crore. The quantitative disclosure
in this regard is as under:
(Rs. in crore)
Sr. Particulars Currency Interest RateNo. Derivatives Derivatives
1. Derivatives(Notional Principal amount)A) For Hedging 563.66
(498.29) NAB) For Trading NA NA
2. Marked to Market Positions [1]a) Asset (+) 69.12
(136.28) NAb) Liability (–) 0.00 NA
(0.00)3. Credit Exposure [2] NA NA
4. Likely impact of one percentage NA NAchange in interest rate (100*PV01)a) on hedging derivatives NAb) on trading derivatives NA NA
5. Maximum and Minimum of NA NA100*PV01 observed during the yeara) on hedging NA NAb) on trading NA NA
127
26.13 Exposures where the FI had exceeded prudential exposure limits during
the year: NIL (NIL)
26.14 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. in crore)
Name of the Party Nature of Nature of Amount of transaction Outstanding
Relationship Transaction during the year
Shri U C Sarangi Key Management Remuneration 0.26 –
Personnel– including (0.14)
Chairman perquisites
Dr. K G Karmakar Key Management Remuneration 0.30 –
Personnel–Managing including (0.22)
Director perquisites
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.
26.15 Issuer categories in respect of investments made
(Rs. in crore)
Sr. Issuer Amount Investment made ‘Below investment ‘Unrated’ ‘Unlisted’No. through grade’ Securities Securities Securities
private placement held held
(1) (2) (3) (4) (5) (6) (7)
1. PSUs 60.00 60.00 – – 60.00(60.00) (60.00) (60.00)
2. FIs 48.00 48.00 – – 48.00(48.00) (48.00) (48.00)
3. Banks – – – – –
4. Private – – – – –Corporate
5. Subsidiaries/Joint 20.60 20.60 – 20.60 20.60ventures (20.60) (20.60) (20.60) (20.60)
6. Others (Net of 1663.96 21.23 21.23 1663.96Provision) (1152.23) (11.75) (0.00) (11.75) (1152.23)includingMutual Funds
7. Provision held 1.44 – – – 1.44towards depreciation (2.12) (2.12)
Total 1794.00 149.83 0.00 41.83 1794.00(1282.95) (140.35) (0.00) (32.35) (1282.95)
128
26.16 Non performing investments: NIL (NIL)
26.17 Disclosure on Repo transactions
26.20 Movement of Gross NPAs
Particulars Amount inRs. Crore
Gross NPAs as on 1st April of particular year 44.71(Opening Balance)
Additions (Fresh NPAs) during the year 8.87Sub-total (A) 53.58Less:-
(i) Upgradations 0.00
(ii) Recoveries (excluding recoveries made from 2.85upgraded accounts)
(iii) Write-offs 0.00
Sub-total (B) 2.85Gross NPAs as on 31st March of following year 50.73(closing balance) (A-B)
26.21 Overseas Assets, NPAs and
Revenue: NIL (NIL)
26.22 Off-balance sheet SPVs sponsored
(which are required to be consolidated
as per accounting norms) : NIL (NIL)
26.23 Information on Business Segment
(a) Brief Background
The Bank has recognized Primary segments as
under:
i) Direct Finance: Includes Loans given to state
governments for rural infrastructure development,
co-finance loans and loans given to voluntary
agencies/non– governmental organisations for
developmental activities.
ii) Refinance: Includes Loans and Advances given to
State Governments, Commercial Banks, Land
Development Banks, State Coop. Banks, Regional
Rural Banks etc. as refinance against the loans
disbursed by them to the ultimate borrowers.
(Rs. crore)
Particulars Minimum Maximum Daily average Outstandingoutstanding outstanding outstanding as on
during the year during the year during the year 31 March 2010
Securities sold under repo 0.00 0.00 0.00 0.00(0.00) (0.00) (0.00) (0.00)
Securities purchased 476.02 476.02 1.30 0.00under reverse repo (275.00) (275.00) (0.75) (0.00)
26.18 Concentration of Deposits,
Advances, Exposure and NPAs
(a) Concentration of Deposits
(Rs. in Crore)
Total Deposits of twenty largest depositors 57661.54
Percentage of Deposits of twenty largest 82.38%depositors to Total Deposits of the Bank
(b) Concentration of Advances
(Rs. in Crore)
Total Advances to twenty largest borrowers 67384.61
Percentage of Advances to twenty largest 55.82%borrowers to Total Advances of the Bank
(c) Concentration of Exposure
(Rs. in Crore)
Total Exposure to twenty largest borrowers/ 67384.61customers
Percentage of Exposure to twenty largest 51.94%borrowers/customers to Total Exposure of thebank on borrowers/customers
(d) Concentration of NPAs
(Rs. in Crore)
Total Exposure to Top four NPA accounts 32.02
26.19 Sector-wise NPAs
S. Sector Percentage of NPAsNo to Total Advances
in that sector
1 Agriculture and allied activities 0.00
2 Industry (Micro & Small, Medium and Large) 0.44
3 Services 0.00
4 Personal Loans 0.00
129
iii) Treasury : Inc ludes 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.
(Rs. in Crore)
Direct Finance Refinance Treasury Unallocated Total
3,295.94 3,393.58 1,255.69 19.59 7,964.80Segment Revenue (2,337.37) (3,389.92) (1,307.36) (16.03) (7,050.68)
372.12 1,198.23 1,227.10 -525.00 2,272.45Segment Results (118.46) (1,181.87) (1,283.21) (-596.01) (1,987.53)
Total carrying amount 60,519.42 61,222.81 12,985.48 1,564.42 1,36,292.13of Segment Assets (45,798.54) (54,265.45) (16,434.04) (1,678.08) (1,18,176.11)
Total carrying amount 60,642.12 55,128.33 239.82 20,281.86 1,36,292.13of Segment Liabilities (47,695.61) (51,039.60) (192.86) (19,248.04) (1,18,176.11)
Other Items :
Cost to acquire Segment 0 0 0 11.21 11.21Assets during the year (11.79) (11.79)
Amortization & Depreciation 0.00 0.00 18.18 23.29 41.48(0.00) (0.00) (18.18) (21.36) (39.54)
Non Cash Expenses 17.96 96.37 -0.68 73.34 186.99(9.07) (64.65) (0.46) (47.76) (121.94)
(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 S Akbar
Partner Chief General Manager
Mumbai Accounts Department
Mumbai, May 26, 2010 Mumbai, May 25, 2010
Umesh Chandra Sarangi Dr. K.G. Karmakar Dr. K. C. Chakrabarty Shashi Rekha Rajagopalan
Chairman Managing Director Director Director
(b) Information on Primary Business Segment
130
National Bank for Agriculture and Rural Development
Cash flow for the year ended 31 March 2010 (Rupees)
Particulars During 2009-10 During 2008-09
(a) Cash flow from Operating activitiesNet Profit as per Profit and Loss a/c before tax 2272,45,27,218 1987,53,10,864
Adjustment for:
Depreciation 23,29,35,835 21,36,41,786
Provisions and Amortisations 17,97,82,941 18,53,69,056
Provision for Non performing Assets 17,60,23,540 8,88,11,531
Provision for Standard Assets 101,50,00,000 73,70,00,000
Provision for sacrifice in interest element of Restructured Loan (-) 4,46,00,000 (-) 8,62,00,000
Profit / Loss on sale of Fixed Assets (-) 20,90,556 (-) 7,61,670Interest credited to various Funds (including addition/ adjustment 91,59,96,739 61,78,34,663
made to Interest Differential Fund)Income from Investment (including Discount Income) (-) 1255,68,93,098 (-) 1307,36,41,258
Expenditure from various Funds (-) 12801,23,52,653 (-) 20857,49,50,989
Operating profit before changes in operating assets (-) 11537,16,70,034 (-) 20001,75,86,017
Adjustment for net change in:
Current Assets 4037,11,93,160 (-) 6610,57,48,689
Current Liabilities 679,38,95,145 1110,19,36,226
Increase in Loans and Advances (Including Housing Loan &
Other Advances to Staff (-) 21785,29,44,290 (-) 16067,34,69,946
Cash generated from operating activities (-) 28605,95,26,019 (-) 41569,48,68,426
Payment of Income Tax (-) 793,21,29,932 (-) 598,75,73,999
Net cash flow from operating activities (A) (-) 29399,16,55,951 (-) 42168,24,42,425
(b) Cash flow from Investing activitiesIncome from Investment (including Discount Income) 1255,68,93,098 1307,36,41,258
Increase / Decrease in Fixed Asset (-) 10,63,14,538 (-) 11,17,05,555
Increase / Decrease in Investment (-) 808,31,58,332 (-) 431,26,76,503
Net cash used / generated from investing activities (B) 436,74,20,228 864,92,59,200
(c ) Cash flow from financing activitiesProceeds of Bonds (-) 3699,24,93,756 (-) 4996,49,24,694
Increase / Decrease in Borrowings 1584,85,53,429 (-) 1207,32,41,806
Increase / Decrease in Deposits 17868,89,67,953 21428,30,49,166
Grants / contributions received 12928,14,78,891 22461,69,90,603
Net cash raised from financing activities (C) 28682,65,06,517 37686,18,73,269
Net increase in cash and cash equivalent (A)+(B)+(C ) (-) 279,77,29,206 (-) 3617,13,09,955
Cash and Cash equivalent at the beginning of the year 908,11,04,689 4525,24,14,644
Cash and cash equivalent at the end of the year 628,33,75,483 908,11,04,689
1. Cash and cash equivalent at the end of the year includes : 2009-2010 2008-2009Cash in hand 11,720 21,579Balance with Reserve Bank of India 25,45,41,783 169,67,65,931Balances with other Banks in India 533,94,81,680 420,21,61,811Remittances in Transit 68,93,40,300 185,25,16,092Collateralised Borrowing and Lending Obligations 0 132,96,39,276
Total 628,33,75,483 908,11,04,689
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 dateKhimji Kunverji & CoChartered Accountants
Hasmukh B Dedhia S AkbarPartner Chief General ManagerMumbai, May 26, 2010 Accounts Department
Mumbai, May 25, 2010
Umesh Chandra Sarangi Dr. K.G. Karmakar Dr. K. C. Chakrabarty Shashi Rekha Rajagopalan
Chairman Managing Director Director Director
131
Consolidated Balance Sheet
Profit and Loss Account
&
Cash Flow
of
NABARD
&
its Subsidiaries(NABCONS, ADFT, ABFL & NABFINS)
2009-2010
132
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, 2010, 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 87.42 crore and Rs15.60 crore respectively. The financial statements of all the four
subsidiaries, being unaudited, any adjustments to their balances could have consequential effects on the attached
Consolidated Financial Statements, the impact of which is not ascertained. These financial statements have been certified
by the managements of the respective subsidiary companies and have been furnished to us. In our opinion, in so far as it
relates to the amounts included in respect of the Subsidiaries in Consolidated Financial Statements is based solely on
such management certified financial statements.
4. We report that the Consolidated Financial Statements have been prepared by the Bank in accordance with the requirements
of Accounting Standard (AS) 21 “Consolidated Financial Statements” issued by the Institute of Chartered Accountants of
India, and on the basis of the separate audited/ certified financial statements of the Bank and its Subsidiaries included in
the consolidated financial statements.
5. We report that on the basis of the information and explanations given and on the consideration 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, 2010;
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: May 26, 2010
For and on behalf of
Khimji Kunverji & Co.
Chartered Accountants
Firm Registration No. 105146W
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
133
National Bank for Agriculture and Rural Development
Consolidated Balance Sheet as on 31 March 2010
(Rupees)
Particulars As on 31.03.2010 As on 31.03.2009
FUNDS AND LIABILITIES
Capital 2000,00,00,000 2000,00,00,000
Reserve Fund and Other Reserves 10695,52,59,087 9551,33,61,533
National Rural Credit Funds 15983,00,00,000 15571,00,00,000
Funds Out of Grants received from International Agencies 149,87,64,124 154,81,78,661
Gifts Grants, Donations and Benefactions 4708,08,54,379 5111,01,92,515
Other Funds 2735,11,97,846 2101,80,68,588
Minority Interest 13,42,22,569 12,73,59,475
Deposits 69996,02,02,581 52127,12,34,628
Bonds and Debentures 20004,38,12,150 23702,62,34,987
Borrowings 5176,83,03,241 3592,94,14,312
Current Liabilities and Provisions 4887,86,69,194 4281,43,94,987
TOTAL FUNDS AND LIABILITIES 136350,12,85,171 118206,84,39,686
PROPERTY AND ASSETS
Cash and Bank Balances 9694,91,32,622 14018,72,65,778
Investments 3764,99,64,266 2974,08,29,886
Advances 120512,26,31,072 98858,23,52,501
Fixed Assets 234,98,90,260 247,31,45,985
Other Assets 2142,96,66,950 2108,48,45,536
TOTAL PROPERTY AND ASSETS 136350,12,85,171 118206,84,39,686
As per our attached report of even date
Khimji Kunverji & Co
Chartered Accountants
Hasmukh B Dedhia S Akbar
Partner Chief General Manager
Mumbai, May 26, 2010 Accounts Department
Mumbai, May 25, 2010
Umesh Chandra Sarangi Dr. K.G. Karmakar Dr. K. C. Chakrabarty Shashi Rekha Rajagopalan
Chairman Managing Director Director Director
134
National Bank for Agriculture and Rural Development
Consolidated Profit and Loss Account for the year ended 31 March 2010
(Rupees)
Particulars 2009-10 2008-09
Income:
Interest Received on Loans and Advances 6654,03,24,335 5694,13,82,207
Income from Investment operations 1216,51,46,645 1218,59,65,570
Discount Received 42,95,49,641 92,55,15,672
Other Receipts 66,84,46,240 60,18,62,544
TOTAL INCOME 7980,34,66,861 7065,47,25,993
Expenditure:
Interest and Financial Charges 4988,46,50,149 4255,90,43,429
Establishment and other expenses 554,72,01,330 698,69,20,566
Depreciation 23,33,50,246 21,39,95,163
Provisions 132,71,74,889 93,04,17,887
TOTAL EXPENDITURE 5699,23,76,614 5069,03,77,045
Profit before Income Tax 2281,10,90,247 1996,43,48,948
Provision for Income Tax 649,54,88,364 676,66,13,885
Provision for Fringe Benefit Tax 0 3,66,35,726
Deferred Tax Asset Adjustment 67,17,34,084 (-) 80,28,25,064
Short / (Excess) provision for Income Tax in earlier years 0 9,397
Profit after Tax 1564,38,67,799 1396,39,15,004
Share of Profit / Loss in Subsidiaries attributable to Minority Interest 71,50,319 80,65,434
Profit available for Appropriation 1563,67,17,480 1395,58,49,570
Appropriations:
Profit as above 1563,67,17,480 1395,58,49,570
Add: Withdrawals from various funds against expenditure 70,34,45,477 48,14,80,880
debited to Profit & Loss Account
Total Profit Available for Appropriation 1634,01,62,957 1443,73,30,450
Transferred to:
Special Reserve u/s 36(I)(viii) of the Income Tax Act, 1961 350,00,00,000 340,00,00,000
National Rural Credit (Long Term Operations) Fund 400,00,00,000 400,00,00,000
National Rural Credit (Stabilisation) Fund 10,00,00,000 10,00,00,000
Co-operative Development Fund 3,83,03,657 3,81,14,043
Research & Development Fund 9,82,98,599 8,76,10,683
Investment Fluctuation Reserve 30,00,00,000 42,00,00,000
Financial Inclusion Fund 0 18,50,00,000
Financial Inclusion Technology Fund 0 32,50,00,000
Farm Innovation and Promotion Fund 96,93,544 46,55,57,504
Farmers Technology Transfer Fund 64,58,40,784 31,61,42,310
MFDEF Reserve Fund 80,00,00,000 -
Reserve Fund 684,80,26,373 509,99,05,910
Total 1634,01,62,957 1443,73,30,450
135
Additional Notes to Consolidated Accounts1. Consolidation has been done pursuant to the listing agreement with stock exchange.
2. Financial statement in respect of Agri Development Finance (Tamilnadu) Ltd, NABARD Financial Services Limited, NABARD Consultancy
Services Limited and Agri Business Finance (AP) Ltd. are unaudited.
3. Details of the subsidiaries:
Name of the Subsidiary Country of Incorporation Proportion of Ownership
Agri Development Finance (Tamilnadu) Ltd. India 52.10Agri Business Finance (AP) Ltd. India 47.82*NABARD Financial Services Limited India 82.41NABARD 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.23.34 crore (21.40 crore) included in
the Consolidated Financial Statement, 0.18% (0.17%) of that amount is determined based on depreciation provided by following WDV
/ SLM at the rates as specified in Schedule XIV to the Companies Act, 1956.
6. Income on foreign assignments by NABCONS is accounted on “receipt” basis. The amount of such fees receivable is not material.
7. Disclosures as required under AS-17 “Segment Reporting” in consolidated financial statements are as under:
(Rs. in crore)
Financial Year 2009-10 Direct Refinance Treasury Unallocated Total(Consolidated) Finance
Segment Revenue 3298.75 (2340.89) 3393.58 (3389.92) 1255.69 (1307.36) 32.32 (27.30) 7980.35 (706.47)Segment Results 374.13 (120.78) 1198.23 (1181.87) 1227.10 (1283.21) -518.36 (-589.43) 2281.11 (1996.43)Total carrying amount ofSegment Assets 60538.90 (45814.35) 61222.81 (54265.45) 12985.48 (16434.04) 1602.94 (1693) 136350.13 (118206.84)Total carrying amount ofSegment Liabilities 60661.60 (47711.41) 55128.33 (51039.60) 239.82 (192.86) 20320.38 (19262.97) 136350.13 (118206.84)Other Items :Cost to acquire SegmentAssets during the year 0.10 11.27 11.37Amortization & Depreciation 0.03 (0.02) 0 18.18 (18.18) 23.30 (21.37) 41.52 (39.58)Non Cash Expenses(other than above) 18.06 (9.62) 96.37 (64.66) (-) 0.68 (0.46) 73.34 (47.75) 187.09 (122.49)
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 dateKhimji Kunverji & CoChartered Accountants
Hasmukh B Dedhia S AkbarPartner Chief General ManagerMumbai, May 26, 2010 Accounts Department
Mumbai, May 25, 2010
Umesh Chandra Sarangi Dr. K.G. Karmakar Dr. K. C. Chakrabarty Shashi Rekha Rajagopalan
Chairman Managing Director Director Director
136
National Bank for Agriculture and Rural Development
Consolidated Cash Flow Statement for the year ended 31 March 2010(Rupees)
Particulars During 2009-10 During 2008-09
(a) Cash flow from Operating activities
Net profit as per P & L a/c before tax 2281,10,90,247 1996,43,48,948
Depreciation 23,33,50,246 21,39,95,164
Provisions and Amortisations 17,97,82,940 18,53,69,056
Provision for Non performing Assets 17,60,23,540 9,42,07,091
Provision for Standard Assets 101,50,00,000 73,70,00,000
Provision for Sacrifice in interest element of restructured loan (-) 4,46,00,000 (-) 8,62,00,000
Interest credited to various funds 91,59,96,740 61,78,34,663
Other expenses (-) 57,807 0
Income from Investment (-) 1255,68,93,098 (-) 1307,40,79,660
Profit / Loss on sale of Fixed Asset (-) 20,90,556 (-) 7,61,799
Expenditure from various funds (-) 12801,23,52,653 (-) 20857,49,50,989
Operating profit before working capital changes (-) 11528,47,50,400 (-) 19992,32,37,526
Adjustment for net change in:
Current Assets 4033,86,71,481 (-) 6610,56,33,642
Current liabilities 698,41,85,640 1109,81,36,716
Increase/Decrease in Loans and Advances (-) 21790,01,00,598 (-) 16067,23,06,900
Cash generated from operating activities (-) 28586,19,93,877 (-) 41560,30,41,352
Payment towards Income tax (-) 795,74,81,119 (-) 601,39,55,521
Net cash flow from operating activities (A) (-) 29381,94,74,996 (-) 42161,69,96,873
(b) Cash flow from Investing Activities
Income from Investment 1255,68,93,098 1307,40,79,660
Increase / Decrease of Fixed Assets (-) 10,80,03,965 (-) 11,21,48,627
Increase / Decrease in Investments (-) 808,60,63,486 (-) 432,27,47,422
Net cash used in investing activities (B) 436,28,25,646 863,91,83,611
(c) Cash flow from Financing Activities
Proceeds of Bonds (-) 3699,24,93,756 (-) 4996,49,24,694
Increase / Decrease in Borrowings 1591,33,42,629 (-) 1207,32,41,806
Increase / Decrease in Deposits 17863,32,63,161 21424,95,42,087
Grants / contributions received 12928,20,41,391 22461,69,90,603
Dividend paid (-) 58,49,750 (-) 29,24,875
Net cash raised from financing activities (C) 28683,03,03,675 37682,54,41,315
Net increase in cash and cash equivalent (A)+(B)+(C) (-) 262,63,45,675 (-) 3615,23,71,947
Cash and cash equivalent at the beginning of the period 911,87,79,541 4527,11,51,488
Cash and cash equivalent at the end of the period 649,24,33,867 911,87,79,541
Cash and cash equivalent at the end of the period includes : 2009-10 2008-09
Cash in hand 21,950 27,285
Balance with Reserve Bank of India 25,45,41,784 173,44,35,078
Balances with other Banks in India 554,85,29,833 420,21,61,810
Remittances in Transit 68,93,40,300 185,25,16,092
Collateralised Borrowing and Lending Obligations 0 132,96,39,276
Total 649,24,33,867 911,87,79,541
As per our attached report of even date
Khimji Kunverji & Co
Chartered Accountants
Hasmukh B Dedhia S Akbar
Partner Chief General Manager
Mumbai, May 26, 2010 Accounts Department
Mumbai, May 25, 2010
Umesh Chandra Sarangi Dr. K.G. Karmakar Dr. K. C. Chakrabarty Shashi Rekha Rajagopalan
Chairman Managing Director Director Director
137
Regional Offices/Sub-Office/Training Establishments
REGIONAL OFFICES
ANDAMAN & NICOBAR
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]@nabard.org
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]
ARUNACHAL PRADESH
Bank Tinali, Post Box No. 133
Basar Building, T.T. Marg
Opposite State Bank of India
Itanagar - 791 111
Tel No. : (0360) 2212675, 215967
Fax No. : (0360) 2212675
E mail : [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]
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]
CHHATTISGARH
Pithalia Complex, K.K. Road
Fafadih,
Raipur - 492 009
Tel No. : (0771) 2888499
Fax No. : (0771) 2884992
E mail : [email protected]
G O A
Third floor, Nizari Bhavan
Menezes Braganza Road
Panaji - 403 001
Tel No. : (0832) 2220490, 2420504
Fax No. : (0832) 2223429
E mail : [email protected]
GUJARAT
Opp. Municipal Garden
Usmanpura
Ahmedabad - 380 013
Tel No. : (079) 27552257-59
Fax No. : (079) 27551584
E mail : [email protected]
HARYANA
Plot No.3, Sector - 34 'A'
Chandigarh - 160 022
Tel No. : (0172) 5046703, 5046728
Fax No. : (0172) 5046784
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) 2624373,
2624379-80
Fax No. : (0177) 2622271
E-mail : [email protected]
JAMMU & KASHMIR
B-II, South Block
Bahu Plaza Complex, P.B. No. 2
Jammu - 180 012
Tel No. : (0191) 2472355, 2472620
Fax No. : (0191) 2472337
E mail : [email protected]
JHARKHAND
Opp. Adivasi College Hostel
Karamtoli Road
Ranchi - 834 001
Tel No. : (0651) 2361107
Fax No. : (0651) 2361108
E-mail : [email protected]
KARNATAKA
113/1, Jeevan Prakash Annexe
J.C. Road, P. B. No. 29
Bangalore - 560 002
Tel No. : (080) 22225241/44
Fax No. : (080) 2222148
E mail : [email protected]
KERALA
Punnen Road, Statue
P. B. No. 220
Thiruvananthapuram - 695 039
Tel No. : (0471) 2323846, 2323590
2323859
Fax No. : (0471) 2324358
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]
MAHARASHTRA
54, Wellesley Road
Shivaji Nagar
Pune - 411 005
Tel No. : (020) 25541439,
25542090
Fax No. : (020) 25542250
E-mail : [email protected]
MANIPUR
Leiren Manson
Opposite Supermarket
Lamphelpat, Manipur - 795 004
Tel No. : (0385) 2410706, 2416192
Fax No. : (0385) 2416191
E-mail : [email protected]
MEGHALAYA
'U' Pheit Kharmihpen Building
Plot No.28(2), Dhankheti
2nd & 3rd Floor
Shillong - 793 003
Tel No. : (0364) 2221602, 2503499
2501518
Fax No. : (0364) 2227463
E mail : [email protected]
MIZORAM
Ramhlun Road (North)
Bawngkawn
Aizawl - 796 014
Tel No. : (0389) 2342328, 2305290
Fax No. : (0389) 2340815
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]
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]
ORISSA
'Ankur', 2/1, Nayapalli Civic Centre
Bhubaneswar - 751 015
Tel No. : (0674) 2553884
Fax No. : (0674) 2552019
E mail : [email protected]
PUNJAB
Plot No.3, Sector 34-A
Post Box No. 7
Chandigarh - 160 022
Tel No. : (0172) 5046700, 5046701
Fax No. : (0172) 5046702
E mail : [email protected]
RAJASTHAN
3, Nehru Place
Tonk Road Post Bag No. 104
Jaipur - 302 015
Tel No. : (0141) 2740821
Fax No. : (0141) 2742161
E mail : [email protected]
138
TRIPURA
Palace Compound (East)
Uzirbari Road, Post Box No.9
Agartala - 799 001
Tel No. : (0381) 2302378, 2229644
2229633
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) 2748611
Fax No. : (0135) 2748610
E mail : [email protected]
SUB-OFFICE/CELL
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]
HYDERABAD
Zonal Training Centre 10-1-128/4
NABARD Officer's Quarters
Masab Tank
Hyderabad - 500 028 (A.P.)
Tel No. : (040) 23375006
Fax No.: (040) 23375007
E mail : [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
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]
LUCKNOW
Banker's Institute of Rural Development
Section 'H', L.D.A. Colony Kanpur Road
Lucknow - 226 012
Tel No. : (0522) 2421187, 2421137
2421055
Fax No.: (0522) 2421176, 2421047
E mail : [email protected]
MANGALORE
Regional Training College
Manjusha Building
Above Automatrix Showroom
Post Box No. 1117, Bejai
Mangalore - 575 004
Tel No. : (0824) 2225836, 2225844
Fax No.: (0824) 2225835
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]
TAMIL NADU
48, Mahatma Gandhi Road
Post Box No.6074 Nungambakkam
Chennai - 600 034
Tel No. : (044) 28276088, 2830444
Fax No. : (044) 28275732
E mail : [email protected]
UTTAR PRADESH
11, Vipin Khand Gomti Nagar
Lucknow - 226 010
Tel No. : (0522) 2304530
Fax No. : (0522) 2304531
E mail : [email protected]
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]
139
LIST OF ABBREVIATIONS
AACS As Applicable to Co-operative
Societies
ACSTI/s Agricultural Co-operative Staff TrainingInstitute/s
ADWDR Agriculture Debt Waiver and Debt Relief
Scheme
AIBP Accelerated Irrigation Benefit Programme
APEDA Agricultural and Processed Food Products
Export Development Authority
APMC Agriculture Produce Marketing
Committee
ARF Automatic Refinance Facility
ATMA Agriculture Technology Management Agency
BAIF Bharatiya Agro Industries Foundation
BLBC Block Level Bankers’ Committee
B.R. Act Banking Regulation Act
BIRD Bankers Institute of Rural
Development
BRAMHA Business Revitalisation and Managing
Human Aspirations
CAB College for Agriculture Banking
CAGR Compount Annual Growth Rate
CAS Common Accounting System
CAT Capacity Building for Adoption of
Technology
CBP Capacity Building Phase
CDF Co-operative Development Fund
CEO Chief Executive Officer
CISS Capital Investment Subsidy Scheme
CD Certificate of Deposits
CLA Central Loan Assistance
CRIDA Central Research Institute for Dryland
Agriculture
CP Commercial Paper
CPIO Central Principal Information Officer
CRR Cash Reserve Ratio
CSA Co-operative Societies Act
CSO Central Statistical Organisation
DAP Development Action Plan
DCCB District Central Co-operative Bank
DDM District Development Manager
DRIP District Rural Industries Project
ERR Economic Rate of Return
FC Farmers’ Club
FCI Food Corporation of India
FIF Financial Inclusion Fund
FITF Financial Inclusion Technology Fund
FIP Full Implementation Phase
FIPF Farm Innovation and Promotion Fund
FRP Fair and Remunerative Price
FRR Financial Rate of Return
FTTF Farmers’ Technology Transfer Fund
GCF Gross Capital Formation
GCFA Gross Capital Formation in Agriculture
GDCF Gross Domestic Capital Formation
GDI Gross Domestic Investment
GDP Gross Domestic Product
GFCE Gross Fixed Consumption Expenditure
GFCF Gross Fixed Capital Formation
GLC Ground Level Credit
GoI Government of India
GTZ Deutsche Gesellschaft fur Technische
Zusammenarbeit
ha. Hectare
HRD Human Resource Development
HO Head Office
HWG Handloom Weavers’ Group
ICAR Indian Council of Agricultural Research
IDP Integrated Development Plan
IGWDP Indo-German Watershed Development
Programme
ILR Internal Lendable Resources
IMF International Monetary Federation
IRV Individual Rural Volunteer
IT Information Technology
JLG Joint Liability Group
JLTC Junior Level Training Centre
KCC Kisan Credit Card
KfW Kreditanstalt fur Wiederaufbau
(German Development Bank)
KVK Krishi Vigyan Kendra
LPA Long Period Average
LT Long-term
LTCCS Long-Term Co-operative Credit
Structure
MEDP Micro-Enterprise Development
Programme
MEPA Micro-Enterprise Promotion Agency
mF Micro-Finance
MFDEF Micro-Finance Development and
Equity Fund
MFI Micro-Finance Institution
MI Minor Irrigation
MIS Management Information System
MITTRA Maharashtra Institute of Technology
Transfer for Rural Areas
MoA Ministry of Agriculture/Memorandum ofAgreement
MoFPI Ministry of Food Processing Industries
MoRD Ministry of Rural Development
140
MoU Memorandum of Understanding
MSP Minimum Support Price
MSME Micro Small and Medium Enterprises
MT Medium-term/Metric Tonne
NABARD National Bank for Agriculture and
Rural Development
Nabcons NABARD Consultancy Services
NAIS National Agricultural Insurance Scheme
NBSC National Bank Staff College
NBTC National Bank Training Centre
NER North-Eastern Region
NFSM National Food Security Mission
NGO Non-Governmental Organisation
NHM National Horticulture Mission
NIMC National Implementing and Monitoring
Committee
NPA Non-Performing Asset
NPK Nitrogen Phosphorous Potash
NRC (LTO) National Rural Credit (Long-Term
Operations)
NREGS National Rural Employment GuaranteeScheme
NRRDA National Rural Roads DevelopmentAgency
NSSO National Sample Survey Organisation
ODI Organisation Development Intervention
OSAO Other than Seasonal Agricultural
Operations
p.a. per annum
PACS Primary Agriculture Credit Society
PCARDB Primary Co-operative Agriculture and Rural
Development Bank
PDS Public Distribution System
PFCE Private Final Consumption Expenditure
PLP Potential Linked Credit Plan
PLI Primary Lending Institution
PLR Prime Lending Rate
PPID Pilot Project for IntegratedDevelopment
PRI Panchayati Raj Institution
PUCB Primary Urban Co-operative Bank
PWCS Primary Weaver’s Co-operative Society
R&D Research and Development
RBI Reserve Bank of India
REDP Rural Entrepreneurship Development
Programme
RFA Revolving Fund Assistance
RFI Rural Financial Institution
RIDF Rural Infrastructure Development Fund
RNFS Rural Non-Farm Sector
RO Regional Office
RIF Rural Innovation Fund
RPF Rural Promotion Fund
RRB Regional Rural Bank
RSVY Rashtriya Sam Vikas Yojana
RTC Regional Training Centre
RUDSETI Rural Development and
Self-Employment Training Institute
SAA Service Area Approach
SAMIS Service Area Monitoring andInformation System
SAO Seasonal Agricultural Operations
SC/ST Scheduled Caste/Scheduled Tribe
SCARDB State Co-operative Agriculture and RuralDevelopment Bank
SCB State Co-operative Bank
SCC Swarozgar Credit Card
SDC Swiss Agency for Development and
Cooperation
SDP Skill Development Programme
SEWA Self-Employed Women’s Association
SF/MF Small Farmers/Marginal Farmers
SFP State Focus Paper
SGSY Swarnjayanti Gram Swarozgar Yojana
SHG Self-Help Group
SHPI Self-Help Promoting Institution
SLBC State Level Bankers’ Committee
SLR Statutory Liquidity Ratio
SME Small and Medium Entreprise
SMP Statutory Minimum Price
SO Sub-office
SSI Small Scale Industry
ST Short-term
STCCS Short-Term Co-operative Credit
Structure
TDF Tribal Development Fund
TE Training Establishment
TFO Total Financial Outlay
TOR Terms of Reference
TOT Training of Trainers
TPDS Targeted Public Distribution System
UT Union Territory
VDP Village Development Programme
VWC Village Watershed Committee
WBCIS Weather Based Crop Insurance Scheme
WDC Women Development Cell
WDF Watershed Development Fund
WPI Wholesale Price Index
WTO World Trade Organisation
WUA Water Users’ Association