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National Seminar

onAgricultural Credit

Silver Jubilee

Celebrations

NABARD

25 YEARS OF DEDICATION

TO RURAL PROSPERITY NABARD completed 25 years of its eventful and trailblazing

existence on 12 July 2007. Established in 1982, by an Act of

Parliament, NABARD's mandate was to provide focused and

undivided attention to the development of rural India by facilitating

credit flow for promotion of agriculture and rural non farm sector.

Emphasizing this in no uncertain terms, its mission statementunderscores NABARD's goal to "promote sustainable and equitable

agriculture and rural prosperity through effective credit support,related services, institution development and other innovative

initiatives".

NABARD's functions can be classified into 4 major categories viz.Credit Planning, Financial Services, Promotion and Development, and

Supervision. Under Credit Planning NABARD prepares PotentialLinked Credit Plan (PLP) annually for each district of the country by

assessing potential available in agriculture and rural sector. This serves

as a guide for banks and Government agencies to prepare their own

investment and credit plans in the district and state. Under its Financial

services, it refinances commercial, co-operative and regional rural

banks for lending to on farm and non-farm activities. This includes

farm activities like minor irrigation, animal husbandry, farm

mechanization, forestry, fisheries, land development, horticulture, plantation and medicinal crops and non-farm like rural industries,

artisans, handicrafts, handlooms, rural housing, rural tourism and agro

processing. Refinance is provided by NABARD for both long term

investment credit as well as short term production credit for crop loans

and working capital for non-farm activities. A nationwide network of

28 regional offices at the state capitals, a sub-office at Port Blair and391 district development offices are at hand to cater to this awesome



task.

Clearly NABARD's benevolent hand has been silently at work insupporting rural resurgence in various ways and its stakes are quite

enormous. A glance at the figures will give a fair idea. It haschannelised a whopping Rs. 1,21,000 crore under its investment credit

programme and RIDF since inception, which includes Rs. 8795 croredisbursed during 2006-07. Under production credit the Bank

sanctioned limits of Rs. 12570 crore during 2006-07.

NABARD has effectively brought in a number of innovations in the

rural credit domains. To quote a few: Formation and Linkage of Self

Help Groups, Farmers Clubs, Rural Infrastructure Development Fund,

Watershed Development, Kisan Credit Card, District Rural Industries

Project, Cluster Development Programme and Rural Innovation Fund.

Self Help Groups (SHGs)

Farmers Clubs

Rural Infrastructure Development Fund (RIDF)

Watershed Development

Tribal Development and WADI approach

Women and Development

District Rural Industries Project (DRIP)

Rural Entrepreneurship Development Programme (REDP)

Rural Marketing

Revival of Short-Term Rural Co-operative Structure (STCCS)

Rural Innovation Fund

NABARD Consultancy Services (NABCONS)

Co-Financing

Self Help Groups (SHGs):

One of the major success stories of NABARD, the SHG Bank linkage

programme started as a pilot project in 1992 with 500 SHGs. SHGscomprise homogeneous groups of poor people who have voluntarily

come together mainly with the idea of overcoming their common problems of low social and economic status. SHGs enable the poor,

especially the women from the poor households, to collectively



identify, prioritize and tackle the problems they face in their socioeconomic environment. By pooling their meager resources and using

them for lending among themselves, they develop the habit of thriftand the skill of credit appraisal, before getting mature enough to access

a loan from banks, which is called credit linkage. Starting with small

loans for consumption they soon graduate to bigger loans for setting

up of income generating micro-enterprises. Today, NABARD's SHGBank Linkage Programme boasts of over 26 lakh SHGs and 3.9 crore

households influencing the lives of over 16 crore poor population.

During the year 2006-07 alone, as many as 458591 groups were credit

linked.

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Farmers Clubs

A popular intervention among both farmers and Bankers, the farmers

Club concept was envisaged as an experiment in social engineering, a

forum to bring the rural banker and the borrower closer and to propagate the principles of development through credit. Farmers Club

is an informal group of 15-20 farmers, one per village, which acts as amedium for accessing and disseminating awareness of modern

methods of farming and technological advancements in agriculture inits area. Financial support is provided by NABARD for opening and

maintenance of Clubs as well as for organizing training programmes inthe respective villages. With corporates and food chains looking for

supply chain linkages of farm produce, Farmers Clubs may have an

important role to play in joint production and marketing of farm

produce. As on 31 March 2007 , there were Farmers Clubs in 534

districts covering 48763 villages.

Rural Infrastructure Development Fund (RIDF):

Deficient Rural infrastructure hinders both social and economic

development. Economists have explicitly emphasized on the direct

correlation between the index of infrastructure development and rural

development. NABARD's support to State Governments through

RIDF since 1995-96 has brought about a sea change in the shape of

upgraded infrastructure in rural areas. Rural roads and bridges under

RIDF have improved market access to farmers; check dams and

irrigation structures have augmented their water resources. Even

drinking water projects and health centres have been supported under the Fund. NABARD so far has sanctioned Rs. 61539 crore for

2,44,025 projects under the Fund. A cumulative position of sector-wise

sanctions as on 31 st March 2007 : Irrigation: Rs. 20637 crore, Rural

connectivity: Rs. 26935 crore for rural road network and bridges,

Power: Rs. 1434 crore Social Sector: Rs. 6988 crore Others: Rs. 5547

crore. A separate window has been created for rural connectivity with

villages of population less than 500, with a corpus of Rs. 4,000 crore

to support the Bharat Nirman project.



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Watershed Development:

In a comprehensive effort to enhance productivity of dryland through

conserving soil, rainwater and irrigation, NABARD embarked on perfecting its experiments in creating a sustainable cost effective

solution to the water harvesting techniques in rural areas. Building on

its experience with the KFW funded watershed development

programme in Maharashtra , NABARD established a Watershed

Development Fund with an initial corpus of Rs. 200 crore in 1999-

2000 which now stands at Rs. 602.76 crore. The programme is now

being replicated in 124 districts of 14 States.

Tribal Development and WADI approach :

With over 8% of the population comprising tribals largely dependent

on forests, livestock and agriculture, NABARD found a holisticapproach by addressing production, processing and marketing of the

produce with WADI as the core of the programme. WADI (smallorchard) was found to be an effective tool for arresting migration of

tribals from their native habitat. The WADI model evolved out of concerted efforts made in association with Bhartiya Agro Industries

Foundation (BAIF). The project also envisages other developmentinterventions like environment, gender and health. Having completed

10 years in Gujarat and 5 years in Maharashtra , the programme hastouched 275111 families in 410 villages.

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Women and Development

Women constitute one third of the labour force. In order to give focusto women in various development activities and increase their access

to Bank credit, schemes like Assistance to Rural women in Non-farmDevelopment (ARWIND), Assistance for Marketing of Non- Farm

Products of Rural Women (MAHIMA), Development of Women

through Area Programme (DEWTA) have been designed to provide

exclusive support to women in rural areas.

District Rural Industries Project (DRIP):

NABARD launched DRIP, an integrated area-based credit

intensification programme, in collaboration with Government, banks

and other development agencies with district specific focus. It was

introduced in 1993-94 with the objective of creating sustainable

employment opportunities in 106 districts all over the country.

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Rural Entrepreneurship Development Programme (REDP):

In order to generate employment in rural areas, it was felt necessary to

develop the entrepreneurial skills of the rural youth. REDP is a promotional programme supported by NABARD to motivate and train

educated unemployed rural youth, to set up their own enterprises. Sofar, 2.32 lakh persons have been trained under the programme under

7792 REDPs.

Rural Marketing:

A number of marketing interventions have been made for marketing of

rural non-farm products since marketing is a key factor in the

sustainability of any such endeavour. With the financial support of

NABARD under its promotional programmes like Rural Haats, Rural

Marts, participation in fairs, exhibitions and marketing melas, rural

artisans and entrepreneurs can get a larger market for their produce

and showcase their talent to urban and upcountry markets.

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Revival of Short-Term Rural Co-operative Structure (STCCS)

NABARD is the implementing agency for the Revival package for the

STCCS which mean the State Coop. Banks, District Coop. Banks and

the Primary Agricultural Coop. Societies. (PACS). The revival

package has been approved by the Govt. of India based on the

recommendations of the Vaidyanathan Committee. NABARD has had

dialogues with State Govts. and so far 10 states have executed MOUwith GoI and NABARD. Apart from being on the national, state and

district level implementing committees, NABARD has designedguidelines and training manuals for the special audit of PACS under

the Package.

Rural Innovation Fund:

In association with Swiss Agency for Development and Cooperation(SDC), NABARD has constituted the ³NABARD SDC Rural

Innovation Fund (RIF)´ to support innovative projects in Farm, Non-

Farm and Micro-Finance Sectors leading to creation of livelihood

opportunities for the poor. Government and Non-GovernmentInstitutions, corporate bodies, financial institutions and individuals can

avail funding support for activities involved in development of new

products, processes, prototypes, technology etc. which have the poor

in their focus.

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NABARD Consultancy Services (NABCONS)



NABCONS is a wholly owned subsidiary of NABARD, which has

established itself as a dependable and professional consultancyservices provider in agriculture and allied activities. As on 31 March

2007 , it has cumulatively contracted 487 national and internationalassignments involving consultancy fee of Rs.25.49 crores.

Co-Financing

It has been the experience that Banks are wary of taking credit risk of

financing high tech/large scale/ export oriented agricultural projects or

those involving sunrise technologies. To instill confidence in banks

and ensure credit flow to such projects, NABARD has entered into

agreements for co-financing with 14 commercial banks. During 2006-

07, seven projects were sanctioned with bank loan of Rs. 145.03 crore

and NABARD's share of Rs. 72.42 crore. Floriculture, organic

farming, milk processing, ethanol production and agro processing are

among the projects sanctioned so far.

Nabard

Human Resources:

As on March 31,2011, the total number of staff in NABFINS was 62of which three are deputed from NABARD- namely the Managing

Director and two Deputy General managers. They are deputed full

time to NABFINS. NABARD has agreed to meet the expenses

incurred on the two Deputy General Managers for a period of five

years. The MDs costs are met by NABFINS. The tenure is for a period

of 2 years which can be extended by a year based on the requirementsof NABFINS (Annexure 1 provides details of Staff .)

y Field Staff:

The two major categories are District Managers and Financial

Service Officers. District Managers. There are 19 DMs in place of

which 13 are in Karnataka, 5 in Tamil Nadu and one in Andhra. DMs

are generally just retired officers from Commercial Banks ; there are

also a few from NGOs and MFIs. They are short listed through an

interview. Those short listed undergo 5 days of training and

exposure during which time they visit NABFINS' partners and devote

2-3 days together with NABFINS' senior staff in a rural area. The

objective of this exercise is to acquaint them with NABFINS'

principles, framework of functioning with the business model and

systems as well as to assess their capability to interact with others,

to build lasting partnerships based on mutual respect and

willingness to take decisions in time. Their commitment and

professional credentials are also assessed on the basis of their

performance in the financial institutions where they served. Given

the risk involved in handling cash directly to SHGs it is necessary



that the DMs have a record which engenders trust and confidence.

Other requirements looked for are i)Experience as Branch

managers ii) A house in the District headquarters in which they

are living and where NABFINS will place them; iii) working

experience in the same district iv) reasonable good health v) no

major domestic liabilities.

The recruitment of just retired Bank officials who have a house

in the District headquarters helps to keep costs down. Theyhave at least 3 to 5 years of active service. Care is taken to

select those who show commitment and initiative and who canwork together with others and build healthy relationships with

institutions (NGOs, Companies, Co-ops etc)

y Financial Service Officers:

The FSOs report to the DMs. There are 32 FSOs in place. The

number in each District depends on the volume of business. The

largest number of FSOs is in Tumkur District (5)and the secondlargest in Bagalkot (3). Most of the other Districts have 2, and a few

one. The FSOs undergo a similar process of interviews, exposure

and training as the DMs. During training, the DMs and FSOs

assigned to the respective districts are formed into teams to

promote a rapport with each other and to assess their compatibility.

y Role of District managers and Field Service Officers. Annexure 2 f or

details :

All DMs and FSOs are employed on a contract basis for one to three

years.

y Head Office: Staff:

There are 11 staff at HO: i) Managing Director (on deputation from

NABARD); ii) Company Secretary; iii) Deputy General manager (ondeputation from NABARD) - managing JLGs and Second level

institutions (second and third verticals) with other organisational

matters; iv) Deputy General Manager (on deputation from NABARD)

- Administration, liaison with NABARD/shareholders; v) Chief

Operations Officer - lending operations overall; managing BCs (first

vertical); vi) AGM (Rtd. from Commercial Bank with experience in

section 25 Company) Managing Staff matters; vii) Senior manager

Accounts (formerly in NBFC/MFI). A risk management unit is being

established at HO, with 2 branches in the field. There is a good

blend of various experiences and backgrounds.

y Committees:

i) Audit ; ii) Empanelment of BCs and training; iii) Investment; iv)Loan Sanction Committee and v) Purchase Committee

y Professional Organisations to whom NABFINS has outsourced

functions: i) S & J Associates: Payroll processing, compliances under

Labour Laws, submission of periodical returns/renewals etc,

compliances under EPF & ESI Acts, remittances of contributions,

compilation and submission of periodical returns, Professional Tax

compliances; ii) Ravi, Sunitha & Suri Advocates for all legal matters

related to loan documentation and opinion on service (staff)



matters etc. iii) IGS Imaging Services (India) Ltd: Recruitment - Data

related to applications (NABFINS received about 1500 applications

during the past 4 months; iv) Software development Several -

Refer to details under No 14 "Strategy to Acquire an Appropriate

Technical Solutions."

y Auditors: Internal Auditors: M/s B.S. Chandrasekhar & Co.;

Statutory Auditors: M/s Holla & Co Comptroller and Auditor General of India

5. Pre sanctioning Appraisal:

y Process for selection of Business Correspondent

o An NGO with good track record which has been in existence

for at least 3 years is eligible to be appointed as BC of

NABFINS.

o An NGO doing MFI activity is not eligible to be a BC of

NABFINS.

o Enquiries are made about the antecedents of the NGO with

DDM- NABARD, local Banks including service area bank andGovt. departments.

o The lists of RMK, CAPART are scanned to ensure that the

organisation does not figure in the Black List Category.

o Previous association with NABARD is desirable and is given

due weightage.

o FSO and DM visit the office of the shortlisted NGO and

share NABFINS' Business model. If the NGO is interested to

partner with NABFINS, an application is obtained in the

prescribed format.

o A list of SHG's promoted by the organization is collected

giving the date of formation, date of meeting, place of

meeting, details of savings of the SHGs.o The following aspects of the potential BC are

scrutinized/assessed:

Composition of Board of Management

Profile & commitment of CEO

Adequacy of field staff

Infrastructure

Track record and potential for sustainability of NGO

operation

Commitment & honesty of CEO & staff

o NABFINS District staff visit the SHGs promoted by the NGO.

The SHGs are selected randomly by the FSO/DM. During the

discussion with SHGs, in addition to studying the bookkeeping & accounting aspects, the relationship of the NGO

staff with the SHG is assessed; arrangements for supervision

& handholding support are made. It is also ascertained

whether the NGO is collecting any fee/charges from the

SHGs.

o Interaction is conducted with NGO's field staff to ascertain

their sense of belongingness, honesty, integrity and

commitment; these are important since they are going to



be our last mile agents if the NGO becomes a BC.

o Assistance is given to the BC in furnishing necessary

information. All photocopies are verified with originals.

o The District Office forwards the application, if

recommended, in the prescribed format to Head Office.

o An officer from HO visits the NGO for assessment. S/he

visits both the office and also a few SHGs promoted by theNGO (which are selected randomly). S/he reviews the

assessment of the NGO made by the District staff

o A Committee comprising Chairperson and Managing

Director approves the NGO proposed to be empanelled as

BC. All three reports (FSO, DM & HO representative) are

placed before the Committee to take a decision.

o The Committee also recommends the exposure limit which

is reviewed on an annual basis.

o After approval from HO, the authorised signatories of the

NGO/BC visit HO for execution of agreement; they also

interact with senior staff.

o

As a BC, the NGO submits a DD/cheque for Rs. 50,000/- assecurity deposit at the time of executing the agreement.

This is a requirement of the RBI. The amount of security

deposit may change and is decided by the committee based

on the total exposure as well as on the duration of the cash

exposure that the BC has from the time the repayment is

collected to the time it is credited to NABFINS account.

y Assessment of Groups: There are three steps to assess a group:

Step 1: A Survey Sheet is given to all the members of the

group to capture their family incomes and liabilities.

NABFINS believes that the loan to an individual member of

the group is loan to a family and thus the income and liabilityof the family is assessed. Individual members of the groups,

with or without, the assistance of the NGO staff fill up the

survey sheet. The group discusses the individual survey sheet

of all the members in the group meeting. Then the requirement

of the loan is discussed within the group factoring the incomes

and liabilities of the individual members of the group. The BC

staff collect the consolidated demand of the group and

recommend (or not) the group to NABFINS for lending. Step

2: Meeting 1: In this meeting the District Manager along withthe FSO read out to the group the information on the survey

sheet and the details of the loan that the group/ individual

members have applied for. The FSO/DM along with the BCrepresentative validates the survey sheet and loan requirementsin this meeting. The group is graded (on the basis of a grading

sheet) on financial and non financial parameters. The group hasto qualify in both the segments separately. After discussion

with the SHG along with BC staff and FSO/DM, the loan

amount is arrived at. The District Manager recommends the

loan for the group in a specific format containing details of the

group like corpus of the group, previous loan status etc and



sends the format to the Head office for a decision..

Step 3: Meeting 2: This meeting takes place after approval of the loan and before the disbursement to the group. In this

meeting the loan documentation is verified and all the terms

and condition of the loan are read out to the group in the local

language. The group is given the sanction letter with terms andconditions in the local language; attention is drawn particularly

to the repayment schedule and interest rates, and agreement is

sought. The loan is then disbursed and recorded in the minutes

book of the group. A condition for the disbursement is the

presence of all the members in the meeting.

y Assessment of Loan to 2nd level institutions: Second level

institutions seeking loans submit details of the institutions and the

purpose of loans in a prescribed format. The loan application is

appraised by designated representatives from NABFINS HO, who

undertake the field visit and recommend ( or reject) the same to the

approving authority which, if satisfied, approves the loan.

y

y 6 of 9

y

y Partners & Associates

o Business Associates

o BCs & BFs

y Fair Practice Code

y Events & News

y Publications o Overview

o Whose Risk is it anyway?

o AP Ordinance on MFIs

o MFI Regulation

y NABFINS Gallery

y Tenders

NABARD Financial Services Ltd # 190, Rashtriya Vidyalaya Road,

Jayanagar 2nd Block, Bangalore-560 004 , Karnataka, INDIA

Telephone : 26563443 / 26574222 Fax: :+91 80 26563442

Copyright © 2010.nabfins.org Powered by Tecnode

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Eagle Star Insurance



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Eagle Star

Industry Insurance

Fate Acquired

Successor Zurich Financial Services

Founded 1904

Defunct 1984

Headquarters Cheltenham, Gloucestershire, England,

United Kingdom

Key people Sir Denis Mountain, (Chairman)

The Eagle Star Insurance Company plc (formerly Eagle Star Insurance Company Limited)

was a leading British insurance business. It underwrote the full range of risks, including fire,accident, marine, motor, life, contingency and Pluvius (weather) insurance. It was listed on

the London Stock Exchange and was a constituent of the FTSE 100 Index.

[edit ] History

The Company was founded by Edward Mountain in 1904 as the British Dominions Marine

Insurance Company, which operated as a marine insurance office in the five principaloverseas Dominions.

[1]It started writing fire and accident policies in 1911 and life assurance

policies in 1916.[1]

It expanded rapidly in its early years acquiring the Eagle (founded by Sir William Rawlins in

1807) in 1916 and both the Sceptre (founded in 1864) and the Star (founded in 1843) in

1917.[1]

It was renamed the Eagle Star & British Dominions in 1917 and Eagle Star in

1937.[1]

(The story surrounding the final renaming is that Sir Edward Mountain's son Brian

was in the USA promoting company business. Having given the name of his firm to an



American businessman, the American is said to have replied, "Are you trying to sing a song,or sell insurance?" The company's name was swiftly changed!)

For many years its Head Office was at the rather prestigious address of 1 Threadneedle

Street, London EC2. However, a new administrative head office and computer centre wasopened in Cheltenham in October 1968.

[1]

In 1981 it fought off a takeover bid from Allianz, the German insurance Group.[2]

It was acquired by BAT Industries for £968m in 1984.[1]

It is now one of the insurance brandsowned by Zurich Financial Services although its active use has now been discontinued.

[3]

[edit ]

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