National Bank for Agriculture and Rural Development-11

ANNUAL REPORT2010-2011

NATIONAL BANK FORAGRICULTURE AND RURAL DEVELOPMENT

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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./ 697 / AR-1/2011-12

11 July 2011

20 Ashadha 1933 (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 2011 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 2011.

Yours faithfully

Prakash Bakshi

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

Rakesh Singh

Chairman

Dr. K. C. Chakrabarty Lakshmi Chand Shashi Rekha

Rajagopalan

P. K. Basu B. K. Sinha Alok Nigam

R. K. Meena A. K. Sinha K. Jayakumar M. I. Khandey

Dr. K. G. Karmakar

Managing Director









ContentsPage No.

NABARD at a Glance

Key Data References

Principal Officers

Highlights .................................................................................................................................................................................... i

I. Economic Environment ....................................................................................................................................................1

• Global Economy ...........................................................................................................................................................1

• Indian Economy ............................................................................................................................................................2

II. Development and Promotional Initiatives ..................................................................................................................17

• Credit Planning ...........................................................................................................................................................17

• Farm Sector .................................................................................................................................................................17

• Rural Non-Farm Sector ...............................................................................................................................................26

• Financial Inclusion ......................................................................................................................................................28

• Micro-Finance ..............................................................................................................................................................30

• NABARD Consultancy Services ..................................................................................................................................34

• Research and Development Activities .........................................................................................................................35

III. Business Operations .......................................................................................................................................................39

• Production Credit ........................................................................................................................................................39

• Investment Credit ........................................................................................................................................................43

• Rural Infrastructure Development Fund ......................................................................................................................54

IV. Capacity Building of Client Institutions .....................................................................................................................63

• Institutional Development ...........................................................................................................................................63

• Supervision of Banks ..................................................................................................................................................76

V. Organisation, Corporate Governance and Management ..........................................................................................79

• Management ...............................................................................................................................................................79

• Human Resources Management .................................................................................................................................80

• Administration and Other Matters ...............................................................................................................................82

VI. Financial Performance & Management of Resources ...............................................................................................87

• Sources of Funds .........................................................................................................................................................87

• Uses of Funds ..............................................................................................................................................................89

• Income and Expenditure .............................................................................................................................................90

Annual Accounts 2010-11 ......................................................................................................................................................91

Auditors’ Report .......................................................................................................................................................................92

Balance Sheet ..........................................................................................................................................................................93

Profit and Loss Account ..........................................................................................................................................................94

Schedules to Balance Sheet ...................................................................................................................................................95

Cash Flow Statement .............................................................................................................................................................117

Consolidated Financial Statements 2010-11 ....................................................................................................................118

E-mail Addresses of NABARD Head Office Departments at Mumbai ...................................................................124

Regional Offices/Cell/Training Establishments .................................................................................................................125

Abbreviations ........................................................................................................................................................................127

1.1 Union Budget 2011-12: Highlights on Agricultureand Rural Development ................................................ 8

1.2 Working Groups for Twelfth Five Year Plan(2012-2017) .................................................................... 8

1.3 Task Force "to look into the issue of a large number offarmers, who had taken loans from privatemoneylenders, not being covered under the loanwaiver scheme" : Recommendations .......................... 14

2.1 Mid-Course Evaluation of Watershed Projectssupported under WDF ................................................. 18

2.2 Outcome of Village Development Programmes -Phase I .......................................................................... 19

2.3 Exotic Vegetables in Low Cost Poly-houses .............. 20

Boxes

2.4 UPNRM Projects - A Success Story ............................ 25

2.5 Salient features of Natueco Farming(10 Gunta Model) ......................................................... 26

2.6 Dalbandhus of Tripura ................................................. 32

2.7 Findings of the Study on Organised Agri-foodRetailing and Supply Chain Management ................. 36

3.1 Evaluation Studies on RIDF Projects : Feedback onBenefits Realised .......................................................... 61

3.2 NABARD Infrastructure Development Assistance ...... 62

4.1 Impact of GoI Revival Package for STCCS ............... 72

5.1 Repositioning of NABARD - Pilot interventions ........ 80





Table 1.1 : Overview of Global Economy .............................. 1

Table 1.2 : Production of Cereals, Vegetables &

Milk in the World ................................................. 2

Table 1.3 : Economic Indicators ............................................. 3

Table 1.4 : Sectoral Growth Rates of GDP ............................. 3

Table 1.5 : Trends in Exports and Imports ............................. 5

Table 1.6 : Trends in Rainfall and Water Storage ................... 5

Table 1.7 : Area Sown under Major Crops ............................. 6

Table 1.8 : Agency-wise Ground Level Credit Flow ............... 7

Table 1.9 : Sub-sector-wise Ground Level Credit Flow for

Agriculture & Allied Activities ............................... 9

Table 1.10 : Production of Major Crops ................................ 10

Table 1.11 : Production, Consumption and

Exports of Major Plantation Crops ..................... 11

Table 1.12 : Area and Production of Major Horticulture Crops . 12

Table 1.13 : Gross Capital Formation in Agriculture .............. 12

Table 1.14 : Agency-wise, Year-wise Kisan Credit Cards Issued .. 13

Table 1.15 : Minimum Support Prices for Major Crops ................ 15

Table 2.1 : Artificial Groundwater Recharge through dugwells 23

Table 2.2 : Externally Aided on-going Projects ................... 24

Table 2.3 : Funds Utilisation - FIF and FITF ........................ 29

Table 2.4 : Progress of the Micro-Finance Programme ........ 30

Table 2.5 : Grant Assistance Extended to various

Partners in SHG-Bank Linkage Programme....... 31

Table 2.6 : Training of RFI Personnel ................................... 37

Table 3.1 : Short-Term Refinance (Production Credit)

for the Last Five Years ........................................ 39

Table 3.2 : Sanction of ST(SAO) Credit Limits to SCB ...... 39

Table 3.3 : Sanction of ST(SAO) Credit Limits to RRB ...... 41

Table 3.4 : Rates of Interest on Refinance ............................ 42

Table 3.5 : Agency-wise Disbursements ................................ 44

Table 3.6 : Region-wise Disbursements ................................ 45

Table 3.7 : Sector-wise Disbursements ................................ 46

Table 3.8 : Projects Sanctioned under

Cold Storages and Rural Godowns .................... 47

Table 3.9 : Units Financed and Completed under

Refinance Support .............................................. 53

Table 3.10 : Sector-wise Projects and Amounts Sanctioned .. 55

Tables

Chart 1.1-(a) : Annual Average Inflation Rate forMajor Sub-groups of WPI .................................... 4

Chart 1.1-(b) : Monthly Inflation Rate for MajorSub-groups of WPI .............................................. 4

Chart 3.1 : Financial Support by NABARD ......................... 39

Chart 3.2 : Agency-wise Share in Refinance Disbursements . 44

Table 3.11 : Tranche-wise Sanctions and Disbursements -

On-going – RIDF XI to XVI ................................ 56

Table 3.12 : Utilisation Percentage under RIDF (I TO XVI) ... 57

Table 3.13 : Year/Tranche-wise Disbursements and

Deposits received under RIDF ............................ 58

Table 3.14 : Cumulative Economic and

Social Benefits of RIDF Projects ......................... 59

Table 3.15 : State-wise Benefits Estimated Under RIDF I to XVI . 60

Table 4.1 : Growth of PACS ................................................. 63

Table 4.2 : Growth of Short-Term Co-operative Banks ........ 63

Table 4.3 : Growth of Long-Term Co-operative Banks ........ 64

Table 4.4 : Working Results of Co-operative Banks ............. 64

Table 4.5 : Accumulated Losses ............................................ 64

Table 4.6 : Region-wise Working Results of SCB ................. 65

Table 4.7 : Region-wise Working Results of DCCB .............. 65

Table 4.8 : Region-wise Working Results of SCARDB ......... 66

Table 4.9 : Region-wise Working Results of PCARDB ......... 66

Table 4.10 : Composition of NPA of Co-operative Banks ..... 67

Table 4.11 : Percentage of Recovery of loans to Demand ..... 68

Table 4.12 : Frequency Distribution of Co-operative

Banks according to Range of

Loan Recovery Percentage ................................. 68

Table 4.13 : Frequency Distribution of States/UT

according to Level of Loan Recovery of

SCB and DCCB .................................................. 69

Table 4.14 : Frequency Distribution of States/UT

according to Levels of Loan Recovery of

SCARDB and PCARDB ...................................... 69

Table 4.15 : Elected Boards under Supersession ................... 70

Table 4.16 : Indicators of Performance of RRB ........................ 73

Table 4.17 : Region-wise Working Results of RRB ................. 74

Table 4.18 : Frequency Distribution of States According to

Levels of Recovery of RRB ................................. 74

Table 4.19 : Status of Financial Inclusion - RRB .................... 76

Table 5.1 : Promotions Effected During the Year ................. 81

Table 5.2 : Total Staff Strength ............................................. 81

Table 6.1 : Sources of Funds .................................................. 87

Table 6.2 : Uses of Funds ...................................................... 89

Charts

Chart 3.3 : Region-wise Share in Refinance Disbursements . 45

Chart 3.4 : Tranche-wise Sanction-RIDF I to XVI ................. 55

Chart 3.5 : Sector- wise Share inAmounts Sanctioned under RIDF ..................... 55

Chart 3.6 : Year-wise Disbursements under RIDF I to XVI ... 56





NABARD AT A GLANCE

(` crore)

Sources of Fund 2011 2010 Net

Accretion

Capital 2,000 2,000 0

Reserves & Surplus 11,863 10,675 1,188

NRC(LTO) Fund 14,468 14,417 51

NRC (Stabilisation) Fund 1,577 1,566 11

Deposits 277 505 (-)228

Bonds and Debentures 26,788 20,004 6,784

Borrowings from GoI 124 147 (-)23

Borrowings from

Commercial Banks 0 500 (-)500

Foreign Currency Loan 503 494 9

Borrowings against STD 360 0 360

Certificate of Deposits 137 379 (-)242

Commercial Paper 6,448 2,680 3,768

Collateralised Borrowing

and Lending Obligation 0 215 (-)215

Term Money Borrowings 110 763 (-)653

RIDF Deposits 67,878 59,869 8,009

STCRC Fund 14,622 9,622 5,000

Other Liabilities 5,546 4,863 683

Other Funds 6,171 7,593 (-)1,422

Total 1,58,872 1,36,292 22,580

Uses of Funds 2011 2010 Net

Utilisation

Cash and Bank Balances 11,218 9,628 1,590

Collateralised Borrowing

and Lending Obligation 228 0 228

Investments in

a) GOI Securities 2,548 1,991 557

b) ADFC Equity 19 15 4

c) AFC Equity 1 1 0

d) SIDBI Equity 48 48 0

e) AICI Ltd. 60 60 0

f) NCDEX Ltd. & MCX Ltd. 18 15 3

g) Nabcons 5 5 0

h) Mutual Fund 390 900 (-)510

i) Biotech Venture Fund 10 5 5

j) Treasury Bills 0 0 0

k) Commercial Paper 1,862 744 1,118

l) Non Convertible Bonds 225 0 225

m) Equity Shares of other 1 0 1

Institutions

n) Debentures in Nature of Advance 13,461 0 13,461

Loans and Advances

a) Production &

Marketing Credit 33,885 24,073 9,812

b) Conversion of Production

Credit into MT Loans 193 0 193

c) Liquidity Support 0 20 (-)20

d) MT & LT Project Loans 25,435 35,742 (-)10,307

e) Interim Finance 0 1 (-)1

f) LT Non-Project Loans 167 199 (-)32

g) Other Loans 182 131 51

h) RIDF Loans 66,078 60,255 5,823

i) Co-finance 88 84 4

(Net of Provision)

Fixed Assets 230 235 (-)5

Others Assets 2,520 2,140 380

Total 1,58,872 1,36,292 22,580





KEY DATA REFERENCES

Page Particulars Unit Numerical Value Amount (` crore)

No.2009-10 2010-11 2009-10 2010-11

Economic Indicators

1 Overall GDP1 % Growth 8.0 QE 8.5 RE – –

2 Agri GDP1+ % Growth 0.4 QE 6.6 RE – –

2 Share of Agri GDP in total GDP % 14.6 14.4 RE – –

4 South-west Monsoon % deviation from normal (-)23 2 – –

5 North-east Monsoon 8 21 – –

7 GLC % increase 27.36 16.19 3,84,514 4,46,779

9 Foodgrains production million tonnes 218.11 235.88 3rd AE – –

10 Oilseeds production million tonnes 24.88 30.25 3rd AE – –

10 Sugarcane production million tonnes 292.30 340.54 3rd AE – –

10 Cotton production million bales++ 24.22 33.92 3rd AE – –

13 KCC Issued million 9.01 7.26 34,982 43,370

Development and Promotional initiatives

18 Watersheds No. 59 66 196 220.57

20 Tribal development projects No. 79 126 236 373.97

20 FIPF- projects No. 17 45 1.55 5.47

21 FTTF No. of projects 151 512 4.9 44.97

21 Farmers’ Club No. of clubs 16,590 21,903 – –

24 NABARD-KfW Projects No. 8 8 7 135.75

26 RIF- promotional programmes No. of projects 155 122 17.7 11

27 REDP No. 2,627 3,327 10.48 12.34

27 SCC Issued lakh 0.63 1.20 240 514.26

29 FITF & FIF No. of projects 47 205 40.97 120.10

30 SHG Loan Disbursed* lakh 16.09 15.86 12,253 14,453

34 Consultancy Assignments - Contracted No. of projects 83 62 17.11 24.13

35 R&D Fund - Sanction No. of projects 9 10 1.01 1.09

Business Operations

39 Financial Support by NABARD – – – 57,068 60,483

Refinance - ST Credit 24,715 34,196

40 ST (SAO) - SCB No. 20 21 18,109 23,759

40 Weavers’ - SCB No. 5 4 177 215.75

41 - RRB No. 74 80 6,832 9,799.69

41 ST (OSAO) - RRB – – – 542 600

42 Refinance - Investment Credit 12,009.08 13,485.87

46 Farm Sector – – – 4,029 5,055

46 NFS – – – 3,466 3,446

46 SHG – – 3,174 2,545

46 Co-financing projects No. 8 3 12 14

55 RIDF Loans - Sanction No. of projects 39,015 41,779 15,630 18,314.88

55 - Disbursement – – – 18,888 12,060.04

Capacity Building of Client Institutions

ST Co-operatives

64 SCB in profit @ No. 26 28 395 463

64 DCCB in profit @ No. 321 323 1,603 1,545

LT Co-operatives

64 SCARDB in profit @ No. 12 11 404 97

64 PCARDB in profit @ No. 343 307 220 154

ST Co-operatives - NPA Position

65 SCB - NPA @ % to loan O/S 11.91 9.08 5,764 4,469.16

65 DCCB - NPA @ % to loan O/S 18.02 13.00 17,928 16,015.45

LT Co-operatives - NPA Position

66 SCARDB - NPA@ % to loan O/S 30 33 4,948 5,627.56

66 PCARDB - NPA @ % to loan O/S 42 43 4,742 4,867.04

RRB

73 RRB in profit No. 79 79 2,515 3,470

73 RRB - NPA Position % to loan O/S 3.72 3.50 – –

76 Inspection of banks^@@ No. 343 302 – –

76 Co-operative banks@@ No. 282 260 – –

76 RRB@@ No. 61 42 – –

Financial Performance &

Management of Resources

87 Market Borrowings – – – 25,254 34,747

87 Total Financial Resources – – – 1,36,292 1,58,872

RE : Revised Estimate 1 : At Factor Cost at 2004-2005 prices AE : Advanced Estamate

+ : Includes agriculture, forestry and fishing ‘++: Of 170 kgs each ^ : Voluntary inspections ‘@@ : Statutory Inspections

@ : Data pertains to financial years 2008-09 & 2009-10 * : Data pertain to 2008-09&2009-10





PRINCIPAL OFFICERS(31 March 2011)

EXECUTIVE DIRECTORS

S. K. Mitra Amaresh Kumar Dr. A. K. Bandyopadhyay Dr. Prakash Bakshi

CHIEF GENERAL MANAGERS

(Rural Development Banking Service)

V. Ramakrishna Rao C. R. Patnaik B. S. Shekhawat R. Narayan C. K . Gopalakrishna P. Satish K C Shashidhar

(Odisha) (Tamil Nadu) (Maharashtra) (Kerala)

Pankaj Pandit Dr. Venkatesh Tagat S . C . Kaushik P. Mohanaiah S. T. Raghuraman Suraj Bhan J. C. Mishra

(Uttarakhand) (Karnataka) (Punjab ) (Andhra Pradesh)

D. P. Mishra M. V. Ashok G. C. Panigrahi S. G. Siddesh K . K. Gupta S. Akbar A. K. Srivastava

(Uttar Pradesh) (Jharkhand) (Gujarat) (Madhya Pradesh) (Assam)

B. B. Nayak S. Balan H. K. Talreja M. L. Sukhdeve K. Muralidhara Rao Dr. S. L. Kumbhare P. C. Mishra

(Haryana) (Jammu & Kashmir) (Rajasthan)

J. G. Menon V. Mohan Doss S. K . Singh Niraj Kumar Gupta A. D. Ratnoo M. V. Patro N. S. P. Rao

(Bihar) (Himachal Pradesh) (NABCONS) (West Bengal)





K. S. Padmanabhan R. Amalorpavanathan Dr. H. N. V. Prasad A. N. Rajwani P. C. Sahoo

NBSC, Lucknow (Chhattisgarh)

CHIEF GENERAL MANAGERS

(Legal/Technical Service)

U. N. Srivastava Neeraj Kumar Dr. P. Renganathan

(Legal) (Technical) (Technical)

OFFICERS-IN-CHARGE OF REGIONAL OFFICES/CELL

TRAINING INSTITUTIONS

H. R. Dave A. P. Sandilya B. G. Mukhopadhyay

(New Delhi) (Goa) (Arunachal Pradesh)

G. R. Chintala B. K. Dey M. M. Baheti

(Andaman & Nicobar Islands) (Sikkim) (RTC, Mangalore)

Dr. P. M. Ghole Dr. U. S. Saha R. S. Jodha

(Mizoram) (Nagaland) (Meghalaya)

R. Sundar S. V. Nemlekar P. L. Negi

(Tripura) (Manipur) (Srinagar Cell)





i

Highlights

1. The World Economic Outlook (WEO) of the

International Monetary Fund has projected the growth

in global output at 4.4 per cent in 2011, a decline of

0.6 percentage points relative to 2010. The Gross

Domestic Product (GDP) of the country has registered

a growth of 8.5 per cent in 2010-11 compared to a

growth of 8.0 per cent in 2009-10.

2. The high growth trajectory of GDP has been

facilitated due to a rebound in agriculture from 0.4 per

cent during 2009-10 to 6.6 per cent during 2010-11.

The contribution of agriculture sector to the GDP was

14.2 per cent during 2010-11, a marginal decline of

0.2 per cent, as compared to 2009-10. The livestock

sector contributed 3.5 per cent to the GDP and 28.4

per cent to GDP from agriculture.

3. The overall inflation rate as measured by changes in

the Wholesale Price Index on a monthly basis was 9.4

per cent during 2010-11 as compared to 3.6 per cent

during the fiscal 2009-10. Food inflation was high due

mainly to rise in prices of rice, vegetables, fruits, milk,

eggs, meat and fish.

4. Agricultural exports increased from ` 81,750 crore

during 2008-09 to ` 85,269 crore during 2009-10, registering

a growth of 4.30 per cent. The percentage share of

agriculture and allied products in the total exports was

9.9 during 2009-10 as compared to 9.0 in 2008-09.

The share of food and allied products in the total imports

of the country increased from 2.1 per cent in 2008-09 to

3.7 per cent in 2009-10.

5. The country as a whole received 912.8 mm of

rainfall, which was 2.0 per cent more than the Long

Period Average (LPA) during the South-West monsoon

(June-September) 2010, as compared to 23 per cent

less than the LPA in the corresponding period last year.

Rainfall during the North-East monson was also 21 per

cent more than the LPA.

Economic Environment

6. Total crop acreage under both kharif and rabi

during 2010-11 indicated an increase of 9.40 million

hectares over the previous year. The crop acreage

under various crops during kharif 2010 was 103.90

million hectares, which was 6.88 million hectares

more than the area covered during the corresponding

period of kharif 2009. The major increase in area was

under rice (2.3 million hectares). Area sown under

rabi crops in 2010-11 was more by 2.52 million

hectares, with growth in area under rabi foodgrains at

3.41 per cent.

7. The production of breeder and foundation seed is

estimated at 1.1 and 18.5 lakh quintals, respectively,

while certified/quality seed distribution was 321.36 lakh

quintals during 2010-11. The irrigation potential created

under all types of irrigation structures has increased from

81.10 million hectares in 1991-92 to 108.2 million

hectares by March 2010. Utilisation was to the extent of

85 per cent.

8. As against the target of ̀ 3,75,000 crore of credit flow

to agriculture for 2010-11, the banking system disbursed

` 4,46,779 crore, as on 31 March 2011, achieving 119.14 per

cent of the target. Commercial Banks, Co-operative Banks and

Regional Rural Banks (RRB) disbursed ` 3,32,706 crore,

` 70,105 crore and ̀ 43,968 crore, contributing 74 per cent,

16 per cent and 10 per cent respectively, of the total credit flow

during 2010-11.

9. During 2010-11, 7.26 million Kisan Credit Cards

were issued by banks with sanctioned credit limit of

` 43,370 crore. Of the cumulative 100.93 million

credit cards issued, as at the end of March 2011,

45.03 million cards were issued by commercial banks,

followed by 40.70 million cards by co-operative

banks and 15.20 million cards by Regional Rural

Banks.





ii

10. Out of ` 29,240 crore received under the

Agriculture Debt Waiver and Debt Relief Scheme

2008, the cumulative disbursements by NABARD was

` 29,071 crore against claims of ` 29,102 crore. The

share of SCB, SCARDB and RRB stood at

` 18,289 crore, ` 3,810 crore and ` 6,972 crore,

respectively.

11. The GCF in agriculture and allied sectors

increased from ` 86,611 crore in 2005-06 to

` 1,33,377 crore (at 2004-05 prices) in 2009-10. The

GCF in agriculture and allied activities, as a proportion

to GDP in the sector, increased from 14.57 per cent in

2005-06 to 20.30 per cent in 2009-10.

12. According to the 3rd Advance Estimates, the

foodgrain production during 2010-11 has been

estimated at 235.88 million tonnes, as compared to

218.11 million tonnes (final estimate) during 2009-10,

registering an increase of over 8 per cent compared to

the previous year. Area and production under

horticulture crops increased from 20.7 million hectares

and 214.7 tonnes, respectively, during 2008-09, to 20.9

million hectares and 223.1 million tonnes, respectively,

during 2009-10. India’s global share in world

production, on a two year average basis, as per Food

and Agriculture Organisation (FAO) estimates, was

10.29 per cent for cereals, 9.23 per cent for vegetables

and 15.81 percent for milk.

Development and Promotional Initiatives

Credit Planning

13. During the year, Potential Linked Credit Plans

(PLP) were prepared for 624 districts in the country, to

guide the banks in the credit planning excercise and

for infrastructure development in 2011-12. State Focus

Papers, presenting a comprehensive picture of the

potential available in various sectors of the rural

economy and critical infrastructure gaps to be bridged,

were discussed with all State Governments and banks.

Farm Sector

14. During the year, 66 watershed projects were

sanctioned, taking the cumulative number of such

projects to 579, covering an area of 4.86 lakh ha., in 14

states, with a total commitment (loan and grant

component) of ` 220.57 crore. Under the Prime

Minister's Relief package for 31 distressed districts in four

States, 71,127 ha., were taken up for implementation

during the year, taking the cumulative area and

financial commitment to 9.42 lakh ha., and ` 1,023

crore, respectively.

15. An amount of ` 152.26 crore and ` 3.18 crore were

disbursed under watershed projects as grants and loans

during the year; the cumulative disbursements under

these components were ` 350.03 crore and

` 33.18 crore, respectively. Under the Special Plan for

Bihar component of the Rashtriya Sam Vikas Yojana

(RSVY), a total of 79 projects covering an area of 84,444

ha., had been sanctioned, of which six are at Capacity

Building Phase and 73 at Full Implementation Phase. A

sum of ` 20.18 crore was disbursed during the year under

the programme and the cumulative disbursement, as on 31

March 2011, stood at ` 34.17 crore.

16. The Climate Change Adaptation Project in

Akole & Sangamner Talukas of Ahmednagar District,

Maharashtra implemented by the Watershed

Organistion Trust is the first of its kind being

considered under WDF. It involves a total financial

outlay of ` 34.15 crore, with grant assistance from

Swiss Agency for Development and Cooperation

(` 10.80 crore) & NABARD (` 20.62 crore) and

contributions from villagers (` 2.73 crore). The project

is expected to develop a replicable model for Climate

Change Adaptation in semi-arid and rainfed regions of

the country.

17. The Village Development Programme is now

being implemented in 801 villages spread across 25





iii

States. The programme was completed in 115 villages

and is under different stages of implementation in

686 villages.

18. During the year, financial assistance of ` 373.97

crore under Tribal Development Fund was sanctioned for

126 projects benefiting 94,163 tribal families in various

states. Cumulatively, ` 917.60 crore was sanctioned to

317 projects covering 2.50 lakh families.

19. During 2010-11, under Farm Innovation and

Promotion Fund (FIPF), 45 projects were sanctioned in

15 states, with grant assistance of ` 5.47 crore.

Cumulatively, 123 projects were sanctioned with a

financial support of ` 11.65 crore. Under the Farmers’

Technology Transfer Fund (FTTF), 512 diverse and

innovative projects in 27 states were sanctioned during

the year 2010-11 with grant assistance of ` 44.97 crore.

20. During the year, 21,903 Farmers' Clubs (FC) were

launched, taking the total number of clubs to 76,708, as

on 31 March 2011. Agency-wise, NGO promoted

maximum number of clubs (13,599), followed by co-

operative banks (2,922), commercial banks (2,733), RRB

(2,215), State Agricultural Universites (SAU)/Krishi

Vigyan Kendras (KVK) [255] and other agencies (179).

During 2010-11, three Farmers' Training and Rural

Development Centres (FTRDC) were provided a total

grant assistance of ` 1.02 crore under FTTF. During the

year, 282 exposure visits for 7,548 farmers were

arranged in collaboration with select research institutes,

KVK and SAU.

21. During the year, 44 projects covering 220

villages were launched with a financial commitment of

` 15.41 crore under ‘Pilot Project on augmenting

productivity of lead crops/activities through adoption

of sustainable agricultural practices’.

22. Under the Special Project on Livelihood Based

Development, ` 0.41 crore and ` 0.33 crore

respectively, were released for Sultanpur and Rae

Bareli districts of Uttar Pradesh, during the year, taking

the cumulative disbursements to ` 8.98 crore and

` 7.72 crore. An amount of ` 27.48 crore was

sanctioned for 2,816 units under Dairy Venture

Capital Fund (DVCF), ` 28.57 crore for 342 units

under Poultry Venture Capital Fund (PVCF) and ` 9.69

crore for 1,978 units under Dairy Entrepreneurship

Development Scheme (DEDS). The cumulative

sanctions as on 31 March 2011 stood at ` 174.39

crore for 18,184 units under DVCF, ` 48.18 crore for

633 units under PVCF, and ` 9.69 crore for 1,978

units under DEDS. Under the programme of Artificial

Groundwater Recharge through Dugwells, net subsidy

of ` 280.637 crore was released by NABARD, for

construction of 7.13 lakh Artificial Recharge Structures.

23. NABARD received ` 132.27 crore during 2010-11

and disbursed ` 135.76 crore as grant assistance during

the year under the Kreditanstalt für Wiederaufbau (KfW)

supported externally aided projects, which are at various

stages of implementation.

Rural Non-Farm Sector

24. During the year, 122 innovative projects were

sanctioned under the NABARD-SDC Rural Innovation

Fund, taking the cumulative number to 375. An amount

of ` 10.42 crore was sanctioned for these projects, taking

the cumulative sanctions to ` 49.28 crore. The

disbursement during the year, including for projects

sanctioned earlier, was ` 14.42 crore.

25. Under the 'Scheme for Strengthening of Rural

Haats', grant support of ` 5.74 crore was sanctioned to

118 rural haats during 2010-11. Cumulative grant

assistance was ` 13.19 crore for 307 rural haats across

23 States. A total of 113 clusters across

84 districts in 22 States had been approved during the

year, while 3,327 Rural Entrepreneurship Development

Programme (REDP) / Skill Development Programme





iv

(SDP) were supported with financial assistance of

` 12.34 crore. As many as 20 clusters are supported in

the NER. Cumulatively, 17,859 REDP/SDP have been

supported with grant of ` 83.35 crore.

26. During the year, 1.20 lakh Swarojgar Credit

Cards (SCC) with credit limit of ` 514.26 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 12.12 lakh involving credit limit of

` 4,949.51 crore.

Financial Inclusion

27. RBI contributed ` 3.46 crore [` 3.05 crore towards

Financial Inclusion Fund (FIF) and ` 0.41 crore towards

Financial Inclusion Technology Fund (FITF)], during the

year 2010-11, while the GoI contributed

` 30 crore each to the two Funds. NABARD contributed

` 30 crore (FIF) and ` 40 crore (FITF). An amount of

` 19 crore under FIF and ` 101.10 crore under FITF were

sanctioned during the year. As on 31 March 2011, ` 38.66

crore for 150 projects under FIF and ` 122.41 crore

under FITF for 55 projects have been sanctioned.

Under NABARD-UNDP collaboration, ` 173.22 lakh

had been utilised during 2010-11 for activities

conducted by NABARD in seven focus states : Bihar,

Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha,

Rajasthan and Uttar Pradesh.

Micro-Finance

28. There were more than 69.53 lakh savings-linked

SHG and more than 48.51 lakh credit-linked SHG

covering 9.7 crore poor households, as on 31 March

2010, under the microfinance programme. The share

of outstanding bank loans to SHG as a percentage of

bank loans to weaker sections by scheduled

commercial banks (31 March 2010) was 16.3 per cent,

compared to 15.8 per cent in the previous year.

29. Under the Microfinance Development and

Equity Fund, ` 47.38 crore was released during 2010-

11, of which ` 29.95 crore was grant support for

promotional activities and ` 17.43 crore for Capital

Support / Revolving Fund Assistance to Micro Finance

Institutions, as against ` 20.49 crore and ` 60.42 crore,

respectively, in the previous year. During the year, grant

assistance of ` 37.86 crore was sanctioned to various

agencies for promoting and credit linking 81,890

groups, taking the cumulative assistance sanctioned to

` 146.22 crore for 5.81 lakh groups. Grant assistance

of ` 51.06 crore was released during the year for the

formation of 4.01 lakh SHG. Nearly 2.60 lakh SHG

were credit linked.

30. Under the Rajiv Gandhi Mahila Vikas

Pariyojana, 25,571 SHG were promoted, of which

14,979 were credit linked by end March 2011. In

addition, 951 Cluster Level Federations and 26 Block

Level Federations have been formed.

31. An amount of ` 24.74 crore was sanctioned as

grant for promoting 1.25 lakh Joint Liability Groups

across the country till March 2011. During the year,

1,606 Micro Enterprise Development Programmes

were conducted for 37,138 members on various

location-specific farm, non-farm and service sector

activities. Cumulatively, 4,449 MEDP were conducted

for 1.09 lakh participants.

32. NABARD continued to support the project

sanctioned to the Government of Arunachal Pradesh

for implementing 'Micro-Finance Vision 2011'.

The project involves promoting and credit linking of

1,650 SHG at a cost of ` 39.15 lakh. An amount of

` 9.49 lakh has been released so far.

33. NABARD Financial Services Ltd. disbursed an

amount of ` 50.64 crore to 2,019 groups through 31





v

Business Correspondents (BC) during 2010-11. In

addition, disbursements to the extent of ` 1.50 crore

were made to MFI and Federations, taking the aggregate

disbursements during the year to ` 52.14 crore. Grant

assistance of ` 153.18 lakh was released during the year

to Centre for Microfinance Research (CMR) established

by NABARD in Bankers Institute of Rural Development

(BIRD), taking the cumulative assistance to ` 347.36

lakh. Of the prioritised 27 themes for research, 6 have

been completed and the remaining are ongoing.

NABARD Consultancy Services

34. NABARD Consultancy Services Pvt Ltd

(NABCONS), the wholly owned subsidiary of

NABARD, achieved ` 24.13 crore of contracts and

executed `16.65 crore worth assignments during

2010-11; the profit after tax was ` 5.80 crore. During

the current year, NABCONS significantlly diversified

its business by entering into new areas of business,

viz., development of web based MIS for various State

Government Programmes, monitoring of various

infrastructure projects in different states adjoining the

international borders of the country, under Border

Area Development Programme (BADP).

Research and Development Activities

35. During the year, ` 17.68 crore was utilised from

the Research and Development Fund for supporting

activities like research projects/studies (` 0.80 crore),

seminars (` 0.80 crore), training/summer placement

(` 15.77 crore), occasional papers (` 0.02 crore),

NABARD Chair Professor Scheme (` 0.14 crore) and

other activities (` 0.15 crore). The cumulative

disbursement stood at ` 136.19 crore. During 2010-11,

ten research projects involving a grant assistance of

` 1.09 crore were sanctioned. Further, six projects/studies

sanctioned earlier were completed during the year.

36. During the year, grant assistance of ` 1.27 crore was

sanctioned to various universities, research institutes and

other agencies for organising 131 seminars, conferences,

symposia and workshops covering subjects/ areas related

to agriculture and rural development including

agricultural marketing.

37. During the year, five Occasional Papers titled Kisan

Credit Card, Infrastructure for Agriculture and Rural

Development, Economics of sugarcane production and

processing, Micro-finance for micro-enterprises and

Promoting Rural non-farm sector were published. Under

the NABARD Chair Professor Scheme, three Professors

affiliated to IARI, Alagappa University and Xavier

Institute of Management, Bhubaneswar were appointed

by the Bank.

38. Grant assistance of ` 15.58 crore was utilised

from the Fund during the year on training of staff of

client banks. During the year, 576 training

programmes were conducted by the Training

Establishments of the Bank for 14,667 participants.

BIRD conducted a special on-location programme on

Credit Planning and Development Finance for IAS

probationers undergoing Phase I course, at the Lal

Bahadur Shastri National Academy of Administration,

Mussorie and an in-house programme on financial

system and development finance for probationers of

the Indian Economic Service. RTC, Mangalore

organised an International Exposure Programme on

Micro Finance for a batch of 14 officers from SANASA

Development Bank, Sri Lanka during the year.

39. During the year 2010-11, the bank provided

technical and financial support to seven Junior Level

Training Centres, 12 Agricultural Co-operative Staff

Training Institutions and three Integrated Training

Institutes to enable them to improve their training

system.





vi

Business Operations

40. The total financial support extended by

NABARD during 2010-11 stood at `60,483 crore,

registering a growth of 5.98 per cent over 2009-10.

Production Credit

41. The total production credit disbursed, at end-

March 2011, was ` 34,196 crore. During 2010-11,

Short-term Seasonal Agricultural Operation (SAO)

credit limits were sanctioned to 21 State

Co-operative Banks (SCB) aggregating `23,759 crore,

as against `18,109 crore sanctioned to 20 SCB during

2009-10. The credit limits included ` 2,249.90 crore

for the Oilseeds Production Programme, `210.97 crore

for National Pulses Development Programme and

`752.76 crore for credit requirements of tribals under

the Development of Tribal Population. The maximum

outstanding was `23,696.72 crore.

42. During 2010-11, Short-Term weavers credit

limits aggregating `215.75 crore were sanctioned to

four SCB (Andhra Pradesh, Karnataka, Pondicherry

and Tamil Nadu), as against `177.32 crore during

2009-10. Further, during the last three years, 4,607

Handloom Weavers’ Groups were formed by banks

in various States. Of these, 1,989 HWG have been

credit linked.

43. The scheme of extending ST refinance to State

Co-operative Agriculture and Rural Development

Banks for SAO was continued during the year.

Refinance of ` 140.01 crore was extended to Kerala

(` 79.39 crore) and Rajasthan (` 60.62 crore)

SCARDB at 4.5 per cent interest rate for lending to

the ultimate borrowers at 7 per cent.

44. During 2010-11, limits of ` 9,799.69 crore were

sanctioned to 80 RRB under ST-SAO as against

` 6,832.13 crore sanctioned to 74 RRB in 2009-10. The

limits included ` 820.31 crore for Oilseeds Production

Programme, ` 201.23 crore for Development of Tribal

Population and ` 16.20 crore for National Pulses

Development Programme. The aggregate limit for ST-

OSAO sanctioned to RRB during 2010-11 was ` 600

crore, as against ` 542 crore in the previous year. The

maximum utilisation was ` 598 crore.

45. The continuance of the interest subvention

scheme was announced in the Union Budget 2010-11.

Interest subvention of 1.5 per cent per annum was

available to public sector banks, co-operative banks

and RRB for deploying their own funds for crop loan

upto ` 3 lakh per farmer, provided the ultimate

borrower got such loans at 7.0 per cent interest rate

per annum. Additional subvention of one per cent,

announced in the year 2009-10 to those farmers who

repaid crop loans promptly within one year of

disbursement was enhanced to 2 per cent during 2010-11.

During the year, an amount of ` 1,261.40 crore was

disbursed as subvention for 2009-10. Interest

subvention for 2010-11 has been estimated at

` 2,000 crore.

46. NABARD continued to act as nodal agency for

GoI package for restructuring of Term Loans of

Co-operative sugar mills. Out of ` 170.14 crore

received from GoI towards interest subvention,

` 169.94 crore was disbursed to 77 co-operative sugar

mills in Maharashtra and Odisha. NABARD also acted

as nodal agency for channelising the interest

subvention to Co-operative Banks and RRB under the

"Scheme for Extending Financial Assistance to Sugar

Undertakings -2007". Out of ` 383.59 crore received

from GoI towards interest subvention, ` 249 crore

was released to 212 sugar mills operating in 11 states.

Investment Credit

47. During the year, the total investment credit

(including co-finance) disbursed was ` 13,485.87

crore, as against the target of ` 12,980 crore. The

achievement against target was 103.90 per cent. The

growth in refinance disbursed during the year was

12.30 per cent over that of the previous year. The





vii

policy of preferential treatment to states in North-

Eastern, Eastern, Hilly Regions, Sikkim and

Lakshadweep was also extended to Chhattisgarh

during 2010-11. RRB, SCB and SCARDB continued to

be classified under A/B/C/D categories based on the

level of Net NPA reckoned as a percentage to net

loans and advances outstanding/ recovery

performance and profitability.

48. Changing market conditions, impacting cost of

funds for NABARD, necessitated the revision of

interest rates on refinance five times during the year.

Interest rates, with effect from 07 February 2011 stood

at 9.75 per cent for Commercial Banks, 9.25 per cent

for RRB, 9.15 per cent for co-operative banks/ PUCB/

NEDFi, 8.15 per cent for ADFC/NABFINS and 10.5

per cent for NBFC. However, for NER, including

Sikkim, the rate of interest for all agencies was pegged

at 9.15 per cent.

49. Refinance distribution across regions varied

widely with the south accounting for the highest share

(43%), followed by north (21%), central (14%) and

other regions (22%). During the year, the major share

of sector-wise refinance was accounted for by NFS

(25.6%), followed by SHG (18.9%), Farm

Mechanisation (13.1%), Minor Irrigation (6.8%) and

Dairy Development (6.8%). Of the total refinance

disbursed, 43.80 per cent was for thrust areas.

50. During the year, MoU for co-financing were

executed with 5 RRB in Andhra Pradesh and

a commercial bank. In all, MoU were executed with 27

banks. During the year, three new projects were

sanctioned, taking the cumulative number of sanctioned

projects to 51, with a total financial outlay (TFO) of

` 840.64 crore. The disbursement during 2010-11 was

to the extent of ` 14.00 crore. Cumulative sanction

and disbursement were ` 240.35 crore and ` 153.64

crore, respectively.

51. NABARD is the nodal agency for channelising

subsidy, monitoring and coordinating with others

under the Capital Investment Subsidy Scheme of GoI.

Under the scheme for Agricultural Marketing

Infrastructure, Grading and Standardisation, 654

projects with TFO of ` 978.45 crore were considered

for sanction. Subsidy of ` 83.15 crore was released to

the banks during the year. Cumulatively, 4,492 units

involving TFO of ` 2,912 crore were granted subsidy of

` 274.03 crore. Subsidy of ` 1.49 crore was disbursed

for 110 projects, involving a TFO of

` 7.75 crore under the Scheme for Agri Clinics and

Agri Business Centres (ACABC). Cumulatively, 390

projects were sanctioned under the scheme involving

TFO of ` 28.62 crore and release of subsidy of ` 5.38

crore. Under the Schemes on Animal Husbandry, an

amount of ` 1.69 crore was released as subsidy for

poultry processing and sheep/goat rearing units. An

amount of ` 3.61 crore towards the subsidy

component, was released for 8,987 units under the

Jawaharlal Nehru National Solar Mission.

52. Under National Project on Organic Farming

(NPOF), a total of 667 units (vermi-hatchery units-627,

bio-fertilizers units-36 and fruit & vegetable waste

compost units-13) had been sanctioned with net subsidy

release of ` 12.45 crore till 31 March 2011.

53. During the year 2010-11, NABARD conducted

seven evaluation studies covering four investments,

viz., rural godowns, agricultural market infrastructure,

agri-clinics and agri-business centres and solar

homelighting system. NABARD also conducted 16

Investment Specific Studies (ISS) and 8 Special

Studies (SS) covering farm and rural non-farm sectors.

Rural Infrastructure Development Fund

54. The annual allocation under the Rural

Infrastructure Development Fund (RIDF) was ` 16,000

crore during 2010-11 taking the cumulative allocation

to ` 1,16,000 crore. Additionally, a separate window

was introduced in 2006-07 for funding rural roads

component of Bharat Nirman Programme, with

allocation of ` 18,500 crore, till 2009-10. The total

allocation for RIDF, thus, stood at ` 1,34,500 crore, as

on 31 March 2011.





viii

55. During 2010-11, a total of 41,779 projects

involving loan amount of ` 18,314.88 crore was

sanctioned under RIDF XVI, taking the cumulative

number of projects to 4,44,162 and cumulative

amount sanctioned to ` 1,21,888.40 crore.

56. During the year, disbursements were made to the

tune of ` 12,060.04 crore. The cumulative

disbursements under RIDF (I to XVI) and Bharat

Nirman aggregated to ` 98,999.78 crore. The state-

wise analysis of ratio of disbursements to the approved

phasing of sanctions revealed that Mizoram topped

with 120 per cent, followed by Uttarakhand and Goa

(100%), Meghalaya (90%), Tamil Nadu (89%),

Haryana and Maharashtra (88%), Punjab and Gujarat

(87%), and UP, Jammu & Kashmir (86%). The

cumulative amount of loan sanctioned and disbursed

to States in the North-Eastern region, including

Sikkim, aggregated ` 6,328.24 crore and ` 3,293.18

crore, respectively, as at the end of March 2011.

57. NABARD is exploring possibilities of funding

implementation of specific projects under the Public

Private Partnership model. The bank is in the process

of networking with the private sector and encouraging

partnerships to bring about private sector competence

and funds into the realm of rural infrastructure.


Institutional Development

58. The total membership of Primary Agricultural

Credit Societies (PACS) during 2009-10 stood at

12.64 crore, of which borrowing members were 5.98

crore, constituting 47.31 per cent of total membership.

Both deposits and loans issued of PACS (as on 31

March 2010) showed increase of 34.45 per cent and

27.47 per cent, respectively, over the previous year.

The borrowings of PACS, however, registered only a

marginal increase of 5.77 per cent over the previous

year.

59. The financial position of the SCB and District

Central Co-operative Bank (DCCB), as on 31 March

2010, indicate that while their deposits increased by

15 per cent each, the borrowings of SCB and DCCB

increased by 12 per cent and 3 per cent, respectively,

over the previous year. Loans issued by SCB

decreased by 17 per cent and that of DCCB increased

by 26 per cent. Loans outstanding of SCB and DCCB

increased by 2 per cent and 24 per cent, respectively.

60. The borrowings of State Co-operative

Agriculture and Rural Development Banks (SCARDB)

as on 31 March 2010, decreased by 0.5 per cent over

the previous year while that of Primary Cooperative

Agriculture Rural Development Banks (PCARDB)

increased by 2 per cent, during the corresponding

period. Loans issued by SCARDB and PCARDB

increased by 19 per cent and 13 per cent respectively,

while their loans outstanding increased by 4 per cent

and 1 per cent, respectively, over the previous year.

61. SCB as a group earned a positive net margin of

1.02 per cent during 2009-10 as compared to the net

margin of 0.57 per cent during 2008-09. The DCCB,

as a group, earned net margin of 1.80 per cent during

2009-10. During the year 2008-09, out of 19

SCARDB, 13 had positive net margins and the

remaining 6 had negative net margins. PCARDB in

only 4 States had positive net margin.

62. During 2010-11, under Co-operative

Development Fund (CDF), financial assistance of

`6.43 crore was sanctioned and ` 6.05 crore disbursed.





ix

As on 31 March 2011, cumulative sanctions and

disbursements were ` 98.17 crore and ` 87.57 crore,

respectively. The balance in the Fund as on 31 March

2011 stood at ` 125 crore.

63. The impact studies conducted by different

agencies on the implementation of GoI revival package

for Short Term Co-operative Credit Structure in 10

States, revealed positive features like improved share

capital position of PACS and DCCB, increase in

volume of busines and credit flow of DCCB, reduction

in NPA of PACS and DCCB, increased coverage of

Small and Marginal Farmers and improved recovery

rates of SCB and DCCB.

64. Post amalgamation, the number of RRB

operating in the country, as on 31 March 2011, stood

at 82, with a network of 15,938 branches. During the

year, the aggregate reserves of RRB, deposits and

investments increased by 20 per cent each, while loans

& advances (outstanding) increased by 22 per cent.

65. Financial results of RRB for the year 2010-11

indicated that 79 out of 82 RRB had earned pre-tax

profit to the extent of ` 3,470 crore. While all RRB in

the Eastern, Western and Northern regions were in

profit, one RRB each in the Central, North-Eastern

and Southern region incurred losses. The recovery

performance of RRB was estimated at 80.03 per cent,

as on 30 June 2010, as compared to 80.09 per cent

as on 30 June 2009.

66. Regional Rural Bank have emerged as a strong

intermediary for Financial Inclusion in rural areas by

opening a large number of “No Frills” accounts and

financing under General Credit Cards (GCC). Total

number of business accounts with RRB stood at 11.88

crore as on 31 March 2010.

67. Based on the recommendations of Amaresh

Kumar Committee, the GoI issued the RRB Service

Regulations 2010. GoI also notified the RRB

Appointment & Promotion Rules 2010, in July 2010.

Supervision of Banks

68. During 2010-11, statutory inspection of 302

banks (31 SCB, 229 DCCB and 42 RRB) and voluntary

inspections of 18 SCARDB and 3 Apex Societies, were

conducted. The inspections brought out supervisory

concerns relating to these institutions, which were

communicated to the banks concerned, Registrar of

Co-operative Societies, State Governments (in respect

of cooperative banks) and Sponsor Banks (in respect of

RRB) for corrective action.

69. During the year 2010-11, twenty DCCB

improved their financial position and recomplied with

the provisions of Section 11(1) of B.R. Act,

1949(AACS). As on 31 March 2011, 68 banks (5 SCB

and 63 DCCB) were not complying with the provisions

of Section 11(1) of the B.R. Act, 1949(AACS), i.e.,

minimum capital requirement. Applications for grant

of exemption in respect of 50 banks (1 SCB and 49

DCCB) were under the consideration of RBI/GoI.

70. Pursuant to the recommendations of Committee

on Financial Sector Assessment, RBI issued licences,

based on revised norms, to 2 SCB and 49 DCCB

during the year, thus, increasing the number of

licensed banks to 246 (24 SCB and 222 DCCB) as on

31 March 2011. During the year, no SCB was included

in the Second Schedule to the RBI Act, 1934. Thus,

the number of scheduled SCB remained unchanged

at 16.





x

71. Thirty-nine amalgamated RRB were included by

RBI in the Second Schedule to the RBI Act, 1934, after

they were found complying with Section 42(6)(a)(ii) of

the Act. With this, the number of Scheduled RRB stood

at 75 as on 31 March 2011. Inclusion of five more RRB

in the Second Schedule to the RBI Act, 1934, was

recommended to RBI in 2010-11.

72. During the year, instructions / circulars were

issued to SCB and DCCB on (i) issuing engagement

letters to Statutory Auditors, specifying the areas to be

covered, (ii) a questionnaire / check list for the use of

concurrent auditors to ensure that all aspects are

covered by the auditors while reviewing the Investment

Portfolio of banks, (iii) fraud prevention measures and

constituting Fraud Risk Management Group, (iv) a

Model Know Your Customer (KYC)/Anti-Money

Laundering (AML) Policy for adoption, (v) detailed

guidelines for inspection of DCCB, branches of SCB/

DCCB and affiliated societies and (vi) clarification on

calculation of Demand and Time Liabilities (DTL) for

maintenance of CRR / SLR.

73. During the year, (i) RRB were permitted to

induct Nominee Director of NABARD on the Audit

Committee of the Banks, with approval of the Board;

(ii) a Model KYC / AML Policy was circulated to all

RRB for adoption with suitable modifications and (iii)

clarifications were issued to RRB on Disclosure in

Financial Statement in Half Yearly Review.

74. For a holistic and more effective approach towards

supervision, especially in strengthening the internal

checks and control systems in the supervised banks,

NABARD continued to forge partnerships with other

agencies under the GIZ-RFIP programme and with ICAI

for preparation of Audit Manual for Co-operatives and

RRB. NABARD also actively supported National

Federation of State Co-operative Banks in revising the

operational manuals for Co-operative Banks.

Organisation, Corporate Governance and Management

75. The Board of Directors met six times during the

year, while the Executive Committee and the Board’s

Projects Sanctioning Committee for Loans under RIDF,

met thrice and seven times, respectively. The Audit

Committee of the Board (ACB) as well as the Risk

Management Committee of the Board (RMCB) met

thrice during the year.

76. NABARD started the ‘Project Reposition’ in

March 2010, with a view to networking resources,

building capabilities and partnering institutions for

bringing about effective integrated rural

development in India. The project seeks to address

the present day challenges without conflict with the

long-term role mandated to NABARD by GoI and

RBI. During the year, diagnostic and design phases

under ‘Project Reposition’ were completed.

77. Reserve Bank of India conducted the

13th Financial Inspection of NABARD (with reference

to its financial position, as on 31 March 2010) from

01 November 2010 to 13 December 2010. Under RTI

Act, 737 applications were provided requisite

information within the stipulated time. Ninety-four

appeals were responded to and 15 hearings on the

appeals made to Central Information Commission

were attended by officials of the Bank.

78. A total of 2,131 officers were imparted training

through 103 programmes conducted during the year





xi

by the National Bank Staff College, Lucknow. Further,

18 on-location programmes were conducted for 425

officers on various topics. During the year, 145 officers

from NABARD, three from client institutions and 18

NGO participants were deputed for various Overseas

programmes. Two batches of 10 senior officers each

were deputed to a programme on Risk Management

and Performance organised by World Savings Bank

Institute and to RIPA, London.

79. During the year, 126 officers were appointed in

Grade ‘A’ in the Rural Development Banking Service

of the Bank. A total of 396 staff was promoted during

the year. The total staff strength of the Bank, as on 31

March 2011, was 4,607. Of these, 18 per cent

belonged to Scheduled Castes and 9 per cent to

Scheduled Tribes. The strength of ex-servicemen and

physically handicapped employees stood at 80 and 94,

respectively.

80. Industrial relations in the Bank continued to be

harmonious during the year. Three meetings each of

the Grievances Redressal Committee and the Appellate

Committee were held during the year. Two pre-

promotional training programmes for 120 SC/ST staff

were conducted at training centres. Other benefits

extended to SC/ST employees included granting

scholarship to 12 wards of the employees and

providing compassionate appointment to dependents

of ten deceased employees.

81. Based on the report of KPMG and the

subsequent study undertaken by BCG

(the repositioning consultant), the Bank finalised its

future IT architecture and IT road map to be

implemented in phases. These consist of the following:

(a) Human Resources Management (Phase I), (b)

Centralised Loan Management & Accounts (Phase II),

(c) Business Processes (Phase III), (d) Enterprise Data

Warehouse (Phase IV).

82. During the year 2010-11, the Inspection

Department of the Bank carried out inspection of

16 HO Departments, 22 Regional Offices and two

Training Establishments, i.e., RTC Mangalore and

NBSC Lucknow. Inspection Reports were issued and

compliance ensured.

83. During the year, five Parliamentary Committees

visited NABARD. Two RO, viz., Karnataka and

Chhattisgarh were notified under Section 10(4) of

Official Languages Act by the GoI. The Regional

Implementation Office, Department of Official

Language, Ministry of Home Affairs, GoI awarded

prizes to Andhra Pradesh RO, Maharashtra RO and

RTC, Mangalore. During the year, 109 Potential-linked

Credit Plans and 69 Inspection Reports were prepared/

issued in Hindi.

Financial Performance & Management of Resources

84. The total financial resources of NABARD

increased to ` 1,58,872 crore, as on 31 March 2011,

registering an increase of 16.57 per cent, over the

previous year. Total market borrowings of ` 34,747

crore, as on March 31, 2011, constituted 21.87 per cent

of the total resources of the bank.

85. The paid up capital, as on 31 March 2011, was

` 2,000 crore against the authorised capital of

` 5,000 crore; with the share of GoI being 99 per cent

and that of the RBI at one per cent. The amount of

reserves and surplus increased by ` 1,188 crore, as on

31 March 2011.





xii

86. 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 ` 167 crore as on

31 March 2011. There was a decrease of ` 32 crore as

compared to the position as on 31 March 2010.

87. The total income of NABARD during the year

amounted to ` 9,202 crore as against ` 7,965 crore for

the year 2009-10. The profit before tax and profit after

tax were at ` 1,824 crore and ` 1,279 crore respectively

as on 31 March 2011, as compared to ` 2,272 crore

and ` 1,558 crore respectively, in the previous year.

The average cost of borrowings (interest expenditure as

a per cent of average borrowings) decreased from 6.83

per cent per annum during 2009-10 to 6.64 per cent

per annum during 2010-11. The capital to risk-

weighted assests ratio (CRAR) was 21.76 per cent as on

31 March 2011, as compared to 24.95 per cent as on

31 March 2010.





1

I

Economic Environment

The global economy witnessed a growth of 5.0 per cent

in 2010, which is the highest in the post-crisis period.

The Indian economy is also expected to regain the pre-

crisis growth levels with the growth rate estimated at 8.5

per cent in 2010-11 as compared to 8.0 per cent in

2009-10. This broad based growth is due to the growth

of 6.6 per cent in agriculture, 7.8 per cent in industry

and 9.3 per cent in services. The impressive growth

performance has enabled the per capita income (at

2004-05 prices) to increase from ` 33,731 during

2009-10 to ` 35,917 during 2010-11. Inflation, at

9.4 per cent during 2010-11, largely driven by primary

food articles as against 3.6 per cent during 2009-10,

has emerged as a major cause of concern.

Global Economy

1.2 The World Economic Outlook of the

International Monetary Fund has projected growth in

global output at 4.4 per cent in 2011, a decline of 0.6

percentage points relative to 2010. Economic growth

in advanced economies was a modest 3 per cent in

2010 and is projected at 2.4 per cent in 2011. In the

emerging and developing economies, the growth rate

improved in 2010 as compared to 2009 and is

expected to remain buoyant at 6.5 per cent in 2011.

Economic growth of China (10.3 per cent) and India

(10.4 per cent) rebounded in 2010 and it is estimated

that the growth in China and India would be 9.6 per

cent and 8.2 per cent, respectively, in 2011

(Table 1.1).

1.3 Commodity prices (both oil and non-oil)

increased by 27.9 per cent and 26.3 per cent,

respectively in 2010, due to strong global demand and

supply shocks. The commodity prices are projected to

remain high in 2011 due to continued robust demand

and slow supply response to the market conditions.

The consumer price inflation in the emerging and

developing economies at 6.2 per cent in 2010 was

attributed mainly to higher food prices and is expected

to rise to 6.9 per cent in 2011. Comparatively,

inflation in the advanced economies was 1.6 per cent

in 2010 and is projected at 2.2 per cent in 2011.

1.4 As per the Food and Agriculture Organisation

data, the world production of cereals decreased by

1.2 per cent; vegetables and milk increased by 2.44

per cent and 0.87 per cent, respectively, in 2009 as

compared to 2008. Asia is a major producer of cereals

(47.46%), vegetables (75.55%) and milk (35.83%).

India’s share on a two-year average basis was 10.29

Table 1.1: Overview of Global Economy

(Annual per cent change)

Growth 2009 2010 2011*

A. GDP (Real)

a. World output (-)0.5 5.0 4.4

b. Advanced Economies (-)3.4 3.0 2.4

i. United States (-)2.6 2.8 2.8

i. Euro Area (-)4.1 1.7 1.6

iii. Japan (-)6.3 3.9 1.4

iv. Newly Industrialised

Asian Economies (-)0.8 8.4 4.9

c. Other Emerging and

Developing Economies 2.7 7.3 6.5

i. Developing Asia 7.2 9.5 8.4

ii. China 9.2 10.3 9.6

iii. India 6.8 10.4 8.2

iv. ASEAN - 5** 1.7 6.9 5.4

B. Consumer Prices

a. Advanced Economies 0.1 1.6 2.2

b. Other Emerging and

Developing Economies 5.2 6.2 6.9

C. World Trade Volume

(goods & services)

a. Imports by Emerging and

Developing Economies (-)8.3 13.5 10.2

b. Exports by Emerging and

Developing Economies (-)7.5 14.5 8.8

D. Commodity Prices

a. Oil Prices (-)36.3 27.9 35.6

b. Non-Fuel Prices (-)15.8 26.3 25.1

* : Projections

** : Includes Indonesia, Malaysia, Philippines, Thailand and

Vietnam

Source: World Economic Outlook, IMF, April 2011

per cent for cereals, 9.23 per cent and 15.81 per cent

for vegetables and milk, respectively (Table 1.2).





2

Indian Economy

Table 1.2: Production of Cereals, Vegetables & Milk in the World, 2008 and 2009

(Million Tonnes)

Country/Group Cereals Vegetables* Milk

% share in % share in % share in

2008 2009 World@ 2008 2009 World@ 2008 2009 World@

India 267.56 248.81 10.29 91.73 92.77 9.23 109.00 112.11 15.81

Africa 152.46 158.67 6.20 64.10 63.68 6.39 37.94 38.65 5.48

Americas 648.28 634.18 25.56 81.56 81.71 8.17 170.11 171.45 24.43

Asia 1182.29 1198.81 47.46 744.48 765.55 75.55 247.69 253.24 35.83

Europe 504.39 465.83 19.34 93.81 97.07 9.55 215.86 213.94 30.74

Oceania 36.4 36.1 1.44 3.43 3.44 0.34 24.51 24.86 3.53

World 2523.84 2493.61 100 987.37 1011.46 100 696.11 702.14 100

* Incudes Melons

@ Share based on the average of 2008 & 2009

Source : FAOSTAT @ FAO Statistics Division, 21 June 2011

A. Economic Scenario

a. Gross Domestic Product

1.5 As per Revised Estimates, the Gross Domestic

Product (GDP) of the country has registered a growth of

8.5 per cent in 2010-11 as compared to 8.0 per cent in

2009-10 and 6.8 per cent in 2008-09

(Table 1.3). The high growth trajectory of the GDP has

been facilitated due to a rebound in agriculture growth

from 0.4 per cent during 2009-10 to 6.6 per cent

during 2010-11. Industry and services registered a

growth of 7.8 and 9.3 per cent, respectively, during

2010-11 as compared to 8.0 per cent and 10.1 per

cent, respectively, during 2009-10. Against an average

growth rate of 9.0 per cent envisaged in the Eleventh

Five Year Plan, the average growth was 8.0 per cent for

the period 2007-08 to 2010-11. The agriculture sector

is estimated to grow at 2.9 per cent during 2007-08 to

2010-11 as against the Plan target of 4.0 per cent.

1.6 Sectoral analysis of growth rates revealed an

increase in agricultural growth by 6.2 per cent;

decrease in services and industrial growth by 0.80 and

0.20 per cent respectively, during 2010-11 as

compared to the previous year. The contributions of

agriculture, industry and services to the GDP were

14.4, 27.9 and 57.7 per cent, respectively, during

2010-11 (Table 1.4).

b. Consumption, Savings and

Investments

1.7 The relative share of Private Final Consumption

Expenditure (PFCE) and Government Final

Consumption Expenditure (GFCE) (at 2004-05 prices),





3

as estimated by Central Statistical Organisation,

Government of India increased by 8.60 and 4.76 per

cent respectively in 2010-11 over 2009-10. The private

expenditure on food items as a proportion to total

private consumption, as per the Economic Survey,

2010, has been gradually declining since 2004-05 from

40.0 per cent to 32.6 per cent in 2009-10 while that of

miscellaneous goods and services has been increasing.

1.8 The Gross Domestic Savings (GDS), as a

proportion of GDP is estimated to have increased from

33.7 per cent during 2009-10 to 35.6 per cent during

2010-11. While private sector savings has remained

virtually stagnant at 31 per cent, public sector savings

increased from 0.5 per cent during 2008-09 to 2.1 per

cent during 2009-10. The Gross Capital Formation

(GCF), as a proportion of GDP, is estimated at 36.5

per cent with the contribution of public and private

sectors at 9.2 and 24.9 per cent, respectively during

2009-10. Within the private sector, the investment rate

for the corporate sector increased from 11.5 per cent

in 2008-09 to 13.2 per cent in 2009-10 while that of

the household sector declined from 13.1 per cent to

11.7 per cent.

Table 1.3: Economic Indicators

(Annual percent change)

Particulars 2008-09 2009-10 2010-11

Gross Domestic Product 6.8 8.0 (QE) 8.5 (RE)

GDP from Agriculture & Allied Activities (-)0.1 0.4 (QE) 6.6 (RE)

Foodgrains Production 1.0 (-)7.1 6.8

Industrial Production 3.2 10.5 7.8

Inflation as measured by WPI 8.0 3.6 9.4

Gross Domestic Savings (as % of GDP) 32.2 33.7 35.6

Gross Domestic Investment (as % of GDP) 34.5 36.5 38.0

Fiscal Deficit (as % of GDP) 6.0 6.3 4.8

Imports 20.7 (-)5.0 21.8

Exports 13.6 (-) 3.5 37.7

Trade Balance (as % of GDP*) (-)9.5 (-)7.9 (-)6.06

External Debt (as % of GDP*) 20.5 18.1 -

QE: Quick Estimates RE: Revised Estimates

*At current market prices

Source: Economic Survey 2010-11; CMIE, May 2011; Central Statistical Organisation, GoI

Table 1.4: Sectoral Growth Rates of GDP

(2004-05 prices)

Sector 2006-07 2007-08 2008-09 2009-10 2010-11(RE)

Agriculture & Allied 3.7(17.2) 4.7(16.4) (-)0.1(15.7) 0.4(14.6) 6.6(14.4)

Industry# 12.7(28.7) 9.5(28.8) 4.4(28.1) 8.0 (28.1) 7.8(27.9)

Services 10.2(54.2) 10.5(54.8) 10.1(56.2) 10.1(57.3) 9.3(57.7)

Total GDP at factor cost 9.7(100.0) 9.2(100.0) 6.8(100.0) 8.0(100.0) 8.5(100.0)

Figures in parentheses indicate percentage shares in GDP RE: Revised Estimates

#: Includes mining & quarrying, manufacturing, electricity, gas and water supply and construction

Source: 1. Monthly Economic Report (April 2011), Ministry of Finance, GoI 2. Economic Survey 2010-11





4

c. Inflation

1.9 A revised Wholesale Price Index (WPI) series

with changes in weights and commodities, and with

the base year as 2004-05 has been released. The WPI

also includes an addition of 241 items in the

commodity basket and increase in the number of price

quotations from 1,918 to 5,482.

1.10 In order to give a clear picture of price

behaviour of goods and services consumed by rural/

urban population, a new initiative of compiling

Consumer Price Index (CPI) for rural and urban India

has been undertaken. Inflation in Consumer Price

Index for Rural Labour (CPI-RL) and Consumer Price

Index for Agricultural Labour (CPI-AL) has declined

from 14.96 per cent each in April 2010 to 8.96 and

9.14 per cent, respectively, in March 2011.

1.11 The overall inflation rate as measured by

changes in the WPI on a monthly basis was 9.4 per

cent during 2010-11 as compared to 3.6 per cent

during the fiscal year 2009-10. The rise has been due

to high prices in primary articles, which was recorded

at 17.61 per cent. Food inflation has been mainly due

to increase in prices of rice, vegetables, fruits, milk,

eggs, meat and fish, condiments, spices and tea. WPI

in the other major groups-manufactured goods and

fuel & power has also risen by 5.43 per cent and

12.24 per cent, respectively (Chart 1.1 (a) & (b)).

d. Trade

1.12 Exports and imports are projected to grow by

22.5 and 13.2 per cent, respectively, during 2010-11.

Agricultural exports increased from ` 81,710 crore

during 2008-09 to ` 85,211 crore during 2009-10,

registering a growth of 4.28 per cent. Increase in

agricultural exports has been mainly due to higher

exports of basmati rice, unmanufactured tobacco, meat

and meat preparations, castor oil and tea. The

percentage share of agriculture and allied products in

the total exports was 10.1 during 2009-10 as

compared to 9.7 in 2008-09. The share of food &

allied product imports in the total imports of the

country also increased from 2.1 per cent in 2008-09 to

3.7 per cent in 2009-10 (Table 1.5).

B. Agriculture & Rural Economy

a. Rainfall Situation

1.13 The country as a whole received 912.8 mm of

rainfall, which was 2.0 per cent more than the Long

Period Average (LPA) during the South-West monsoon

(June-September) 2010 as compared to 23 per cent





5

less than the LPA in the corresponding period in 2009.

Apart from North-East India, where the rainfall was

18 per cent less than the LPA, rainfall received in all

other divisions: Central, North-West and Southern

Peninsula was more than the LPA. Out of the 36

sub-divisions, 5 recorded deficient rainfall during the

South-West monsoon in 2010.

1.14 During the North-East monsoon (October-

December), the cumulative rainfall received for the

country as a whole was 153.2 mm, which was 21 per

cent above the LPA as compared to 8 per cent more

during the previous year. The core regions (Tamil

Nadu, Kerala, coastal Andhra Pradesh, Rayalseema

and south interior Karnataka) receiving North-East

monsoon had excess rainfall to the extent of 55 per

cent above the LPA. In terms of spatial distribution,

25 sub-divisions recorded excess/normal rainfall and

the remaining 11 sub-divisions recorded deficient

rainfall during the North-East monsoon period

(Table 1.6).

1.15 Total live water storage, in 81 major reservoirs

across the country, at 104.68 billion cubic meters was

69 per cent of the Full Reservoir Level of 151.77

billion cubic metres by the end of December 2010

which was 32.18 per cent higher than the previous

year's level of 79.19 billion cubic metres.

Table 1.5: Trends in Exports and Imports

(`'000 crore)

Year Total Agriculture & Total Food &

Exports Allied Products Imports Allied Products

2005-06 456.4 46.7 (10.2) 660.4 16.5 (2.5)

2006-07 571.8 58.9 (10.3) 840.5 24.3 (2.9)

2007-08 655.9 65.2 (9.9) 1012.3 23.2 (2.3)

2008-09 840.8 81.7 (9.7) 1374.4 28.8 (2.1)

2009-10 845.5 85.2 (10.1) 1363.7 50.4 (3.7)

2010-11* 1118.8 – 1596.8 –

* Provisional; Figures in parantheses indicate percentage share to total

Source: Economic Survey, Various Isssues; Ministry of Commerce & Industry, GoI

Table 1.6: Trends in Rainfall and Water Storage

Particulars South-West Monsoon* North-East Monsoon**

2008 2009 2010 2008 2009 2010

A. Cumulative rainfall (% variation from normal) (-)2 (-)23 2 (-)31 8 21

B. Number of Sub- Divisions with Normal/Excess Rainfall 32 13 31 6 23 25

Deficient/Scanty/No Rainfall 4 23 5 30 13 11

C. Reservoir status (% of FRL$@) 73.2 58.6 75.4 56.4 52.1 69

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 67% of total reservoir capacity in the country as at the end of the season

@: As on 30 September in the case of SW Monsoon and 31 December in the case of NE Monsoon

Source: Indian Meteorological Department; CMIE, April 2011





6

b. Crop Acreage

1.16 Total crop acreage under both kharif and rabi

during 2010-11 indicated an increase of 9.40 million

hectares (Mha) over the previous year. The crop

acreage under various crops during kharif 2010 was

103.90 Mha which was 6.88 Mha more than the area

covered during the corresponding period of kharif

2009. The major increase in area sown was under rice

(2.3 Mha). Increase in area sown under cotton,

oilseeds and sugarcane increased marginally by 0.75,

0.10 and 0.86 Mha, respectively, in kharif 2010 as

compared to the period of kharif 2009. Area sown

under foodgrains during kharif 2010 was higher by 5.0

Mha as compared to kharif 2009.

1.17 The growth in rabi foodgrains during 2010-11

was 3.87 per cent over the previous year. Area sown

under all rabi crops was 65.79 Mha during 2010-11 as

compared to 63.27 Mha in the corresponding period

of 2009-10 (Table 1.7).

c. Inputs Use in Agriculture

i. Seeds

1.18 The Indian Seed Programme involving Central/

State Governments, Indian Council of Agricultural

Research, State Agricultural Universities, Co-operatives

and private sector has been addressing the issue of low

seed replacement rate. Besides, the scheme for

'Development and Strengthening of Infrastructure

Facilities for Production and Distribution of Quality

Seeds' is being implemented since 2005-06 to ensure

timely availability of quality seeds at affordable prices

to farmers. The scheme has covered 1.31 lakh seed

villages and 183.10 lakh quintals of certified/ quality

seeds have been produced upto 2009-10. Breeder

seed production and foundation seed production

reached 0.94 lakh quintals and 11.46 lakh quintals,

respectively during 2009-10, registering 26.96 and

18.27 per cent growth over the previous year. During

2010-11, the production of breeder and foundation

seeds is estimated at 1.1 lakh quintals and 18.5 lakh

quintals, respectively. Certified/quality seed distribution

during 2010-11 at 321.36 lakh quintals was

14.8 per cent higher than the previous year.

ii. Chemical Fertilizers

1.19 Production of urea, Di-Ammonium Phosphate

(DAP) and complex fertilisers increased by 5.98, 41.86

and 17.38 per cent, respectively during 2009-10 as

compared to the previous year. Fertiliser consumption

in nutrient terms increased by 6.33 per cent from

249.09 lakh tonnes during 2008-09 to 264.86 lakh

tonnes during 2009-10. The per hectare consumption

of fertilisers also increased from 127.2 kg to 135.3 kg

during the same period. To meet the current level of

fertiliser consumption, urea, DAP and Muriate of

Table 1.7: Area Sown under Major Crops

(Million hectares)

Crop Kharif (a) Rabi (b) Total (a+b)

2009-10 2010-11 2009-10 2010-11 2009-10 2010-11

Rice 33.53 35.86 4.39 4.39 37.92 40.25

Wheat 0.00 0.00 28.36 29.40 28.36 29.40

Coarse Cereals 20.61 21.21 6.58 6.18 27.19 27.39

Pulses 10.53 12.60 14.30 15.72 24.83 28.32

Total Foodgrains 64.68 69.68 53.64 55.72 118.32 125.40

Oilseeds@ 17.44 17.54 9.63 10.07 27.07 27.61

Cotton 10.09 10.84 0.00 0.00 10.09 10.84

Sugarcane 4.20 5.06 0.00 0.00 4.20 5.06

All crops 97.02 103.90 63.27 65.79 160.29 169.69

@: Includes rapeseed & mustard, groundnut, safflower, sunflower, castorseed, nigerseed, soyabean, sesamum and linseed

Source: Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India





7

Potash (MOP) were imported to the extent of 52.09,

58.89 and 52.86 lakh tonnes, respectively, during

2009-10. Import of fertilizers, which accounted for

10.60 per cent of total fertilizer consumption in

2000-01, increased to 34.53 per cent during 2009-10.

1.20 A nutrient based subsidy for phosphatic and

potassic fertilisers to promote balanced use of fertlisers

has been under implementation since April 1, 2010.

The price of urea has been increased by 10 per cent

while the price of other subsidized fertilisers is being

maintained at current level. Additional subsidy on

micro-nutrients like boron and zinc has also been

introduced.

iii. Irrigation

1.21 Total irrigation potential created under all types

of irrigation structures has increased from 81.10

million hectares in 1991-92 to 108.2 million hectares

by March 2010. Utilisation was to the extent of 85 per

cent, leaving a gap of 15 per cent.

1.22 For extending assistance for incomplete

irrigation schemes, the Government of India initiated

the Accelerated Irrigation Benefit Programme (AIBP)

during the year 1996-97. As on 31 March 2010, 281

projects have been covered and 120 completed under

the AIBP scheme. Further, the cumulative Central

Loan Assistance/grant of an amount of ` 41,729.37

crore has been released under the scheme as on

March 31, 2010. With a view to enhance the water use

efficiency, the National Mission on Micro Irrigation

(NMMI) was launched in June 2010 in addition to the

Micro Irrigation Scheme to encourage the adoption of

drip and sprinkler irrigation systems. The scheme has

covered 2.27 lakh hectares under micro irrigation.

iv. Credit

1.23 As against the target of ` 3,75,000 crore of credit

flow to agriculture for 2010-11, the banking system

disbursed ` 4,46,779 crore as on 31 March 2011,

achieving 119.14 per cent of the target. Commercial

banks, Co-operative banks and Regional Rural Banks

disbursed ` 3,32,706 crore, ` 70,105 crore and

` 43,968 crore, respectively, sharing 74 per cent, 16

per cent and 10 per cent of the total credit flow during

2010-11 (Table 1.8, also see Box 1.1 and 1.2).

1.24 During the period 2005-10, the Ground Level

Credit (GLC) flow for agriculture and allied activities

registered a Compound Annual Growth Rate

(CAGR) of 19.57 per cent. The growth rate for crop

loans and term loans was 26.49 per cent and 7.56

per cent, respectively for the five year period (2005-

06 to 2009-10). An analysis of the term loans during

2009-10 for the broad sub sectors indicated that Minor

Table 1.8: Agency-wise Ground Level Credit Flow

(` crore)

Agency 2006-07 2007-08 2008-09 2009-10 2010-11 Growth Rate (%)

2006-10# 2009-10* 2010-11*

Co-operative Banks 42,480 48,258 45,966 63,497 70,105 15.66 38.14 10.41

Regional Rural Banks 20,435 25,312 26,765 35,217 43,968 20.40 31.58 24.85

Commercial Banks 166,485 18,1088 228,951 285,800 332,706 20.01 24.83 16.41

Total 229, 400 254,658 301,908** 384,514 446,779 18.97 27.36 16.19

#: Compound Annual Growth Rate; *: Percentage change over previous year. ** Includes ` 226 crore by other Agencies.

Source: NABARD





8

A. Agricultural Production and Productivity

• Allocation of ` 400 crore for realising Green Revolution

in the Eastern Region (Assam, Bihar, Chhattisgarh,

Jharkhand, Orissa and Eastern Uttar Pradesh) has been

proposed.

• To increase the productivity of pulses, oil palm andmillets, ` 300 crore each has been earmarked to

promote 60,000 pulse villages in rainfed areas, bringing

60,000 hectares under oil palm plantation and covering

25,000 villages under millets respectively.

B. Agricultural Credit

• Farm credit target has been raised from ` 3,75,000

crore in 2010-11 to ` 4,75,000 crore in 2011-12. Direct

lending for agriculture and credit to be enhanced for

small and marginal farmers.

• Interest subvention for timely repayment of loans

enhanced from 2 per cent during 2010-11 to 3 per cent

during 2011-12 making the effective rate of interest at

4 per cent.

• NABARD’s capital base to be increased from ` 2,000

crore to ` 5,000 crore in a phased manner.

• ` 10,000 crore to be contributed to NABARD's short-

term Rural Credit Fund from the shortfall in prioritysector lending by Scheduled Commercial Banks during

2011-12 for enabling NABARD to refinance short-term

crop loans to co-operative credit institutions and RRBs

at concessional rates.

• The Corpus of RIDF XVII raised from ` 16,000 crore to` 18,000 crore.

C. Financial Inclusion/ Micro Finance

• Banking facilities to all the identified 73,000 habitations

having a population of more than 2,000 to becompleted by 2011-12.

• 'Women's SHG's Development Fund' to be created with

a corpus of ` 500 crore to promote SHG.

• 'India Microfinance Equity Fund' with a corpus of ` 100

crore to be created with SIDBI for providing equity tosmaller MFIs.

D. Other Initiatives

• ` 3,000 crore to be provided to NABARD to providesupport to handloom weaver co-operative societies

which have become financially unviable due to non-

repayment of debt by weavers facing economic stress.

• To address the issue of storage of vegetables and fruits,15 more Mega parks to be set up during 2011-12. New

storage capacity of 150 lakh MT through private

entrepreneurs and warehousing corporations has been

augmented.

• ` 500 crore to be provided to RRBs during 2011-12 to

enable them maintain a CRAR of at least 9 per cent as

on March 31, 2012.

• Provision under Rural Housing Fund enhanced to

` 3,000 crore.

Box 1.1

Union Budget 2011-12: Highlights on Agriculture and Rural Development

The excercise for the XIIth Five Year Plan (2012-17) has

commenced with the setting up of several working groups on

various sectors of the economy.

A. The Working Group on Outreach of Institutional

Finance, Cooperatives and Risk Management for Twelfth Five

Year Plan has been constituted under the Chairmanship of

Dr. Y. S. P. Thorat, former Chairman, NABARD for the

formulation of the Twelfth Five Year Plan. Dr. Prakash Bakshi,

Chairman, NABARD, is the Member Secretary for the

Working Group. The specific Terms of Reference (ToR) are :

(i) To review the flow of credit to agriculture and allied

sectors during the XIth Plan, giving sub-sectoral analysis

and recommend measures to increase the flow of credit at

reasonable rates of interest throughout the country with

special consideration of disadvantaged sections such as

small and marginal farmers, women farmers, tenant

farmers, oral lessees and landless labourers and assess the

short-term and long-term credit requirements of agricultural

credit during XIIth plan.

(ii) To review the contribution and performance of

credit cooperatives towards outreach of credit to agriculture

and allied activities and recommend measures for their

increased proactive participation.

Box 1.2

Working Groups for Twelfth Five Year Plan (2012-2017)

(iii) To study the performance, efficiency and adequacy

of risk management policies, strategies and programmes

being implemented for agriculture and allied sectors and

recommend the course to be followed for risk management

during XIIth plan as well as measures required to increase

uptake and service levels of micro insurance products.

(iv) To study the issues concerning micro-financing

institutions such as their costs and rates of lending, their

contribution in credit outreach and recommend future

course of actions.

B. The Working Group on Savings under the

Chairmanship of Dr. Subir Gokarn, Deputy Govenor, RBI was

constituted to estimate the savings in line with the broad macro

economic parameters set for the Twelfth Five Year Plan. The

Working Group constituted six sub-groups to deal with various

sectors of the economy. The ‘Sub-group on Flow of Private

Investment for SME and Agriculture’ has been constituted under

Shri. S.K. Mitra, Executive Director, NABARD as Convenor. The

broad TOR of the Sub-Group is to estimate resources available

for private investment, including infrastructure, and the likely

flows for SME and agriculture. NABARD is providing the

Secretariat for both the Groups.





9

Table 1.9: Sub-sector-wise Ground Level Credit Flow for Agriculture & Allied Activities

(` crore)

Sl Sector/Sub-Sector 2005-06 2006-07 2007-08 2008-09 2009-10 Growth rate (%)

No.2005-10^ 2009-10*

I. Crop Loan 1,05,350 1,38,455 1,81,393 2,10,461 2,76,656 26.49 31.45

(ST-Production Credit)

II. Term Loan 75,136 90,945 73,265 91,447 107,858 7.56 17.91

(MT & LT Investment Credit)

i. Minor Irrigation 8,663 8,566 2,840 3,180 5,197 (-)18.23 63.43

ii. Land Development 1,749 2,285 2,553 2,887 3,669 18.72 27.09

iii. Farm Mechanisation 9,695 10,113 8,303 8,334 10,211 (-)0.89 22.52

iv. Plantation & Horticulture 4,481 5,266 5,910 6,045 6,407 8.9 5.99

v. Animal Husbandry 7,341 8,045 9,034 10,398 10,260 9.7 (-)1.33

vi. Fisheries 1,019 1,424 1,248 1,281 1,854 11.53 44.73

vii. Hi-tech agriculture 9,737 21,498 33,325 41,694 50,797 48.68 21.83

viii. Others$ 32,451 33,748 10,052 17,628 19,463 (-)15.4 10.41

Total (I + II) 1,80,486 2,29,400 2,54,658 3,01,908 3,84,514 19.57 27.36

$ : Others include storage/market yards, forestry/waste land development, RIDF, bullock and bullock carts, bio-gas and credit flow throughprivate sector commercial banks.^: Compound Annual Growth Rate; *: Percentage change over the previous year.

Source: NABARD

Irrigation witnessed the highest annual growth of

63.43 per cent, followed by Fisheries (44.73 per

cent), Land Development (27.09 per cent) and Farm

Mechanisation (22.52 per cent) in GLC flow over

2008-09 (Table 1.9).

d. Agricultural Production

i. Foodgrains & Non-foodgrains

1.25 According to the 3rd Advance Estimates, the

country's foodgrain production during 2010-11 was

estimated at 235.88 million tonnes as compared to

218.11 million tonnes (final estimate) during 2009-10,

registering an increase of 8.14 per cent over the

previous year. During the year, production of all crops

except jute & mesta was estimated to be higher, the

maximum increase being for cotton at 40.04 per cent

followed by oilseeds (21.58%), coarse cereals

(19.85%), pulses (17.94%), sugarcane (16.50%), rice

(5.63%) and wheat (4.29%). Production of Jute &

mesta was expected to be lower by 11.26 per cent

during 2010-11 as compared to the previous year

(Table 1.10).

ii. Plantation Crops

1.26 Tea production in the country during 2010-11

has been estimated at 9.66 lakh tonnes as against

9.91 lakh tonnes achieved in 2009-10. Further,

the export of tea from India during 2010-11 was

1.78 lakh tonnes as against 2.13 lakh tonnes in

2009-10. (Table 1.11).

1.27 Coffee is cultivated in an area of around 3.99

lakh hectares confined mainly to Southern India. The

estimated coffee production for the year 2010-11 is

2.99 lakh tonnes, i.e., 0.99 lakh tonnes of Arabica and

2 lakh tonnes of Robusta. Export of Coffee at 3.22

lakh tonnes during 2010-11 was 65 per cent higher

than that exported during 2009-10 (Table 1.11).

1.28 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. The production of

Rubber (natural & synthetic) was 9.08 lakh tonnes

during 2010-11 (April, 2010-February, 2011) as

against 9.38 lakh tonnes during 2009-10.





10

The estimated export of natural rubber during the

corresponding period was 29 ,851 tonnes against an

import of 1,71,282 tonnes (Table 1.11).

iii. Horticulture Crops

1.29 Development of horticulture is recognised as an

avenue for diversification in agriculture to address

nutritional security, enhance employment opportunities

and provide export earnings. Among the various

horticulture crops, fruits and vegetables form the single

largest sub-sector constituting about 92.3 per cent of

the total horticultural production in the country.

Table 1.10: Production of Major Crops

(Million tonnes)

Year/Crop 2006-07 2007-08 2008-09 2009-10 2010-11*

Rice 93.35 96.69 99.18 89.09 94.11

Wheat 75.81 78.57 80.68 80.80 84.27

Coarse Cereals 33.92 40.76 40.03 33.55 40.21

Pulses 14.20 14.76 14.57 14.66 17.29

Foodgrains 217.28 230.78 234.47 218.11 235.88

Kharif 110.57 120.95 118.14 103.95 118.39

Rabi 106.71 109.83 116.33 114.16 117.48

Oilseeds 24.28 29.75 27.71 24.88 30.25

Cotton# 22.63 25.88 22.27 24.22 33.92

Sugarcane 355.52 348.18 285.02 292.30 340.54

Jute & Mesta## 11.27 11.21 10.36 11.81 10.48

*3rd Advance Estimates; # 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.

Floriculture in Poly House

1.30 The National Horticulture Mission (NHM), in

operation in 372 districts of the country, aims to

promote holistic development of the horticulture sector

through area based and regionally differentiated

strategies. Under the mission, an area of 16.57 lakh ha.,

has been brought under horticulture crops and an

expenditure of ` 4,125.43 crore had been incurred upto

2009-10. Area and production under horticulture crops

increased from 20.7 million hectares and 214.7 million

tonnes, respectively during 2008-09 to 20.9 million

hectares and 223.1 million tonnes, respectively, during

2009-10 (Table 1.12).

e. Agriculture and Allied Sector

1.31 Agriculture and allied activities contributed to

14.6 per cent of GDP in 2009-10 with agriculture

accounting for 12.3 per cent, followed by forestry and

logging at 1.5 per cent, and fishing at 0.8 per cent.

i. Livestock and Poultry

1.32 During 2009-10, the livestock sector

contributed to 3.5 per cent of GDP and 28.4 per cent

of GDP from agriculture and allied activities. As per the





11

18th Livestock Census 2007, the livestock and poultry

population in the country were 529.7 million and

648.8 million, respectively. The production of milk was

112.5 million tonnes and the per capita availability of

milk increased from 258 grams per day to 263 grams

per day due to increase in milk production in the

country during 2009-10 over 2008-09. The production

of poultry meat was estimated to be 1.85 million

tonnes and egg production at 59.8 billion during

2008-09. The per capita availability of eggs has been

around 51 per annum.

ii. Fisheries

1.33 Fishing, aquaculture and allied activities are

reported to have provided livelihood to over 14 million

persons in 2008-09. During 2009-10, the fisheries sector

contributed to 0.8 per cent of GDP and 6.4 per cent of

GDP from agriculture and allied activities. Fish

production is projected to reach 10 million tonnes by

the end of 11th Five Year Plan from the base level of

6.87 million tonnes during 2006-07. During the period

between 2007-08 and 2009-10, the total fish

production in the country increased by 10.5 per cent

and reached 7.85 million tonnes (2.98 million tonnes

of marine fish and 4.87 million tonnes of inland fish).

Export of marine products was 6.64 lakh tonnes

valued at ` 9,921 crore during 2009-10 as compared

to 6.02 lakh tonnes with a value of ` 8,608 crore in

the previous year.

f. Agro and Food Processing Sector

1.34 Agro and Food Processing sector is regarded as

a promising sector of the Indian economy in view of

its large potential for growth and its socio economic

impact, specifically on employment and income

generation. Agro-processing helps in better utilization

and value addition of agricultural produce. The Vision

Document 2015 by the Ministry of Food Processing

Industries has set a challenging target of trebling the

size of processed food sector by 2015 through

appropriate enabling policies. The export of processed

foods including processed fruits and juices increased

from ` 3,176 crore during 2008-09 to ` 3,255 crore

during 2009-10.

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

2006-07 9.73 7.71 2.18 2.88 0.85 2.49 9.52 10.91 0.57

2007-08 9.87 7.86 1.85 2.62 0.90 2.19 9.31 11.58 0.60

2008-09 9.73 8.02 1.90 2.62 0.94 1.97 9.61 11.64 0.47

2009-10 9.91 7.70 2.13 2.90 1.02 1.95 9.38 12.78 0.25

2010-11* 9.66 NA 1.78 2.99 1.08 3.22 9.08 $ 12.43 $ 0.29

NA: Not Available *: Estimated $: April 2010- February 2011

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

Paddy cum fish Cultivation





12

Table 1.12: Area and Production of Major Horticulture Crops

(Area in million hectares and Production in million tonnes)

Year Area Production

Fruits Vegetables Flowers Total Fruits Vegetables Flowers Total

Horticulture Horticulture

2005-06 5.3 7.2 0.1 18.7 55.4 111.3 0.6 182.8

2006-07 5.6 7.5 0.1 19.4 59.6 114.9 0.8 191.8

2007-08 5.8 7.8 0.2 20.2 65.6 128.4 0.8 211.2

2008-09 6.1 7.9 0.2 20.7 68.4 129.1 0.9 214.7

2009-10 6.3 7.9 0.2 20.9 71.5 133.7 1.0 223.1

Source: National Horticulture Board

g. Agricultural Marketing

1.35 Seventeen States/Union Territories have

amended their APMC Acts for agricultural market

reforms. Initiatives have been undertaken by GoI for

setting up terminal market complexes for fruits,

vegetables and other perishables in States that have

amended their APMC Acts. Agricultural Marketing

Information Network (AGMARKNET) provides internet

connectivity to agricultural markets for establishing

information network of prices and other market related

information. Agricultural commodities valued at

` 8,614.58 crore and ` 306.65 crore were certified

under ‘Agmark’ for domestic trade and exports,

respectively during 2009-10 as compared to ` 7,865.25

crore and ` 241.08 crore, resepectively, during 2008-09.

h. Commodity Futures

1.36 Agriculture commodity futures market includes

21 commodity exchanges in the country. The value of

total trade in commodity futures market increased from

` 77,64,754 crore in 2009-10 to ` 119,48,942 crore in

2010-11 recording a growth of 53.89 per cent during

the period. The value of agricultural commodities as a

proportion to total trade in commodity futures market

decreased from 15.68 per cent in 2009-10 to 12.18

per cent in 2010-11.

i. Capital Formation

1.37 Gross Capital Formation (GCF) in agriculture and

allied sectors increased from ` 86,611 crore in 2005-06 to

` 1,33,377 crore (at 2004-05 prices) in 2009-10. The

GCF in agriculture and allied activities as a proportion to

GDP in the sector increased from 14.57 per cent in

2005-06 to 20.30 per cent in 2009-10. But the GCF in

agriculture and allied activities as a proportion of total

GDP varied between 2.66 to 3.09 per cent during the

same period (Table 1.13).

j. Kisan Credit Card Scheme

1.38 Kisan Credit Card (KCC) scheme introduced in

1998-99 has eased the flow of credit to farmers

(Box 1.3). During 2010-11, 7.26 million KCC were

issued by banks with sanctioned credit limit of

` 43,370 crore as against 9.01 milion cards and credit

limits of ` 34,982 crore during 2009-10. Of the

cumulative 100.93 million credit cards issued, as at end-

March 2011, 45.03 million cards (44.62%) were issued

Table 1.13: Gross Capital Formation in Agriculture

(at 2004-05 prices)

(` crore)

Year Ratio of GCF in Agriculture to (%)

GCF in Total GDP in Total

Agriculture & GCF Agriculture & GDP

Allied Activities Allied Activities

2005-06 86,611 7.3 14.57 2.66

2006-07 90,710 6.6 14.65 2.54

2007-08 1,05,034 6.5 16.03 2.69

2008-09 1,28,659 8.3 19.67 3.09

2009-10(QE) 1,33,377 7.7 20.30 2.97

QE: Quick Estimates Source: Economic Survey 2010-11





13

crore against the claims of ` 29,102 crore. The share

of SCB, SCARDB and RRB stood at ` 18,289 crore,

` 3,810 crore and ` 6,972 crore, respectively.

l. Agricultural Insurance

1.41 With a view to providing indemnity to farmers

in the event of crop failure due to natural calamities,

pests and diseases, the National Agricultural Insurance

Scheme (NAIS) has been in operation since rabi 1999-

2000. This scheme, based on 'Area Approach', is open

to all farmers irrespective of their size of holding and is

being implemented by 25 States and 2 Union

Territories. During the period from rabi 1999-2000 to

kharif 2010, the total claims was to the extent of

` 20,437 crore as against an amount of ` 6,213 crore

paid as permium by farmers. A Modified National

Agricultural Insurance Scheme (MNAIS) has been

notified in 34 districts covering 22 States during rabi

2010-11.

1.42 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 2010, 81 lakh farmers have

been covered under the pilot scheme and

` 639.19 crore has been released as premium for

farmers. The Coconut Palm Insurance Scheme (CPIS)

was launched on a pilot basis in selected areas of eight

States, i.e., Andhra Pradesh, Goa, Karnataka, Kerala,

Maharashtra, Odisha, Tamil Nadu and West Bengal

during 2009-10. As on 30 July 2010, 27,023 farmers

were covered under the scheme.

m. Minimum Support Prices,

Procurement and Stock of Foodgrains

1.43 Minimum Support Price (MSP) for the major

kharif and rabi crops, except cotton, was increased

Table 1.14: Agency-wise, Year-wise Kisan Credit Cards Issued

(As on 31 March 2011)(million)

Year Co-operative Regional Commercial Total

Banks Rural Banks Banks

2006-07 2.29 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 1.74 1.95 5.31 9.01

2010-11 2.81 1.78 2.67* 7.26

Cumulative# 40.70 15.20 45.03 100.93

* Data for commercial banks available up to 30 June 2010

# Since inception of the Scheme, i.e., August 1998

Source: NABARD

by commercial banks, followed by 40.70 million cards

(40.33%) by co-operative banks and 15.20 million cards

(15.05%) by Regional Rural Banks (Table 1.14).

1.39 State-wise analysis of KCC issued as at end-

March 2011, revealed that Uttar Pradesh accounted for

17.9 percent of the total cards issued, followed by

Andhra Pradesh (16.9 per cent), Maharashtra (9 per

cent), Tamil Nadu (6.5 per cent), Karnataka and Madhya

Pradesh (6 per cent each).

k. Agricultural Debt Waiver and Debt Relief

Scheme, 2008

1.40 The Agricultural Debt Waiver and Debt Relief

(ADWDR) Scheme, 2008 for farmers was announced

in the Union Budget 2008-09 to address the

indebtedness of farmers and difficulties of the farming

community, especially small and marginal farmers.

NABARD implemented the Scheme as the nodal

agency for co-operative banks and RRBs. 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.

Out of ` 29,240 crore received under the Agriculture

Debt Waiver and Debt Relief Scheme 2008, the

cumulative disbursements by NABARD was ` 29,071





14

The Government of India had constituted a Task Force (TF)

headed by Shri Umesh Chandra Sarangi, the then

Chairman of NABARD 'to look into the issue of a large

number of farmers, who had taken loans from private

moneylenders, not covered under the loan waiver scheme'.

The TF submitted its report to the Ministry of Agriculture,

Government of India in June 2010. The policy

recommendations of the Task Force are delineated below:

A. Relief measures for farmers not covered by

Agricultural Debt Waiver and Debt Relief

(ADWDR) Scheme, 2008

• Banks and co-operative credit institutions may

encourage farmers, who had defaulted on loans taken

prior to 1 April 1997, to access fresh farm loans.

B. Policy measures for addressing the issues of

farmer indebtedness to moneylenders and on

measures to provide relief to such farmers

• State Governments to continue to make available funds

for interest rebate/refund for timely repayment.

• Interest subvention be made available when loans are

rescheduled.

• A portion of the anticipated interest subvention amount

be parked with banks at the beginning of the year (as

in the case of subsidy oriented development schemes of

GoI) and adjusted at the end of the year to incentivise

banks to reach out to more farmers with crop loans.

• Insurance schemes be redesigned, using satellite

imagery and ground truths, with the panchayat as the

unit for arriving at crop loss.

• Budgetary support for developing weather insurance

products to be provided.

• JLG to be formed on a 'mission mode' so as to enable

the farmers to access collateral free loans from the

banking system.

• State governments to recognise the existence of tenant

farmers, oral lessees, sharecroppers and amend related

laws appropriately.

• All India Debt and Investment Survey (AIDIS) and

Situation Assessment Survey (SAS) be interspersed and

undertaken every 5 years.

• Other cooperatives of marginalised farmers, especially

for the supply of inputs, storage, processing and

marketing and banks be encouraged to lend to these

and other agro processing cooperatives.

• NBFC to be more closely monitored and their loans not

to be automatically considered as 'priority sector' loans.

BOX 1.3

Task Force "to look into the issue of a large number of farmers, who had taken loans from private

moneylenders, not being covered under the loan waiver scheme”: Recommendations

• User owned and not-for profit MFIs may be provided

access to finance from banks.

• Stamp duty on agricultural loan agreements to be

exempted.

• Farm Credit Rating Institution on lines of CIBIL to be

set-up.

C. Kisan Credit Card (KCC):

• KCC be technology enabled, including the conversion

to a smart card with withdrawals and remittances

enabled at ATMs, points of sale, and through hand held

machines. Banks need to have core banking solutions

in place at the earliest, to enable technology to benefit

the farmers.

• The KCC limit be fixed for five years, based on the

bankers assessment of total credit needs of the farmer

for a full year, and that the limit be operated by the

borrower as and when needed, with no sub limits for

kharif and rabi,or for stages of cultivation.

• Each withdrawal under KCC be allowed to be

liquidated in twelve months.

• Automatic renewal of and annual increase on credit

limit to be linked to inflation rate .

• Financial literacy and counselling campaigns to be

undertaken to increase awareness among farmers on

KCC.

• Cards issued to women farmers be reported separately,

and that for women members of SHG as well as of

thrift and credit cooperatives with a good savings

history be provided with specially designed credit cards

by banks, with limits linked to the value of their unpaid

labour on their own farms or on farms of relatives.

D. Legislation regulating loans from private

moneylenders

• Severe deterrent/punishment for non-registration and

for other violations of the law.

• Creation of a quasi-judicial authority for quick

redressal.

• Widening of definition of 'moneylender' to include all

forms of for-profit closely held financial organisations

lending money.

• Any other closely held entity whose lending rates are not

subject to other laws, to be covered by the money lending

law.

• Initiation of action on the grievance of an aggrieved

person and the constitution of a grievance redressal

committee at the district or Loan recovery mechanisms.

• Confidentiality of transactions for registered moneylenders.





15

during 2010-11 over the previous year (Table 1.15).

Maximum increase in the MSP during 2010-11, was

for arhar (30.43%) followed by lentil (20.32%), gram

(19.31%), moong (14.85%), groundnut in shell

(9.52%), sugarcane (7.14%) and common paddy

(5.26%). MSP for jowar, bajra and maize were raised

by ` 40 per quintal.

1.44 The procurement of rice and wheat as on March

1, 2011 (kharif marketing season for rice and rabi

marketing season for wheat) at 22.7 million tonnes

and 22.51 million tonnes, respectively, represents a

decline of (-) 1.3 per cent and (-) 11.30 per cent as

compared to the corresponding date last year. The

stock of foodgrains (rice and wheat) held by the Food

Corporation of India (FCI) and State Agencies as on

January 1, 2011 was 47.1 million tonnes against the

buffer norms including the strategic reserve of 25.0

million tonnes. The off-take of foodgrains (rice and

Table 1.15: Minimum Support Prices for Major Crops

(` per quintal)

Crop 2006-07 2007-08 2008-09 2009-10 2010-11

Kharif

Paddy (Common) 580 ^ 645 ^^ 850 $ 950 $ 1000

Jowar (Hybrid) 540 600 840 840 880

Bajra 540 600 840 840 880

Maize 540 620 840 840 880

Arhar 1410 1550 $$ 2000 2300 3000 *

Moong 1520 1700 $$ 2520 2760 3170 *

Groundnut in shell 1520 1550 2100 2100 2300

Soyabean (black) 900 910 1350 1350 1400

Cotton 1770 1800 2500 # 2500 # 2500 #

Sugarcane@ 80.25 81.18 81.18 129.84 139.12 **

Rabi

Wheat 750 ^^ 1000 1080 1100 1120

Gram 1445 1600 1730 1760 2100

Lentil 1545 1700 1870 1870 2250

Rapeseed/Mustard 1715 1800 1830 1830 1850

^ An additional incentive bonus of ` 40 per quintal was payable on procurement between 1 March 2006 to 31 March 2007

^^An additional incentive bonus of ` 100 per quintal was payable over MSP

$ An additional incentive bonus of ` 50 per quintal was payable over MSP

$$ A bonus of ` 40 per quintal was payable over MSP

* Additional incentive of ` 5 per kg for arhar and moong sold to procurement agencies was payable during the harvest/arrival

period of 2 months

# Staple length (mm) of 24.5-25.5 & micronaire value of 4.3-5.1

@ Statutory Minimum Price (SMP) upto 2008-09; Fair & Remunerative Price (FRP) since 2009-10

** At 9.5 per cent recovery, subject to a premium of ` 1.46 for every 0.1 per cent increase in the recovery above 9.5 per cent

Source: Directorate of Economics & Statistics, GoI





16

wheat) under Targeted Public Distribution System

(TPDS) and other schemes at 25.2 million tonnes

during April-September 2010-11 was 7.69 per cent

higher than that at 23.40 million tonnes during April-

September 2009-10.

n. Micro, Small & Medium Enterprises

1.45 Micro, Small and Medium Enterprises (MSME)

contribute significantly to the economic growth by

being inclusive, employment friendly and promoting

equitable development. The major advantage of the

sector is its employment potential at low capital cost.

The sector manufactures more than 6,000 products,

ranging from traditional to high-tech items. It is

estimated that in terms of value, MSME sector

accounts for about 45 per cent of the manufacturing

output and 40 per cent of the total exports of the

country. As per the 4th Census of the MSME Sector,

there were 28.5 million enterprises producing output

valued at ` 8,80,805 crore and providing employment

to 65.9 million persons during 2008-09. The sector

contributes 8 per cent to the country's GDP. Initiatives

taken for the development of MSME sector include the

implementation of MSMED Act, 2006, reservation of

21 items for exclusive manufacture in micro and small

enterprise sector, dereservation of certain items for

providing opportunities to MSME for technological

upgradation, promotion of exports and achieving

economies of scale and providing competitive edge to

these units under the National Manufacturing

Competitiveness Programme (NMCP).





17

I I

Development and Promotional Initiatives

NABARD continued to support various innovative

initiatives in addition to the Bank's ongoing activities.

Various initiatives and programmes of the Bank

during the year are detailed in this Chapter.

Programmes of the Government of India and the

State Governments, implemented in association with

the banks for the development of agriculture and

rural sectors are also discussed.

Credit Planning

2.2 There are 395 District Development Managers'

(DDM) offices of NABARD across the country. In

addition, 106 districts are tagged to specific DDM

districts to focus on credit planning, development

and promotional activities in these districts.

A. Potential Linked Credit Plans

2.3 In order to provide meaningful link between

development and credit planning for supporting

agriculture and rural development, NABARD prepares

Potential Linked Credit Plans (PLP). During the year,

PLP were prepared for 624 districts in the country to

guide the banks in their credit planning exercise and

infrastructure development for 2011-12. The sector-

wise credit flow projections captured in the PLP were

utilised for arriving at the credit flow target to

agriculture sector and priority sector.

B. Integrated District Plans

2.4 NABARD was involved as a Technical Support

Institution in the preparation of Integrated Development

Plans under Backward Regions Grants Fund in 17

districts covering five states, viz., Andhra Pradesh,

Jharkhand, Maharashtra, Tripura and Uttar Pradesh.

C. State Focus Paper

2.5 State Focus Papers, presenting a comprehensive

picture of potential available in various sectors of the

rural economy, critical infrastructure gaps to be filled

in and linkage support to be provided by various

Government departments, were prepared by the

Regional Offices at the State Level, based on PLP.

State Credit Seminars were organised for discussing

with the officials from State Government departments

and financial institutions to bridge the infrastructure

gaps for facilitating potential credit flow.

Farm Sector

A. Watershed Development

2.6 The objective of developing watersheds is to

significantly mitigate the drought induced distress of

farmers in the area. NABARD anchors four types of

watershed development programmes in the country

covering over 1.70 million hectare. These programmes

are: Indo-German Watershed Development

Programme (IGWDP) in Maharashtra, Andhra

Pradesh, Gujarat and Rajasthan (See Section L),

Participatory Watershed Development Programme

under Watershed Development Fund (WDF) in 15

States, Prime Minister’s package in four States, and

Integrated Watershed Development Programme

(IWDP) in Bihar, supported by the Planning

Commission.

2.7 The Watershed Development Fund was

established in NABARD in 1999-2000 with an initial

corpus of ` 200 crore. The Fund is replenished every

year and was augmented during the year with

` 947.12 crore. The Fund had a balance of

` 1,897.69 crore, as on 31 March 2011.





18

2.8 During the year, 66 watershed projects were

sanctioned, taking the cumulative number of such

projects to 579, covering an area of

4.86 lakh ha. in 14 states, with a total commitment (loan

and grant component) of ` 220.57 crore.

During the year, 45 projects graduated to Full

Implementation Phase (FIP), taking the number of

such projects to 255.

2.9 Under the Prime Minister's Relief package for 31

distressed districts in the four States, viz., Andhra

Pradesh, Karnataka, Kerala and Maharashtra (for

developing 15,000 ha. of watershed annually over two

years in each of these districts), 71,127 ha. were taken

up for implementation during the year, taking the

cumulative area and financial commitment to 9.42

lakh ha. and ` 1,023 crore, respectively.

2.10 The watershed projects are entirely grant based

in distressed districts while the assistance is

grant-cum-loan in non-distressed districts. During the

year, ` 152.26 crore and ` 3.18 crore were disbursed

under watershed projects as grants and loans,

respectively; the cumulative disbursements under these

components were ` 350.03 crore and ` 33.18 crore,

respectively. Major findings of the mid-course

evaluation of a few WDF supported projects are given

in Box 2.1.

2.11 The participatory watershed development

programme being implemented by NABARD under the

Special Plan for Bihar component of Rashtriya Sam

Vikas Yojana (RSVY), aims to develop 80,000 ha. of

wasteland in Aurangabad, Banka, Bhabua, Gaya,

Jamui, Munger, Nawada and Rohtas districts of Bihar

with an allocation of ` 60 crore. Under the

programme, a total of 79 projects in an area of 84,444

ha. had been sanctioned, of which six are at Capacity

Building Phase (CBP) stage and 73 at FIP stage.

During the year, 24 projects graduated to FIP stage. A

sum of ` 20.18 crore was disbursed during the year

and the cumulative disbursement, as on

31 March 2011, stood at ` 34.17 crore.

Box 2.1

Mid-Course Evaluation of Watershed Projects supported under WDF

(a) Chipni-Bandhoni and Lodhwara Watershed

Projects in Chitrakoot District of Uttar Pradesh -

Study by Dhan Foundation

• Gross cropped area increased as fallow land/waste land was

brought under cultivation. Ground water levels during

monsoon rose by 12-18 feet from pre-development work.

• Significant gains in crop yields were observed in bajra/

jowar/pulses (50%), followed by paddy (43%).

• Population of cross bred dairy animals increased from

12 to 37 in Chipni - Bandhoni; in Lodhwara, it was

21 to 57.

(b) Teliki, Nethigutlapalli, Kothapalli, Kosuvaripalli

Watersheds in Andhra Pradesh - Study by Action

for Food Production (AFPRO)

• Area under sweet orange increased from 20 acres to

58 acres.

• Reduction in distress migration due to improved

agricultural production and productivity.

• Agricultural income increased two fold.

(c) Chaitanya, Mabbugutta, GB Thanda, Gramajyoti

Watersheds in AP - Study by Central Research

Institute for Dryland Agriculture (CRIDA )

• Seventy acres of fallow/cultivable wastelands brought

under cultivation during Kharif. Productivity increased

in green gram (36%) & red gram (42%); bengal gram

(45%) & groundnut (18%) during rabi.

• Rabi cropped area increased from 136 ha to 404 ha.

• Milch animal population increased from zero to 294;

area under horticulture increased from 2.50 ha to

16 ha.





19

Box 2.2

Outcome of Village Development Programmes - Phase I

• Ten Essential Areas had been identified to facilitate

development of agriculture and allied sectors, with focus

on crop productivity, storage, processing and marketing

linkages. Towards this end, 6,634 training and

awareness programmes had been organised for the

benefit of 1.80 lakh farmers.

• Promotional interventions covered 1.55 lakh rural

people through training and capacity building, especially

in allied and non-farm sector activities, institution

building through promotion of Farmers’ Club (FC) and

Self-Help Groups (SHG), organising rural

entrepreneurship development programmes, etc.

• Credit related interventions facilitated access to

institutional credit with focus on financial inclusion,

Kisan Credit Card (KCC) scheme and investment in

agriculture sector. Financial inclusion varied from 50% to

100% in the VDP villages.

• Critical infrastructure needs identified during

Participatory Rural Appraisal have been addressed by

ensuring synergy and convergence through 1,921

infrastructure development projects involving a financial

outlay of `193.61 crore.

• Adoption of solar home/street lighting in several villages

under the programme, awareness on environment and

publications in vernacular for the benefit of the village

community.

B. Climate Change Adaptation Project in

Akole & Sangamner Taluka of

Ahmednagar District, Maharashtra

2.12 Ahmednagar, the largest district of Maharashtra,

lies in the direct rain-shadow of Western Ghats and is

vulnerable to frequent droughts. The project, therefore,

seeks to enable vulnerable rural communities in the

Akole and Sangamner taluks of the district, to cope

with the inpact of climate change. The project is

expected to develop a replicable model for Climate

Change Adaptation in semi-arid and rainfed regions of

the country. The project, being the first of its kind to be

considered by NABARD under WDF, involves a total

financial outlay of ` 34.15 crore, with grant assistance

from the Swiss Agency for Development and

Cooperation (SDC) (` 10.80 crore), NABARD (` 20.62

crore) and contributions from villagers (` 2.73 crore).

The Watershed Organisation Trust (WOTR) is the

implementing agency for the project.

C. Village Development Programme

2.13 The Village Development Programme (VDP)

introduced in 2007-08, is meant to fulfil NABARD's

mandate of bringing about integrated rural

development through credit and promotional efforts.

Under the programme, one village in each DDM

district and five villages in each of the Pilot Project for

Integrated Development of Backward Blocks (PPID)

blocks are to be developed in an integrated and

holistic manner. The programme is now being

implemented in 801 villages spread across 25 States,

through 482 Project Implementing Agencies (PIA),

including Non Governmental Organisations (NGO),

Farmers' Clubs (FC) and Krishi Vigyan Kendras (KVK).

The programme was completed in 115 villages and is

under different stages of implementation in 686

villages. The Programme has been upscaled with the

launch of Phase II of the programme (from April

2010), envisaging coverage of 1500 villages. The

outcome of implementing of VDP-I are highlighted in

Box 2.2.

High Density Mango plantation in Watershed of Barakar





20

D. Tribal Development

2.14 The Tribal Development Fund (TDF) was

created in 2004 with a corpus of ` 50 crore to support

integrated tribal development projects with wadi

(a small orchard) as the core component.

These projects provide sustainable livelihood for tribal

families through orchard based farming along with

social welfare measures to improve their living

standards. During the year, financial assistance of

` 373.97 crore (` 355.56 crore as grant and

` 18.41 crore as loan) was sanctioned for 126 projects

benefiting 94,163 tribal families in various states. The

cumulative sanction was `917.60 crore, as on

31 March 2011, covering 2,50,493 families in 317

projects across 24 States/Union Territories (UT).

E. Farm Innovation and Promotion Fund

2.15 The corpus under Farm Innovation and Promotion

Fund (FIPF) has been enhanced to ` 50 crore, from

1 April 2009. During 2010-11, 45 projects were

sanctioned in 15 states, with grant assistance of

` 5.47 crore, The projects cover activities like

(i) innovative participatory guarantee system as a low

cost alternative certification process for organic

products for small and marginal farmers;

(ii) production, distribution and processing of organic

milk; (iii) sustainable upscaling of weather insurance;

(iv) mass propagation of selected species of bamboo

through innovative techniques for rural resource

development; (v) standardisation of planting geometry

and growth stage based fertigation patterns for

commercial cultivation of selected vegetables using

drip irrigation system; (vi) identifying and developing

sustainable strategies for combating twisting malady in

onion; (vii) sustainable initiative for improving

production & productivity of sugarcane; (viii) seed

purification, multiplication and area expansion of

Navara rice; (ix) demonstration and field adaptation of

Phytotron Sugarcane Ripener technology innovation for

quantitative and qualitative improvement in sugarcane

production; (x) commercialisation of Anthurium and

Heliconia; and (xi) promotion of Natueco farming

across various states. Cumulatively, 123 projects were

sanctioned with a financial support of ` 11.65 crore,

of which 51 projects with financial assistance of ` 2.55

crore have been completed. Some of the major

completed projects include (i) promoting commodity

based marketing of agricultural produce on cluster

basis in Uttarakhand; (ii) system of wheat

intensification in Himachal Pradesh, (iii) development

of Bharath Chakra (animal drawn mechanical plough)

in Tamil Nadu; (iv) post- harvest value addition of

medicinal and aromatic crops produced through

dehydration in solar dryers in Uttarakhand;

(v) implementation of Kisan Bandhu Yojana in

Moradabad, Uttar Pradesh; (vi) study of commercial

viability of whole seed corn production of elephant foot

yam in West Bengal; (vii) skill upgradation for small and

marginal farmers through training and empowerment for

production of exotic vegetables in low cost poly-houses

in Tamil Nadu (Box 2.3); (viii) demonstration of Organic

Farming using the Phosphate Rich Organic Manure

technology in Rajasthan; and (ix) protected vegetable

cultivation in Uttarakhand.

Box 2.3

Exotic Vegetables in Low Cost Poly-houses

A project on "Skill Upgradation for Small and Marginal

Farmers for Production of Exotic Vegetables in Low-Cost

Poly- houses" was sanctioned under FIPF to TVS

Educational Society, Chennai. The project was

implemented in Shoolagiri block in Krishnagiri district with

NABARD assistance of ` 6.02 lakh. The major

interventions under the project included construction of

poly-houses, capacity building of farmers on low cost

poly-houses, improved methods of vegetable cultivation,

cultivation of exotic vegetables like coloured capsicum,

broccoli, chinese cabbage, zucchini, lettuce, training on

adoption of organic farming, installation of drip irrigation

system, hand holding support for the farmers on

construction of poly-houses and market and bank linkages.

The impact of the project was visible with increased water

use efficiency through drip, reduction in pest attack by 25-

30%, increase in yields of capsicum and lettuce by 100%

vis-a-vis crops in open condition, reduced labour, off-season

enhanced production, improved quality of the produce

fetching premium prices (5-10 % increase) and capturing

niche markets. The project, which was a demonstrative

model, has trained 30 entrepreneurs (small and marginal

farmers). The project is now being replicated in the states of

Karnataka and Uttarakhand.





21

F. Farmers' Technology Transfer Fund

2.16 Farmers' Technology Transfer Fund (FTTF) has

been augmented to ` 100 crore from 1 April 2010.

During the year, 512 diverse and innovative proposals

for transfer of technology, were sanctioned with grant

assistance of ` 44.97 crore in 27 states. The

cumulative disbursement was ` 33.55 crore. Some of

the major proposals sanctioned were: (i) setting up of

Very Small Aperture Terminal (VSAT) based Village

Resource Centres involving ISRO-VSAT; (ii) food

security and sustainable livelihood by upscaling

System of Rice Intensification (SRI); (iii) creating

sustainable livelihood through organic farming;

(iv) providing Short Messaging Service (SMS) services

to the Farmers' Clubs by Reuters Market Light (RML),

(v) intensive cultivation of vegetables through drip

irrigation system; (vi) demonstration of brackish water

poly-culture technology for rural development;

(vii) transfer of technology to farmers and livelihood

improvement through formation of technology users'

groups and formation of Joint Liability Groups (JLG);

(viii) scientific sericulture; (ix) preparation of web

based interactive packages for selected medicinal

crops; (x) developing organic farming technology and

package of practices for organic production of Navara

rice; and (xi) establishing Farmers' Resource Centre

(FRC).

G. Farmers' Club Programme

2.17 The programme aims to organise farmers to

facilitate accessing credit, extension services,

technology and markets. During the year, 21,903

Farmers' Clubs (FC) were launched, taking the total

number of clubs to 76,708 as on 31 March 2011.

Agency-wise, NGO promoted maximum number of

clubs (13,599), followed by co-operative banks

(2,922), commercial banks (2,733), RRB (2,215), State

Agricultural Universities (SAU)/Krishi Vigyan Kendras

(KVK) [255] and other agencies (179). An analysis of

the region-wise distribution of clubs indicated that the

Central region had the highest share (30.39%),

followed by the Southern (21.87%), Eastern (19.95%),

Western (13.15%), and the Northern (11.39%) regions,

while NER accounted for only 3.25 per cent. During

2010-11, NABARD launched a pilot project aimed at

development of a cadre of farmers from amongst the

members of Farmers' Clubs, trained in the areas of

Technology Transfer, Credit Counselling and Market

Advocacy. As on 31 March 2011, 25 projects had

been sanctioned in 12 states, viz., Arunachal Pradesh,

Bihar, Haryana, Jharkhand, Karnataka, Kerala,

Maharashtra, Odisha, Tamil Nadu, Uttar Pradesh,

Uttarakhand and West Bengal. Other initiatives

included (i) Entering into a Memorandum of

Understanding (MoU) for convergence of Farmers'

Club Programme with the developmental schemes of

Government of Uttar Pradesh and (ii) engaging 432

FC as Business Facilitators (in 13 states) and four FC

as Business Correspondents by banks. As an

Information and Communication Technology (ICT)

initiative, FC are being provided with information on

weather, market prices, crop advisory, etc., through

SMS on mobile phones (29,838 mobiles served till

31 March 2011). Three Farmers' Training and Rural

Development Centres (FTRDC) were provided grant

assistance of ` 1.02 crore under FTTF, as on

31 March 2011.

H. Capacity Building for Adoption of

Technology

2.18 The 'Scheme for Capacity Building for Adoption

of Technology (CAT)' aims at capacity building of

farmers for adopting new/innovative methods of

farming, through training and exposure visits. During

the year, 282 exposure visits for 7,548 farmers were

arranged in collaboration with select research

institutes, KVK and SAU. The areas covered were

vermi-compost, organic farming, tissue culture, nursery

management, off-season hybrid vegetable cultivation,

vegetable production in poly-house, drip irrigation in

medicinal plants, processing of horticulture produce,

milk processing & manufacture of milk products,

poultry farming, scientific cultivation of lac, etc.





22

I. Pilot Project on Augmenting

Productivity of Lead Crops

2.19 NABARD in 2009-10, had launched the 'Pilot

Project on augmenting productivity of lead crops/

activities through adoption of sustainable agricultural

practices'. The yield gap of crops would be bridged

through adoption of sustainable agricultural practices,

cost reduction and value addition, resulting in

improved standards of living for the rural farming

community. The project is to be implemented initially

in 4-6 clusters of five villages per state, proliferating to

600-900 villages at the national level. As on 31 March

2011, 44 projects covering 220 villages were launched

with a financial commitment of ` 15.41 crore.

J. Financing Purchase of Land for

Agriculture Purposes

2.20 The Scheme for "Financing Purchase of Land

for Agriculture Purposes", under implementation since

August 2001, aims to provide credit facility to SF/MF,

share croppers and tenant farmers for purchase of

agriculture land and fallow land with a view to

increasing agricultural production and taking up

diversified activities. During 2010-11, ` 20.55 crore

bank loan was disbursed to 464 borrowers in 7 states

with refinance of ` 18.99 crore.

K. Government Projects

2.21 NABARD continued to implement/coordinate

the following area specific projects of the Government

of India (GoI).

i. Cattle Development Projects

2.22 Cattle Development Projects (CDP) were

sanctioned in 2004-05 by GoI for implementation by

Bharatiya Agro Industries Foundation (BAIF), Pune in

17 districts of Uttar Pradesh and 13 districts of Bihar.

NABARD is the co-ordinating agency and facilitator for

channelising funds, ensuring its utilisation, project

supervision and monitoring. Against a total financial

outlay of ` 27.22 crore, GoI released ` 23.67 crore;

with the utilisation at ` 23.02 crore. While 100 Cattle

Development Centres have been established in each

state, 16 District Dairy Farmers' Associations have

been formed in Uttar Pradesh and 13 in Bihar. As

against a target of 80,000 families to be covered in

each state, a total of 83,938 and 99,230 families were

registered in Uttar Pradesh and Bihar, respectively. The

number of pregnancies confirmed (under the Artificial

Insemination component) was 3,20,296 and 2,51,294

in Uttar Pradesh and Bihar, respectively.

ii. Special Project on Livelihood Based

Development

2.23 The Special Project on Livelihood Based

Development was sanctioned under Swarnjayanti

Gram Swarozgar Yojana (SGSY) by GoI in 2006-07

for implementation in Sultanpur and Rae Bareli

districts of Uttar Pradesh. The project aims at covering

8,000 Below Poverty Line (BPL) families under Multi-

activity Approach for Poverty Alleviation (MAAPA) and

15,000 financially very needy youth under Demand

Driven Skill Development (DDSD) through Livelihood

Advancement Business School (LABS) in the

two districts. The cost of the project is

` 14.97 crore for Sultanpur and ` 14.90 crore for Rae

Bareli. NABARD is the project holder while BAIF and

Dr. Reddy Foundation are the implementing agencies

for the two components. During 2010-11,

` 0.41 crore and ` 0.33 crore were released for

Sultanpur and Rae Bareli districts, respectively, taking

the cumulative disbursement to ` 8.98 crore and

` 7.72 crore.

iii. Dairy and Poultry Venture Capital Funds

2.24 Dairy Venture Capital Fund (DVCF) scheme was

modified as Dairy Entrepreneurship Development

Scheme (DEDS) with effect from 1 September 2010 by

replacing interest free loan with capital subsidy. However,

Poultry Venture Capital Fund (PVCF) continued in the





23

Interest Free Loan mode. During the year, an amount of

` 12 crore was received from the Ministry of Agriculture

(MoA), GoI for DVCF, ` 25.69 crore for PVCF and

` 20.40 crore for DEDS. An amount of ` 27.48 crore

was sanctioned for 2816 units under DVCF, ` 28.57

crore for 342 units under PVCF and ` 9.69 crore for

1978 units under DEDS. The cumulative sanctions as on

31 March 2011 stood at ` 174.39 crore for 18184 units

under DVCF, ` 48.18 crore for 633 units under PVCF,

and ` 9.69 crore for 1978 units under DEDS.

iv. Artificial Groundwater Recharge through

Dugwells

2.25 The programme covered 1155 Blocks/Talukas in

146 districts of seven states, viz., Andhra Pradesh,

Gujarat, Karnataka, Madhya Pradesh, Maharashtra,

Rajasthan and Tamil Nadu, phased over three years, i.e.,

from 2007 to 2010. An estimated 44.54 lakh recharge

structures was envisaged for construction adjacent to

dugwells, at a total cost of ` 1,871.10 crore. Out of this,

the subsidy to be distributed to the farmers/beneficiaries

is ` 1,499.25 crore (Table 2.1). Out of the total funds of

` 1,536.75 crore received from the Ministry of Finance,

GoI, net subsidy [including for IEC (Information,

Education, Communication) activities] released by

NABARD was ` 280.637 crore, for construction of 7.13

lakh Artificial Recharge Structures.

L. Externally Aided Projects

2.26 NABARD received ` 132.27 crore during 2010-11

and disbursed ` 135.76 crore as grant assistance during

the year under the Kreditanstalt für Wiederaufbau (KfW)

supported externally aided projects, which are at various

stages of implementation (Table 2.2).

a. Adivasi Development Programme in

Gujarat and Maharashtra

2.27 The KfW-NABARD-V-Adivasi Development

Programme in Gujarat is being implemented in

Valsad and Dangs districts through BAIF since

1994-95, with an outlay of ` 67.25 crore with

components of mango and cashew nut wadi (small

orchard), soil conservation, water resources

development, women/landless family development

and health. The programme covered 13,663 families

from 162 villages against the target of 10,000

families. A total area of 5,153 ha., was brought

under wadi, against the target of 4,047 ha.. KfW

also sanctioned a grant assistance of € 7 million

(approx. ` 38.15 crore) for Phase II (2006-2014) of

the programme, covering 4,700 families in these

districts. Under this Phase, 5,922 families had been

identified, 2,343 ha., of wadi established and 253

wadi tukadis (group of 8-10 wadi holders) formed,

as on 31 March 2011.

2.28 The KfW NABARD Adivasi Development

Programme in Maharashtra is under implementation

in Nashik and Thane Districts, since 2000, with KfW

assistance of € 14.32 million (` 82.22 crore). The

project covered 13,848 families against the target of

13,000 families and 4,975 ha. of wadi area against

the target of 4,047 ha..

b. Indo-German Watershed Development

Programmes

2.29 The Indo-German Watershed Development

Programmes (IGWDP) introduced in Maharashtra, is

an integrated programme implemented by Village

Watershed Committees (VWC) in association with

NGO for regeneration of natural resources. Phase I

(1990-2000) and Phase II (2001-2007) of the

Table 2.1:

Artificial Groundwater Recharge through dugwells

Sl. State No. of Amount of subsidy

No. Dug Wells for dug well recharge

(lakh) (`crore)

1 Andhra Pradesh 7.37 298.87

2 Gujarat 5.59 189.72

3 Karnataka 1.54 53.62

4 Madhya Pradesh 3.60 123.09

5 Maharashtra 3.28 100.68

6 Rajasthan 10.65 283.07

7 Tamil Nadu 12.51 450.20

Total 44.54 1499.25

Period : 2007-10





24

Table 2.2: Externally Aided on-going Projects

(As on 31 March 2011)

(` lakh)

Sl. Name of the Project External Amount received Disbursements made

No. assistance by NABARD by NABARD

(million) During Cumulative During Cumulative

2010-11 2010-11

1. KfW-NABARD

V-Adivasi Development Programme € 13.29

in Gujarat (Phase I) (+ 1.5 Suppl. 1310.31 8470.94 1108.41 8395.23

i. Grant)

Adivasi Development Programme € 7.00

in Gujarat

(Phase II)

ii. IX-Adivasi Development € 14.32 1685.25 7595.85 1632.35 7576.87

Programme in Maharashtra

iii. Indo-German Watershed € 8.69 1402.14 2434.29 1307.47 2591.02

Development Programme in Andhra Pradesh

iv. Indo-German Watershed Development € 19.94 2785.06 8495.56 3286.12 8683.86

Programme in Maharashtra (Phase III)

v. Indo-German Watershed € 9.20 346.06 789.91 394.59 816.87

Development Programme in Gujarat

vi. Indo-German Watershed € 11.00 230.84 642.12 418.70 872.70

Development Programme in Rajasthan

vii. KfW-Sewa Bank Project € 4.09 266.73 960.74 264.06 951.13

2. KfW-Umbrella Programme for Natural Resources Management (UPNRM)

i Loan FC Loan : 4738.86 5411.240 4765.454 6197.94

€ 15.00

ii Grant FC Grant : 82.484 97.122 80.804 108.414

€ 1.4

iii Grant for Accompanying Measures Grant for 286.837 373.410 263.726 357.852

Accompanying Measures :

€ 3.00

iv Technical Component (TC) FA of TC from GIZ 92.520 92.520 54.058 54.058

Assistance from GIZ € 1.50 #

Total 13227.091 35363.702 13575.742 36605.944

# Part of € 8.5 million total TC grant support from GIZ FC: Financial Co-operation

Sewa: Self Employed Women’s Association

programme were successfully completed, covering

95 watersheds on 1.02 lakh ha. Under Phase III

(2005-12), 114 projects have been sanctioned since

January 2005. Of these, 10 projects were completed,

100 watersheds reached FIP and four projects were

terminated.

c. Umbrella Programme on Natural

Resources Management

2.30 The Umbrella Programme on Natural Resources

Management (UPNRM) is a loan-cum-grant based

Indo-German programme being implemented since

2007-08 by NABARD in collaboration with KfW and





25

Efficient Irrigation System in Doddaballapur Taluk

of Bengaluru (Rural) District of Karnataka

The project is based on a pilot developed by the Bangalore

Electric Supply Company (BESCOM) in partnership with

the US Agency for International Development (USAID/

India) wherein, the energy service company, Enzen Global

Solutions Private Limited (ENZEN) has been engaged to

replace the IP sets in 37 villages spread over five Gram

Panchayats, viz., Melekote, Thubugere, Konaghatta,

Rajaghatta & Hadonahalli in Doddaballapur Taluka of

Bangalore (Rural) district of Karnataka.

Under UPNRM, NABARD sanctioned a financial assistance

of ` 3.28 crore [` 3.08 crore as term loan for replacing 647

irrigation pump sets and ` 0.20 crore as grant for

Agriculture Demand Side Management (AgDSM)] to

ENZEN.

The project being implemented in PPP mode envisages a

return for ENZEN and BESCOM in the ratio of 75:25,

respectively, from the revenue generated out of energy

savings. In this model, the farmer does not have to pay

anything for getting his inefficient pump replaced with a

New High Energy Efficiency Pump Set (NHEP). ENZEN

will be paid by BESCOM, through the energy savings

achieved. ENZEN will also benefit through the carbon

credits earned under the Clean Development Mechanism

(CDM) to ensure return on its investment in NHEP. On

an average, the project will generate an assured income

of ` 122.44 lakh (75% of the same to accrue to ENZEN)

out of energy savings from 647 pumpsets and the

income from Certified Emission Reductions (CER) from

the third year onwards, will be to the tune of ` 66.79

lakh per year.

Box 2.4

UPNRM Projects - A Success Story

GIZ (formerly GTZ). It aims at boosting rural

livelihoods by supporting community managed

sustainable natural resource management projects. The

total fund envisaged under the programme is € 30.90

million (€ 19.40 million from KfW, € 8.50 million

from GIZ and € 3.00 million from NABARD). During

the year, 34 projects were sanctioned, with a financial

assistance of ` 76.36 crore (` 71.72 crore as loan and

` 4.64 crore as grant). Cumulatively, 64 projects in

13 states and one UT (A & N Islands) have been

sanctioned financial assistance of ` 155.75 crore

(` 146.04 crore as loan and ` 9.71 crore as grant), as on

31 March 2011. A success story under UPNRM is given in

Box 2.4. An amount of ` 50.32 crore (` 47.65 crore as

loan and ` 2.67 crore as grant) was disbursed during the

year, taking cumulative disbursements to ` 65.87 crore

(` 61.98 crore as loan and ` 3.89 crore as grant) as

on 31 March 2011. An amount of ` 47.39 crore as

Financial Co-operation (FC) loan, ` 0.82 crore as FC

grant, ` 2.87 crore as Accompanying Measures (AM)

from KfW and ` 0.93 crore from GIZ under Technical

Component (TC) were received during the year. The

cumulative FC Loan, FC grant and AM received from

KfW was ` 54.11 crore, ` 0.47 crore and ` 3.73 crore,

respectively while ` 0.92 crore was received as TC from GIZ.

M. New Initiatives

(a) System of Rice Intensification

2.31 System of Rice Intensification (SRI) is a

combination of simple agronomic and management

practices that improve productivity. A project of 150

Model Units covering 28,800 ha and 84,000 farmers,

was launched in June 2010 in 13 identified states for

implementation over a period of three years, with total

financial outlay of ` 25.68 crore. A total of 158 Model

Units with a financial outlay of ` 22.35 crore was

sanctioned, against which an amount of ` 5.83 crore

was disbursed during the year. The Deptartment of

Agriculture & Cooperation, MoA, GoI has agreed for

financial convergence of SRI promotion programme

with National Food Security Mission (NFSM)

programme implemented in identified NFSM-Rice

districts.





26

Box 2.5

Salient features of Natueco Farming (10 Gunta Model)

• Adoption of zero tillage with simultaneous cultivation

of a combination of seasonal and perennial crops.

• High density planting and canopy management

through pruning (roots and foliage) for optimising yield

• In-situ incorporation of entire crop residue and other

biomass including weeds, which shall form the source

of nutrients on decomposing.

• Watering of the plant to maintain moisture instead of

irrigating the field

• Border planting with herbs and tree species of

commercial use

• Zero pesticide application, relying on pest and disease

management by Nature

• Preference for local varieties of food and non food

crops

• Total involvement of the family in production process

(b) Pilot Project on Natueco Farming

2.32 Keeping in view the opportunities for replicating

the Natueco Farming model, especially among small

and marginal farmers, pilot projects involving a

financial outlay of ` 2.29 crore were launched in six

States, viz., Andhra Pradesh, Gujarat, Madhya

Pradesh, Maharashtra, Tamil Nadu and West Bengal.

Seventeen projects with a financial commitment of

` 0.87 crore were sanctioned. The salient features of

Natueco farming are given in Box 2.5.

(c) Sustainable Sugarcane Initiatives

2.33 Sustainable Sugarcane Initiatives (SSI), developed

under ICRISAT-WWF Project for promoting farm-based

methods to improve water productivity, aims at providing

practical solutions to farmers in improving the

productivity of land, water and labour. In addition, it

reduces crop duration and provides factories a much

longer crushing season, hence increasing employment. A

proposal for promoting SSI technology was sanctioned

by Karnataka Regional Office under FIPF, involving an

outlay of ` 9.35 lakh during the year. Four workshops

were also organised in Karnataka, Tamil Nadu and

Maharashtra during the year, to understand the

operational issues, needs of the farmers and working out

effective linkages among the stakeholders. Based on the

feedback, necessary guidelines are being framed for

upscaling the programme.

Rural Non-Farm Sector

A. NABARD-SDC Rural Innovation

Fund

2.34 NABARD, in collaboration with the SDC

constituted the Rural Innovation Fund (RIF) from 1

October 2005, with a corpus of ` 140 crore. The

setting up of the Fund is intended to support

innovative and risk mitigating experiments in farm,

non-farm and micro-finance sectors. During 2010-11,

122 innovative projects were sanctioned, taking the

cumulative number to 375, as at end-March 2011. An

amount of ` 10.42 crore (including supplementary

assistance to projects sanctioned earlier) was sanctioned

during the year taking the cumulative sanctions, till 31

March 2011, to ` 49.28 crore, against which an

amount of ` 14.42 crore was disbursed during the year,

taking the cumulative disbursement to ` 32.99 crore.

Sixty-two projects had been successfully completed

and 34 projects were in advanced stages of

implementation.

B. Strengthening of Rural Haats

2.35 Under the 'Scheme for Strengthening of Rural

Haats' introduced in 1999, grant support of

` 5.74 crore was sanctioned to 118 rural haats during

2010-11. Cumulative grant assistance of

` 13.19 crore has been sanctioned for 307 rural haats

across 23 States.





27

C. Cluster Development

2.36 NABARD has been implementing the Cluster

Development Programme under the National

Programme on Rural Industrialisation (NPRI) from

1999-2000. The programme encompasses a

comprehensive strategy aimed at holistic development

of clusters and raising income levels and living

standards of artisans through various planned

interventions. A total of 113 clusters across 84 districts

in 22 States had been approved, as on 31 March

2011. During the year, four programmes under

participatory clusters and two under intensive clusters

were approved. As many as 20 clusters are being

supported in the North Eastern Region alone and a

large number of clusters are being promoted in less

developed states like Chhattisgarh, Jharkhand, Odisha

and Madhya Pradesh. In order to ensure smooth

implementation and monitoring of the initiatives,

capacity building programmes were organised for the

participants from banks, government departments/

NGO/ VA etc. During 2010-11, four on-location cluster

workshops were conducted, taking the total number of

such programmes to 29.

D. Rural Entrepreneurship Developmentand Skill Development Programmes

2.37 NABARD has been supporting Rural

Entrepreneurship Development Programmes (REDP)

and Skill Development Programmes (SDP), since early

nineties, as proven tools for generating self-

employment opportunities in rural areas. During the

year, 3,327 REDP/ SDP were supported with financial

assistance of ` 12.34 crore. Cumulatively, 17,859

REDP/SDP have been supported with grant of

` 83.35 crore. This included support extended to

RUDSETI and other similar institutes for incurring

capital and recurring expenditure.

E. Women Empowerment Programme

2.38 As on 31 March 2011, 201 Women

Development Cells (WDC) were supported to address

gender discrimination in credit and support services.

A sum of ` 0.37 crore was disbursed for the purpose.

Under Assistance to Rural Women in Non-Farm

Development (ARWIND) scheme, grant support of

` 0.36 crore was released.

F. Marketing

2.39 During 2010-11, 320 marketing events/

exhibitions, were supported with a grant assistance of

` 2.59 crore. The Bank continued to co-sponsor

SARAS Mahalaxmi Fair wherein 130 artisans and 61

agencies from 24 States participated in the 15-day

long exhibition, which helped the artisans to realise

sales of over ` 0.75 crore.

G. Swarojgar Credit Card Scheme

2.40 During the year, 1.20 lakh Swarojgar Credit

Cards (SCC) having credit limit of ` 514.26 crore were

issued for facilitating hassle-free credit for investment

and working capital requirements of small/micro-

entrepreneurs. The cumulative total of SCC was 12.12

lakh involving credit limit of ` 4,949.51 crore.REDP training in in tailoring in NER





28

2.41 The 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, were set up in NABARD during

2007-08, as recommended by the Committee on

Financial Inclusion (Chairman : Dr. C. Rangarajan).

The corpus of each Fund is ` 500 crore, to be

contributed by the GoI, The Reserve Bank of India

(RBI) and NABARD in the ratio of 40:40:20 in a

phased manner over five years. GoI and NABARD

made initial contributions of ` 10 crore and ` 5 crore,

respectively, to each of these Funds. GoI again

contributed ` 10 crore for 2009-10 and 2010-11 to each

of the Funds. As on 31 March 2011, the contribution to

this corpus by GoI stood at ` 30 crore in each of the

Funds, and by NABARD at ` 30 crore (FIF) and ` 40

crore (FITF). The RBI has decided to contribute to these

Funds on a reimbursement basis. During the year 2010-

11, RBI contributed ` 3.46 crore (` 3.05 crore towards

FIF and ` 0.41 crore towards FITF), being its share of

expenditure incurred upto July 2009.

A. Policy Initiatives

2.42 The following policy inititatives were taken

during the year:

i. The capacity building component for authorised

functionaries of well-run SHG, to be identified by

banks, would be supported under FIF. Business

Correspondents (BC), being agents of banks, are

expected to work at the 'last mile'. As such

remuneration to BC is to be taken care of by the

banks themselves. Also, pilot projects of Farmers'

Clubs (FC) as Business Facilitator (BF) and SHG

as BC/BF in one district have been extended to all

villages having 2000 and more population in the

command area of RRB. Financial support of

` 3,000 per BC or Customer Service Provider

(CSP) for three-days training at ` 1,000 per day

through Financial Information Network &

Operations Ltd. (FINO)-Fintech Foundation would

be available and the cost would be reimbursed

through the bank engaging the BC/CSP.

ii. The Primary Agricultural Credit Societies (PACS)

have been permitted to function as BC of

Commercial Banks (CB) and RRB, as per RBI

guidelines. However, PACS cannot function as BC

of co-operative banks, till necessary guidelines are

issued by RBI.

iii. Support is being made available from FIF for

producing and telecasting financial literacy

programmes in Hindi, through Doordarshan, in six

states, viz., Bihar, Chhattisgarh, Jharkhand,

Madhya Pradesh, Rajasthan and Uttar Pradesh.

The production and telecast of financial literacy

programmes in regional languages is also

envisaged based on the experience with

Doordarshan. Support is being extended to

Agricultural Finance Corporation Ltd. (AFC) for

promoting financial literacy among rural adults in

West Bengal through SHG and FC.

iv. NABARD is working with the Indian School of

Microfinance for Women (ISMW) and has

identified state level partners on modalities for

alliance, monitoring systems and impact evaluation

mechanism, for formulating a National Alliance on

Financial Literacy.

Financial Inclusion

Financial Literacy Camp





29

v. As hardship areas need special attention, it has

been decided to extend financial support to all the

banks from FIF & FITF at 100 per cent the project

outlay for eligible activities in the North Eastern

Region, Andaman & Nicobar Islands, Chhattisgarh,

Himachal Pradesh, Jammu & Kashmir, Jharkhand,

Sikkim and Uttarakhand. Ten districts, viz.,

[Khammam (Andhra Pradesh); Bokaro, East

Singhbum, Latehar, West Singhbum (Jharkhand);

Deogarh, Gajapati, Malkangiri, Rayagada and

Sambalpur (Odisha)], which are considered

disturbed but do not figure in the list of 256

critically excluded districts are to be given the

same priority as the 256 critically excluded

districts. The existing quantum of support to CB,

RRB and Cooperatives has been enhanced to 60,

80 and 90 per cent, respectively, of the project

outlay. Fifty per cent of the sanctioned amount will

be released in advance to meet the start-up

expenses and to hasten the pace of

implementation.

vi. A simplified procedure linking the support (under

FITF) to cost of Smart Cards or Point of Sale (POS)

devices, at rates approved by the Advisory Board,

was introduced for RRB and Cooperatives, replacing

the present approach of Viability Gap Funding. This

was also extended to CB in the North Eastern

Region, Hilly Regions and those in the 256 excluded

and 10 disturbed districts.

vii. For implementing Core Banking Solutions (CBS) in

28 weak RRB in the first phase, support from FITF

will be to the extent of 40 per cent of the total

cost, with the balance to be met by the sponsor

banks and the RRB in the ratio of 50:10,

respectively. RRB will be extended support for

Information and Communications Technology

(ICT) solutions in all villages having population of

above 2,000 and falling in the command area of

the RRB.

viii. Support to Lead Banks to establish Financial

Literacy and Credit Counselling Centres (FLCC) is

extended, subject to certain conditions.

ix. The following major proposals were sanctioned

during the year under FIF and FITF: (i) project on

Micro-Pension Model among SHG members and

the Rural Poor, submitted by Invest India Micro-

Pension Services (IIMPS), (ii) project for promoting

finger print interoperability to IIT, Kanpur and (iii)

installation of 25 ATM by Langpi Dehangi Rural

Bank, Assam. The project submitted by Pension

Fund Regulatory and Development Authority

(PFRDA) and Dept. of Financial Services on

'Swavalamban Scheme' under New Pension System

(NPS) was accorded “in-principle” approval.

B. Fund Utilisation

2.43 An amount of ` 19 crore under FIF and ` 101.10

crore under FITF were sanctioned towards Financial

Inclusion during the year. As against the targets of

` 22 crore and ` 28 crore to be disbursed, respectively

under FIF and FITF during 2010-11, ` 9.21 crore and

` 54 crore were disbursed under the funds (Table 2.3).

The cumulative sanction as on 31 March 2011, was

` 38.66 crore for 150 projects under FIF and ` 122.41

crore for 55 projects under FITF.

Table 2.3: Funds Utilisation - FIF and FITF

(1 April 2010 to 31 March 2011)

(` crore)

Name of Target Commercial RRB Cooperative Others TOTAL

the Fund for 2010-11 Banks Banks

D S D S D S D S D S D

FIF 22.00 0.15 0.70 2.31 1.52 0.22 0.24 16.32 6.75 19.00 9.21

FITF 28.00 2.72 0.41 97.75 52.27 0.09 1.24 0.54 0.08 101.10 54.00

TOTAL 50.00 2.87 1.11 100.06 53.79 0.31 1.48 16.86 6.83 120.10 63.21

S: Sanctioned D: Disbursed





30

C. NABARD-UNDP Collaboration for

Financial Inclusion

2.44 UNDP-NABARD Financial Inclusion Fund has

been established in NABARD to provide better access

to financial products and services for reducing risks

and enhancing livelihood for the poor, especially the

SC and ST, minorities and the displaced. Under the

collaboration, ` 173.22 lakh had been utilised during

2010-11 for activities conducted by NABARD in

seven focus states; Bihar, Chhattisgarh, Jharkhand,

Madhya Pradesh, Odisha, Rajasthan and Uttar Pradesh.

The Annual Work Plan for 2011 (1 January to

31 December 2011) for NABARD is of the order of

` 228.55 lakh.

Micro-Finance

2.45 NABARD is instrumental in facilitating various

activities under micro-finance sector at the ground

level, involving all partners, viz., NGO, bankers,

socially spirited individuals, other formal and informal

entities and even government functionaries. This is

done through training and capacity building of

partners, promotional grant assistance to Self Help

Promoting Institutions (SHPI), Revolving Fund

Assistance (RFA) to Microfinance Institutions (MFI),

equity/Capital Support (CS) to MFI to supplement their

financial resources and 100 per cent refinance against

bank loans for micro-finance activities.

2.46 As on 31 March 2010, there were more than

69.53 lakh savings-linked Self Help Group (SHG) and

more than 48.51 lakh credit-linked SHG covering 9.7

crore poor households under the micro-finance

programme. As on 31 March 2010, the share of bank

loans outstanding to SHG, as a percentage to loans

outstanding to weaker sections by scheduled commercial

banks, improved marginally to 16.3 per cent from 15.8

per cent in the previous year. The progress of the micro-

finance programme is given in Table 2.4.

A. Micro-finance Development and

Equity Fund

2.47 The Micro-finance Development and Equity Fund

(MFDEF) is being utilised for promotion of various

micro-finance activities such as formation and linkage of

SHG through SHPI, training and capacity building of

stake holders, capital and soft loan assistance to MFI,

livelihood propagation, studies, documentation, etc.

During 2010-11, ` 47.38 crore was released, of which

` 29.95 crore was grant support for promotional

activities and ` 17.43 crore for CS/ RFA to MFI, as

against ` 20.49 crore and ` 60.42 crore, respectively,

in the previous year.

Table 2.4: Progress of the Micro-Finance Programme

(As on 31 March)

(` crore)

Sl. Particulars Self-Help Groups Micro-Finance Institutions (MFI)*

No. 2009 2010 2009 2010#

Number Amount Number Amount Number Amount Number Amount

1 Loans disbursed 16,09,586 12,253.51 15,86,822 14,453.30 581 3732.33 779 10728.49

during the year (2,64,653) (2,015.22) (2,67,403) (2,198.00) [88] [2665.75]

2 Loans Outstanding 42,24,338 22,679.84 48,51,356 28,038.28 1915 5009.09 1659 13955.74

(9,76,887) (5,861.73) (12,45,394) (6,251.08) [146] [3808.20]

3 Savings Accounts 61,21,147 5,545.62 69,53,250 6,198.71 – – – –

with Banks (15,05,581) (1,563.39) (16,93,910) (1,292.62)

Figures in parentheses indicate the share of SHG covered under SGSY

* : Actual Number of MFI provided with bank loans would be lower, as several MFI availed loans from more than one bank

# : Figures in parentheses indicate the assistance of SIDBI to MFI





31

Table 2.5: Grant Assistance Extended to various Partners in SHG-Bank Linkage Programme


(` lakh)

Sanctions during the year Cumulative Sanctions Cumulative Progress

Agency No. Amount No of No. Amount No. of Amount SHG SHG

SHG SHG released formed linked

DCCB 6 112.95 7850 108 793.31 66955 287.22 47203 31454

RRB 3 16.00 1350 120 445.44 49335 193.05 55548 36610

NGO 223 3601.03 69165 2847 12626.84 414338 4471.38 268791 175080

FC 47 12.62 1085 807 82.43 7628 73.68 17321 9642

IRV 3 43.92 2440 71 728.38 42923 80.97 12208 6749

Total 282 3786.52 81890 3953 14622.40 581179 5106.30 401071 259535

B. Support to Partner Agencies

2.48 NABARD continued to extend grant support to

NGO, RRB, DCCB, FC and Individual Rural Volunteers

(IRV) for promoting and nurturing quality SHG. New

SHPI were identified even while continuing support to

existing ones. During the year, grant assistance of

` 37.86 crore was sanctioned to various agencies for

promoting and credit linking 81,890 groups, taking the

cumulative assistance sanctioned to ` 146.22 crore for

5.81 lakh groups (Table 2.5). As on 31 March 2011, an

amount of ` 51.06 crore was released resulting in

formation of 4.01 lakh SHG. The Number of SHG

credit linked during the year was 2.60 lakh.

C. Capacity Building of Partner

Agencies

2.49 In order to fine tune the strategies for

up-scaling support to the micro-finance sector,

NABARD conducted awareness creation and

sensitisation programmes and arranged exposure visits

for SHG members, NGO, bankers, trainers, Panchayat

Raj Institution (PRI) representatives, NABARD officials,

Government Officials and micro-entrepreneurs,

throughout the year, entailing an expenditure of

` 10.08 crore during the year, as against ` 9.93 crore

in the previous year.

D. Support to Micro-Finance Institutions

(i) Support to banks and MFI for rating

2.50 NABARD continued to provide grant assistance

to CB and RRB for getting the MFI rated by accredited

rating agencies (CRISIL, M-CRIL, ICRA, CARE and

Planet Finance). During the year, rating support of

` 17.66 lakh was provided to 14 agencies as against

` 15.83 lakh to 13 agencies during the previous year.

(ii) Capital Support and Revolving Fund

Assistance to MFI

2.51 The RFA is provided to MFI, on a selective

basis, for on-lending to the unreached poor. During the

year, CS of ` 2.53 crore was sanctioned to nine agencies,

taking the cumulative support to ` 27.40 crore for 41

agencies. During the year, RFA amounting to ` 15.18

crore was sanctioned to 20 agencies; the cumulative RFA

sanctioned was ` 99.33 crore for 48 agencies.

E. Special Initiatives in Backward

Region

(i) Rajiv Gandhi Mahila Vikas Pariyojana

2.52 NABARD continued to support the Rajiv Gandhi

Mahila Vikas Pariyojana (RGMVP), a special initiative

of the Rajiv Gandhi Charitable Trust (RGCT), for

promotion, credit linkage and federating of SHG in

select districts of UP, in association with participating

banks and implementing NGO. As on 31 March 2011,

25,571 SHG have been promoted, of which 14,979

have been credit linked. In addition, 951 Cluster Level

Federations and 26 Block Level Federations have been

formed.





32

Box 2.6

Dalbandhus of Tripura

Dalbandhus are the backbone of the SHG movement in

Tripura. They are socially motivated community resource

persons, working for the betterment of the standard of

living of the poor. They are engaged by Block Panchayats

in consultation with District Rural Development Agency

(DRDA) under the Tripura State Support Project on SHG

(TSSPS) and Swarnjayanti Gram Swarozgar Yojana

(SGSY) to form and nurture SHG. A dalbandhu is

expected to form and nurture maximum 50 SHG in three

years. At present there are 275 dalbandhus covering four

districts of Tripura State. The tasks handled by

dalbandhus include formation of SHG, maintenance of

books of accounts, capacity building, grading of SHG and

maintenance of SHG data. They are provided a fixed

remuneration of ` 1,300 per month plus ` 500 towards

TA/DA. Under the TSSPS, dalbandhus are provided

incentives of ` 10 per SHG per month for a period of first

24 months for maintenance of books of accounts, ` 50 for

formation of new SHG and ` 50 for first time credit

linkage and ` 100 for repayment of first loan by SHG.

NABARD, as a project partner under TSSPS, has

undertaken the task of Capacity Building of Dalbandhus.

(ii) Priyadarshini Project

2.53 The Programme for 'Rural Women

Empowerment and Livelihood in Mid-Gangetic Plains'

called "Priyadarshini" envisages holistic empowerment

of 1,08,000 poor women and adolescent girls through

formation of 7,200 SHG. 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, with a

project outlay of US $ 32.73 million is jointly funded

by the International Fund for Agriculture Development

(IFAD) and the GoI to the extent of US $ 30 million

and US $ 2.73 million, respectively. During the year,

the process of engagement of Resource NGO and Field

NGO and establishment of Programme Implementing

Units was completed.

F. Scaling-up of Micro-Finance

Programme: Special Initiatives

(i) Financing of Joint Liability Groups

2.54 Exposure visits for Joint Liability Groups (JLG)

for senior officers of the Bank were arranged during

the year, in the districts of Alappuzha (Kerala), Vellore,

Tiruvannamalai (Tamilnadu) and Mysore (Karnataka).

An amount of ` 24.74 crore was sanctioned as grant

for promotion of 1.25 lakh JLG across the country till

31 March 2011. During the year, banks disbursed a

loan of ` 659.70 crore to 85,766 JLG taking the

cumulative loan disbursed to ` 1,145.29 crore for

1,41,045 JLG.

(ii) Micro-Enterprise Development

Programme

2.55 NABARD had launched the Micro-Enterprise

Development Programme (MEDP) during 2005-06 for

skill upgradation and development of sustainable

livelihoods/venturing into micro-enterprises by

members of matured SHG. During the year, 1,606

MEDP were conducted for 37,138 members on

various location-specific farm, non-farm and service

sector activities. Cumulatively, 4,449 MEDP had been

conducted for 1,08,656 participants.

G. State Specific Support in North

East Region

2.56 NABARD continued to support the project

sanctioned to the Government of Arunachal Pradesh

for implementing 'Micro-Finance Vision 2011'.

The project involves promoting and credit linking of

1650 SHG at a cost of ` 39.15 lakh. An amount of

` 9.49 lakh has been released so far. Further, an

amount of ` 33.66 lakh was also sanctioned to the

Essomi Foundation Trust for setting-up a Resource

Centre at Itanagar for providing policy, operational

inputs, capability support and marketing linkages

among groups. NABARD has released ` 5.452 lakh to

the Trust up to 31 March 2011. NABARD also provided

technical support to Tripura State Support Project on SHG.

The project is being implemented by the Government of

Tripura through the 'Dalbandhus' also (Box 2.6). As on

31 March 2011, 34,588 SHG have been promoted,

which includes groups promoted by Dalbandhus.





33

H. Pilot Projects

2.57 In order 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

2.58 The results of SHG-Post Office Linkage

Programme in Tamil Nadu have been very

encouraging. The project utilises the vast network of

Post Offices in rural areas for disbursement of credit to

the rural poor, on an agency basis. NABARD has

sanctioned an additional ` 200 lakh RFA to India Post

for onward lending to SHG. A total of 2,819 SHG

have opened zero interest savings accounts, of which

1,219 SHG have been credit linked by Post Offices,

with loans amounting to ` 3.36 crore, as on 31 March

2011. The project is also being implemented in

Meghalaya; RFA of ` 5 lakh for on-lending to 50 SHG

in East Khasi Hills was sanctioned to India Post.

J. Other Developments

(i) NABARD GIZ Study - Remittances

2.59 NABARD in association with GIZ conducted a

study on 'Remittance Needs in India', which confirmed

the magnitude and significance of the remittance issue

and identified important points for the way forward.

NABARD entered into an agreement on joint technical

cooperation within the framework of the ongoing Rural

Financial Institutions Programme (RFIP), with

Remittances and Payments System being an additional

component. The German Government had committed

• 5 million to this new component, subject to the

positive outcome of a joint appraisal for identifying the

concept, deliverables and important institutional

arrangements for the envisaged component. The

appraisal was launched in Odisha-Andhra Pradesh

Corridor, Uttar Pradesh-Mumbai Corridor, Maharashtra

Intra-state Corridor and Rajasthan-Gujarat Corridor.

The team also studied the payment system in West

Bengal. The Report of the Joint Appraisal is to be

presented to GoI and RBI.

(ii) NABARD Financial Services Ltd.

2.60 Karnataka Agriculture Development Finance

Company Ltd. (KADFC) was restructured into an MFI,

viz., NABARD Financial Services Ltd. (NABFINS),

during 2007, to further the promotion of Micro-finance

Sector. The major stakeholder is NABARD, with other

shareholders being, Government of Karnataka, Canara

Bank, Federal Bank and Dhanalakshmi Bank.

NABFINS started its lending operations in November

2009. During 2010-11, it mobilised share capital to

the extent of ` 9.70 crore, taking the total share capital

to ` 16.01 crore. Direct lending to SHG was started in

January 2010. During 2010-11, 2019 groups

disbursed an amount of ` 50.64 crore through 31 BC.

In addition, disbursements to the extent of

` 1.50 crore were made to MFI and Federations,

taking the aggregate disbursements during the year to

` 52.14 crore. The cumulative number of loanee SHG

was 2,044, as at end March 2011. All the processes,

viz., grading of groups, acceptance of loan

applications, disbursements, collection of repayments

are done at the doorsteps of the SHG. Further,

NABFINS follows a client friendly and low cost model

and the lending rate of SHG has been kept at an

annual rate of 12 per cent on reducing balance

method.Women members of SHG of Meghalaya engaged in candle making





34

(iii) Centre for Micro-finance Research

2.61 The Centre for Micro-finance Research (CMR)

established by NABARD in BIRD in 2008 and four

sub-centres in Guwahati, Patna, Chennai & Jaipur

continued to conduct research on various themes of

micro-finance across the country, for bringing out

policy initiatives that would improve the design and

delivery of various micro-finance products. The CMR

brought out two issues of its half-yearly journal

'The Micro-finance Review' during the year. Grant

assistance of ` 153.18 lakh was released by NABARD

during the year to CMR, taking the cumulative

assistance to ` 347.36 lakh. The sub-centres of CMR

in Guwahati, Patna, Chennai and Jaipur undertook

research on 27 prioritised themes, of which, six

research studies were completed and four reports

published/uploaded on BIRD's website for the benefit

of all stakeholders.

(iv) APRACA Centre of Excellence

2.62 The APRACA Centre of Excellence (ACE) in

Linkage Banking set up in CMR as a leading centre of

knowledge in Linkage Banking, prepared a training

manual on SHG-Bank Linkage Programme (SBLP), for

use in the training programmes of APRACA member-

countries. During the year, a proposal for Pilot-testing

of SHG-Bank Linkage in Cambodia was prepared and

submitted to APRACA.

NABARD Consultancy Services

2.63 NABARD Consultancy Services Pvt. Ltd.

(Nabcons), the wholly owned subsidiary of NABARD,

provides professional consultancy service in

agriculture, allied activities and rural development to

GoI, State Governments, CB, cooperative institutions,

corporates, NGO, international organisations and other

clients.

A. Financial Achievements

2.64 As against the target of contracting and

executing assignments of ` 25 crore and ` 20 crore,

respectively, during 2010-11, Nabcons achieved

` 24.13 crore and ` 16.65 crore, respectively. During

2010-11, the company earned ` 14.81 crore as

professional fees on assignments executed, ` 0.72 crore

as commission from mutual fund distribution and

` 1.76 crore as interest on investments. The Profit

before Tax was ` 8.74 crore as against ` 6.65 crore

during the previous year and net Profit after Tax was

` 5.80 crore as against ` 4.33 crore during the

previous year. The company has targeted to achieve a

business of ` 100 crore in the next three years.

Accordingly, the company has fixed a business target of

contracting and executing assignments of ` 40 crore

and ` 30 crore, respectively for the year 2011-12.

B. Business Highlights

2.65 During the current year, Nabcons has

significantlly diversified its business. It entered into

new areas of business, viz., development of web based

MIS for various State Government Programmes,

monitoring of various infrastructure projects in

different states adjoining the international borders of

the country under the Border Area Development

Programme (BADP). Nabcons also conducted an

evaluation study of the scheme "Monitoring of

Pesticide Residue at National Level" for MoA, GoI.

The company has emerged as a major partner of NER

States in third party monitoring of infrastructure

projects and preparation of Detailed Project Reports

(DPR) for various development initiatives of State

Governments. It prepared DPR for two clusters under

New Land Use Policy (NLUP) in Mizoram. The

company also submitted MPLADS reports of 55

districts to the Ministry of Statistics and Programme

Implementation (MoSPI), GoI.





35

2.66 The Research and Development (R&D) Fund,

set up in NABARD in 1982-83, provides grant support

to select agencies for promoting applied research

through projects/studies, training and upgrading skills

of personnel of client institutions and disseminating

research findings. The corpus of the Fund has been

pegged at ` 50 crore since 2004-05, with the

expenditure incurred being replenished every year

through appropriation of profits.

A. Utilisation

2.67 During the year, ` 17.68 crore was utilised from

the fund for supporting activities like research projects/

studies (` 0.80 crore), seminars (` 0.80 crore), training/

summer placement (` 15.77 crore), occasional papers

(` 0.02 crore), NABARD Chair Professor Scheme

(` 0.14 crore) and other activities (` 0.15 crore). The

cumulative disbursement since inception, stood at

` 136.19 crore.

B. Sanctions under the Fund

i. Research Projects/Studies

2.68 During 2010-11, ten research projects involving

a grant assistance of ` 1.09 crore were sanctioned.

Further, six projects/studies sanctioned earlier were

completed during the year.

2.69 The study on "Opportunities and Constraints of

Organic Agriculture in North-East Hilly Region of India"

brought out that although turmeric, ginger, pineapple,

cashew and oranges have been identified as potential

crops to be grown organically, other vegetable crops

with higher market surplus and lower production and

marketing risks could also be covered under organic

farming. There is, thus, a need to develop the organic

production technology for vegetable crops, which are

more susceptible to diseases and insect-pests under

inclement weather conditions.

2.70 The study on "Employment Diversification in an

Agriculturally Developed Region of India - A Case

Study of Punjab" upholds the rural non-farm sector as

the engine of growth and rural poverty amelioration.

Pull factors, however, were found to be more

important in comparison to push factors, with

agricultural development playing a catalytic role in the

growth of non-farm activities in the rural areas,

through production, market and input linkages.

2.71 The study on "Motorisation of Traditional Crafts

and its Economic Impact - A Study of Bank Sponsored

Units in Andhra Pradesh" gave insight into the role of

technology in ameliorating poverty while evaluating

the scheme. The value of catch was much higher for

the motorised crafts as compared to the traditional

crafts, reflecting the contribution of technology. The

motorisation scheme has pulled most of the

beneficiary households above poverty line. There is a

potential for motorisation in Andhra Pradesh, as

hardly 925 (7.91%) out of about 11,700 crafts have

been motorised under the motorisation scheme from

2003-04 to 2007-08.

2.72 The Study on "Organised Agri-food Retailing

and Supply Chain Management" brought out several

findings with policy implications. The organised retail

is poised to grow faster and reach ` 53,000 billion by

2020. Agri-retailing is around 18 per cent of the

organised retail as of now, and is likely to have a

lower share (12%) by 2020. The study has identified

some of the major impediments, especially structural,

for the growth of organised retail (Box 2.7).

ii. Seminars, Conferences and Workshops

2.73 During the year, grant assistance of ` 1.27 crore

was sanctioned to various universities, research institutes

and other agencies for organising 131 seminars,

conferences, symposia and workshops covering subjects/

areas related to agriculture and rural development,

including agricultural marketing, measurement of

productivity and efficiency, women empowerment

through SHG, food security, financial derivatives with

thrust on agri-commodity futures, poverty alleviation,

green technology in dairy and food processing, plant

physiology, physiological and molecular approaches,

agri-business and food processing, veterinary

parasitology, plant diversity, water partnership, future

strategies for sericulture, etc. The grant support extended

to the organisers enabled them to document the

Research and Development Activities





36

NABARD sponsored from its R&D Fund, a study on

organised agri-food retail in the country during 2009-10.

The major findings of the study and recommendations are

given below:

Organised food retailing: Size and growth

• In 2008-09, agri-food retailing (`150 billion) was 18%

of organised retailing (` 855 billion) accounting for 5%

of total retail.

• Retailing and organised food retailing are expected to

grow @11% & touch ` 53,000 billion and ` 620

billion (12 % of the former) by 2020.

• Impediments to growth are non-profitability of

organised food retailing, low consumer preference for

organised retailers.

Farmer Linkage

• Direct procurement from farmers beneficial for all

stakeholders – farmers, retailers and consumers.

• Very few retailers are engaged with farmers directly

due to ‘high involvement and relatively low margins’

and lack of scale

Bankers’ Perception & Practice

• Quantum of lending to both organised and

unorganised retail is low.

• Lending to unorganised is only against collateral.

Bankers perceive moderate-yet-manageable risk.

• Lending to organised retailers is largely based on

promoter’s credentials. No established template for

measuring and evaluating risks in an organised retailer.

Box 2.7

Findings of the Study on Organised Agri-food Retailing and Supply Chain Management

Opportunity For NABARD:

Direct role

Promote farmers’ clusters; Facilitate partnerships

between clusters, organised retailers and banks;

Facilitate training and awareness among producers;

Refinance rural infrastructure and Village level

structures; Recommend priority lending status to

lending to the organised retailers to the extent directly

procured from farmers.

Indirect role

A. Support to consolidator:

Help develop credit products to finance consolidators,

which could result in direct benefit to farmers. e.g. long

term finance for creation of storage and transport

infrastructure and short-term working capital loans to

the consolidators

B. Training:

Initiate special schemes to prepare farmers and

intermediaries in the agri-value chain

Recommendations for the Government

• Implement reforms in agricultural marketing as

proposed in the Model Act.

• Organised retail sector has direct employment potential

of about 1.88 lakh persons. Indirect employment in the

supply chain is additional. Further, 50 to 53 per cent of

the employment is for people with skill that can be

imparted with a short and focussed intervention.

Hence, facilitate its growth through lower transaction

costs, encouraging direct linkage with producers and

providing level playing field.

proceedings and publish background papers, thus,

facilitating wider dissemination of the recommendations/

action points and initiate suitable policy interventions by

concerned agencies.

iii. Occasional Papers

2.74 NABARD continued its endeavour of publishing

Occasional Papers (OP) to generate and disseminate

information on policy issues related to agricultural and

rural development. During the year, five OP on 'Kisan

Credit Card', 'Infrastructure for Agriculture and Rural

Development', 'Economics of Sugarcane Production and

Processing', 'Micro-finance for Micro-enterprises' and

'Promoting RNFS under multi-stakeholder environment-

DRIP' were published. Thus, a total of 56 OP were

published since its inception in 1994-95.

iv. NABARD Chair Professor Scheme

2.75 The NABARD Chair Unit Scheme was revived

during the year with the approval of the Board.

Unlike the earlier scheme where institutions were

identified first, candidates with proven track record

are selected in the present scheme. Accordingly, three

professors viz. Prof. B.C. Barah affiliated to Indian

Agricultural Research Institute (IARI), New Delhi,

Prof. A. Narayanamoorthy, affiliated to Alagappa

University, Karaikkudi and Prof. Amar Nayak,

affiliated to Xavier Institute of Management,

Bhubhaneswar were appointed as NABARD Chair

Professors for a period of three years, commencing

from 01 January 2011.





37

v. Summer Placement Scheme

2.76 The Summer Placement Scheme is being

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 for generating new ideas, products and

services, which could be introduced for the benefit of

its constituents. During the year, 70 students were

assigned such projects and project reports were

received. An expenditure of ` 0.19 crore was incurred

under this Scheme, during the year.

vi. Training Activities

2.77 Apart from extending grant assistance for

various R&D activities, an amount of ` 15.58 crore

was utilised from the Fund during the year for capacity

building of the staff of RFI.

C. Training and Sensitisation

Programmes

2.78 NABARD continued to provide financial and

other support to training institutions like Bankers

Institute of Rural Development (BIRD), Lucknow,

Regional Training Colleges (RTC) at Mangalore and

Bolpur, National Institute of Rural Banking (NIRB),

Bengaluru, Manpower Development & Management

Institute (MDMI), Shillong, and Indian Institute of Bank

Management (IIBM), Guwahati.

D. Training of Personnel of RFI

2.79 NABARD provides advanced training to the RFI

personnel through its three Training Establishments (TE),

viz., the Regional Training Centres at Bolpur and

Mangalore and BIRD, Lucknow. It also supplements the

efforts of other training institutions by providing technical

support. During the year, 576 training programmes were

conducted by the TE for 14,667 participants (Table 2.6).

E. Other Developments

2.80 BIRD conducted a special on-location

programme on Credit Planning and Development

Finance for IAS probationers undergoing Phase I

course, at the Lal Bahadur Shastri National Academy

of Administration (LBSNAA) Mussorie and an in-house

programme on financial system and development

finance for probationers of the Indian Economic

Service (IES). A programme on credit aspects of rural

development was conducted for the officials of KVK/

Govt. Departments involved in rural development. A

Post-Graduate Diploma in Rural Banking (PGDRB)

course was also started in order to build a competent

cadre of professionals in the field of rural banking.

This is going to be an essential qualification for a

career in rural banking, in the days to come. A

Certificate course for BC/ BF was launched in

collaboration with Bank of Baroda

2.81 The first All-India Conference of Principals and

Directors of Co-operative Training Institutes (CTI) was

held at BIRD, Lucknow to deliberate on the emerging

training needs of co-operatives, the strategy for

upscaling the activities of Centre for Professional

Excellence in Co-operatives (C-PEC), development of

reading material in local languages and other relevant

issues.

2.82 Two studies, viz., 'Comparative study of

performance of Krishna Bhima Samruddhi Local Area

Table 2.6: Training of RFI Personnel

(Number)

Institute Programmes Conducted Personnel Trained

2008-09 2009-10 2010-11 2008-09 2009-10 2010-11

BIRD, Lucknow 257 261 377 6616 6139 9645

RTC, Mangalore 91 93 106 2065 2474 2649

RTC, Bolpur 86 113 93 2268 2894 2373

Total 434 467 576 10949 11507 14667





38

Bank and Andhra Pradesh Grameena Vikas Bank' and

'CBS implementation in Saurashtra Gramin Bank' were

undertaken. A Training Need Assessment study in West

Bengal State Co-operative Bank was completed.

2.83 RTC, Mangalore organised an International

Exposure Programme on Micro-Finance for a batch of

14 officers from SANASA Development Bank,

Sri Lanka. The College also conducted an on-location

induction training programme for the probationary

officers of South Indian Bank, Kerala. In view of the

need for trained officers in co-operatives in the post-

revival package era, the college prioritised capacity

building of senior officers and branch managers of

co-operative banks of select states and conducted 38

programmes during the year through a dedicated

channel. During the year, the college also conducted

new programmes, viz., Orientation programme for

senior officers and branch managers of co-operative

banks, Programme on Treasury Opportunities and

Investment Management for General Managers and

Senior officers of RRB, Awareness programme on Post-

Watershed approaches for Bankers, Programme on

Financial Inclusion, Trainers Training Programme on

Financial Inclusion, Exposure Programme for Financing

of JLG, and Rating of MFI. The College also organised

a Workshop for CEO and Senior Executives of SCB

and DCCB of Karnataka, Andhra Pradesh and Tamil

Nadu, to deliberate upon the operational problems/

issues in implementation of the recommendations of the

revival package and the Working Group on Human

Resources in Co-operative banks. An Orientation

Programme on Official Language for senior officers of

NABARD was organised by the College.

2.84 During the year, RTC Bolpur conducted 15

Orientation Training Programmes for Branch Managers

of SCB and DCCB and a new programme on Micro-

Finance, besides an exclusive programme for West

Bengal Minority Development and Finance Corporation.

In addition, the College adopted Sambalpur DCCB in

Odisha for providing comprehensive solutions to the

DCCB staff. The College also directed its efforts towards

women empowerment, in collaboration with Women

Study Centre, Visva Bharati University and five training

programmes were conducted during the year.

2.85 The C-PEC, set up at BIRD, Lucknow during the

year 2008-09 in collaboration with GTZ (now GIZ),

continued its efforts to make the training system of the

Co-operative Credit Structure professional. During the

year, 27 Co-operative Training Institutions, which

included eight Agriculture Co-operative Staff Training

Institutes (ACSTI), five Regional Institutes of

Co-operative Management (RICM) and 14 Institutes of

Co-operative Management (ICM) under the ambit of the

National Council for Co-operative Training (NCCT),

obtained Accreditation from C-PEC. Further, 29

Co-operative Training Institutes, 5 SCB and 7 DCCB

and 8 PACS were enrolled as Institutional Members of

C-PEC. The Centre also launched the first course of

Certified Trainer in Financial Co-operatives (CTFC)

during the year for 36 Trainers of CTI. BIRD conducted a

Training of Trainers programme on Standardised Banking

Programme for Co-operatives (SBPC), for the trainers of

CTI during the year, after which the first SBPC was

launched at APCOB-CTI, Hyderabad.

2.86 NABARD has been extending funding support

under the Scheme of Financial Assistance for Training

of Co-operative Banks Personnel (SOFTCOB) to Junior

Level Training Centres (JLTC) of SCARDB, ACSTI of

SCB and Integrated Training Institutes (ITI), out of the

Co-operative Development Fund (CDF). The scheme

was revised during the year and extended up to

31 March 2013. The ACSTI, JLTC and ITI are now

eligible for additional assistance from NABARD under

the revised scheme, for linking their activities with

C-PEC. During the year 2010-11, the bank provided

technical and financial support to 7 JLTC, 12 ACSTI

and 3 ITI to enable them to improve their training

system. An amount of ` 5.95 crore was disbursed out

of CDF, to these institutions for conducting 451

programmes, covering 9121 participants during 2010-11,

as against ` 3.90 crore for 1019 programmes and

12,088 participants during 2009-10.

2.87 During the year, NABARD released grant

assistance of ` 0.05 crore to NIRB, Bengaluru for

conducting 21 programmes for 220 participants.





39

III

Business Operations

The business operations of NABARD comprise

(a) providing refinance support to State Co-operative

Banks (SCB), commercial banks, Regional Rural

Banks (RRB), Scheduled Primary Urban Co-operative

Banks (PUCB) and Agriculture Development Finance

Companies (ADFC) to supplement their financial

resources for enhancing credit flow to agriculture and

rural sectors, (b) providing loans to State

Governments for their Rural Infrastructure Projects

under the Rural Infrastructure Development Fund

(RIDF) and (c) co-financing viable projects with

commercial banks, RRB, SCB & Non-Banking Finance

Companies (NBFC). This chapter details the business

operations and achievements of the Bank during

the year.

3.2 The total financial support extended by

NABARD during 2010-11 stood at ` 60,483 crore,

registering a growth of 5.98 per cent over 2009-10

(Chart 3.1).

A. Short-Term Refinance

3.3 The Short-Term Seasonal Agricultural Operations

(ST-SAO) for refinance in terms of credit limits

sanctioned and maximum outstanding, for the last five

years, registered an average annual growth rate of

22.73 per cent and 28.27 per cent respectively

(Table 3.1).

a. State Co-operative Banks

i. Support for Seasonal Agricultural

Operations

3.4 The refinance assistance to co-operative banks

for ST-SAO was linked to Net NPA and level of

utilisation of the sanctioned credit limit during the

previous year by the banks (Table 3.2).

Production Credit

Table 3.1: Short Term Refinance (Production Credit) for

the Last Five Years

(` crore)

Year Credit Limits SAO Average Maximum

sanctioned Outstanding outstanding

2006-07 16089 10480 14168 (88.06)

2007-08 18291 14433 16352 (89.40)

2008-09 19627 15951 17212 (87.70)

2009-10 25661 17577 24715 (96.31)

2010-11 34375 27247 34196 (99.47)

Figures in the parentheses refer to percentage share

Table 3.2: Sanction of ST(SAO) Credit Limits to SCB

for the year 2010-11

Region/ Net NPA Per cent Normal limit as

States level (%) utilisation % of RLP*

in 2009-10

NE/Hilly Region/ > 15 < 90 50

A & N Islands > 90 55

≤ 15 < 90 40

> 90 45

Eastern Region ≤ 10 < 90 45

> 90 50

> 10 < 90 40

> 90 45

Rest of India ≤ 10 < 90 40

> 90 45

> 10 < 90 35

> 90 40

NE: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland and Tripura.

Hilly Region: Jammu and Kashmir, Himachal Pradesh, Uttarakhand,

Sikkim.

Eastern Region: Bihar, West Bengal, Odisha, Jharkhand and

Chhattisgarh.

*: Realistic Lending Programme





40

3.5 During 2010-11, ST-SAO credit limits were

sanctioned to 21 SCB aggregating ` 23,759 crore as

against ` 18,109 crore sanctioned to 20 SCB during

2009-10. The credit limits included ` 2,249.90 crore

for the Oilseeds Production Programme (OPP),

` 210.97 crore for National Pulses Development

Programme (NPDP) and ` 752.76 crore for credit

requirements of tribals under the Development of

Tribal Population (DTP). The maximum outstanding

was ` 23,696.72 crore during 2010-11, with a

utilisation rate of 99.74 per cent.

3.6 SCB in the northern region (Haryana, Himachal

Pradesh, Punjab and Rajasthan) accounted for

36 per cent, SCB in the southern region (Andhra

Pradesh, Karnataka, Kerala, Puducherry and Tamil

Nadu), western (Gujarat and Maharashtra) and central

regions (Madhya Pradesh, Uttarakhand and Uttar

Pradesh) accounted for 22, 14 and 16 per cent,

respectively, of the aggregate credit limits sanctioned.

Eastern region (Bihar, Chhattisgarh, Odisha and West

Bengal) accounted for 12 per cent. The share of

refinance availed by the co-operative banks in the

North-Eastern Region (NER) continued to be low

despite relaxations. Meghalaya, Nagaland and Sikkim

SCB were sanctioned credit limits aggregating ` 7.00

crore, which was fully utilised.

ii. Support for Short Term (Others)

3.7 Refinance support is extended for Short-Term (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 and ST- Labour

Contract Co-operatives engaged in civil work in rural

areas under the ST (others). Those SCB with Net NPA

not exceeding 10 per cent, as on 31 March 2009, were

considered eligible for refinance. Relaxations in NPA

norms extended to the North Eastern regions in the

case of ST-SAO was made applicable for ST-Others

also. The assessment norms hitherto followed, for

different purposes continued. A consolidated ST

(Others) limit was sanctioned to SCB on behalf of

eligible DCCB.

iii. Support to Weavers

3.8 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 SCB on behalf of the eligible DCCB.

Relaxations in NPA norms as extended to the 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 co-operative

societies for production and marketing of handloom

products, 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 2010, without

accumulated losses, were considered eligible. Working

capital requirements of weaver members of defunct

weaver societies, mutually aided co-operative societies,

societies outside the co-operative fold and producer

group companies were also brought under the

umbrella of refinance through RRB and Commercial

banks. Short term credit was also available to SCB

and commercial banks for financing working capital

requirements of State Handloom Development

Corporations for production, procurement and

marketing of handloom products.

3.9 During 2010-11, ST (weavers) credit limits

aggregating ` 215.75 crore were sanctioned to four

SCB (Andhra Pradesh, Karnataka, Puducherry and

Tamil Nadu), as against ` 177.32 crore during

2009-10. Further, during the last three years, 4,607

Handloom Weavers’ Groups (HWG) were formed

by banks in various States, viz., Odisha (1,366),





41

Andhra Pradesh (1,220), Jharkhand (500),

Karnataka (498), Assam (272), Uttar Pradesh

(272), Madhya Pradesh (266), West Bengal (88),

Bihar (82) and other States (43). Of these, 1,989

HWG have been credit linked. The maximum

outstanding during 2010-11 was ` 198.14 crore, as

against ` 180.78 crore in the previous year.

b. State Co-operative Agriculture and

Rural Development Banks

3.10 The scheme of extending ST refinance to State

Co-operative Agriculture and Rural Development

Banks (SCARDB) for SAO was continued during the

year. Refinance of ` 140.01 crore was extended to

Kerala SCARDB (` 79.39 crore) and Rajasthan

SCARDB (` 60.62 crore) at 4.5 per cent interest rate

for lending to the ultimate borrowers at 7.0 per cent.

c. Regional Rural Banks

3.11 The quantum of refinance to RRB was linked to

Net NPA and utilisation of the sanctioned credit

limit during the previous year. The details are given in

Table 3.3.

3.12 During 2010-11, limits of ` 9,799.69 crore were

sanctioned to 80 RRB under ST-SAO as against

` 6,832.13 crore sanctioned to 74 RRB in 2009-10.

The limit included ` 820.31 crore for Oilseeds

Production Programme (OPP), ` 201.23 crore for

Development of Tribal Population (DTP) and

` 16.20 crore for National Pulses Development

Programme (NPDP). Uttar Pradesh with a limit of

` 1,773 crore under ST(SAO) for RRB, accounted for

the largest share of credit limit sanctioned, followed by

Andhra Pradesh (` 1,316 crore), Rajasthan

(` 1,174.59 crore), Kerala (` 904 crore) and

Karnataka (` 800 crore). The maximum outstanding

was ` 9,703.03 crore, forming 99 per cent of the limit

sanctioned during 2010-11. Five RRB in the North

Eastern Region were sanctioned credit limit of ` 37.72

crore, of which RRB in Assam, Meghalaya, Mizoram

and Nagaland utilised 100 per cent.

3.13 Consolidated limits were sanctioned to RRB for

Short Term-Other than Seasonal Agriculture

Operations (ST-OSAO) to the extent of 60 per cent of

their Realistic Lending Programme (RLP) for eligible

purposes like marketing of crops, fisheries, 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 allied activities. RRB having Net NPA upto

5.0 per cent were eligible for refinance. The aggregate

limit for ST-OSAO sanctioned during 2010-11 was ` 600

crore, as against ` 542 crore in the previous year. The

maximum utilisation was ` 598 crore (99%).

Table 3.3: Sanction of ST(SAO) Credit Limits to RRB

for the year 2010-11

Region/ Net NPA Per cent Normal limit as

States level utilisation % of RLP*

in 2009-10

NE/Hilly Region/ > 10 < 90 30

A & N Islands > 90 35

≤ 10 < 90 35

> 90 40

Eastern Region ≤ 5 < 90 30

> 90 35

> 5 < 90 25

> 90 30

Rest of India ≤ 5 < 90 25

> 90 30

> 5 < 90 20

> 90 25

NE: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,

Nagaland and TripuraHilly Region: Jammu and Kashmir, Himachal Pradesh, Uttarakhand,Sikkim.

Eastern Region: Bihar, West Bengal, Odisha, Jharkhand andChhattisgarh

*: Realistic Lending Programme





42

B. Other Initiatives

a. Interest Subvention to Farmers

3.14 The continuance of the interest subvention

scheme was announced in the Union Budget 2010-11.

Interest subvention of 1.5 per cent per annum was

available to public sector banks, co-operative banks

and RRB for deploying their own funds for crop loans

upto ` 3 lakh per farmer, provided the ultimate

borrower got such loans at 7.0 per cent interest rate

per annum. Additional subvention of one per cent,

announced in the year 2009-10 to those farmers who

repaid crop loans promptly within one year of

disbursement, was enhanced to 2.0 per cent during

2010-11. Thus, the interest paid on crop loans by such

farmers was effectively 5.0 per cent. This was to

reward prompt payment by farmers, which in turn

helped lending institutions by declogging their line of

credit. Suitable interest subvention was given to

NABARD for providing concessional refinance to SCB

and RRB at 4.0 per cent and 4.5 per cent interest

rates, respectively. Aggregate interest subvention of

` 1,220.78 crore was provided by GoI to NABARD,

co-operative banks and RRB for the year 2008-09.

During the year, an amount of ` 1261.40 crore was

disbursed for 2009-10. Interest subvention for 2010-11

has been estimated at ` 2,000 crore.

b. GoI Package for Sugar Industry

3.15 NABARD continued to act as the nodal agency

for the GoI package for restructuring of term loans of

co-operative sugar mills. Out of ` 170.14 crore

received from the GoI towards interest subvention,

` 169.94 crore was disbursed to 77 co-operative sugar

mills in Maharashtra and Odisha. NABARD also acted

as the nodal agency for routing the interest

subvention to co-operative banks and RRB under

"Scheme for Extending Financial Assistance to Sugar

Undertakings - 2007". Out of ` 383.59 crore received

from GoI towards interest subvention, ` 249 crore

was released to 212 sugar mills operating in 11 states.

c. Interest Rates on Refinance

Assistance

3.16 The rates of interest on Short Term/ Medium

Term (ST/MT) refinance to Co-operative Banks, RRB

and Scheduled Commercial Banks and Long-term (LT)

loans to State Governments for contribution to the

share capital of co-operative credit institutions during

2010-11 are given in Table 3.4.

Table 3.4: Rates of Interest on Refinance

(per cent)

Sl. No. Purpose Agency Interest Rate

1 SAO SCB/RRB 4/4.5

2 SAO against pledge of securities SCB 8.0

3 ST (Others - other than weavers) SCB 8.5

4 ST (Weavers - Primary and Apex/ Regional Weavers’ Cooperative Societies) SCB 8.0

5 ST - Weavers - Financing of Primary Weavers Cooperative Societies Scheduled Commercial Banks 8.0

6 ST- OSAO RRB 8.5

7 ST - Working capital requirements of SHDC SCB & Scheduled Commercial Banks 8.0

8 MT (Conversion) loan SCB/RRB 6.0 *

9 LT loans to State Governments State Governments 8.5

* : 3.0 per cent below the rate fixed for ultimate borrower, with a minimum of 6.0 per cent





43

Investment Credit

A. Refinance Policy and Eligibility

Criteria

3.17 The policy of preferential treatment to North-

Eastern, Eastern, Hilly Regions, Sikkim and

Lakshadweep was also extended to Chhattisgarh

during 2010-11. Concessions included 100 per cent

refinance and relaxation in eligibility criteria. RRB,

SCB and SCARDB continued to be classified under

A/B/C/D categories based on the level of Net NPA as a

percentage to net loans and advances outstanding,

recovery performance and profitability for availing the

quantum of refinance. However, (i) SCB with Net NPA

of more than 20 per cent (ii) SCARDB with recovery

of less than 30 per cent, (iii) RRB with Net NPA above

15 per cent or deposit erosion of more than 20 per

cent were considered ineligible for availing refinance

during the year. Similarly, Commercial Banks / PUCB

and North Eastern Development Finance Corporation

Ltd. (NEDFi) with Net NPA of more than 3 per cent

were considered ineligible for availing refinance during

the year. SCARDB, SCB, RRB and ADFC are not

required to pay prepayment charges. Commercial

Banks and PUCB are required to pay prepayment

charges even if the recoveries are actual. Activities like

water harvesting and water conservation devices, seed

production, tissue culture based production, non-

conventional energy sources, small farm implements,

financing in watershed and tribal development

programmes areas were also included in ‘Thrust Area’.

Refinance was provided at 100 per cent of the eligible

bank loan for thrust areas in all regions.

B. Special Package for North Eastern

and Other Regions

3.18 With a view to enhancing the credit flow to the

NER and other specified regions, NABARD continued

to (i) apply uniform interest rate on refinance to all

client institutions operating in the NER and Sikkim,

(ii) relax the Net NPA norms by 5.0 and 3.0 per cent,

respectively, for the SCB and RRB in NER including

Sikkim, Hill States (Jammu & Kashmir, Uttarakhand,

Himachal Pradesh), Eastern region (Odisha, West

Bengal, Andaman & Nicobar Islands, Bihar &

Jharkhand) and Lakshadweep and refinance at 100

per cent of the eligible bank loan for all agencies and

for all purposes in these regions. As a special initiative,

these facilities were extended to Chhattisgarh state

during 2010-11.

C. Security Norms

3.19 The release of refinance to SCARDB as also to

SCB/ DCCB for farm and non-farm sector activities is

against government guarantee. However, the

requirement of Government guarantee was waived for

well performing SCB and DCCB on compliance of

certain conditions. Refinance to Section 11(1) of BR

Act, 1949, (AACS), non-compliant SCB/DCCB and to

non-scheduled SCB 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/ well performing SCB/ DCCB were considered.

D. Interest Rates on Refinance

3.20 Changing market conditions impacting the cost

of funds for NABARD necessitated the revision of

interest rates five times during the year. The interest

rates, with effect from 07 February 2011, was revised

to 9.75 per cent for Commercial Banks, 9.25 per cent

for RRB, 9.15 per cent for co-operative banks/ PUCB/

NEDFi, 8.15 per cent for ADFC/NABFINS and

10.5 per cent for NBFC. However, for NER, including

Sikkim, the rate of interest for all agencies (except

NBFC) was fixed at 9.15 per cent.





44

E. Refinance Support

3.21 During 2010-11, the refinance disbursed

(including ` 140.01 crore disbursed under ST-SAO to

SCARDB) was ` 13,485.87 crore as against the target

of ` 12,980.00 crore. The achievement against target

was 103.90 per cent. The growth in refinance

disbursed during the year was 12.30 per cent over the

previous year.

a) Agency-wise Disbursements of

Refinance

3.22 During 2010-11, commercial banks availed of

refinance to the extent of ` 7,348.49 crore, accounting

for 54.49 per cent of the total disbursement, as

compared to 50.44 per cent of the total disbursement

during the previous year (Table 3.5 / Chart 3.2).

b) Spatial Distribution of Refinance

3.23 Refinance disbursement across regions during

the year varied widely with the highest share being in

the south (43%), followed by north (21%), central

(14%) and other regions (22%) (Table 3.6 / Chart 3.3).

Agency-wise and state-wise disbursements indicated

that around 90 per cent of the refinance disbursed to the

SCB was in Andhra Pradesh, Gujarat, Punjab,

Karnataka, Himachal Pradesh, Odisha and Rajasthan.

Table 3.5: Agency-wise Disbursements

(` Crore)

Agency 2008-09 2009-10 2010-11

Target Disb % Share Target Disb % Share Target Disb % Share

SCARDB * 1987.00 1986.54 18.86 2290.00 2221.30 18.50 2160.00 2351.85 17.44

SCB 801.00 801.51 7.61 1040.50 1251.95 10.43 1340.00 1356.62 10.06

CB 5867.00 5867.19 55.69 6085.50 6057.19 50.44 7052.00 7348.49 54.49

RRB 1879.00 1879.04 17.83 1879.00 2457.46 20.46 2288.00 2287.84 16.96

PUCB 1.00 1.01 0.01 – 16.14 0.13 85.00 84.87 0.63

ADFC – – – 5.00 5.05 0.04 55.00 56.20 0.42

Total 10535.00 10535.29 100.00 11300.00 12009.08 100.00 12980.00 13485.87 100.00

*: Includes ST-SAO refinance released to SCARDB





45

Ninety six per cent of the refinance disbursed to

SCARDB was absorbed in the states of Uttar Pradesh,

Kerala, Haryana, Punjab, Rajasthan, West Bengal, and

Karnataka. The trends reflected the credit absorptive

capacity of different category of banks in different states.

c) Sector-wise Disbursements

3.24 During the year, the major share of refinance

was accounted for by NFS (25.6%), followed by SHG

(18.9%), Farm Mechanization (13.1%), Minor Irrigation

(6.8%) and Dairy Development (6.8%). Of the total

refinance disbursed, 43.80 per cent was for thrust

areas. The proportion of refinance to Minor Irrigation,

Plantation and Horticulture and Dairy Development

showed an increase, while there was decline in

refinance for Farm Mechanization and SHG

(Table 3.7).

Table 3.6: Region-wise Disbursements

(` crore)

Region 2008-09 2009-10 2010-11

Target Disb. %Share Target Disb. %Share Target Disb. %Share

Northern 2636.00 2636.45 25.00 2790.00 2419.87 20.20 2835.00 2810.70 20.80

North Eastern 174.00 174.18 1.70 210.00 139.85 1.20 266.00 265.82 2.00

Southern 1103.00 4298.91 40.80 1185.00 5967.89 49.70 1392.00 5821.73 43.20

Eastern 1526.00 1102.99 10.50 1680.00 891.07 7.40 1718.00 1405.35 10.40

Central 797.00 1526.02 14.50 935.00 1478.60 12.30 965.00 1928.63 14.30

Western 4299.00 796.74 7.60 4500.00 1111.79 9.30 5804.00 1253.64 9.30

Total 10535.00 10535.29* 100.00 11300.00 12009.08* 100.00 12980.00 13485.87* 100.00


Northern : Chandigarh, Delhi, Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab and Rajasthan

North Eastern : Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim

Southern: Andhra Pradesh, Karnataka, Kerala, Puducherry, Tamil Nadu and Lakshwadeep Islands

Eastern : A&N Islands, Bihar, Jharkhand, Odisha and West Bengal

Central : Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Uttarakhand

Western : Dadra & Nagar Haveli, Daman & Diu, Goa, Gujarat and Maharashtra





46

F. Co-financing

3.25 During the year, MoU for co-financing was

executed with 5 RRB in Andhra Pradesh and

a commercial bank. In all, MoU were executed with

27 banks. During the year, three new projects were

sanctioned, taking the cumulative number of sanctioned

projects to 51, with a total financial outlay of

` 840.64 crore. The disbursement during 2010-11 was

` 14.00 crore. The number of ongoing projects are 37.

Cumulative sanctions and disbursements were ` 240.35

crore and ` 153.64 crore, respectively.

G. Capital Investment Subsidy

Schemes

3.26 Since 1999-2000, NABARD is the nodal agency

for various Capital Investment Subsidy Schemes

(CISS) of the GoI, for routing subsidy, monitoring

progress and co-ordinating with bankers & the GoI in

respect of the following:

(i) Construction of cold storages and onion godowns;

(ii) Construction of rural godowns;

(iii) Development/strengthening of agriculture marketing

infrastructure, grading and standardization;

(iv) Establishment of Agri-clinic and Agri-business

Centres (ACABC);

(v) Bihar Ground Water Irrigation Scheme; and

(vi) Schemes on Animal Husbandry

a. Establishment/modernization of Rural Slaughter

Houses;

b. Integrated Development of Small Ruminants and

Rabbits;

c. Scheme for Poultry Estates and Mother Units for

Rural Backyard Poultry;

d. Male buffalo calf rearing;

e. Utilization of fallen animals; and

f. Scheme on Pig Development

Table 3.7: Sector-wise Disbursements

(` crore)

Purpose 2008-09 2009-10 2010-11

Target Disb Share % Target Disb Share % Target Disb Share %

Minor Irrigation 997.00 545.85 5.2 660.00 496.73 4.1 909.00 920.61 6.8

Land Development 326.00 949.94 9.0 976.00 303.67 2.5 1168.00 295.69 2.1

Farm Mechanisation 1173.00 1514.03 14.4 2194.00 1714.66 14.3 1817.00 1762.98 13.0

Plantation &

Horticulture 331.00 374.54 3.6 362.00 377.40 3.1 579.00 698.39 5.2

PF/ SGP/ AH-Others 301.00 298.70 2.8 230.00 349.79 2.9 266.00 402.37 3.0

Fisheries 63.00 77.15 0.7 132.00 54.62 0.5 149.00 47.45 0.4

Dairy Development 1066.00 489.41 4.6 570.00 725.35 6.0 649.00 918.11 6.8

Forestry 25.00 6.56 0.1 38.00 6.46 0.1 52.00 9.57 0.1

Storage Godown &

Market Yard 63.00 141.01 1.3 143.00 187.22 1.6 172.00 170.79 1.3

SGSY 288.00 201.12 1.9 274.00 151.50 1.3 322.00 228.84 1.7

Non-Farm Sector 3135.00 2706.79 25.7 2852.00 3465.99 28.9 3115.00 3446.40 25.6

SC/ ST- Action Plan 125.00 28.94 0.3 91.00 2.30 0 130.00 12.63 0.1

SHG 2466.00 2620.03 24.9 803.00 3173.56 26.4 795.00 2545.36 18.9

Others 176.00 581.22 5.5 1975.00 999.82 8.3 2857.00 2026.68 15.0

Total 10535.00 10535.29* 100.0 11300.00 12009.08* 100.0 12980.00 13485.87* 100.0






47

(vii) Scheme for installation of Solar Off Grid and

Decentralised Applications under Jawahar Lal

Nehru National Solar Mission (JNNSM)

(viii) National Project on Organic Farming

(i) Cold Storages and Onion Godowns

3.27 The scheme was launched in 1999-2000 to

promote creation of cold storage and scientific storage

facilities for horticultural produce. As advised by the

GoI, NABARD ceased to be associated with the

implementation of the scheme from 1 May 2010

onwards.

(ii) Rural Godowns

3.28 The Scheme was launched by the GoI in April

2001, to create scientific storage facility for farmers to

avoid wastage, product deterioration and distress sales.

NABARD continued to associate with the Scheme in

administering the subsidy. The number of projects

sanctioned under Cold Storages, Onion Godowns and

Rural Godowns are detailed in Table 3.8.

(iii) Agricultural Marketing Infrastructure,

Grading and Standardization

3.29 The Scheme, operationalised since October

2004, aims at establishing/strengthening infrastructure

for marketing, grading, standardization and quality

certification of produce for agriculture and allied

sectors. Being linked to the amendment of the

Agricultural Produce Market Committee (APMC) Act to

allow private participation, the scheme is implemented

in those States that have carried out market reforms.

During the year, 654 projects with Total Financial

Outlay (TFO) of ` 978.45 crore and bank loan of

` 639.84 crore were considered and subsidy of

` 83.15 crore was released to 14 states. Cumulatively,

4,492 units involving TFO and bank loan of ` 2,912

crore and ` 1,922.97 crore, respectively, were

considered and subsidy of ` 274.03 crore was released.

(iv) Agri-Clinics and Agri-Business Centres

3.30 The Scheme was started in 2006-07 to provide

fee based extension services to farmers and at the

same time provide gainful employment to unemployed

agriculture graduates in new emerging areas in

agriculture sector. The guidelines of the scheme were

revised during the year for widening the list of eligible

candidates, enhancing the capital subsidy to 36 per

cent of the TFO for general category agri-preneurs

(44% for SC/ST, NE and Hill States) and dispensing

with the interest subsidy. During 2010-11, a subsidy

of ` 1.49 crore was disbursed for 110 projects,

involving a TFO of ` 7.75 crore and bank loan

of ` 6.02 crore. Cumulatively, 390 projects were

sanctioned under the scheme involving TFO of ` 28.62

crore, bank loan of ` 22 crore and subsidy of ` 5.38

crore was released.

(v) Bihar Ground Water Irrigation Scheme

3.31 The Scheme, promoted by the Planning

Commission, GoI, commenced from 2009-10 to

Table 3.8: Details of Projects Sanctioned under Cold Storages and Rural Godowns

(` crore)

Sl. Facility 2010-11 Cumulative Cumulative

No. No. of TFO Bank Subsidy No. of TFO Bank Subsidy Capacity*

Projects Loan Projects Loan

1 Cold Storage 93 200.35 123.51 56.28 1944 3100.94 1758.17 499.86 83.02

2 Rural Godowns 2159 550.79 411.84 70.86 19715 4349.37 2915.91 649.83 244

*Capacity: Lakh Metric Tonnes TFO: Total Financial Outlay





48

provide irrigation facility to 9.28 lakh ha. of

agricultural land in Bihar by installing 4.64 lakh

private shallow tubewells / dugwells with pumpsets

over a period of three years. The scheme was to be

implemented in all the districts of Bihar through CB

and RRB, utilizing the balance amount of ` 231.67

crore, under Million Shallow Tubewell Programme

(MSTP) that was closed on 31 March 2007. The Minor

Water Resources Department, Govt. of Bihar is the

nodal implementing department with the active

support of NABARD, banks and other participating

agencies. The back ended subsidy at 45 per cent of

the project cost is to be released by NABARD through

the financing banks. As on 31 March 2011, an amount

of ` 48.30 crore was released to banks implementing

the scheme.

(vi) Schemes on Animal Husbandry

3.32 Three animal husbandry schemes, viz.,

(a) Establishment/Modernization of Rural Slaughter

Houses, (b) Integrated Development of Small

Ruminants and Rabbits and (c) Scheme for Poultry

Estates and Mother Units for Rural Backyard Poultry

launched by GoI during 2009-10 were implemented by

NABARD during 2010-11. In addition, three animal

husbandry schemes, viz., (a) Male buffalo calf rearing,

(b) Scheme for Pig Development and (c) Utilization of

fallen animals were launched by GoI during July-

August 2010. All these schemes will be implemented

during the remaining period of XI Five Year Plan

(2010-11 & 2011-12). The Department of Animal

Husbandry, Dairying and Fisheries (DAHDF), MoA,

GoI, is the nodal department for operating these

schemes. NABARD will be administering the interest

subsidy and capital subsidy and monitoring the

progress of the scheme, besides providing refinance

support to the eligible financing institutions for the term

loan. A State Level Sanctioning and Monitoring

Committee (SLSMC) was constituted by the State

Animal Husbandry Department in association with

NABARD in each State for sanctioning of the subsidy /

interest subsidy/ interest free loans under these schemes.

a. Scheme for Rural Slaughter Houses

3.33 The Scheme is being implemented on a pilot basis

in three states, viz., Uttar Pradesh, Andhra Pradesh and

Meghalaya for establishing/ modernizing slaughter

houses in rural areas, with emphasis on hygiene,

pollution control and value addition. Credit linked back

ended subsidy upto a maximum of ` 2.00 crore would

be available under the scheme. As on 31 March 2011,

an advance subsidy amount of ` 0.10 crore was

released for establishment of one poultry processing

unit under the scheme.

b. Scheme for Integrated Development of

Small Ruminants and Rabbits

3.34 The Scheme aims to improve the quality of the

existing breeds and to promote rearing and breeding

on commercial basis. Under this scheme, 25 per cent

of the outlay (33.33% in NE States including Sikkim

and Hill States) as back ended capital subsidy will be

provided by NABARD for rearing/ breeding of sheep

and goat and rearing of rabbit. Non-Governmental

Organisations, identified by the SLSMC act as

facilitators for organizing and training the beneficiaries,

coordinating with local Animal Husbandry Department

and banks and arranging for inputs and marketing of

the animals. As on 31 March 2011, subsidy amount of

` 1.59 crore was released for establishment of 304

Sheep/ Goat rearing units under the scheme.

c. Scheme for Establishment of Poultry

Estates and Mother Units for Rural

Backyard Poultry

3.35 The Scheme aims at establishing poultry estates

having upto 100 broiler/layer units on the lines of

industrial estates, where all common infrastructure

facilities, inputs supply and marketing arrangements

are provided. Two pilot projects are proposed under

the Scheme and preference is given to States that

provide land and infrastructure for this purpose. The

units will be eligible for interest free loans upto





49

50 per cent of TFO, to be routed through NABARD.

During the year, two poultry estates have been

sanctioned in Odisha and Sikkim.

3.36 Under the rural backyard poultry component of

the scheme, interest free loan upto 50 per cent of TFO

of the project is available for Mother Units (MU) where

day old chicks of low input birds are reared for

4 weeks for distribution to the beneficiaries. This

component of the scheme intends to promote rearing

of low input breeds that will survive in rural areas and

is intended for Below Poverty Line (BPL) beneficiaries.

As on 31 March 2011, GoI has sanctioned 622 MU in

Kerala, Bihar, Madhya Pradesh, Andhra Pradesh, West

Bengal and Nagaland.

d. Scheme for Salvaging and Rearing of

Male Buffalo Calves

3.37 During 2010-11, the Scheme was launched by

GoI to assist farmers, NGO, professionals and

corporate bodies to rear male buffalo calves for meat

production and recovery of hides. Under the Scheme,

100 per cent interest subsidy on short term loan will

be provided for rearing of male buffalo calves (1 to 9

calves). An indicative unit cost of ` 6,400 per calf

would be provided by banks as short term loan for

rearing the calf up to its marketable age (12 months).

Back-ended capital subsidy at 25 per cent of the

outlay (33.33 per cent in NE States, including Sikkim

and hilly areas) is made available for establishment of

commercial and industrial units.

e. Scheme for Pig Development

3.38 With a view to encouraging commercial pig

rearing by farmers to improve performance of native

breed through cross breeding, a scheme was

launched during the year 2010-11. Under the

scheme, 25 per cent (33.33% in NER, including

Sikkim and hilly areas) and 50 per cent of the outlay

as back ended capital subsidy will be provided for pig

breeding/ rearing/ fattening units and retail outlets/

facilities for live stock markets, respectively. As on 31

March 2011, subsidy of ` 1.49 crore was released for

establishing 239 pig rearing units under the scheme.

f. Scheme for Utilization of Fallen

Animals

3.39 The Scheme, launched during 2010-11, aims at

improving the quality of hides and skins from fallen

animals and to convert other by-products into value

added items. It also aims at reducing/checking

environmental pollution and bird hazard to aircrafts.

Under the Scheme for the establishment of Carcass

Utilization Centre (CUC) and Bone Crushing Unit,

90 per cent and 50 per cent respectively, will be

provided as back ended capital subsidy.

Implementation of the scheme will facilitate

compliance to the Infectious & Contagious Diseases

in Animal Act, 2009 wherein, proper disposal of

carcasses of animals is mandatory. The Department of

Animal Husbandry, Dairying and Fisheries (DAHDF),

MoA, GoI, is the nodal department for operating the

scheme. NABARD will be administering the capital

subsidy in respect of establishing bone crushing units,

in case bank loan component is involved.Solar System





50

(vii) Scheme for Installation of Solar Off-

grid & Decentralised Applications

under Jawahar Lal Nehru National

Solar Mission

3.40 The Ministry of New and Renewable Energy

(MNRE), GoI launched a subsidy linked credit scheme

on 1 November 2010, to promote commercial

marketing of solar energy systems and devices by

extending financial incentives in the form of capital

subsidy (30% of the project cost) and subsidised

interest (5%) on bank loans. The objective of the

scheme is to promote off-grid applications of solar

energy [both Photo-voltaics and Solar Thermal] to

encourage replacement of non-renewable energy

sources like fossil fuels, kerosene and diesel with solar

energy to meet energy requirements. The scheme

covers projects, specifically approved by MNRE, and

provides for routing capital subsidy and subsidised

interest on bank loans through NABARD. Banks are

eligible to avail of hundred per cent of the loan

outstanding as refinance from NABARD, on an automatic

basis, at an interest rate of 2 per cent per annum. As on

31 March 2011, a subsidy amount of ` 3.61 crore was

released for establishing 8,987 units.

(viii) National Project on Organic Farming

3.41 The Ministry of Agriculture, Govt. of India had

launched a subsidy based National Project on Organic

Farming (NPOF) in 2005 for commercial production of

organic inputs like bio-fertilisers, vermiculture

hatchery, fruit and vegetable waste compost units.

The project has been extended by the GoI for the year

2010-11. However, the vermi-hatchery component of

the scheme was discontinued with effect from

11 August 2010. The Project is being implemented by

NABARD and National Centre of Organic Farming

(NCOF). Workshops were organised to popularise the

scheme. A total of 676 units (vermi-hatchery units-

627, bio-fertilizers units-36 and fruit & vegetable waste

compost units-13) have been sanctioned with net subsidy

release of ` 12.45 crore (as on 31 March 2011), against

receipt of ` 12.51 crore from GoI.

H. Evaluation Studies

3.42 During the year, seven evaluation studies

covering four investments, viz., rural godowns,

agricultural market infrastructure, agri-clinics and

agri-business centres and solar home lighting system,

were conducted.

a. Rural Godowns

3.43 In Andhra Pradesh, the evaluation study report

observed that farmers using rural godowns to store

agriculture produce benefited by way of 10 to 14 per

cent incremental income due to reduction in losses

and realisation of better price. Regular repayment of

loan was reported in 29 out of 56 sample cases, while

the units sanctioned to State Warehousing Corporation

(SWC) had become NPA as SWC had not paid

installments of loan regularly under the scheme. The

report suggests that while scrutinising the proposals

under the subsidy scheme, preference may be given to

those farmers who have smaller sized godowns.

3.44 In Karnataka, the evaluation study on rural

godowns was conducted in Bellary and Gulbarga

districts. The findings of the study revealed that small

and medium sized godowns constructed in the paddy

growing tracts of Bellary and Gulbarga districts were

exclusively utilised by the owner farmers for storing

their own produce. Large godowns, especially those

near the Gulbarga city, were either rented out to

Karnataka SWC or to other farmers. Utilisation of

godown capacity was hundred per cent in both Bellary

and Gulbarga districts. Pulses dominated in storage

accounting for 65 per cent of the storage space





51

created, followed by paddy in Gulbarga district. The

monthly rent charged by farmers was ` 8 to ` 10 per

quintal. The rate of interest charged by banks ranged

from 9.5 per cent to 13.5 per cent. There is a huge

storage gap, with a potential to construct storage

godowns. The report specially recommends

continuation of the scheme.

b. Agricultural Marketing Infrastructure

3.45 An evaluation study of the Agricultural Marketing

Infrastructure (AMI) scheme was conducted in Andhra

Pradesh, covering major activities such as combine

harvesters, seed processing and cotton ginning and

pressing units. At farm level, the net gain to a farmer

due to use of hired combine harvester was estimated at

` 2,400 per acre, mainly on account of savings in labour

cost. The cash accruals were ` 726, ` 1,064 and ` 886

per tonne, respectively, for paddy processing units, maize

processing units and maize drying units. Gross income per

unit from cotton ginning units was ` 0.43 crore, while it

was ` 0.23 crore for processing units. The study suggested

the need to modernise old cotton ginning and processing

units in the State.

3.46 The evaluation study of AMI scheme in

Maharashtra covered investments such as combine

harvesters, seed units and APMC regulated markets.

The study reported positive Net Present Worth (NPW)

and Internal Rate of Return (IRR) of more than 50 per

cent for combine harvesters but negative NPW and

IRR of 7 per cent for seed units. Combine harvesters

played an important role in reducing the cost of

harvesting, particularly wheat and paddy. In general,

the infrastructure created under the AMI scheme has

helped the farmers in selling their produce in bigger

market areas, increasing the holding capacity of the

farmers and getting higher prices through storage.

3.47 The evaluation study of AMI scheme in Punjab

covered investments like units for cleaning and waxing

of ‘kinnows’, rice sortex plants and combine

harvesters. The study findings indicated that

infrastructure developed under the scheme benefitted

owners, who were either large farmers or established

entrepreneurs. Small and marginal farmers remained

out of the domain of such infrastructure and had to

depend on commission agents and midddlemen. The

waxing units had improved price realisation for

kinnows and enhanced shelf life of fruits. This has

attracted more number of farmers for cultivation of

kinnows. Rice sortex plants had enhanced the export

of basmati and long grain non-basmati rice from

Punjab. Combine harvesters have become essential for

harvesting crops in Punjab due to scarcity of labour

and short time available between two crop seasons for

harvesting. The study report recommends that

infrastructure for marketing of produce from allied

activities like dairy, poultry, fisheries, floriculture, etc.,

needs to be developed to augment the area under

integrated farming.

c. Agri-Clinic and Agri-Business Centers

3.48 An evaluation study on Agri-Clinic and Agri-

Business Centers (ACABC) was conducted in

Himachal Pradesh. All the sample agri-preneurs had

received 2 months training from Indian Society of

Agri-business Professionals (ISAP) under the scheme.

The units were sanctioned bank loan ranging between

` 5 lakh and ` 10 lakh. Their annual turnover ranged

from ` 12 lakh to ` 1 crore, with an average profit

margin of around 10 per cent. The agri-preneur units

were able to attract farmers by providing good quality

inputs, providing quality advice to the farmers

regarding proper use of inputs, especially fertilisers

and pesticides, and consultancy services. The agri-

business centres have been successful in imparting





52

knowledge to the farmers on the new and scientific

methods of farming, thus leading to an increase in the

production per hectare and farm incomes. Highest

employment generation of 10,950 person days per

year was estimated for inputs supply units. The study

suggests that in order to ensure long-term viability and

sustainability of agri-preneurs, banks may engage them

as Business Correspondents (BC) and Business

Facilitators (BF) and use their technical/advisory

services for identification of prospective borrowers and

for appraisal of loan applications. The agri-preneurs

may be given preference over other general candidates

for issuance of dealership licence for fertilizers,

pesticides, insecticides, etc.

d. Solar Home Lighting System

3.49 The evaluation study of solar home lighting

system (SHLS) in Barabanki district of Uttar Pradesh

reported that the system could replace four kerosene

lamps per household. Due to installation of SHLS, the

quality of life had improved for the sample

beneficiaries; many chores like cooking, washing

utensils, fodder cutting, seed preparation, etc., could

be carried out even during night. There were other

benefits like children being able to study during the

night, use of mobile rechargers using solar power, etc.

The only concern about the SHLS was the non-

availablity of after-sales-service.

I. Investment Specific and Special

Studies

3.50 NABARD has been conducting Investment

Specific Studies (ISS) to identify the problems at the

field level in the implementation of schemes, to

estimate the benefits accruing from the investment,

repayment performance, etc. Conduct of Special

Studies (SS) was introduced from 2010-11, and is

based on the potential for the activity, its importance

in the state/districts, the emerging areas and the need

for such studies. During 2010-11, 16 ISS and eight SS

covering farm and rural non-farm sectors were

conducted in association with financing banks and

nodal Departments of State Governments.

J. Physical Achievement

3.51 The refinance disbursement supporting varied

economic activities under various types of investments

during the year are presented in Table 3.9. Under

minor irrigation, 20,000 tubewells with pumpsets and

22,000 pumpsets on existing wells were financed

during the year. Tractor financing continued to be a

major item of investment under farm mechanisation

with 49,000 units financed during the year. During

2010-11, under land developement, an area of 38,000

ha., was developed. Under the animal husbandry

sector, dairy farming and sheep/goat rearing showed

an increase of 5.12 lakh animals. The poultry sector

showed good growth with 2.80 crore birds being

financed during 2010-11.

K. Relief Measures for Poultry Units

in West Bengal

3.52 The Government of India announced relief

measures to the poultry units affected by Avian Flu in

West Bengal by way of interest subvention @ 4 per

cent p.a on the outstanding non-overdue term loan

and working capital loans as on 01 January 2008 for

the period from 01 January 2008 to 31 March 2009.

During 2010-11, an amount of ` 1.46 crore was

released to 12 PCARDB, 7 DCCB and one RRB,

covering 17,532 units in the state as relief measures.





53

Table 3.9: Units Financed and Completed under Refinance Support

Sr. Investments Units Cumulative Units Financed Cumulative Units Completed

No. (upto 31 March) (upto 31 March)

2010 2011 2010 2011

1. Minor Irrigation

i. Tubewells with pumpsets @ ‘000 1,640 1660 1,621 1641

ii. Dugwells with pumpsets * ‘000 2,096 2109 2,083 2095

iii. Pumpsets on existing wells ‘000 2,500 2522 2,469 2491

iv. Others ** ‘000 1,919 1973 1,882 1936

2. Land Development*** ‘000 ha. 3,387 3425 3,319 3356

3. Farm Mechanisation

i. Tractors ‘000 1,476 1525 1,440 1489

ii. Power tillers ‘000 168 170 163 165

iii. Other farm equipments ‘000 766 795 758 787

4. Plantation & Horticulture ‘000 ha. 2,324 2388 2,274 2338

5. Forestry ‘000 ETPs 3,21,700 3,21,984 2,65,800 2,66,084

6. Storage ‘000 tonnes 18,898 18899 18,711 18712

7. Market Yards No. 3,559 3665 3,526 3932

8. Dairy Development ‘000 animals 16,261 16500 16,031 16270

9. Sheep/ Goat Rearing ‘000 animals 38,758 39031 38,299 38572

10. Piggery 000 animals 1,712 1728 1,703 1719

11. Poultry lakh birds 2,029 2309 1,997 2278

12. Fishery

i. Mechanised Boats No. 22,777 22780 22,094 22097

ii. Other Boats No. 75,025 75086 73,805 73866

iii. Brackish Water Aquaculture ha. 5,381 5389 5,318 5389

iv. Fresh Water Aquaculture ‘000 ha. 418 421 413 416

13. Non-Farm Sector ‘000 8,549 8721 8,368 8558

14. Miscellaneous$ ‘000 15,882 16255 15,224 15578

@ : Includes borewells with pumpsets. * : Includes dug-cum-borewells with pumpsets, ETP : Entire Trans-Planting.

** : Includes dugwells/ dugwells-cum-borewells, deep tubewells with pumpsets, dugwells with conventional lift, 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, SHG, other activities under AH, Kisan bikes, sericulture, ACABC, soil/water testing, compost/

manure plants, gobar gas plants, vermiculture, SRTO, contract farming, AEZ, SC/ ST Action Plan, bee- keeping, etc.

P: Provisional

Note: While estimating the completed units, appropriate adjustments have been made for units financed upto March 2011, 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.





54

Rural Infrastructure Development Fund

3.53 Development of rural infrastructure is imperative

for agriculture and overall economic growth as also

improving the quality of life. Rural Infrastructure

Development Fund (RIDF) was instituted in NABARD

during 1995-96. The main objective of the Fund is to

provide loans to the State Governments and State-

owned Corporations to enable them to complete on-

going rural infrastructure projects.

A. Funding

3.54 Domestic commercial banks contribute to the

RIDF to the extent of their shortfall under priority

sector lending to agriculture, as stipulated by the RBI.

Started with ` 2,000 crore during 1995-96 (RIDF I),

the annual allocation to the Fund has now reached

` 16,000 crore during 2010-11 (RIDF XVI), taking the

cumulative allocation to ` 1,16,000 crore. Additionally,

a separate window was introduced in 2006-07 for the

funding rural roads component of the Bharat Nirman

Programme, with allocation of ` 18,500 crore, till

2009-10. The total allocation for RIDF, thus, stood at

` 1,34,500 crore, as on 31 March 2011.

B. Broad Sectors/ Activities

3.55 The broad categories of projects covered under

the RIDF are:

(i) Agriculture and Allied Sectors

3.56 These include irrigation projects, soil

conservation, flood protection, watershed, reclamation

of water logged areas; animal husbandry, plantation

and horticulture, seed, agriculture and horticulture

farms, forest development, fishing harbour/jetties,

riverine fisheries; market yards, godowns, marketing

infrastructure; cold storages; grading/certifying

mechanisms; testing laboratories; hydel projects (upto

10 MW); village knowledge centres; infrastructure for

Information Technology 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 Sector

3.57 Social sector includes drinking water; public

health institutions; construction of toilet blocks in

existing schools, especially for girls and "Pay & Use"

toilets in rural areas, infrastructure for rural education;

and construction of ‘anganwadi’ centres. The loans for

the above sectors are provided at 90 per cent of

project cost for NE and Hill States and at 85 per cent

for all other states.

(iii) Rural Connectivity

3.58 Rural Connectivity includes rural roads and

rural bridges and loans for these sectors are provided

at 90 per cent of project cost for NER and Hill States

and at 80 per cent for all other states.

Rural Road under RIDF





55

C. RIDF Operations- Sanctions and

Disbursements

3.59 During 2010-11, a total of 41,779 projects

involving loan amount of ` 18,314.88 crore were

sanctioned under RIDF XVI, taking the cumulative

number of projects, as at end March 2011, to 4,44,162

and cumulative amount sanctioned to ` 1,21,888.40

crore. Tranche wise position of sanctions are given in

Chart 3.4. Of the total amount sanctioned during the

year 2010-11, rural road projects accounted for

33.5 per cent, followed by irrigation projects (20.1%),

social sector projects (19.7%), rural bridges (14.2%)

and others (12.6%) (Table 3.10). Cumulative sanction,

as on 31 March 2011, was highest for Rural roads

(32.7%), followed by Irrigation (30.3%). Sector-wise

cumulative sanctions are depicted in Chart 3.5.

3.60 The State governments had a total pool of

projects of ` 1,21,888.40 crore, as on 31 March 2011,

under various tranche (RIDF I to XVI). During the

year, disbursements were made to the tune of

` 12,060.04 crore, as at end-March 2011. As per the

phasing of projects under various tranche (RIDF I to

Table 3.10: Sector-wise Projects and Amounts Sanctioned


(` crore)

Sector RIDF XVI (2010-11) RIDF I to XVI (Cumulative)

No. of Share in Amount Share in No Share in Amount Share in

projects total total projects total total

projects (%) amount (%) projects (%) amount (%)

Irrigation 18,784 45.0 3,675.59 20.1 2,34,427 52.8 36,914.27 30.3

Rural Bridge 1,369 17.10 2,604.32 14.2 14,705 3.3 14,088.02 11.6

Rural Roads 7,152 29.5 6,138.34 33.5 80,160 18.0 39,876.99 32.7

Social Sector 12,304 29.5 3,600.22 19.7 85,387 19.2 17,213.76 14.1

Power 11 0.0 158.58 0.9 761 0.2 2,138.77 1.8

Agriculture related 2,156 5.2 2,137.80 11.7 28,722 6.5 11,656.38 9.6

Total 41,779 100.0 18,314.85 100.0 4,44,162 100.0 1,21,888.40 100.0





56

XVI), the total amount sanctioned (phased) was

` 1,00,064.36 crore, against which disbursements

aggregated ` 80,499.78 crore (Table 3.11/Chart 3.6).

Six States (Andhra Pradesh, Uttar Pradesh, Gujarat,

Tamil Nadu, Madhya Pradesh and Rajasthan) together

accounted for nearly 50 per cent of total

disbursements and 47 per cent of total sanctions. The

state-wise analysis of ratio of disbursements to the

approved phasing of sanctions revealed that Mizoram

topped with 120 per cent, followed by Uttarakhand,

Goa (above 99%), Meghalaya (90%), Tamil Nadu

(89%), Haryana and Maharashtra (88%), Punjab and

Gujarat (87%), UP and Jammu & Kashmir (86%)

(Table 3.12). Cumulative amount of loan sanctioned

and disbursed to States in the North Eastern region,

including Sikkim, aggregated ` 6,328.24 crore and

` 3,293.18 crore, respectively, as on 31 March 2011.

The slow pace of utilization of loans under RIDF was

due mainly to delay in administrative and technical

approval by the State Governments, land acquisition

problems, delay in obtaining statutory clearances and

tendering process, inadequate budgetary support at

State level, lack of co-ordination among implementing

departments, etc.

D. Deposits/Repayments

3.61 The cumulative deposits received under RIDF

stood at ` 95,784.63 crore, as on 31 March 2011.

During the year, an amount of ` 13,056.22 crore was

received as deposits from commercial banks. The

details of year-wise and tranche-wise disbursements

against deposits received are given in Table 3.13. An

amount of ` 5,047.23 crore was received from state

governments towards repayment of RIDF loans during

2010-11. The total RIDF loan outstanding, as on

31 March 2011, was ` 66,077.96 crore.

Table 3.11: Tranche-wise Sanctions and Disbursements - On-going tranches – RIDF XI to XVI


(` crore)

Amount

Tranche Corpus No. of Projects Sanctioned Phased Disbursed Percent*

i. Closed Tranches (I to X) 42000 169662 41921.84 41921.84 36906.42 88

ii. Ongoing Tranches

XI 8000 29763 8310.50 8310.50 7010.19 84

XII 10000 41774 10377.15 10377.15 8000.73 77

XIII 12000 36810 12614.46 12614.46 8969.09 71

XIV 14000 85428 14726.35 13310.52 9252.67 70

XV 14000 38946 15623.22 9420.78 6629.24 70

XVI 16000 41779 18314.85 4109.11 3731.44 91

Total 74,000 2,74,500 79,966.56 58,142.52 43,593.36 75

Grand Total 1,16,000 4,44,162 1,21,888.40 1,00,064.36 80,499.78 80

*: Disbursed as per cent to phased





57

E. Monitoring of RIDF Projects

a. In-house Monitoring

3.62 The primary responsibility of monitoring of

RIDF projects is of State Governments for ensuring

timely completion and quality of assets being created.

NABARD also undertakes monitoring of RIDF projects

by exception. This two-pronged monitoring approach

results in better implementation of projects, as various

constraints are identified, reviewed and sorted out at

Table 3.12: Utilisation Percentage under RIDF (I TO XVI)


(` crore)

Sl.No. State Sanctions Phasing Drawn Utilisation (%)

1 Andhra Pradesh 13004.86 11300.24 8985.44 79.52

2 Karnataka 6416.23 5445.12 4241.45 77.89

3 Kerala 3498.88 2816.37 2302.41 81.75

4 Tamil Nadu 8228.53 7046.36 6298.07 89.38

5 Puducherry 239.08 134.85 78.26 58.03

South Zone 31387.58 26742.94 21905.62 81.91

6 Goa 385.12 298.98 297.59 99.53

7 Gujarat 9386.04 8279.71 7166.97 86.56

8 Maharashtra 7746.78 6090.11 5336.25 87.62

West Zone 17517.94 14668.81 12800.82 87.27

9 Haryana 3041.82 2287.98 2019.45 88.26

10 Himachal Pradesh 3114.90 2366.84 2014.95 85.27

11 Jammu & Kashmir 4058.98 2954.28 2537.14 85.88

12 Punjab 4527.16 3850.15 3362.48 87.33

13 Rajasthan 7574.76 6555.52 5197.41 79.28

14 Uttar Pradesh 10316.79 8916.48 7667.18 85.99

15 Uttarakhand 2440.18 1392.61 1389.58 99.78

North Zone 35074.59 28323.87 24188.19 85.41

16 Madhya Pradesh 1648.04 1509.02 1264.42 83.79

17 Chhattisgarh 8731.16 7541.46 5103.75 67.68

Central Zone 10379.20 9050.48 6368.17 70.36

18 Bihar 4906.83 3616.48 2424.52 67.04

19 Jharkhand 3103.51 2403.92 1740.95 72.42

20 Odisha 5770.87 4578.21 3331.35 72.77

21 West Bengal 7419.64 5674.46 4446.98 78.37

East Zone 21200.85 16273.08 11943.80 73.40

22 Arunachal Pradesh 736.23 674.58 509.94 75.59

23 Assam 2129.98 1925.71 1347.26 69.96

24 Manipur 329.38 326.73 54.58 16.70

25 Meghalaya 588.28 357.18 321.53 90.02

26 Mizoram 361.55 166.62 200.79 120.51

27 Nagaland 705.76 501.77 293.04 58.40

28 Tripura 1002.98 764.98 371.44 48.56

29 Sikkim 474.08 287.61 194.60 67.66

North-East & Sikkim 6328.24 5005.19 3293.18 65.80

RIDF Total 121888.40 100064.36 80499.78 80.45

Bharat Nirman 18500.00 18500.00 18500.00 100.00

GRAND TOTAL 140388.40 118564.36 98999.78 83.50





58

regular intervals. The High Power Committee (HPC)

chaired by the Chief/Finance Secretary of the State,

meets quarterly to review the pace of project

implementation. The HPC, has proven to be an

effective mechanism for monitoring and ensuring

speedy and timely completion of projects.

3.63 During the year, 5,553 projects were monitored

through field visits. Major observations/issues were

taken up with the implementing departments and the

Finance Department of State Governments for

improving the pace and quality of the project

execution.

b. Monitoring Studies - Feedback

3.64 The monitoring visit to poly-house projects in

Himachal Pradesh revealed that factors like, time

overrun, improper opening of the ventilators, heavy

rains and lack of awareness among farmers caused

damages. Standardization of cropping practices and

awareness creation among farmers on upkeep of

poly-houses were recommended. Monitoring of

social sector projects in Karnataka indicated that

there were problems of poor maintenance. Provision

Table 3.13: Year/Tranche-wise Disbursements and Deposits received under RIDF


(` crore)

Year Deposits Disbursements Tranche Deposits Disbursements

1995-96 350.00 387.34 I 1,586.56 1,760.87

1996-97 1,042.30 1,087.08 II 2,225.00 2,397.95

1997-98 1,007.04 1,009.03 III 2,308.02 2,453.50

1998-99 1,337.95 1,313.12 IV 1,412.53 2,482.00

1999-00 2,306.63 2,277.87 V 3,051.88 3,054.96

2000-01 2,653.64 3,176.85 VI 4,080.54 4,070.85

2001-02 3,590.72 3,790.37 VII 4,073.77 4,052.59

2002-03 3,857.09 4,103.42 VIII 5,215.00 5,148.50

2003-04 2,158.69 3,922.09 IX 4,913.64 4,916.48

2004-05 4,353.47 4,316.85 X 6,466.98 6,568.69

2005-06 6,092.37 5,953.32 XI 8,000.00 6,851.52

2006-07 6,966.43 6,222.58 XII 9,018.27 7,638.22

BNP 0.00 0.00 4,000.00 0.00

2007-08 7,369.46 8,033.64 XIII 9,837.65 8,445.71

BNP 4,438.42 4,500.00 3,544.06 4,500.00

2008-09 12,157.78 10,458.64 XIV 6,442.49 8,236.15

BNP 6,647.43 7,500.00 3,817.18 7,500.00

2009-10 12,677.01 12,387.54 XV 5,300.00 5,129.72

BNP 3,718.95 6,500.00 6,491.06 6,500.00

2010-11 13,056.22 12,060.04 XVI 4,000.00 3,731.44

Total 95,784.63 98,999.78 Total 95,784.63 98,999.78

BNP: Bharat Nirman Programme

Poly Houses under RIDF





59

for electrification, toilet and water supply was

missing in primary school projects. In Haryana, road

projects were not completed in time due to

non-availability of stone, because of a ban on

mining, land acquisition, non-availability of

adequate labour, forest clearance, etc.

F. Capacity Building Support

3.65 During 2010-11, five Regional Business Meets

were organized in five major regions to address

various constraints in implementing RIDF, which

involves several processes like, project identification,

area survey, project design, preparing Detailed Project

Reports (DPR) mid-term appraisal (both technical and

economic), monitoring and evaluation, quality testing,

etc., through training and capacity building of officials/

staff involved in implementing RIDF, especially for

those states that have comparatively lower off-take of

RIDF because of their weak implementing apparatus.

In addition, 45 regional awareness workshops have

been conducted by Regional Offices for State

Government officials of Finance and other

implementing Departments, agencies and user groups

agencies.

G. Economic/Social Benefits of RIDF

Projects

3.66 Completed projects under RIDF realise the

economic and social benefits in terms of: (i) creation of

additional irrigation potential, (ii) generation of

additional employment for the rural people,

(iii) contribution to the economic wealth of the country

(GDP), (iv) all weather connectivity/ improved

connectivity to villages and marketing centers and

(v) improvements in quality of life through better

facilities in education, health and drinking water supply.

Hanging Bridge under RIDF

Table 3.14: Cumulative Economic and Social Benefits of RIDF Projects

S.No. Particulars Additional benefits created

1 Irrigation potential (lakh ha.) 164.78

2 Rural Roads (km) 3,30,855.00

3 Rural Bridges (m) 6,67,306.00

4 Gross Domestic Product (` crore) 23,811.00

5 Recurring Employment (No.of jobs) 85,40,476.00

6 Non Recurring Employment:

A. Irrigation (lakh persondays) 26,396.78

B. Rural Roads and Rural Bridges (lakh persondays) 36,478.45

C. Others (lakh persondays) 18,768.94

7 Power Sector

A. Hydel Power Generation (MW) 200.11

B. System Improvement to minimise T & D losses (lakh units/ year) 22315

8 Social Sector (People /Students benefited)

A. Health Centres (lakh) 581.43

B. Primary & Secondary Schools (lakh) 94.83

C. Rural Drinking Water Supply (lakh) 1167.16

MW: Mega Watt T & D: Transmission and Distribution





60

Table 3.15: Statewise Benefits Estimated Under RIDF I to XVI


State Potential Value Recurring Non-recurring Employment

Irrigation Bridges Roads Prodn. Employment Irrigation Road+Bridges Others

(ha) (m) (km) (` crore) (Numbers) (lakh Persondays)

Andhra Pradesh 1786202 47286 31017 2662 1952853 5058 5450 3242

Arunachal Pradesh 0 2473 1010 0 0 0 233 62

Assam 317317 52323 795 348 102400 84 816 204

Bihar 556578 21598 4371 701 231693 311 1166 537

Goa 54080 1410 258 45 5284 81 158 8

Gujarat 1210934 4346 19873 1209 1321078 1492 954 1076

Haryana 868590 2969 2512 1835 167256 706 413 165

Himachal Pradesh 104992 18261 7771 398 414939 511 610 316

Jammu & Kashmir 129849 15000 11082 190 97738 214 1359 161

Karnataka 455365 38955 35074 1121 123605 1673 2700 874

Kerala 231338 29028 3915 501 79860 330 706 339

Madhya Pradesh 1313447 37881 13454 3610 1063265 3123 1454 344

Maharashtra 655034 54143 24506 1435 270236 3127 2354 191

Manipur 19550 0 0 29 8808 20 0 147

Meghalaya 7992 4250 1326 10 3621 61 268 64

Mizoram 2990 283 693 3 1976 12 65 22

Nagaland 7471 759 1622 8 3727 22 179 267

Orissa 836501 73632 5679 1777 441160 1880 2566 260

Punjab 496782 8543 6993 755 179077 654 828 783

Rajasthan 421644 2905 51070 738 98671 1268 2759 2560

Tamilnadu 270322 43971 31301 275 270786 534 3274 1246

Tripura 94893 32101 4389 50 11175 72 1085 472

Uttar Pradesh 4225908 41373 36371 3263 561833 1900 1538 706

West Bengal 1847915 25813 12944 1960 914068 1485 2668 3670

Sikkim 40516 3258 2533 29 26462 98 410 484

Jharkhand 73571 57500 7049 210 90742 303 1006 464

Chhattisgarh 341065 31603 4303 475 69618 828 448 10

Uttarakhand 105368 15315 8772 174 27439 224 975 49

UT of Puducherry 1836 327 172 1 1108 327 37 46

Total 16478050 667306 330855 23812 8540478 26398 36479 18769





61

An econometric analysis for estimating the effect of

infrastructure index (irrigation, connectivity, social sectors)

on agricultural production and productivity was carried out

for Chhattisgarh and Uttar Pradesh. Infrastructure index as

an independent variable explained 54-78 per cent variation

in agricultural productivity in the two states. Thus, the

results substantiated that infrastructure projects supported

under RIDF have positive impact on agricultural production

and productivity.

Major impact of Irrigation Projects was on increase in

cropping intensity (10-42%) and yield (10-50%). Other

benefits accrued from the sample irrigation projects were

recharge of ground water, availability of drinking water,

increase in allied activities like dairy, increase in land value,

increase in employment generation per year (non-recurring

employment in the range of 30 to 6,50,000 persondays

and recurring employment the range of 40 to 2,38,370

persondays).

Economic impact of Rural Roads & Bridges projects was

observed in terms of increase in land prices, price of

agriculture produce and cropping intensity, shift in acreage

towards cash crops, employment generation, allied

Box 3.1

Evaluation Studies on RIDF Projects : Feedback on Benefits Realised

activities, etc., increase in crop yield for paddy (4-10%),

wheat (3-8%) and sugarcane (10-20%). Wastage in

marketing of agricultural produce, especially perishables

was also reduced due to reduction in distance and time in

transportation. The Vehicle Operating Cost (VOC) came

down due to reduction in distance and improvement in the

quality of roads and bridges. Linkage by roads resulted in

convenient access to hospitals, banks, schools and

administration. Non-recurring employment generation was

in the range of 823 to 52,000 persondays per year and the

recurring employment was in the range of 653 to 41,659

persondays per year for the sample projects.

Economic benefits from Rural Water Supply Projects were

in terms of time saved (1.87 hours per family) and

adequate availability of safe drinking water in schools.

Water availability for animals and savings of time had

boosted dairy activity in the sample district. An average of

` 6.96 lakh was estimated to be the incremental income

from enhanced dairy activity. Other non-tangible benefits

like improvement in hygiene and environment were also

reported. As many as 35,000 persondays of non-recurring

employment and 930 persondays of recurring employment

per year were generated by the sample projects.

Source : NABARD (2010)- “Infrastructure for Agriculture Development” Occasional Paper-53

The benefits generated, as at end March 2011, are

presented in Table 3.14, Table 3.15 and Box 3.1.

H. RIDF: Looking Ahead

3.67 Despite funding lakhs of projects in irrigation,

rural connectivity, and other vital sectors under RIDF,

it is felt that the gigantic gap in rural infrastructure

cannot be bridged by the state governments due to

their limited budgetary resources and organisational

structure. In order to leverage private resources and its

implementing capacity, NABARD is exploring the

possibilities of allowing implementation of specific

projects under the public-private partnership (PPP)

model (Box 3.2). Accordingly, a quick study was

conducted by NABARD as well as State Governments

during 2008-09. Based on the study results/feedback

received and in consultation with GoI and RBI,

NABARD as part of its repositioning exercise, is in the

process of encouraging partnerships and network

relations to bring about private sector competence and

funds into the realm of rural infrastructure.





62

Box 3.2

NABARD Infrastructure Development Assistance (NIDA)

The first NABARD Infrastructure Development Assistance

(NIDA) loan has been sanctioned to the Karnataka State

Warehousing Corporation, for construction of 1.06 lakh

MT of storage space in 9 districts of the State, involving

loan support of ` 42.12 crore. Depending upon need,

Special Purpose Vehicles (SPV) set up under the PPP

model and private entrepreneurs will also be considered

on a case-to-case basis. Assistance will be provided based

upon viability of the borrowing entity and its financial

condition, including track record for execution of works

and delivery of services related to the specific investment

being financed. NIDA loan will typically be of long

tenure (7-15 years) and carry rates of interest which

appropriately reflect the borrower’s risk profile while

ensuring business viability. The loans will be guaranteed

against appropriate security and collateral. NABARD

will also build-in appropriate “Finance+” services like

monitoring, quality assurance, programme management,

capacity building, etc., to increase the sustainability of

the investments in the long run. A dedicated fund “Rural

Infrastructure Promotion Fund” has been created during

the year with an initial contribution of ` 25.00 crore.





63

IV


The Co-operative Banks and Regional Rural Banks

(RRB), which play a very crucial role in financial

intermediation in agriculture and rural development,

are vulnerable to disruptions created by economic

and that of DCCB increased by 3 per cent over the

previous year. Loans issued by SCB decreased by

17 per cent and that of DCCB increased by 26 per

cent during the year 2009-10, as compared to the

previous year. Loans outstanding of SCB increased

marginally by 2 per cent while that of DCCB increased

by 24 per cent in 2009-10 as compared to the

previous year.

4.4 In the Long Term Co-operative Credit Structure

(LTCCS), borrowings of State Co-operative Agriculture

and Rural Development Banks (SCARDB), as on

31 March 2010, marginally decreased by 0.5 per cent

over the previous year while that of Primary

Co-operative Agriculture Rural Development Banks

(PCARDB) marginally increased by 2 per cent during

the corresponding period. Loans issued by SCARDB

and PCARDB during the year 2009-10 increased by

19 per cent and 13 per cent, respectively, while the

shocks. NABARD endeavours to strengthen the

capacity of these institutions through various

developmental and supervisory initiatives to enable

them withstand such shocks effectively.

Institutional Development

A. Rural Co-operative Credit

Institutions - Overview

a. Performance

4.2 The total membership of Primary Agricultural

Credit Societies (PACS) during 2009-10 stood at

1,264 lakh, of which borrowing members were 598 lakh,

constituting 47.31 per cent of total membership. The

membership as well as borrowing members declined

during the year 2009-10. Both deposits mobilised and

loans issued by PACS (as on 31 March 2010)

registered an increase of 34.45 per cent and 27.47

per cent, respectively, over the previous year. The

borrowings of PACS also registered only an increase of

5.77 per cent over the previous year (Table 4.1).

4.3 An analysis of the financial position of the SCB

and DCCB (Table 4.2) indicated that their deposits as

on 31 March 2010, increased by about 15 per cent

each; the borrowings of SCB increased by 12 per cent

Table 4.1: Growth of PACS

(As on 31 March)

(` crore)

Particulars 2008 2009 2010

Number 94,950 95,633 94,647

Membership (lakh) 1,315 1,323 1,264

Borrowing Members (lakh) 794 765 598

Owned Funds 10,984 11,806 12,479

Deposits 25,449 26,245 35,286

Borrowings 47,848 48,938 51,764

Loans issued 57,642 58,787 74,938

Source : NAFSCOB

Table 4.2: Growth of Short-Term Co-operative Banks

(As on 31 March)

(` crore)

Particulars SCB DCCB

2009 2010 P* 2009 2010 P*

Number 31 31 370 370

Share Capital 1,570 1,635 6,452 7,226

Reserves 10,256 10,403 22,719 22,598

Deposits 71,272 82,311 1,28,434 1,47,109

Borrowings 20,971 23,430 27,588 28,334

Loans Issued 64,779 53,589 90,006 1,136,10

Loans Outstanding 48,382 49,199 99,462 1,23,221

P : Data provisional

* : Data for the year 2010 is repeated from: (i) 2008-09 for the

states of Puducherry and Sikkim; (ii) 2007-08 for Jharkhand,

Kerala (DCCB) and West Bengal; and (iii) 2006-07 for Bihar





64

loans outstanding increased by 4 per cent and one per

cent, respectively, over the previous year (Table 4.3).

b. Working Results

i. Profitability

4.5 During 2009-10, 28 out of 31 SCB were in profit

aggregating ` 463 crore while the remaining 3 SCB

were in loss (` 210 crore), resulting in aggregate profit

of ` 253 crore. While 323 out of 370 DCCB earned

profit of ` 1,545 crore, 47 DCCB incurred losses to

the extent of ` 524 crore, resulting in a overall profit

of ` 1,021 crore. Eleven SCARDB earned an

aggregate profit of ` 97 crore, while eight incurred an

aggregate loss of ` 155 crore, resulting in a loss of

` 58 crore. Out of 697 PCARDB, 307 earned an

aggregate profit of ` 154 crore, while 390 incurred an

aggregate loss of ` 518 crore during the year, resulting

in a loss of ` 364 crore (Table 4.4).

4.6 The aggregate accumulated losses of all the tiers

of co-operatives in the short-term and long-term

structures showed an increase as on 31 March 2010,

as compared to 2008-09 (Table 4.5).

4.7 An analysis at the regional level showed that

during 2009-10, the overall profits of SCB decreased by

22 per cent over the previous year (Table 4.6).

Profits of SCB in Eastern Region marginally improved

but in the North Eastern Region, it increased four fold

compared to the previous year. Gujarat SCB in

Table 4.3: Growth of Long-Term Co-operative Banks

(As on 31 March)

(` crore)

Particulars SCARDB*@ PCARDB*

2009 2010P 2009 2010P

Number 20 20 697 697

Share Capital 814 817 1515 1513

Reserves 3272 3369 3236 3269

Deposits 707 756 467 447

Borrowings 14773 14701 12403 12592

Loans Issued 2586 3076 2054 2324

Loans Outstanding 16279 16879 11231 11377

* : Data for 2009-10 repeated from 2008-09, for the states ofBihar, Kerala, Maharashtra (SCARDB), Odisha, Puducherry,Tamil Nadu and Tripura

@ : Manipur SCARDB is defunct P : Data provisional

Table 4.5: Accumulated Losses

(As on 31 March)

(` crore)

Year SCB# DCCB # SCARDB * PCARDB $

2008 428 6195 1263 3403

2009 404 5204 1054 3631

2010# 574 5270 1188 4087

Data for 2009-10 Provisional.

# Data for 2009-10 repeated in respect of SCB and DCCB from

2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and West

Bengal; from 2007-08 in Bihar, Jharkhand and Kerala (DCCB)

* Data for 2009-10 repeated from previous year in respect of

SCARDB and PCARDB in Bihar, Kerala, Maharashtra

(SCARDB), Odisha, Tamil Nadu, Puducherry and Tripura

Table 4.4: Working Results of Co-operative Banks

(` crore)

Agency SCB DCCB SCARDB $ PCARDB

Year 2008-09 2009-10*P 2008-09 2009-10*P 2008-09$ 2009-10$**P 2008-09# 2009-10#**P

Total (No.) 31 31 370 370 20 20 697 697

In Profit (No.) 26 28 321 323 12 11 343 307

Profit Amount 395 463 1603 1545 404 97 220 154

In Loss (No.) 5 3 49 47 7 8 353 390

Loss Amount 71 210 261 524 88 155 342 518

* : Data for SCB and DCCB repeated from : (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu, West Bengal; (ii) 2007-08 in Bihar,Jharkhand and Kerala(DCCB).

# : Data for 1 PCARDB and 4 PCARDB in West Bengal not available for 2008-09 and 2009-10, respectively$ : Manipur SCARDB is defunct.**: Data for year 2009-10 repeated from previous year for SCARDB and PCARDB in the states of Bihar, Kerala,, Maharashtra (SCARDB),

Odisha, Puducherry, Tamil Nadu and Tripura.

P : Data provisional





65

Western region and Assam, Nagaland and Tripura SCB

in North Eastern Region, which had incurred losses in

the previous year turned around, earning profits in

2009-10. Haryana SCB in Northern region incurred

loss during the year. While 10 SCB (Andaman &

Nicobar, Andhra Pradesh, Chhattisgarh, Uttarakhand,

Himachal Pradesh, Jammu and Kashmir, Goa,

Meghalaya, Mizoram and Odisha) improved their profit

as on 31 March 2010 over the previous year, 10 SCB

(Madhya Pradesh, Uttar Pradesh, Chandigarh, Delhi,

Punjab, Rajasthan, Maharashtra, Karnataka, Manipur

and Tamil Nadu) showed declining trend in profits

over the previous year. At the aggregate level, the non-

performing assets (NPA) in absolute terms as well as a

percentage to the loans outstanding, as on

31 March 2010 registered decrease, probably due to

an improvement in the recovery performance.

4.8 At the aggregate level, the number of profit

earning DCCB increased but were marked by a

decline in their profits during 2009-10. The number

of loss making DCCB decreased from 49 to 47 with

the losses doubling from ` 261.14 crore in 2008-09 to

` 523.87 crore in 2009-10. In the case of DCCB, the

overall profits of DCCB increased in Central and

Western Regions but decreased in Northern and

Table 4.6: Region-wise Working Results of SCB #

(As on 31 March)

(` crore)

Region Profit/Loss Gross NPA NPA as % to loans Recovery (%)

(+)/ (-) outstanding (As on 30 June)

2008-09 2009-10* 2008-09 2009-10* 2008-09 2009-10* 2008-09 2009-10*

Northern 105.39 71.30 347.02 365.44 3.12 3.16 97.29 97.93

North-Eastern 14.50 59.48 435.01 453.29 37.39 36.05 49.23 45.47

Southern 125.77 (-)30.76 1599.99 753.39 11.34 5.36 95.03 93.90

Eastern 43.29 44.01 505.64 498.92 10.32 9.18 86.82 86.83

Central 69.17 45.56 607.16 469.30 10.01 7.29 92.97 92.42

Western (-)33.99 64.06 2268.67 1928.82 20.58 18.42 83.26 81.59

All-India 324.13 253.65 5763.50 4469.16 11.91 9.08 91.78 91.22

# data for 2009-10 in respect of SCB in Bihar, Odisha, Puducherrry and Sikkimand West Bengal repeated from 2008-09

* Data for 2009-10 provisonal

Table 4.7: Region-wise Working Results of DCCB

(As on 31 March)

(` crore)

2008-09 2009-10*# Gross NPA NPA % to Recovery %

Loans (As on 30

Outstanding June)

Region DCCB Profit Loss DCCB Profit Loss 2009 2010 2009 2010 2009 2010

No. No. Amt. No. Amt. No. No. Amt. No. Amt.

No. Amt. No. Amt. No. Amt. No. Amt.

Northern 73 69 148.47 4 27.67 73 65 113.01 8 35.81 1806.63 1812.21 6.56 8.89 77.84 79.57

Southern 80 71 510.11 9 67.44 80 71 447.50 9 61.42 5125.53 4334.58 15.55 12.03 78.89 79.94

Eastern 64 50 76.36 14 67.12 64 50 76.36 14 67.12 1136.44 1136.44 17.70 5.06 62.66 68.41

Central 104 90 294.54 14 43.48 104 95 314.28 9 37.65 3357.10 3134.98 27.73 24.72 63.70 67.98

Western 49 41 573.29 8 55.43 49 42 593.38 7 321.87 6501.97 5597.24 22.33 17.68 66.80 71.80

All-India 370 321 1602.77 49 261.14 370 323 1544.53 47 523.87 17927.68 16015.45 18.02 13.00 72.17 74.94

* Data for 2009-10 provisional.

# Data for 2009-10 repeated from 2008-09, in respect of DCCB from Bihar, Jharkhand, Kerala and Odisha





66

Southern Regions during the year 2009-10. The

extent of profits of DCCB increased in Chhattisgarh,

Uttar Pradesh, Jammu and Kashmir, Gujarat,

Karnataka and Maharashtra. The percentage of NPA

to loans outstanding in all regions improved, except in

the Northern Region (Table 4.7).

4.9 At the aggregate level, SCARDB incurred loss of

` 57.91 crore (Table 4.8) and PCARDB incurred loss

of ` 518.06 crore (Table 4.9) during the year 2009-10.

The number of profit making PCARDB decreased to

303 in 2009-10 from 343 in 2008-09.

4.10 During 2009-10, profits of the SCARDB

increased in Eastern Region. SCARDB in Southern

and Western Regions slipped into loss making entities.

In the NE Region, the losses of SCARDB increased.

While profits of SCARDB in Chhattisgarh, Punjab and

West Bengal increased, profits of SCARDB in

Haryana, Himachal Pradesh and Uttar Pradesh

decreased.

4.11 During 2009-10, PCARDB in all regions

recorded a decrease in the level of their profits over

the previous year. While the loss making PCARDB in

Table 4.8: Region-wise Working Results of SCARDB *$

(As on 31 March)

(` crore)

Regions No. of Profit/Loss(-) Gross NPA NPA % Recovery %

Branches to demand

2010 2009 2010 2009 2010 2009 2010 2009 2010

Northern 85 69.00 50.02 759.77 898.64 13.86 15.60 64.92 58.00

North Eastern# 35 (-)2.56 (-)3.51 16.34 15.95 51.99 51.76 53.41 54.45

Southern 56 20.95 (-)61.65 696.12 709.11 18.97 19.15 51.65 56.85

Eastern 138 (-)1.03 7.06 368.93 313.99 40.26 31.39 34.73 36.47

Central 349 207.89 (-)49.82 1724.69 2265.76 39.21 49.04 35.31 37.48

Western 181 22.19 (-)0.03 1381.81 1424.11 77.57 80.71 20.06 19.54

All India Total 844 316.45 (-)57.91 4947.65 5627.56 30.39 33.34 40.73 40.88

* Data for 2009-10 is provisional

$ Data repeated for 2009-10 from 2008-09 in respect of SCARDB in Bihar, Kerala, Madhya Pradesh, Odisha, Puducherry, Tamil Nadu, Tripura and West Bengal

# Manipur SCARDB is defunct

Table 4.9: Region-wise Working Results of PCARDB@

(As on 31 March)

(` crore)

2008-09 2009-10# Gross NPA NPA % to Loans Recovery %Outstanding As on 30 June

Region No. Profit Loss No. Profit Loss

No. Amt. No. Amt. No. Amt. No. Amt. 2009 2010 2009 2010 2009 2010

Northern 145 99 72.27 46 75.81 145 105 51.37 40 203.04 1881.05 2287.87 35.32 34.73 39.14 41.19

Southern 403 167 71.21 236 60.61 403 144 66.78 259 78.39 1251.79 1300.80 36.57 36.14 50.15 48.18

Eastern 70 50 46.60 19 4.98 70 38 33.61 28 16.37 249.33 174.29 37.65 23.11 56.29 46.27

Central 50 23 24.06 27 69.02 50 16 2.25 34 35.81 745.75 623.47 63.20 56.69 37.64 37.48

Western 29 4 6.08 25 131.88 29 0 0.00 29 184.45 614.21 480.61 95.91 98.85 7.97 20.83

All-India 697 343 220.22 353 342.30 697 303 154.01 390 518.06 4742.13 4867.04 42.22 42.78 39.48 40.60

@: Data for 2009-10 provisional.

# : Data for 2009-10 repeated from 2008-09 in respect of PCARDB in Maharashtra, Odisha, Puducherry and Tamil Nadu





67

Central Region reported reduced lossess, PCARDB in

other regions reported increased losses during 2009-10

over the previous year (Table 4.9).

ii Costs and Margins

4.12 During 2009-10, SCB as a group earned an

overall return of 7.39 per cent while the cost of funds

worked out to 5.30 per cent, resulting in a financial

margin of 2.09 per cent (excluding miscellaneous

income of 0.82 per cent). The average transaction cost

and risk cost of SCB during the year worked out to

1.34 per cent and 0.55 per cent, respectively. SCB as a

group earned a positive net margin of 1.02 per cent

during 2009-10 compared to net margin of 0.57 per

cent during 2008-09.

4.13. In the case of DCCB, the overall return on

working funds was 7.52 per cent while the cost of

funds was 5.05 per cent, yielding a financial margin of

2.47 per cent (excluding miscellaneous income of 2.57

per cent). The average transaction cost and risk cost,

as a percentage to working funds were 1.89 per cent

and 1.35 per cent, respectively during 2009-10. The

DCCB, as a group, earned net margin of 1.80 per cent

during 2009-10.

4.14 During the year 2008-09, out of 19 SCARDB,

13 had positive net margin and the remaining 6 had

negative net margin. PCARDB in only 4 States had

positive net margin.

iii. Non-Performing Assets (Gross) and

Recovery Performance

4.15 At the aggregate level, the percentage of gross

NPA to total loans and advances outstanding in respect

of both SCB and DCCB, improved to 9.08 and 13.00

per cent, as on 31 March 2010, from 11.91 and 18.02

per cent as on 31 March 2009, respectively. (Table 4.6

and 4.7) In absolute terms, gross NPA was estimated at

` 4,469.16 crore for SCB and ` 16,015.45 crore for

DCCB, as on 31 March 2010, registering a decline of

22 and 11 per cent, respectively, over the previous

year. The percentage of gross NPA to total loans and

advances outstanding in the case of SCARDB,

as on 31 March 2010, increased to 33.34 per cent

from 30.39 per cent in the previous year, and

marginally increased to 42.78 per cent from 42.22 per

cent for PCARDB, during the corresponding period.

The gross NPA of SCARDB and PCARDB were

estimated at `5627.56 crore and `4867.04 crore,

showing an increase of 14 and 3 per cent, respectively.

The asset classification of NPA of SCB, DCCB,

SCARDB and PCARDB are given in Table 4.10.

4.16 The non-performing assets in SCB was the lowest

in the Northern Region (3.16%), followed by Southern

(5.36%) and Central (7.29%) Regions, and these regions

had a lower percentage of NPA as compared to the all-India

average of 9.08 per cent during 2009-10. In the Eastern

(9.18%), Western (18.42%) and and North-Eastern

(36.05%) regions, gross NPA was higher than the all-India

average. SCB in Arunachal Pradesh, Bihar, Assam,

Manipur, Tripura, Andaman and Nicobar, Chhattisgarh,

Uttar Pradesh, Meghalaya, Mizoram, Nagaland, Himachal

Pradesh, Jammu and Kashmir, Chandigarh, Kerala, Goa

and Maharashtra continued to have high levels of NPA. In

the case of DCCB, as compared to the all India average

(13.00%), NPA in Eastern (5.06%), Northern (8.89%)

and Southern (12.03%) regions were lower during

Table 4.10: Composition of NPA of Co-operative Banks

(As on 31 March 2010^)

(` crore)

Asset SCB* DCCB* SCARDB#$ PCARDB#

Classification

Sub-Standard 1412.35 7084.92 3460.93 2757.03

Doubtful 2257.82 6317.31 2146.54 2081.84

Loss Assets 798.99 2613.22 20.09 28.17

Total NPA 4469.16 16015.45 5627.56 4867.04

Provisions required 2861.47 10871.25 1188.28 1040.60

Provisions made 4438.25 12300.99 1445.56 1113.13

^ Data for 2009-10 Provisional

* data for the year 2009-10 in respect of SCB and DCCB

repeated from (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil

Nadu and West Bengal; (ii) 2007-08 in Bihar, Jharkhand and

Kerala (DCCB)

# Data for the states of Bihar, Kerala, Maharashtra (SCARDB),

Odisha, Tamil Nadu and Tripura repeated from previous year

$ Manipur SCARDB is defunct





68

2009-10. Haryana, Himachal Pradesh and Punjab had

low levels of NPA, while they were very high for DCCB in

Jharkhand, Uttar Pradesh, Chhattisgarh, Madhya

Pradesh, Jammu and Kashmir, Gujarat, Maharashtra,

Andhra Pradesh, Kerala, Tamil Nadu and West Bengal, as

on 31 March 2010.

4.17 The average loan recovery of SCB marginally

decreased to 91 per cent as on 30 June 2010, from

92 per cent as on 30 June 2009, while that of DCCB

increased to 75 per cent as on 30 June 2010, from 73 per

cent as on 30 June 2009 (Table 4.11). The loan recovery

of Chhattisgarh SCB increased considerably to 80 per

cent from 59 per cent, as on 30 June 2010. SCB in

Uttarakhand, Haryana, Jammu & Kashmir, Rajasthan,

Arunachal Pradesh and Tripura had improved their loan

recovery performance. However, SCB in Uttar Pradesh,

Chandigarh, Delhi, Himachal Pradesh, Andaman &

Nicobar, Maharashtra, Assam, Manipur, Meghalaya and

Nagaland showed decline in recovery of loans

during 2009-10.

4.18 The average loan recovery of SCARDB marginally

improved from 40.73% in 2008-09 to 40.88% in 2009-10.

In the case of PCARDB also, the recovery of loans during

2009-10 improved to 41 per cent compared to 39 per

cent during 2008-09. The PCARDB in the Southern

(48.18%) and Eastern (46.27%) regions registered higher

levels of recovery. The loan recovery of SCARDB in

Assam and Uttar Pradesh increased considerably to

36 per cent and 43 per cent, as on 30 June 2010, from 31

per cent and 38 per cent as on 30 June 2009. Low

recovery performance and its declining trend were

recorded by SCARDB in Chhattisgarh, Haryana, Madhya

Pradesh, Punjab and Rajasthan. The loan recovery in

respect of PCARDB in Chhattisgarh, Haryana, Himachal

Pradesh, Maharashtra and Punjab showed improvement,

as on 30 June 2010, over the previous year. The loan

recovery in respect of PCARDB had declined in

Karnataka, Madhya Pradesh, Rajasthan and West Bengal.

Table 4.11: Percentage of Recovery of loans to Demand

(As on 30 June)

Agency 2008 2009 2010*

SCB 84.59 91.78 91.22

DCCB # 55.61 72.17 74.94

SCARDB* $ 50.40 40.73 40.88

PCARDB* 40.90 39.48 40.60

* Data Provisional for the year 2009-10.

# Data for 2009-10 in respect of SCBs and DCCBs repeated

from 2008-09 in Kerala (DCCB), Odisha, Puducherry, Sikkim,

Tamil Nadu and West Bengal; from 2006-07 in Bihar; and

2007-08 in Jharkhand

$ Manipur SCARDB is defunct

Table 4.12: Frequency Distribution of Co-operative Banks According to Range of Loan Recovery Percentage

(As on 30 June)

(Number)

Recovery (%) SCB DCCB SCARDB PCARDB(No.) (No.) (No.) $ (No.)

2009 2010# 2009 2010#@ 2009 * 2010^* 2009 2010**

<40 4 4 102 47 9 10 382 337

>40 to <60 2 2 82 77 2 4 173 205

>60 to < 80 9 8 101 121 6 4 98 113

>80 16 17 85 124 2 1 43 42

Total 31 31 370 369 19 19 696 697

* : Data provisional for the year 2009# : Data for the year 2009-10 in respect of SCB and DCCB repeated from (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and West

Bengal; (ii) 2007-08 in Bihar,Jharkhand and Kerala (DCCB); @: data for one DCCB in MP not available^: Data for SCARDB and PCARDB in Bihar, WB, Kerala, Tamilnadu and SCARDB in Maharashtra repeated from previous year.

$ : Manipur SCARDB is defunct.





69

4.19 The frequency distribution of loan recovery of

banks in the co-operative structure are presented in

Tables 4.12 to 4.14.

c. Supersession of Elected Boards

4.20 NABARD, as a matter of policy, continues to

emphasise the need for co-operative banks to be

Bihar (5), Gujarat (3), Jharkhand (7), Karnataka (1), Madhya Pradesh (8),

Maharashtra (2), Odisha (4), Tamil Nadu (1), Uttar Pradesh (12), Uttarakhand (1),

West Bengal (3) (47)

Andhra Pradesh (2), Bihar (10), Chhattisgarh (1), Gujarat (1), Haryana (5), Jammu

and Kashmir (1), Jharkhand (1), Karnataka (4), Kerala (2), Madhya Pradesh (7),Maharashtra (10), Odisha (4), Rajasthan (4), Tamil Nadu (3), Uttar Pradesh (16),

Uttarakhand (1), West Bengal (5) (77)

Andhra Pradesh (8), Bihar (6), Chhattisgarh (4), Gujarat (5), Haryana (14), Himachal

Pradesh (1), Jammu & Kashmir (1), Karnataka (5), Kerala (3), Maharashtra (11),

Madhya Pradesh (14), Odisha (4), Punjab(1), Rajasthan (15), Tamil Nadu (5), Uttar

Pradesh (15), Uttarakhand (2), West Bengal (7) (121)

Andhra Pradesh (12), Bihar (1), Chhattisgarh (1), Gujarat (9), Himachal Pradesh (1),

Jammu and Kashmir (1), Karnataka (11), Kerala (9), Madhya Pradesh (8),

Maharashtra (8), Odisha (5), Punjab (19), Rajasthan (10), Tamil Nadu (14), Uttar

Pradesh (7), Uttarakhand (6), West Bengal (2) (124)

Arunachal Pradesh, Bihar,

Manipur and Meghalaya (4)

Andaman & Nicobar and Jammu

and Kashmir (2)

Assam, Chandigarh,

Maharashtra, Mizoram,

Nagaland, Sikkim, Tripura, Uttar

Pradesh, (8)

Andhra Pradesh, Chhattisgarh,

Delhi, Goa, Gujarat, Haryana,

Himachal Pradesh, Karnataka,

Kerala, Madhya Pradesh, Odisha,

Puducherry, Punjab, Rajasthan,Tamil Nadu, Uttarakhand, West

Bengal (17)

Total 31 369

Data for the year 2009-10 in respect of SCBs and DCCBs repeated from (i) 2008-09 in Odisha, Puducherry, Sikkim, Tamil Nadu and WestBengal; (ii) 2007-08 in Bihar, Jharkhand and Kerala; @: data for one DCCB in MP not available

<40

>40 and

<60%

>60 and <80%

>80%

Table 4.13: Frequency Distribution of States/UT according to Level of Loan Recovery of SCB and DCCB

(As on 30 June 2010)

Recovery (%) SCB DCCB @

Assam, Bihar, Chhattisgarh,

Gujarat, Jammu & Kashmir,

Madhya Pradesh, Maharashtra,

Tamil Nadu (8)

Haryana, Himachal Pradesh,

Rajasthan, Odisha, West Bengal,

Uttar Pradesh, Karnataka (7)

Punjab, Tripura (2)

Kerala, Puducherry (2)

Chhattisgarh (2), Haryana (15), Karnataka (59), Kerala (3), Madhya Pradesh (29),

Maharashtra (29), Odisha (26), Punjab (8), Rajasthan (16), Tamil Nadu (170), West

Bengal (11) (368)

Chhattisgarh (7), Haryana(4), Karnataka (77), Kerala (15), Madhya Pradesh

(7), Odisha (11), Punjab (24), Rajasthan (15), Tamil Nadu (8), West Bengal

(9) (177)

Chhattisgarh (3), Himachal Pradesh (1), Karnataka (37), Kerala (20), Madhya

Pradesh (2), Odisha (5), Punjab (29), Rajasthan (4), Tamil Nadu (2), West Bengal (2)

(105)

Karnataka (4), Kerala (8), Odisha (4), Punjab (28), Rajasthan (1), West Bengal (2)

(47)

< 40 %

> 40 % and

< 60%

> 60% and

< 80%

> 80%

Total 19* 697

* Data in respect of Manipur SCARDB and Maharastra SCARDB not available ; Data in respect of SCARDB and PCARDB for the states inBihar, West Bengal, Punjab, Kerala, Gujarat, and Maharashtra repeated from previous year

Table 4.14: Frequency Distribution of States/UT according to Levels of Loan Recovery of SCARDB and PCARDB(As on 30 June 2010)

Recovery SCARDB PCARDB





70

managed by duly elected Boards of Management. One

of the covenants of the Memorandum of

Understanding (MoU) executed by State Governments

under the GoI revival package for STCCS stipulates

that co-operative banks should be managed by duly

elected Boards of Directors. Despite this, the practice

of superseding elected Boards continued in some

States. As on 31 March 2010, duly elected Boards

were superseded in 9 SCB and 86 DCCB in the ST

Structure, and in 6 SCARDB and in 265 PCARDB in

the LT Structure (Table 4.15).

d. Development Initiatives of NABARD

i. Development Action Plans / Memorandum

of Understanding

4.21 The process of preparing institution specific

Development Action Plans (DAP) and execution of

MoU began in 1994-95. Three phases have been

completed with PACS included during the third phase

(2004-05 to 2006-07). The revised fourth phase of

DAP/MoU (for both ST and LT structure), spanning

from April 2007 to March 2012, is more institution

specific and participative with close involvement of

the Board of Directors and repositions NABARD, RBI

and the Registrar of Co-operative Societies (RCS) as

external facilitators. As on 31 December 2010, 21

SCB and 10 SCARDB and state governments

concerned had executed DAP/MoU for 2007-12

(Phase IV) with NABARD. The DAP are regularly

monitored and reviewed in the State Level Task Force

(SLTF)/District Level Monitoring and Review Committee

(DLMRC) meetings.

ii. Co-operative Development Fund

4.22 The Co-operative Development Fund (CDF),

constituted in 1993 under Section 45 of NABARD

Act 1981, with an initial contribution of ` 10 crore,

is replenished every year through contributions from

NABARD's surplus. Assistance from the CDF is

available to co-operatives in the form of soft loans/

grants for resource mobilisation, human resource

development, capacity building and streamlining of

operations, building up quality MIS, etc., which in

turn contribute to their functional efficiency. During

2010-11, financial assistance of ` 6.43 crore was

sanctioned and ` 6.05 crore disbursed (including

disbursements against sanctions of previous years). As

on 31 March 2011, cumulative sanctions and

disbursements were ` 98.17 crore and ` 87.57 crore,

respectively. The balance in the Fund, as on 31 March

2011, stood at ` 125 crore.

iii. Organisation Development Initiatives

4.23 Organisation Development Initiatives (ODI)

being conducted by NABARD since 1994-95, is a

re-engineering process, which facilitates RRB and

Co-operative Banks in achieving sustainable

viability and financial inclusion. During 2010-11,

ODI have been conducted in 18 Co-operative

Banks (SCB and DCCB) and 2 RRB.

e. Other Developments

i. Core Banking Solution Project for

Cooperative Banks

4.24 NABARD has decided to offer support to

cooperative banks in Core Banking Solution (CBS),

under its repositioning initiatives. Cooperative Banks

have been advised to express willingness to opt for the

Application Service Provider (ASP) model of CBS.

Under the project, NABARD would play the role of an

advisor and facilitator and ensure that the interests of

the banks are protected throughout the implementation

process.

Table 4.15: Elected Boards under Supersession(As on 31 March 2010)

Particulars SCB* DCCB* SCARDB* PCARDB*

Total Institutions (No.) 31 370 20 697

Boards under 9 86 6 265

Supersession (No.)

Boards under 29 23 30 38

Supersession (%)

*: Data provisional





71

ii. Standard Audit Manual for PACS

4.25 NABARD-GIZ Rural Finance Institutions

Programme (RFIP) undertook the task of preparation

of Standard Audit Manual for PACS through study

visits to Gujarat and Orissa in May 2010. The

objectives were: (i) Revising audit framework for PACS

in consultation with the stakeholders; (ii) Developing a

Model/Standard Audit Manual for PACS based on the

revised audit framework; (iii) Developing audit rating

tool for PACS; and (iv) Developing a training

programme for PACS auditors on the revised audit

system. In order to have a better understanding of the

risk perceptions of PACS, a questionnaire was

circulated and requisite information obtained from 467

PACS of 49 DCCB in 9 States. Based on this

information, the draft audit manual for PACS is being

prepared.

f. Revival Package for Short-Term Rural

Co-operative Credit Structure

4.26 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 announced by the GoI in 2006. The

integrated package for units under the STCCS

envisages provision of liberal financial assistance

through Special Audits, introduction of legal/

institutional reforms and initiating measures to improve

the quality of management.

i. Special Audit and Release of Funds

4.27 Special audits of the units under STCCS, as

on 31 March 2004, were completed in 80,639 PACS

across 25 States to arrive at the precise amount of

losses after factoring in prudential provisioning norms

and the sharing pattern. The special audit of DCCB

has been completed in ten states and approval

pending from SLIC in respect of three States. Special

audits of SCB have been completed in 10 States.

While an amount of ` 8,661.45 crore has been

released by NABARD as GoI share for recapitalisation

of 53,380 PACS in sixteen states till 31 March 2011,

the State Governments have released ` 816.77 crore

as their share. During the year, ` 364.77 crore was

released to DCCB as GoI share in respect of 1,314

ineligible PACS in Gujarat and Maharashtra.

ii. Legal Reforms

4.28 The participating States are required to amend

their Co-operative Societies Acts (CSA) for securing

the democratic character and autonomy of

co-operatives and for their regulatory control by RBI.

So far, twenty one States have amended their CSA.

The draft amendments proposed by the remaining four

States have been vetted by NABARD, even as

previous amendments in two 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, and

Computerisation in PACS

4.29 The process of adoption of Common

Accounting System (CAS) and Management

Information System (MIS) formulated for PACS is

underway in 16 States, while in the remaining States

where the MoU has been signed, the RCS concerned

have been advised to adopt CAS on the lines

suggested by NABARD. Training on CAS/ MIS has

also been initiated. Once operationalisation of CAS/

MIS is complete and development of capacities to

manually maintain the new system is achieved,

computerisation of CAS/MIS would start. The Core

Software has been finalised by NABARD and sent to

all 18 States that have opted for it. The revised

guidelines for rolling out of software, training of PACS

staff and hardware procurement were sent to all the

implementing states and the process of dry run is

being initiated in these States. Computerisation of

PACS is in progress in Andhra Pradesh, Haryana and

Tamil Nadu through software developed on their own.

Gujarat, Punjab, Jammu & Kashmir and Uttarakhand

are yet to decide on computerisation.





72

iv. HRD Initiatives

4.30 The package lays emphasis on training and

capacity building of Board Members and functionaries

of STCCS. Till date, training has been imparted to

330 master trainers from 23 States, who in turn have

trained 2,595 District Level Trainers (DLT). As on

31 March 2011, training has been imparted to 81,037

Secretaries of PACS from 18 States, 1,12,354 elected

Board Members of PACS from 14 States, 368 CEO of

DCCB from 16 States, CEO of SCB in six NER States

and 2,047 Directors of DCCB/ SCB from 14 States. In

addition, training on CAS/ MIS has been provided to

70,899 PACS functionaries and 4,173 bank

supervisors/ departmental auditors. During the year,

the following new modules were rolled out: (i) a five-

day in-campus orientation programme for Branch

Managers/ Senior Officers of DCCB/ SCB for business

development/ diversification. As on 31 March 2011,

1,582 Branch Managers/Senior Officers of DCCB/ SCB

have been trained; (ii) a new programme on Business

Development and Profitability for PACS Secretaries in

which 76 master trainers from 14 implementing States

were trained at Bankers Institute for Rural

Development (BIRD), Lucknow. These master trainers

have trained 556 DLT from six implementing states.

Further, 36,125 PACS staff in eight States have been

trained under this module.

v. Deposit Safety System for PACS

4.31 With a view to securing the deposits of PACS,

which would provide them a better standing among

members / clients and better access to finance, a draft

Institutional Protection and Deposit Safety Scheme

(IPDSS) for PACS was finalised and submitted to the

Govt of India for approval, which is awaited.

vi. Impact of the Revival Package

4.32 Reputed institutes like IIM, Bangalore and ISEC,

Bengaluru were entrusted with the task of conducting

A. Impact Studies

• Recap assistance has helped cleansing of Balance Sheet

and improved share capital of both PACS and DCCB.

• Govt. share holding reduced to less than 25% of the

total share capital in majority of the banks.

• Increase in volume of business and credit flow of DCCB

(Average Annual Growth Rate (AAGR) of 4% and 8%

in AP and Bihar, respectively) and of PACS (AAGR of

5% in MP, 37-106% in AP and 23% in Bihar).

• Reduction in NPAs of PACS and DCCB (AP, MP &

Bihar).

• PACS making conscious efforts to improve/diversify

business and earn profits.

• Increase in coverage of SF/MF by PACS.

• Elections conducted in all PACS and professionals

being co-opted on their Boards.

• CEO of DCCB being appointed as per "Fit & Proper

Criteria".

• CCS staff and Board Members imparted training under

eight modules.

• CAS introduced and training imparted.

B. World Bank Assessment

• CAS introduced and training imparted.

• Far reaching amendments to Co-operative Societies

Act.

• Elections to all three tiers of the CCS

• Introduction of Fit & Proper criteria to the Boards and

CEO of DCCB & SCB.

• Conduct of Statutory Audit by CA in DCCB & SCB.

• Training imparted country wide covering 2,40,000

(over 60,000 in World Bank funded states)

• Staff/Boards of DCCB trained in governance,

accounting and business planning.

• Ground level credit in the four states has increased by

120% in aggregate terms over March 2005.

• A 43% growth over March 2005 position has been

registered in the coverage of small and marginal

farmers.

• Recovery rates of the DCCB/SCB have improved.

Box 4.1

Impact of GoI Revival Package for STCCS





73

impact studies in six states, viz., Andhra Pradesh, Bihar,

Madhya Pradesh, Maharashtra, Rajasthan and Tamil

Nadu of the implementation of the revival package

during the last 3 years. Similarly, World Bank also

conducted monitoring studies in four states, viz.,

Gujarat, Haryana, UP and Odisha. The impact studies

by the IIM and ISEC and the World Bank assessment

have brought out a number of positive features

(Box 4.1).

g. Revival of Long-Term Rural

Co-operative Credit Structure

4.33 The Task Force, constituted by the GoI under

the Chairmanship of Shri G. C. Chaturvedi, to

review the need for a separate package for Revival

of Long Term Co-operative Credit Structure

(LTCCS), submitted its report to the GoI on

25 February 2010. Announcement of the Package

by the GoI is awaited.

B. Regional Rural Banks

a. Financial Performance

4.34 Post amalgamation, the number of RRB

operating in the country was 82, with a network of

15,938 branches (Table 4.16) spread over 618 districts

in twenty-six States and one UT (Puducherry). During

the year under review, the aggregate reserves,

deposits and investments of RRB increased by 20 per

cent each while loans and advances (outstanding)

increased by 22 per cent (Table 4.16).

4.35 Financial results of RRB for the year 2010-11

indicated that 79 out of 82 RRB had earned pre-tax

profit to the extent of ` 3470 crore, compared to

` 2515 crore in 2009-10. The viability of RRB, as on

31 March 2011, is expected to improve as compared

to the previous year. The estimated aggregate

reserves and net worth of all the RRB increased to

` 9,678 crore and ` 12,567 crore, respectively, in

2010-11. The accumulated losses of RRB decreased

by 23 per cent over the previous year. The

performance of RRB varied widely across the regions

in 2009-10. While all RRB in the Eastern, Northern

and Western regions were in profit, one RRB each in

Central, North-Eastern and Southern region incurred

losses (Table 4.17).

Table 4.16: Indicators of Performance of RRB(As on 31 March)

(` crore)

Particulars 2009 2010 2011 P

No. of RRBs (No.) 86* 82* 82

Branch Network (No.) 15181 15480 15938

Share Capital 197.00 197.00 197.00

Share Capital Deposit 3959.30 3984.90 3984.90

Reserves 6753.99 8065.26 9678.31

Deposits 120189.90 145034.95 174041.94

Borrowings 12734.65 18770.06 27216.59

Investments 65909.92 79379.16 95245.99

Loans & Advances 67802.10 82819.10 101039.30

(Outstanding)

Loans Issued 43367.13 56079.24 72903.01

RRB Earning Profit (No.) 80 79 79

Amount of Profit (A) $ 1823.55 2514.83 3470.47

RRB incurring Losses (No.) 6 3 3

Amount of Loss (B) 35.91 5.65 5.65

Net Profit (A -B) $ 1787.64 2509.18 3464.82

Accumulated Losses 2299.98 1775.06 1366.80

RRB with accumulated 31 27 26

losses (No.)

Recovery (%) 77.85 80.09 80.03

NPAs to loans outstanding (%) 4.14 3.72 3.50

Net worth 8610.31 10472.10 12566.52

* : Number reduced due to amalgamation

$ : Before Tax P : Provisional





74

b. Recovery Performance

4.36 The recovery performance of RRB was

estimated at 80.03 per cent, as on 30 June 2010,

compared to 80.09 per cent, as on 30 June 2009

(Table 4.17). RRB as a group in the Northern and

Southern region registered a recovery performance

above the national average. A recovery of above

80 per cent was achieved by 39 RRB in the country,

while 37 RRB had recovery levels ranging above 60

per cent but less than 80 per cent. Six RRB had

recovery more than 40 per cent but below 60 per cent

(Table 4.18).

c. Non-Performing Assets

4.37 The aggregate gross NPA of all RRB declined

from 4.14 per cent as on 31 March 2009 to 3.72 per

cent, as on 31 March 2010. Two regions, viz.,

Northern and Southern regions had NPA as

Table 4.17: Region-wise Working Results of RRB


(` crore)

Region RRB Profit Loss Net Accumu Loans & Gross NPA Recovery (%)No. Earning Incurring Profit lated Advances (As on

Losses O/S 30 June)

No. Amt. No. Amt. Amount % 2009 2010P

Northern 15 15 361.56 – – 361.56 208.00 13255.65 268.21 2.02 85.69 88.70

North-Eastern 8 7 96.35 1 2.98 93.37 163.52 3028.76 196.77 6.50 72.47 74.82

Southern 16 15 707.27 1 0.22 707.05 0.29 28472.27 600.17 2.11 82.83 81.40

Eastern 14 14 407.98 – – 407.98 1235.56 13310.90 933.70 7.01 74.58 73.10

Central 23 22 854.95 1 2.45 852.50 86.92 20790.35 905.93 4.36 75.45 75.01

Western 6 6 86.72 – – 86.72 80.77 3961.17 180.04 4.55 76.64 77.36

All India 82 79 2514.83 3 5.65 2509.18 1775.06 82819.10 3084.82 3.72 80.09 80.03

P : Provisional

< 40 0

> 40 and < 60 6

> 60 and < 80 37

>80 39

Nil

Bihar (1), Madhya Pradesh (1), Manipur (1), Odisha (1), Jharkhand (1), Karnataka (1)

Andhra Pradesh (3), Arunachal Pradesh (1), Assam (1), Bihar (2), Chhattisgarh (2), Gujarat (1), Jammu &

Kashmir (1), Jharkhand (1), Karnataka (2), Madhya Pradesh (5), Maharashtra (2), Meghalaya (1), Nagaland (1),

Odisha (3), Tripura (1), Uttar Pradesh (7), West Bengal (3)

Andhra Pradesh (2), Assam (1), Bihar (1), Chhattisgarh (1), Gujarat (2), Haryana (2), Himachal Pradesh (2),

Jammu & Kashmir (1), Karnataka (3), Kerala (2), Madhya Pradesh (2), Maharashtra (1), Mizoram (1), Odisha

(1), Puducherry (1), Punjab (3), Rajasthan (6), Tamil Nadu (2), Uttar Pradesh (3), Uttarakhand (2)

Table 4.18: Frequency Distribution of States According to Levels of Recovery of RRB(As on 30 June 2010)

Recovery (%) States





75

percentage to loans outstanding below the all-India

average. The gross NPA level is expected to be at 3.50

per cent, as on 31 March 2011.

d. Capital to Risk-Weighted Assets

Ratio

4.38 Consequent upon the release of (i)

recapitalisation assistance to RRB and (ii) funds under

ADWDR Scheme, 2008, the Capital to Risk-Weighted

Assets Ratio (CRAR) of RRB has improved. As on

31 March 2010, 53 out of 82 RRB had a CRAR of

9 per cent and above, while 6 RRB had CRAR between

7 and 9 per cent.

e. Capitalisation of RRB

4.39 After approving the major recommendations of

the Committee on Capitalisation of RRB for

maintaining CRAR (Chairman : Dr. K. C. Chakrabarty),

the GoI had made a provision of ` 350 crore for 2010-

11 in the Union Budget, for recapitalisation of RRB.

Against this, the GoI had released its share of

` 61.71 crore to four RRB as on 31 March 2011.

f. Performance Review by Govt. of India

4.40 In continuation of the mechanism for reviewing

the performance of RRB by GoI, introduced in

2007-08, a Review Meeting was held in July 2010,

under the Chairmanship of Hon'ble Union Finance

Minister. While appreciating the performance of RRB

in the areas of deposit growth, priority sector and

agricultural lending, reduction in NPA, etc., the

Hon'ble Union Finance Minister also advised RRB to

make earnest efforts to (i) achieve the goal of

opening 2000 new branches by 31 March 2011;

(ii) attain Gross NPA level of less than 5 per cent;

(iii) draw Action Plan for achieving 100 per cent

Financial Inclusion; (iv) bring all their branches under

CBS by September 2011; (v) prepare time-bound

plan for wiping out their accumulated losses and (vi)

make concerted efforts for improving CRAR.

g. Human Resource Development

4.41 Based on the recommendations of the

Amaresh Kumar Committee, the GoI issued the RRB

Service Regulations, 2010. GoI also notified the

RRB Appointment & Promotion Rules 2010, in

July 2010.

h. Development Initiatives

i. Branch Expansion Programme/Core

Banking Solution

4.42 RRB were given a target of opening 2000 new

branches by March 2011. In the current year, as on

31 March 2011, RRB had opened 463 new branches

taking the cumulative number of branches of all RRB

to 15938 spread over 618 districts, in 26 states and

one UT. It is now compulsory for all new branches to

be equipped with CBS. The sponsor banks are

required to extend all necessary help in this regard,

including financial assistance, training, back office

support, etc. RRB were directed by GoI to implement

CBS in all their branches by September 2011. As on

date, CBS has been fully implemented in 32 RRB and

is in progress in other RRB.

ii. Financial Inclusion

4.43 The RRB have emerged as a strong

intermediary for Financial Inclusion in rural areas

by opening large numbers of "No Frills' accounts

and financing under General Credit Card (GCC).

Total number of business accounts (deposit plus

loan accounts) with RRB stood at 1188.83 lakh, as

on 31 March 2010 (Table 4.19).





76

4.44 NABARD inspects SCB and DCCB in terms of

the powers vested under Section 35(6) of the Banking

Regulation Act, 1949 (As Applicable to Cooperative

Societies) and RRB under Section 35(6) of the

Banking Regulation Act, 1949. NABARD also

conducts voluntary inspections of SCARDB, Apex level

Co-operative Societies and Federations having

borrowings outstanding from it. 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 SCB, DCCB and RRB not

complying with minimum capital requirements as

stipulated under the B.R. Act, 1949 (AACS)/ RBI Act

1934 and voluntary inspections of all SCARDB

continue to be annual. The statutory inspections of

those DCCB and RRB with positive net worth and

voluntary inspections of Apex Co-operative Societies/

Federations are conducted biennially.

A. Operational Matters

a. Inspection of Banks

4.45 During 2010-11, all the targeted statutory

inspections of 302 banks (31 SCB, 229 DCCB and

42 RRB) and voluntary inspections of 18 SCARDB and

3 Apex Societies had been conducted. The inspections

brought out supervisory concerns relating to these

institutions, which were communicated to the banks

concerned, RCS, State Governments (in respect of

co-operative banks) and Sponsor Banks (in respect of

RRB) for corrective action. NABARD also held

discussions with the Board of Directors of SCB/DCCB/

RRB apprising them of the deficiencies found in the

inspection and urging them to initiate immediate

remedial action. Besides, meetings were also held with

the CEO of the banks concerned, after 45 days of issue

of Inspection Reports, to secure satisfactory compliance

on core inspection findings. Supervisory ratings were

also conveyed confidentially to the Top Management of

the banks.

b. Board of Supervision

4.46 The Board of Supervision (BoS) constituted by

the Board of Directors of NABARD in 1999, met four

Table 4.19: Status of Financial Inclusion - RRB


(No. in lakh)

Of total Loan Accounts, major areas of

Financial Inclusion

Year No. of Of which, No. of SSI, artisans,

Deposit ‘No-Frills’ Loan SCC & retail

Accounts Accounts Accounts GCC SHG KCC Tenants trade

2007-08 758.02 81.17 171.20 2.35 7.20 69.84 1.03 20.78

2008-09 935.54 153.81 170.66 3.22 8.04 67.87 0.95 19.64

2009-10 1002.16 200.09 186.67 4.12 8.97 83.72 0.83 21.28

Supervision of Banks





77

times in 2010-11. It reviewed (i) the functioning of

SCB, DCCB and SCARDB as brought out in the

inspections; (ii) the functioning of co-operative credit

institutions in Andhra Pradesh, Punjab and Jharkhand;

(iii) the working of RRB sponsored by SBI, Union Bank

of India and Punjab National Bank; (iv) reports of

frauds in the supervised banks; (v) the functioning of

weak DCCB in Uttar Pradesh, Gujarat and Bihar;

(vi) the status of submission (including delay) of Banks'

compliance to inspection reports and delay in scrutiny

of compliance by NABARD RO; (vii) the Scheduling of

amalgamated RRB; (viii) the Exposure of SCB and

DCCB to Marketing Societies; and (ix) major

observations from the investment portfolio studies taken

up in some of the banks.

c. Health of Supervised Banks

i. Compliance with Minimum Share Capital

Requirements

4.47 During the year 2010-11, twenty DCCB

improved their financial position and recomplied with

the provisions of Section 11(1) of B.R. Act, 1949

(AACS). As on 31 March 2011, 68 banks

(5 SCB and 63 DCCB) were not complying with

the provisions of Section 11(1) of the B.R. Act, 1949

(AACS), i.e., minimum capital requirements.

Applications for grant of exemption in respect of

50 banks (1 SCB and 49 DCCB) were under the

consideration of the RBI/GoI.

ii. Grant of Licence/Scheduling of Banks

4.48 Pursuant to the recommendations of the

Committee on Financial Sector Assessment (CFSA)

[Chairman : Dr. Rakesh Mohan], the RBI had revised

the licensing norms for co-operative banks during

October 2009. As on 31 March 2010, the number of

licenced SCB and DCCB stood at 22 and 173,

respectively. During the year, RBI issued licences to 2

SCB and 49 DCCB, thus, increasing the number of

licensed banks to 246 (24 SCB and 222 DCCB), as on

31 March 2011. During the year, no SCB was included

in the Second Schedule to the RBI Act, 1934. Thus, the

number of scheduled SCB remained unchanged at 16.

4.49 From its very inception, all RRB were included

in the Second Schedule to the RBI Act 1934.

However, amalgamated RRB, being new entities could

become Scheduled Banks only with the approval of

the 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 to the RBI Act, 1934, after they

were found complying with Section 42(6)(a)(ii) of the

Act, ibid. With this, the number of Scheduled RRB

stood at 75 as on 31 March 2011. Inclusion of five

more RRB in the Second Schedule to RBI Act, 1934,

was recommended to RBI during 2010-11.

iii. Compliance with various Statutory

Provisions

4.50 As on 31 March 2011, five SCB and 63 DCCB

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. Eight SCB and 186 DCCB 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 SCB, two were not

complying with Section 42(6)(a)(i) of the RBI Act,

1934 as regards minimum capital requirement of

` 5 lakh, and four 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 2011, out

of 82 RRB, 75 complied with Section 42(6)(a)(i) of the

RBI Act, 1934 while 56 complied with Section

42(6)(a)(ii) of the Act, ibid.

B. Policy Decisions/Guidelines

a. Co-operative Banks

4.51 Keeping in view the relaxation in the licencing

norms for co-operative banks, the norms for





78

compliance with Section 22(3)(b) of B R Act, 1949

(AACS) were also relaxed. During the year, the

following important instructions/circulars were issued

to SCB and CCB: (i) instructions advising the

cooperative banks to issue engagement letters to

Statutory Auditors, specifying the areas to be covered;

(ii) a questionnaire/check list for the use of concurrent

auditors to ensure that all aspects are covered by the

auditors while reviewing the Investment Portfolio of

banks; (iii) circular on fraud prevention measures and

constituting Fraud Risk Management Group; (iv) a

Model Know Your Customer (KYC) / Anti-Money

Laundering (AML) Policy for adoption; (v) detailed

guidelines for inspection of DCCB, branches of SCB/

DCCB and affiliated societies; (vi) clarification on

calculation of Demand and Time Liabilities (DTL) for

maintenance of CRR/SLR; and (vii) guidelines to RCS

of all States and UT on opening of branches by DCCB,

consequent to the amendment of Co-operative Societies

Act as per GoI revival package for STCCS.

b. Regional Rural Banks

4.52 During the year, (i) RRB were permitted to

induct Nominee Director of NABARD in the Audit

Committee, with the approval of the Board; (ii) a

Model KYC/ AML Policy was circulated to all RRB

for adoption with suitable modifications; and

(iii) clarifications were issued to RRB on Disclosure

in Financial Statement in Half-Yearly Reviews.

C. Supervisory Interventions

4.53 Six Regional Supervision Seminars on internal

inspection and internal audit were conducted during

the year, for Co-operative banks and RRB. Training /

sensitisation programmes and workshops on

Investment Management, Asset Liability Management

(ALM), AML/ KYC, monitoring of frauds, prudential

norms and CMA were conducted for the auditors and

other personnel of SCB, DCCB and RRB. Two

training programmes were conducted in IDRBT,

Hyderabad, to acquaint the Bank's inspecting officers

with conducting of inspections in a Computerised

Environment. Four Regional Supervision Seminars

were conducted for the Bank's inspecting officers for

discussing various issues involved in inspection of

banks. A National Seminar on Audit was also

conducted in Bengaluru in May 2010, to sensitise the

auditors on issues relating to audit of co-operative

banks. A seminar was conducted for Inspecting

Officers of DoS, for a better understanding of the

deficiencies pointed out in the Inspection Reports

(IR), to ensure submitting proper compliance, by the

supervised banks, and to encourage issuing IR in

Hindi.

D. Advisory to Regional Offices

4.54 The Bank's Inspecting Officers were advised to

critically examine the management aspect of banks

(especially weak banks), incremental NPA, systemic risks,

KYC/ AML standards, etc., during the course of inspection,

and highlight them in the inspection reports so as to draw

the focussed attention of the management. With a view to

addressing the problem of reconciliation of inter-branch

and inter-bank accounts, Regional Offices were advised to

convene a meeting of all SCB and DCCB under their

jurisdiction, and prepare time bound action plan. Regional

Offices were also advised to monitor the receipt of

compliance reports and pursue with the supervised banks

for their timely submission.


4.55 For a holistic and more effective approach

towards supervision, especially in strengthening the

internal checks and control systems in the supervised

banks, NABARD continued to forge partnerships with

other agencies under the GIZ-RFIP programme and

with Institute of the Chartered Acccountants of India

(ICAI) for preparation of Audit Manual for

Co-operatives and RRB. NABARD also actively

supported the National Federation of State

Co-operative Banks (NAFSCOB) in revising the

operational manuals for Co-operative Banks.





79

V

Organisation, Corporate Governance and Management

In order to align itself with the changing financial and

credit markets, NABARD has initiated several steps to

reposition itself and face the challenges for becoming an

effective and sustainable development institution. Human

Resources are an integral part in the change process of an

organisation. Recognising this, the Bank continues its

emphasis on capacity building of the staff by upgrading

their skills and developing their expertise.

A. Board of Directors

5.2 The Board of Directors met six times during the

year, while the Executive Committee and the

Sanctioning Committee for Loans under RIDF met

thrice and seven times, respectively. The Audit

Committee of the Board (ACB) as well as 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) Shri. Rakesh Singh, Additional Secretary (FS),

Department of Financial Services, Ministry of

Finance, Government of India was appointed as

Chairman with effect from 03 December 2010

vice Shri. U. C. Sarangi, who demitted office on

02 December 2010 after completion of his term.

(b) Shri. Lakshmi Chand and Smt. Shashi Rekha

Rajagopalan were reappointed on the Board.

(c) Shri. K. Jayakumar, Additional Chief Secretary

(Home & Vigilance) and Agriculture Production

Commissioner, Government of Kerala was

appointed as Director vice Shri L. C. Goyal with

effect from 03 September 2010.

(d) Shri. J. C. Mohanty, Principal Secretary,

Department of Agriculture, Government of

Rajasthan was appointed as Director with effect

from 27 July 2010, vice Shri Roshan Lal.

Subsequently, Shri R. K. Meena, Principal

Secretary, Department of Agriculture, Government

of Rajasthan was appointed as Director with effect

from 20 January 2011 vice Shri. J. C. Mohanty.

(e) Shri. A. K. Sinha, Agriculture Production

Commissioner, Government of Bihar was

appointed as Director with effect from 27 July

2010, vice Shri. Letkhogin Haokip.

B. Senior Management

5.4 Four Executive Directors manage the operations

of the Bank. Dr. A. K. Bandyopadhyay was promoted as

Executive Director during the year. Shri P. L. Behera,

Executive Director retired on 31 January 2011 and

Dr. A. K. Bandyopadhyay, Executive Director retired on

31 March 2011.

C. Repositioning of NABARD

5.5 NABARD started the Project ‘Reposition’ in

March 2010, with a view to networking resources,

building capabilities and partnering institutions for

bringing about effective integrated rural development in

India. The project seeks to address the present day

challenges without conflicting with the long-term role

mandated to NABARD by GoI and RBI. During the

year, diagnostic and design phases were completed.

The pilot and implementation phases have commenced

(Box 5.1).

D. Inspection of NABARD

5.6 Reserve Bank of India conducted the 13th

Financial Inspection of NABARD (with reference to its

Management





80

financial position as on 31 March 2010) from

01 November 2010 to 13 December 2010.

E. Right to Information

5.7 The Bank has been complying with the statutory

requirements of the Right to Information (RTI) Act

2005. During the year, 737 applications were received

and requisite information provided within the

stipulated time. Ninety-four appeals were responded to

and 15 hearings on appeals made to Central

Information Commission were attended. Workshops

were conducted for four major Regional Offices, viz.,

Andhra Pradesh, Bihar, Gujarat and Uttar Pradesh.

Shri S K Mitra, Executive Director was designated as

the Transparency Officer for the Bank.

Human Resources Management

A. Training and Skill Upgradation

a. Staff Training

5.8 During 2010-11, officers (2,131) were imparted

training on various topics through 103 programmes

conducted by the National Bank Staff College (NBSC),

Lucknow. Customised training on Co-financing,

Software Development and System Analysis, Disaster

Management, etc., was imparted to 78 officers. Further,

18 on-location programmes were also conducted for

425 officers, covering topics like Tribal Development

Fund (TDF), Funds & Risk Management, Treasury &

Risk Management, Futures Trading, APRACA-

CENTRAB international programme on Financial

Inclusion, advanced training programme on SHG-Bank

Linkage, etc. Besides, 424 officers were deputed for

126 off-the-shelf programmes, workshops, seminars

and conferences organised by reputed institutions.

National Bank Training Centre (NBTC), Lucknow and

capital and farm asset maintenance needs of the individual

borrowers and affiliated PACS. This is being implemented on

a pilot basis. During the year, one proposal involving credit

limit of ` 100 crore was sanctioned.

• Adopting a comprehensive approach to financing and

supporting producer organisations: NABARD has taken

up a pilot initiative for supporting producer organisations,

adopting a flexible approach to suit the needs of the

producers. Two projects were taken up on a pilot basis and an

amount of ` 1.96 crore was sanctioned under UPNRM for

these. In order to give a special focus, the ‘Producer

Organisations Development Fund’ was set up during the year

with an initial corpus of ` 50 crore, for meeting the financial

requirements of this business vertical.

• Internal process redesign to enhance Human

Resource (HR) optimisation and improve turn-

around time: Simplification of the existing administrative

processes, doing away with redundant practices, enhancing

delegation of powers to reduce the reponse time and

complete migration to automation are the core areas of

intervention to improve the functional efficiency of the work

process in the Bank.

• Assisting the cooperative banks for setting up Core

Banking Solution (CBS): NABARD has decided to offer

support to cooperative banks by playing the role of an advisor

and facilitator. It will aggregate the demand across banks and

would assist them to identify a suitable product, negotiate

with vendors on behalf of the banks and extend project

management and advisory support during roll out of the

product. The CBS would be offered on an Application Service

Provider (ASP) model to co-operative banks. In this model,

the banks would be responsible for setting up infrastructure

facilities within the branch and HO. The CBS vendor will be

responsible for developing and customising CBS and other

application software, setting up and maintaining Data

Centres/ Disaster Recovery Centres and for providing network

connections. The vendor will also provide user training and

data migration support. The process of signing Memorandum

of Agreement (MoA) with the banks interested in joining CBS

initiative has started. As on 31 March 2011, 135 Banks (SCB

and DCCB) across 11 states and one UT have joined this

initiative.

• Direct Lending to District Central Cooperative Banks

(DCCB): A Short-term multi-purpose credit product has been

designed for direct lending to DCCB, for meeting working

Box 5.1

Repositioning of NABARD - Pilot interventions





81

Zonal Training Centre (ZTC), Hyderabad conducted 67

training programmes for 1075 Group ‘B’ and ‘C’ Staff

and pre-promotional training programmes for Group

‘B’ staff for promotion to the officer cadre.

b. Overseas Training/Visits by Top

Management

5.9 During the year, 145 officers from NABARD,

three from Client Institutions and 18 participants from

different Non-Governmental Organisations (NGO) were

deputed for various overseas training programmes,

exposure visits, seminars, meetings, etc. In addition, a

batch of 10 senior officers was deputed to a programme

on Risk Management and Performance in Brussels,

Belgium, organised by the World Savings Bank

Institute. Another batch of 10 senior officers was

deputed to RIPA International, London for

Programme on Implementing Sustainable Change and

Programme on Managing People through Change.

Dr. K. G. Karmakar, Managing Director, participated in

the London Business Forum organised by London

Business School, London and in the “Rehovot

Conference 2010 on Inclusive Sustainable

Development Initiatives” organised at Weitz Centre,

Israel, where he presented a paper on the topic

“Mainstreaming Financial Inclusion in India:

Sustainable Initiatives”. The Chairman, Shri Umesh

Chandra Sarangi attended the 58th EXCOM meeting

and 17th General Assembly of APRACA held in

Tashkent, Uzbekistan as well as the Alliance for

Financial Inclusion (AFI) Global Policy Forum 2010

held at Bali, Indonesia. He also attended the 59th

EXCOM meeting of APRACA held in Paris.

c. Support for Professional Studies

5.10 Under the modified Incentive Scheme, introduced

in April 2008, to encourage staff to pursue professional

studies through part time and distance learning

courses, 26 staff members availed of the facility during

the year. The major courses being pursued by the

employees are Chartered Financial Analyst (CFA),

Company Secretary (CS) and Master of Business

Administration (MBA) from reputed institutions.

d. E-learning

5.11 During the year, an E-learning programme for

235 officers was launched, in collaboration with the

Harvard Business School, USA. The course is of one-

year duration from 01 July 2010 to 30 June 2011 and

includes 16 compulsory and five optional topics, relevant

to developmental and promotional institutions.

B. Staff Matters

a. Recruitment and Promotion

5.12 During the year, 126 officers were appointed in

Grade ‘A’ in the Rural Development Banking Service of

the Bank. A total of 396 staff was promoted during the

year, of which 18, 27 and 57 officers were promoted to

Grade ’F’, ‘E’ and ‘D’, respectively. The details of the

number of staff promoted to other Grades are

presented in Table 5.1.

b. Staff Strength

5.13 The total staff strength of the Bank, as on

31 March 2011, was 4,607. Of these, 18 per cent

belonged to Scheduled Castes and 9 per cent to

Scheduled Tribes (Table 5.2). The strength of ex-

servicemen and physically handicapped employees

stood at 80 and 94, respectively, each constituting

about 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’ 103 18 12

Officers from Grade ‘A’ to ‘B’ 121 21 14

Group ‘B’ to officers' cadre (Grade A) 70 11 12

Total 294 50 38

Table 5.2: Total Staff Strength

Cadre Total of which

SC ST

Group ‘A’ 2758 407 209

Group ‘B’ 990 123 84

Group ‘C’ 859 306 106

Total 4607 836 399





82

A. Industrial Relations

5.14 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. The Memorandum of

Settlement on wage revision and service conditions of

the employees was signed between the Bank and the All

India NABARD Employees’ Association on

31 March 2011, on the basis of well-established

principles of negotiations. The Memorandum became

effective for a period of five years from 1 November

2007. The pay & allowances and service conditions of

the officers of the Bank were also revised after

discussions with the National Bank Officers’ Association.

B. Transparency / Consultative

Approach

i. Grievances Redressal System

5.15 Three meetings each of the Grievances Redressal

Committee and the Appellate Committee were held

during the year. Seventeen grievances and six appeals

were considered, of which 13 grievances and 4 appeals

were disposed.

ii. Joint Consultation Scheme for Officers

5.16 The Joint Consultative Committee [JCC]

comprising representatives from Bank Management and

National Bank Officers’ Association, met on 28 June

2010 for discussing issues of common interest in HR

areas.

C. Welfare Measures for SC/ST

Employees

5.17 The Bank continued to adhere to instructions

issued by GoI on reservation for SC/ST employees in

recruitment and promotion. Quarterly meetings of the

Senior Executives and Chief Liaison Officer with

representatives of the Welfare Association of SC/ST

employees were held at HO and RO. A team of

officials from Banking Division, Ministry of Finance,

GoI visited NABARD in May 2010 and reviewed the

Reservation Policy implemented by the Bank. The

team expressed satisfaction with the records maintained

in this regard and appreciated the Bank for its

favourable stance on reservation. Two pre-promotional

training programmes for 120 SC/ST staff were

conducted at the training centres. Other benefits

extended to SC/ST employees included granting

scholarship to 12 wards of the employees and

providing compassionate appointment to the

dependents of ten deceased employees.

D. Other Welfare Measures for the Staff

5.18 During the year, housing loans aggregating

` 39.65 crore were sanctioned to 343 employees. The

disbursements against sanctions, including sanctions of

previous year, amounted to ` 36.54 crore. The

fourteenth Annual Sports and Cultural Festival of the

Bank, NABOTSAV was held at Bhubaneswar between

21 and 25 November 2010.


5.19 The Communal Harmony Campaign Week and

Flag Day were observed from 19 to 25 November

2010, as directed by the Ministry of Finance,

Administration and Other Matters





83

Government of India. During the year, two Workshops

on ‘Human Resources Management and Disciplinary

Proceedings’ were conducted for 82 Senior Officers in

Bengaluru and Kolkata. The Central Complaints

Committee in HO and Committees in RO continued to

function effectively for prevention of sexual harassment

of women at workplace.

F. Library

5.20 The Central Library in HO at present houses

27,333 English and 5,762 Hindi books, 69 NABARD

publications, 66 RBI publications and 35 other

publications, besides 598 CD on various subjects.

G. Data Management

5.21 The revised and updated District Data Profile/

Banking Profile were included in the Potential Linked

Plan (PLP) for 2011-12. Two data products, (i) MIS for

Top Management giving the latest achievements in all

major business and development areas and (ii) Star

Performance Indicators indicating the comparative

position of achievements by RO in important functional

areas, were continued to be made available on

NABNET (intranet of the Bank) and updated every

month. Two new parameters, viz., achievements under

Financial Inclusion Fund (FIF) and Financial Inclusion

Technology Fund (FITF) vis-à-vis targets are to be

introduced in the Star Performance during 2011-12. An

innovative District Agricultural Development Indexation

(DADI) model called the “Clustering Method Model”

was successfully developed for comparing the status of

agricultural development in the Districts of

Maharashtra. One issue of “NABSTATS”, a bulletin of

Statistical Information incorporating the performance of

PACS, was also brought out during the year.

H. Information Technology

5.22 The Video Conferencing (VC) facility

inaugurated last year was used successfully during the

current year for interviewing candidates for

appointment and promotion. In addition, around 200

workshops/seminars/training programmes were

conducted through VC. The computer networking in

the Bank is being strengthened through installation of

latest switches. The existing Windows Operating System

(OS) would be replaced by Linux OS in a phased

manner, and initially, it will be installed in 10 per cent

of the newly purchased personal computers. The

Bank’s intranet portal “NABNET” became more user

friendly with an extensive search facility, during the

year. The mobile version of NABNET was also

launched in the year and can be accessed on

web-enabled mobile phones. Based on the report of

KPMG and the subsequent study undertaken by Boston

Consultancy Group (BCG), the repositioning

consultant, the Bank finalised its future IT architecture

and the IT road map to be implemented in phases,

which consists of the following: (a) Phase 1 – Human

Resources Management (b) Phase 2 – Centralised Loan

Management & Accounts (c) Phase 3 - Business

Processes (d) Phase 4 - Enterprise Data Warehouse.

Phases 1 and 2 were started during the year and

Project Management Groups were constituted for its

implementation. For the project in Phase 1, a contract

was awarded to the successful bidder and for the Phase

2 implementation, an Expression of Interest (EoI) was

invited. The Enterprise Resource Planning (ERP)

software on Human Resource Management (HRM)

would centralise, streamline and automate the entire

HR operations across the Bank, including payroll and

employee benefits. As a capacity building measure, the

IT personnel of the Bank were exposed to the latest

system/application software, database, viz. Oracle,

Windows Server 2008, Active Directory, etc.





84

I. Office Premises/Residential Quarters

5.23 Construction of office-cum-residence complex at

Port Blair was completed during the year. Construction

of Regional Office (RO)/Regional Training College

(RTC) Buildings continued to be in progress at

Bengaluru, Itanagar and Mangalore. The premises for

Jammu RO, Punjab RO & Haryana RO, RTC Bolpur

and Natural Resources Management Centre (NRMC),

Kolkata, and residential quarters at Chandigarh and

Lucknow are expected to enter construction phase

during 2011-12. Plots for construction of RO Buildings

at Raipur and Dehradun have been allotted by the

Chhattisgarh and Uttarakhand State Governments,

respectively. Further, purchase of plots for office

buildings/residential quarters is under process in

Agartala, Dimapur, Gangtok, Imphal and Patna.

Construction of residential flats is progressing in Raipur

and Ranchi.

5.24 The Bureau of Energy Efficiency (BEE) has

awarded a certificate with Four Star rating for the

Bank’s building at HO, determined on the basis of

energy efficiency norms fixed by them. A project of

converting solid waste into vermicompost was started in

the Bank’s Kandivli staff quarters complex in Mumbai.

Steps are on to replicate this in other staff quarters of

the Bank.

J. Vigilance

5.25 Four Preventive Vigilance Inspections of Regional

Offices were conducted by the Central Vigilance Cell

(CVC), HO, to ensure that the systems and procedures

were duly followed. In order to become more

transparent in its functioning and eliminating scope for

corruption, an interface has been created on NABARD

website (www.nabard.org) called ‘Application Status

Tracker System’, through which an applicant can track

the status of any application submitted to NABARD for

availing of services (grant/subsidy/soft loan, co-finance,

etc.) under various schemes. This system became

operational from 1 September 2010 and nine schemes

have been initially introduced. Central Vigilance Cell,

HO became a member of the ‘Vigilance Study Circle,

Mumbai’, for exchange of views among Public Sector

Undertakings on vigilance related matters. A ‘Vigilance

Awareness Week’ was observed in the Bank from

25 October to 1 November 2010.

K. Inspections and Concurrent Audits

5.26 During the year 2010-11, in accordance with

the Annual Inspection Programme approved by the

ACB, the Inspection Department of the Bank carried

out inspection of 16 HO Departments, 22 Regional

Offices and two Training Establishments, i.e., RTC

Mangalore and NBSC Lucknow. On conclusion of the

inspections and issue of Inspection Reports (IR), Flash

Reports (FR) incorporating positive features, major

areas of concern and SWOT analysis were submitted

to the Top Management. Memoranda and synopses

of IR issued together with compliance were placed

before the Management Committee (MC) and ACB for

deliberation and guidance. The Concurrent Audit of

Head Office Departments, continued to be out

sourced to external auditors, while the concurrent

audit of all RO/TE were undertaken by the Concurrent

Audit Cells (CAC) set up in the respective RO/TE. The

ACB reviewed the internal inspection/audit function in

the institution - the system, its quality and

effectiveness with focus on the follow-up of major

areas of concern in housekeeping. The Committee

followed up on all the issues raised in the Statutory





85

Auditor’s report, inspection reports of RBI, etc., and

interacted with the external auditors before the

finalisation of the annual financial accounts and

report. The RMCB oversaw the functioning of the

Credit Risk Management, Asset and Liability

Management, Operational Risk Management and other

risks of the bank and guided in devising the policy

and strategy for integrated risk management for

containing various risk exposures of the Bank.

Inspection Department continued to monitor defaults

by client institutions and apprise the Top Management

of the status and follow up action initiated for

recovery of default, on a fortnightly basis.

L. Public Relations

5.27 NABARD continued to disseminate its

programmes and activities through the print and

electronic media. Guidance on matters of agriculture

and rural development was provided to a number of

visitors, students, researchers and agri-preneurs

throughout the year. The Bank also sponsored a

Coffee Table Book, ‘Harvest of Hope’, brought out by

the Ministry of Agriculture, Government of India, as a

tribute to the Indian farmers.

M. Visits of Parliamentary Committees

5.28 During the year, the following Parliamentary

Committees visited NABARD:

i. Parliamentary Standing Committee on Personnel,

Public Grievances, Law & Justice visited Mumbai,

Bengaluru & Chennai from 13-19 June 2010. The

Committee held discussions in Mumbai on 15 June

2010 regarding “Status of women employees,

service conditions, protection against exploitation,

incentives and other related issues”.

ii. Parliamentary Committee on Papers Laid on the

Table of the Rajya Sabha visited Mumbai,

Bengaluru, Chennai & Kolkata from 20-27 June

2010. The Committee held discussions in Mumbai

on 21 June 2010 regarding “Delayed laying of

Annual Reports and Audited Accounts of

NABARD” in Rajya Sabha.

iii. The Third Sub-Committee of the Committee of

Parliament on Official Languages inspected Central

Government offices located in Delhi, Coimbatore,

Salem, Bengaluru, Mumbai, Mehsana and

Ahmedabad from 21.10.2010 to 29.10.2010. It

held discussions in Mumbai on 26 October 2010

regarding “Progress of work related with Official

Language - Rajbhasha”

iv. The Committee on Subordinate Legislation, Rajya

Sabha visited Hyderabad and Chennai from 17-22

December 2010. It held discussions in Hyderabad

on 18 Dec 2010 and in Chennai on 21 December

2010 regarding: (i) the RRB (Appointment and

Promotion of Officers and Employees) Rules, 2010;

(ii) Priority Sector Lending Schemes with special

reference to micro-credit to farmers; and (iii)

Situation after the ADWDR Scheme, 2008.

v. The Committee on Government Assurances, Rajya

Sabha, held discussions in Port Blair, Chennai and

Kochi on 08, 10 and 11 February 2011,

respectively, regarding Assurance arising from:

(i) Unstarred Question (USQ) No. 2053 dated

08.12.2009 regarding appointment on

compassionate ground in RRB; and (ii) USQ

No. 3089 dated 23.04.2010 regarding time frame

for debt waiver scheme.





86

N. Promotion of Hindi

5.29 Hindi workshops were conducted during the

year, to facilitate increased usege of Hindi in office

work. Rajbhasha orientation programmes for senior

officers were also conducted at RTC, Mangalore and

NBSC, Lucknow. During the year, on-site inspections

of four RO were undertaken, with a view to ensuring

compliance with Rajbhasha Policy. Two RO, viz.,

Karnataka and Chhattisgarh were notified under

Section 10(4) of the Official Languages Act, 1963 by

GoI. Rajbhasha Shield for excellent work in Hindi

during 2009-10 was awarded to the best RO in

Regions ‘A’, ‘B’ & ‘C’, respectively and to one

Training Establishment and two HO Departments.

The Regional Implementation Office, Rajbhasha

Department, Ministry of Home Affairs, GoI also

awarded prizes to Andhra Pradesh RO, Maharashtra

RO and RTC, Mangalore. During the year, 109

Potential Linked Credit Plans and 69 IR were

prepared/issued in Hindi.





87

VI

Financial Performance & Management of Resources

NABARD, like any other financial organisation has put

in place a sound financial resources management

system. The management of funds by the Bank and its

financial performance during the year are detailed in

this Chapter.

6.2 The financial resources of NABARD (Table 6.1)

increased to ` 1,58,872 crore, as on 31 March 2011,

registering an increase of 16.57 per cent, over the

previous year. The funds deployed for investment

operations (including rural infrastructure development)

and for production and marketing activities (including

conversion) increased by ` 8,945 crore and

` 10,005 crore, respectively, as on 31 March 2011.

The total market borrowings stood at ` 34,747 crore,

as on 31 March 2011, constituting 21.87 per cent of

the total resources of the bank.

Sources of Funds

A. Capital, Reserves & Surplus

6.3 The paid up capital, as on 31 March 2011, was

` 2,000 crore against the authorised capital of

` 5,000 crore; with the share of GoI being

99 per cent and that of RBI at 1 per cent.

The amount of reserves and surplus increased by

` 1,188 crore, as on 31 March 2011.

B. National Rural Credit (Long Term

Operations) and the National

Rural Credit (Stabilisation) Funds

6.4 The National Rural Credit (Long Term

Operations) [NRC (LTO)] Fund and the National Rural

Credit (Stabilisation) [NRC (Stab.)] Fund 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 the RBI. During the year, an

amount of ` 62 crore was contributed to these Funds.

C. STCRC Fund

6.5 With a view to augmenting NABARD's resources

for short-term credit facilities to Co-operative

Institutions, the Short-Term Co-operative Rural Credit

(Refinance) [STCRC] Fund was set up in 2008-09 with

contributions by scheduled commercial banks not

achieving their priority sector obligations. From an

initial corpus of ` 4,622 crore, it was augmented with

an additional allocation of ` 5,000 crore each for

2009-10 and 2010-11. The outstanding under the

STCRC (Refinance) Fund, as on 31 March 2011,

stoodat ` 14,622 crore.

Table 6.1: Sources of Funds

(` crore)

Particulars 31.03.2010 31.03.2011

Amount Share Amount Share

(%) (%)

Capital, Reserves & Surplus 12,675 9.3 13,863 8.7

NRC (LTO) and (Stab.) Funds 15,983 11.7 16,045 10.1

STCRC Fund 9,622 7.1 14,622 9.2

Deposits 505 0.4 277 0.2

RIDF Deposits 59,869 43.9 67,878 42.7

Bonds & Debentures 20,004 14.7 26,788 16.9

Certificates of deposits 379 0.3 137 0.1

Term Money Borrowings 763 0.5 110 0.1

Commercial Paper 2,680 1.9 6,448 4.0

Borrowings from GoI 147 0.1 124 0.1

Borrowings from CB* 500 0.4 0 0.0

Foreign Currency Loan 494 0.4 503 0.3

Borrowing under CBLO 215 0.2 0 0.0

Borrowings against STD 0 0 360 0.2

Other Liabilities/Funds 12,456 9.1 11,717 7.4

Total 1,36,292 100.0 1,58,872 100.0

* CB : Commercial Banks





88

D. Deposits

i. Term Deposits

6.6 The amount of term deposits and deposits

received from the tea, coffee and rubber companies

aggregated ` 277 crore, as on 31 March 2011, as

against ` 505 crore at the end of the previous year,

reflecting a decrease of ` 228 crore during the current

year. This was mainly due to redemption of term

deposits of ` 344 crore during the year. However, tea,

coffee and rubber deposits rose from ` 124 crore, as on

31 March 2010, to ` 228 crore as on 31 March 2011.

ii. RIDF Deposits

6.7 During the year, RIDF Deposits from

commercial banks under RIDF VIII to XVI aggregated

` 13,056.22 crore, with repayments being ` 5,047.23

crore under RIDF VI to XVI. As on 31 March 2011,

aggregate outstanding RIDF deposits stood at

` 67,878 crore, as against ` 59,869 crore at the end of

the previous year, resulting in a net inflow of

` 8,009 crore, an increase of 13.4 per cent over the

deposits held as on 31 March, 2010.

E. Borrowings

i. Capital Gains Bonds

6.8 Capital Gains Bonds aggregating ` 354.11 crore

were redeemed during the year 2010-11 and the

outstanding, at the end of March 2011, under this

segment of borrowing was ` 7.53 crore.

ii. Corporate Bonds

6.9 Corporate Bonds amounting to ` 9,320 crore

were issued during the year while ` 2,513 crore were

redeemed. The amount outstanding, at the end of

March 2011, stood at ` 21,682 crore.

iii. Statutory Liquidity Ratio Bonds

6.10 Statutory Liquidity Ratio (SLR) Bonds worth

nearly ` 90 crore were redeemed and the outstanding

aggregated ` 99 crore, as on 31 March 2011.

iv. Bhavishya Nirman Bonds

6.11 During the year, additional funds to the tune of

` 421 crore were mobilised under Bhavishya Nirman

Bonds (BNB). The outstanding, as on 31 March 2011,

stood at ` 4,975 crore as against the outstanding as on

31 March 2010 at ` 4,554 crore.

v. NABARD Rural Bonds

6.12 No fresh bonds were issued during the year.

The outstanding at the end of March 2011 stood at

` 24 crore.

vi. Certificates of Deposits

6.13 Fresh borrowings through Certificates of

Deposits (CD) of ` 137 crore were mobilised and

` 379 crore were redeemed during the financial year.

The outstanding balance was ` 137 crore, as on

31 March 2011.

vii. Term Money Borrowings

6.14 Term Money Borrowings (TMB) of three to six

months tenor were resorted to, in order to meet

short-term requirements. TMB worth ` 557 crore were

raised and repayments to the tune of ` 1209 crore

were made, leaving an outstanding of ` 110 crore, as

on 31 March 2011, compared with the outstanding of

` 762 crore, as at the end of March 2010.

viii. GoI Borrowings

6.15 There were no borrowings from Government of

India during the year 2010-11 whereas repayments of

` 23 crore, on maturity of loans drawn under various

externally aided projects, were made. The outstanding

in respect of borrowings from GoI stood at

` 124 crore, as on 31 March 2011, as against

` 147 crore, outstanding as on 31 March 2010.





89

ix. Borrowings from Commercial Banks

6.16 There were no fresh borrowings during the year,

but ` 500 crore of past borrowings were repaid in full.

x. Borrowings in Foreign Currency

6.17 An amount of ` 48 crore was drawn under KfW

(UPNRM) which resulted in borrowings in foreign

currency from KfW, Germany, aggregating ` 503 crore,

as on 31 March 2011. The foreign exchange risk on this

loan as well as interest payments have been fully

hedged at an average annual cost of 1.54 per cent for

10 years.

xi. Borrowings against Short Term Deposits

6.18 The investment policy of the bank was amended

to allow borrowings against Short Term Deposits (STD)

placed by NABARD with other banks in order to meet

liquidity requirements. As interest rates moved up, this

option proved to be cheaper than raising resources

through CP and CD. The outstanding borrowings against

STD stood at ` 360 crore.

Uses of Funds

A. Short Term Loans, Medium Term

(Conversion) Loans and Liquidity

support

6.19 The ST (SAO) loans advanced to the SCB at

` 23,484 crore and RRB stood at ` 9,605 crore.

Together with ST (OSAO) loans to SCB at

` 198 crore and RRB at ` 598 crore, the total

outstanding ST loans increased to ` 33,885 crore at

the end of the year. There has been a growth of

40.8 per cent in availing of refinance by credit

institutions under this segment (Table 6.2).

Table 6.2: Uses of Funds

(` crore)

Particulars 31.03.2010 31.03.2011

Amount Share (%) Amount Share (%)

Cash and Bank Balance 9,628 7.1 10,537 6.6

Government Securities and other Investments 3,785 2.8 5,868 3.7

CBLO 0 0 228 0.1

Production and Marketing Credit 24,073 17.7 33,885 21.3

Conversion of Production Credit into MT Loans 0 0 193 0.1

Liquidity Support 20 0.1 0 0.00

MT & LT Project Loans * 35,742 26.2 38,896 24.5

LT Non Project Loans 199 0.1 167 0.1

Loans out of RIDF 60,255 44.2 66,078 41.7

Co Finance Loans(net of provision) 84 0.0 88 0.1

Other Loans (including Interim finance) 133 0.1 182 0.1

Fixed & Other Assets 2,373 1.7 2,750 1.7

Total 1,36,292 100.0 1,58,872 100.0

* : Including the amount subscribed to Special Development Debentures of SCARDB, which are in the nature of “Deemed

Advances”





90

B. Project Loans under RIDF

6.20 RIDF loans to State Governments stood at

` 66,078 crore, as on 31 March 2011, compared with

` 60,255 crore at the end of previous year, recording a net

outflow of ` 5,823 crore during the year (Table 6.2).

C. 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 ` 167 crore on 31 March 2011.

There was a decrease of ` 32 crore as compared to the

position as on 31 March 2010 (Table 6.2).

D. Investment Credit

6.22 Refinance assistance extended to banks for

medium and long term investment credit reached a level

of ` 38,896 crore, as on 31 March 2011 as against

` 35,742 crore, at the end of previous year. During the

year, refinance provided for investment credit activities

grew by 8.83 per cent (Table 6.2).

E. Co-finance

6.23 The Bank entered into agreements with

commercial banks to co-finance various projects. The

outstanding (net of provision), as on 31 March 2011,

stood at ` 88 crore (Table 6.2).

F. Other Loans

6.24 Other loans extended out of different Funds

(CDF, MFDEF, WDF, TDF, KfW UPNRM, FIPF, and

NFS promotional activities) stood at ` 182 crore as on

31 March 2011 (Table 6.2).

G. Investment of Surplus Funds

6.25 The surplus funds were deployed in Government

Securities and other Financial Instruments to the extent

of ` 6,097 crore and amounts aggregating ` 9,002 crore

were kept in the form of Short Term Bank Deposits to

meet liquidity and contingency requirements, as on

31 March 2011.

Income and Expenditure

6.26 The total income of NABARD during the year

amounted to ` 9,202 crore as against ` 7,965 crore

for the year 2009-10. The profit before tax (PBT) and

profit after tax (PAT) were at ` 1,824 crore and

` 1,279 crore, respectively, during the year, as

compared to the PBT and PAT of ` 2,272 crore and

` 1,558 crore, respectively, in the previous year. The

average cost of borrowings (interest expenditure as a

per cent of average borrowings) decreased from 6.83

per cent per annum during 2009-10 to 6.64 per cent

per annum during 2010-11, due mainly to redemption

of high cost borrowings. An amount of ` 360 crore,

` 50 crore, ` 10 crore and ` 801 crore, respectively,

were transferred to Special Reserve u/s 36(1) (viii) of

IT Act 1961, NRC (LTO) Fund, NRC (Stabilisation)

Fund and Reserve Fund. Further, an aggregate amount

of ` 261 crore was transferred to various Funds, viz.,

Cooperative Development Fund, Research and

Development Fund, Investment Fluctuation Reserve,

FIF, FITF, FTTF and FIPF.

Capital Adequacy

6.27 The capital to risk-weighted assets ratio (CRAR)

was 21.76 per cent, as on 31 March 2011, as

compared to 24.95 per cent, as on 31 March 2010, as

against a minimum 9 per cent stipulated by RBI.

Asset-Liability Management

6.28 The Asset-Liability Management Committee

(ALCO) of the Bank oversees the monitoring and

management of market risk. ALCO also manages

liquidity/interest rate risks, as per the comprehensive

ALM/liquidity policies approved by the Board. The

role of ALCO includes, inter-alia, reviewing the Bank's

currency-wise structural liquidity and interest-rate

sensitivity positions vis-à-vis prudential limits

prescribed by the RBI/Board, monitoring results of

periodical stress testing of cash flows and identifying a

suitable ALM strategy.





91

Annual

Accounts

2010-2011





92

P. Parikh & Associates

HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009,

Tel : 23443549, 23437853, Fax : 23415455,

Website : www.pparikh.com

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, 2011 and the Profit and Loss Account and the Cash Flow Statement for the year ended on that

date annexed thereto in which are incorporated the returns of 12 Regional Offices and 1 Training Centre audited by us. These

offices and training Centre have been selected in consultation with the Bank in terms of notification no.F.No.1/14/2004-BOA

dated January 03, 2011 issued by Government of India, 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 17 Regional Offices and 2

Training Centers which have not been subjected to audit. These unaudited offices account for 19.29% of advances (includes

deemed advances as per Note B-14(c) of Schedule 18), 0.04% of deposits and term money borrowings, 17.97% of interest

income (includes interest on ‘deemed advances’ as per Note B-14(b) of Schedule 18) and 0.08% 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 have 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 the Regional Offices and Training Centres of the Bank have been found adequate for the

purpose 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 contain 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, 2011; 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 For and on behalf of

Date: May 30, 2011 P. Parikh & Associates


Firm Registration No. 107564W

Ashok Rajagiri

Partner,

Membership No.: 046070





93

(` in '000)

Sr. FUNDS AND LIABILITIES SCHEDULE As on As on

No. 31.03.2011 31.03.2010

1. Capital 2000,00,00 2000,00,00

(Under Section 4 of the NABARD Act, 1981)

2. Reserve Fund and other Reserves 1 11862,72,33 10674,59,96

3. National Rural Credit Funds 2 16045,00,00 15983,00,00

4. Funds out of grants received from International Agencies 3 138,89,56 149,87,64

5. Gifts, Grants, Donations and Benefactions 4 2601,89,23 4706,76,57

6. Other Funds 5 3431,47,40 2735,06,36

7. Deposits 6 82776,67,53 69996,02,03

8. Bonds and Debentures 7 26788,21,49 20004,38,12

9. Borrowings 8 7681,29,10 5177,79,68

10. Current Liabilities and Provisions 9 5546,09,80 4864,62,84

Total 158872,26,44 136292,13,20

Forward Foreign Exchange Contracts 592,09,63 563,65,54

(Hedging) as per contra

(` in '000)

Sr. PROPERTY AND ASSETS SCHEDULE As on As on

No. 31.03.2011 31.03.2010

1 Cash and Bank Balances 10 107,65,26,79 9628,33,75

2 Investments 11 193,29,50,93 17199,09,54

3 Advances 12 126027,99,95 107092,24,68

4 Fixed Assets 13 229,48,63 234,71,82

5 Other Assets 14 2520,00,14 2137,73,41

Total 158872,26,44 136292,13,20

Forward Foreign Exchange Contracts (Hedging) as per contra 592,09,63 563,65,54

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



FRN. 107564W

Ashok Rajagiri K. S. Padmanabhan

Partner : Chief General Manager

M. No. 046070 Accounts Department

Mumbai Mumbai : May 30, 2011

Date : May 30, 2011

Rakesh Singh Dr. K C Chakrabarty Alok Nigam K Jayakumar

Chairman Director Director Director

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

BALANCE SHEET AS ON 31 MARCH 2011





94


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2011 (` in '000)

Sr. No. INCOME SCHEDULE 2010-11 2009-10

1 Interest received on Loans and Advances 8169,13,99 6653,31,462 Income from Investment Operations/Deposits

(Refer Note B-4 of Schedule 18) 943,23,85 1255,68,933 Other Receipts (Refer Note B-6 & B-30 of Schedule 18) 89,63,23 55,79,62

Total "A" 9202,01,07 7964,80,01

Sr.No. EXPENDITURE SCHEDULE 2010-11 2009-10

1 Interest and Financial Charges(Refer Note B-5 of Schedule 18) 15 6193,86,85 4988,45,58

2 Establishment and Other Expenses 16 A 1126,09,88 547,97,743 Provisions 16 B 35,60,34 132,62,064 Depreciation 22,57,98 23,29,36

Total "B" 7378,15,05 5692,34,74

5 Profit before Tax (A - B) 1823,86,02 2272,45,276 a) Provision for Income Tax 460,00,00 647,00,00

b) Provision for Deferred Tax -( Asset)(Refer Note B-11 of Schedule 18) 84,65,00 67,19,00

7 Profit after Tax 1279,21,02 1558,26,27

Significant Accounting Policies and Notes on Accounts 18

Schedules referred to above form an integral part of accounts

PROFIT AND LOSS APPROPRIATION ACCOUNT(` in '000)

Sr.No. APPROPRIATIONS / WITHDRAWALS 2010-11 2009-10

1. Profit for the year brought down 1279,21,02 1558,26,272.1 Add: Withdrawals from funds against

expenditure debited to Profit & Loss A/ca) Co-operative Development Fund (Refer Schedule 1) 6,05,32 3,83,04b) Research and Development Fund (Refer Schedule 1) 17,67,49 9,82,99c) Watershed Development Fund (Refer Schedule 5) 1,01,14 44,70,44d) Micro Finance Development and Equity Fund (Refer Schedule 5) 11,40,75 10,01,05e) Investment Fluctuation Reserve (Refer Schedule 1) 2,07,65 0f) Farm Innovation & Promotion Fund 2,39,20 96,94g) Financial Inclusion Technology Fund 0 1,00,00

2.2 Withdrawals of funds which have been closedi) Foreign Currency Risk Fund (Refer Note B-18 of Schedule 18) 147,06,04 0ii) Soft Loan Assistance Fund for Margin Money (Refer Note B-18 of Schedule 18) 10,00,00 0iii) Agriculture & Rural Enterprise Incubation Fund (Refer Note B-18 of Schedule 18) 5,00,00 0

3. Profit available for Appropriation 1481,88,61 1628,60,73Less: Transferred to:a) Special Reserves u/s 36(1) (viii) of IT Act, 1961 360,00,00 350,00,00b) National Rural Credit (Long Term Operations) Fund 50,00,00 400,00,00c) National Rural Credit (Stabilisation) Fund 10,00,00 10,00,00d) Co-operative Development Fund 6,05,32 3,83,04e) Research and Development Fund 17,67,49 9,82,99f) Investment Fluctuation Reserve (Refer Schedule 1) 116,07,65 30,00,00g) Farmers Technology Transfer Fund 33,55,54 64,58,40h) Farm Innovation & Promotion Fund (Refer Schedule 1) 2,34,20 96,94i) Producers' Organization Development Fund (Refer Note B-17 of Schedule 18) 50,00,00 0j) Rural Infrastructure Promotion Fund (Refer Note B-17 of Schedule 18) 25,00,00 0k) Financial Inclusion Technology Fund 10,00,00 0l) MFDEF Reserve Fund 0 80,00,00m) Reserve Fund 801,18,41 679,39,36

Total 1481,88,61 1628,60,73

Refer Schedule 18 for Significant Accounting Policies and Notes on Accounts

As per our attached report of even dateP. Parikh & AssociatesChartered AccountantsFRN. 107564W

Ashok Rajagiri K. S. PadmanabhanPartner : Chief General ManagerM. No. 046070, Mumbai Accounts DepartmentDate : May 30, 2011 Mumbai : May 30, 2011

Rakesh Singh Dr. K C Chakrabarty Alok Nigam K JayakumarChairman Director Director Director





95

SCHEDULES TO BALANCE SHEET

Schedule 1 – Reserve Fund and Other Reserves(` in '000)

Sr. Particulars Opening Additions/ Transferred Transferred Balance as on

No. Balance adjustments From P&L to P&L 31.03.2011

as on 01.04.2010 during the year Appropriation Appropriation

1 Reserve Fund 5902,73,39 0 801,18,41 0 6703,91,80

2 Research and Development Fund 50,00,00 0 17,67,49 17,67,49 50,00,00

3 Capital Reserve 74,80,53 0 0 0 74,80,53

4 Investment Fluctuation Reserve 145,00,00 0 116,07,65 2,07,65 259,00,00

5 Co-operative Development Fund 125,00,00 0 6,05,32 6,05,32 125,00,00

6 Soft Loan Assistance Fund for Margin Money 10,00,00 0 0 10,00,00 0

7 Agriculture & Rural Enterprise Incubation Fund 5,00,00 0 0 5,00,00 0

8 Foreign Currency Risk Fund 147,06,04 0 0 147,06,04 0

9 Special Reserves Created & Maintained

u/s 36(1)(viii) of Income Tax Act, 1961 4085,00,00 0 360,00,00 0 4445,00,00

10 Producers' Organizations Development Fund 0 0 50,00,00 0 50,00,00

11 Rural Infrastructure Promotion Fund 0 0 25,00,00 0 25,00,00

12 MFDEF - Reserve Fund 80,00,00 0 0 0 80,00,00

13 Farm Innovation & Promotion Fund 50,00,00 5,00 2,34,20 2,39,20 50,00,00

Total 10674,59,96 5,00 1378,33,07 190,25,70 11862,72,33

Previous year 9535,20,60 0 1154,02,32 14,62,96 10674,59,96

Schedule 2 – National Rural Credit Funds

(` in '000)

Sr. Particulars Opening Balance Contribution by Transferred from Balance as on

No. as on 01.04.2010 RBI P&L 31.03.2011

Appropriation

1. National Rural Credit (Long Term Operations) Fund 14417,00,00 1,00,00 50,00,00 14468,00,00

2 National Rural Credit (Stabilisation) Fund 1566,00,00 1,00,00 10,00,00 1577,00,00

Total 15983,00,00 2,00,00 60,00,00 16045,00,00

Previous year 15571,00,00 2,00,00 410,00,00 15983,00,00

Schedule 3 – Funds out of Grants received from International Agencies

(` in '000)

Sr. Particulars Opening Grants received/ Interest Exp./Disb./adjusted Balance

No. Balance as on adjusted during credited to during the as on

01.04.2010 the year the Fund year 31.03.2011

1 National Bank - Swiss

Development Coop. Project 55,61,77 0 0 0 55,61,77

2 Rural Innovation Fund (RIF)

(Refer Note B-2 & 8 of Schedule 18) 83,30,56 0 4,14,13 14,28,31 73,16,38

3 Rural Promotion Fund

(Refer Note B-2 & 8 of Schedule 18) 8,05,29 79,06 1,17 (-)33,97 9,19,49

4 KfW - NABARD V Fund for Adivasi Programme 2,90,02 15,60,31 0 17,58,41 91,92

Total 149,87,64 16,39,37 4,15,30 31,52,75 138,89,56

Previous year 154,81,79 16,31,68 4,73,69 25,99,52 149,87,64





96

Schedule 4 – Gifts, Grants, Donations and Benefactions

(` in '000)

Sr. Particulars Opening Grant received Interest Adjusted Balance as on

No. Balance as on during Credited to against the 31.03.2011

01.04.2010 the year the Fund expenditure

A.

1 KfW - NB - IX Adivasi Development Programme -

Maharashtra (Refer Note B- 8 of Schedule 18) 6,69 16,85,25 18,84 16,32,36 78,42

2 KfW UPNRM - Accompanying Measures (-)7,30 2,86,84 1,07 2,63,73 16,88

3 KfW NB UPNRM - Financial Contribution 7,84 82,48 0 9,32 81,00

4 KfW UPNRM - Risk Mitigation Fund 11,74 52,94 0 52,94 11,74

5 International Fund for Agriculture Development

(IFAD) Priyadarshini (-)19,11 5,82,80 0 97,25 4,66,44

6 GTZ - Uttarakhand Regional Economic Development 86,39 0 0 0 86,39

7 KfW-NB-Indo German Watershed Development Programme -

Phase III - Maharashtra (Refer Note B- 8 of Schedule 18) 3,53,07 27,85,06 5,80 31,41,60 2,33

8 Indo German Watershed Development Programme -

Andhra Pradesh (Refer Note B- 8 of Schedule 18) 0 11,64,69 71 11,64,67 73


Gujarat (Refer Note B- 8 of Schedule 18) 27,54 3,46,06 53 3,73,98 15


Rajasthan (Refer Note B- 8 of Schedule 18) 0 1,93,75 1,78 1,95,53 0

11 KfW Umbrella Programme on Natural Resource

Management Fund (Refer Note B- 3 of Schedule 18) 9,18,96 1,55 0 0 9,20,51

12 NABARD Grant for Fixed Assets under NB-SDC HID Project 6,60 0 0 0 6,60

13 GTZ-NABARD RFP - Financial Component 0 0 0 (-)1,00 1,00

14 NE Council Fund for Miscellaneous Training Programme 1,98 50,00 0 50,19 1,79

15 KfW NB SEWA Bank Capitalisation of

Rural Financial Institutions (RFIs) 0 2,66,73 0 2,64,07 2,66

16 GTZ Rural Financial Institutions Program (RFIP) 42,18 74,24 0 58,42 58,00

B.

1 Capital Investment Subsidy for Cold Storage Projects - NHB 19,59,17 43,84,47 0 44,24,97 19,18,67

2 Capital Subsidy for Cold Storage NHM 9,66 0 0 0 9,66

3 Capital Subsidy for Cold Storage TM North East 4,31,44 11,12,24 0 11,05,72 4,37,96

4 Credit Linked Capital Subsidy for

Technology Upgradation of SSIs 12,00 11,11,11 0 11,16,88 6,23

5 Capital Investment Subsidy for Rural Godowns 14,21,96 96,03,00 0 70,86,02 39,38,94

6 On-farm Water Management for Crop Production 1,92 0 0 1,92 0

7 Million Shallow Tubewell Programme - Bihar 2,63,15 0 0 0 2,63,15

8 Bihar Ground Water Irrigation Scheme (BIGWIS) 199,65,41 0 0 16,76,38 182,89,03

9 Cattle Development Programme -

Uttar Pradesh (Refer Note B- 8 of Schedule 18) 3,84 1,90,10 8,98 1,76,31 26,61

10 Cattle Development Programme - Bihar

(Refer Note B- 8 of Schedule 18) 1,09,49 0 9,28 19,31 99,46

11 National Project on Organic Farming 2,24,74 0 0 2,18,52 6,22

12 Integrated Watershed Development Programme -

Rashtriya Sam Vikas Yojana 10,01,18 25,00,00 0 20,78,63 14,22,55

13 Centrally Sponsored Scheme on Integrated

Development of Small Ruminants and Rabbits 3,00,00 2,00,00 0 1,55,45 3,44,55

14 Rain Water Harvesting Scheme 83,11 0 0 (-) 6,82 89,93





97

Schedule 4 – Gifts, Grants, Donations and Benefactions

(` in '000)

Sr. Particulars Opening Grant received Interest Adjusted Balance as on

No. Balance as on during Credited to against the 31.03.2011

01.04.2010 the year the Fund expenditure

15 Kutch Drought Proofing Project 64,47 0 0 25,12 39,35

16 Dairy and Poultry Venture Capital Fund 16,34,61 12,00,00 0 16,06,96 12,27,65

17 Poultry Venture Capital Fund 7,58,50 (-)1,90,93 0 5,86 5,61,71

18 Scheme for providing Financial Assistance to

Sugar Undertakings - 2007 (SEFASU - 2007) 77,07,92 257,87,91 0 200,12,98 134,82,85

19 Capital Subsidy for Agriculture Marketing

Infrastructure, Grading and Standardisation 5,00,53 98,79,64 0 83,14,54 20,65,63

20 Centrally Sponsored Scheme for establishing Poultry Estate 2,21,27 3,75,76 0 0 5,97,03

21 Livelihood Advancement Business School -

Sultanpur, Uttar Pradesh (Refer Note B- 8 of Schedule 18) 41,98 0 2,08 41,90 2,16

22 Livelihood Advancement

Business School - Rae Bareli, Uttar Pradesh

(Refer Note B- 8 of Schedule 18) 81,53 0 5,62 32,68 54,47

23 Multi Activity Approach for Poverty Alleviation -

Sultanpur, Uttar Pradesh

(Refer Note B- 8 of Schedule 18) 47,00 0 4,14 0 51,14

24 Multi Activity Approach for Poverty

Alleviation - BAIF - Rae Bareli, Uttar Pradesh

(Refer Note B- 8 of Schedule 18) 1,25,93 0 11,08 0 1,37,01

25 GTZ UPNRM Technical Collaboration 0 92,52 0 53,31 39,21

26 CSS - on Pig Development 0 1,50,00 0 1,48,42 1,58

27 Dairy Entrepreneurship development Scheme 0 20,40,00 0 9,94,48 10,45,52

28 CSS - S & R Male Buffaloe calves 0 1,92,00 0 0 1,92,00

29 CSS - JNN Solar Mission 0 35,00,00 0 3,60,81 31,39,19

30 CSS - on Rural Slaughter Houses 0 20,33 0 10,41 9,92

31 Capital Subsidy Scheme -

Agri Clinics and Agri Business Centres 1,10,05 1,89,34 0 1,39,78 1,59,61

32 Artificial Recharge of Groundwater in Hard Rock Area 1256,16,00 0 0 11,96 1256,04,04

33 ISSPUAF (4% Interest Subvention scheme - Avian Flu) 0 1,68,00 0 1,68,00 0

34 United Nation Development Programme(UNDP) -

NABARD-Financial Inclusion Fund (-)11,32 1,62,37 0 2,60,79 (-)1,09,74

35 Agricultural Debt Waiver and Debt Relief Scheme (ADWDR)2008 2930,24,82 1240,12,00 0 3750,51,57 419,85,25

36 Interest Subvention (Sugar Term Loan) 7,31,37 31,60,00 0 38,71,73 19,64

C Revival Package of Short Term Cooperative

Credit Structure

1 Cost of Special Audit 160,047 (-)4,00,00 0 15,132 104,915

2 Recapitalisation Assistance to Credit Cooperative Societies 19,135 10,279,600 0 6,892,310 3,406,425

3 Technical Assistance 320,979 (-)160,000 0 21,906 139,073

4 Human Resources Development 525,539 (-)320,000 0 114,512 91,027

5 Implementation Cost 54,126 386,900 0 252,826 188,200

D Revival Package for Long Term

Co-operative Credit Structure (LTCCS) 200,000 0 0 0 200,000

Total 47,067,657 29,887,725 6,991 50,943,451 26,018,922

Previous year 51,103,245 122,313,252 5,854 126,352,694 47,067,657





98

Schedule 5 – Other Funds(` in '000)

Sr. Particulars Opening Additions/ Transferred Interest Expenditure/ Transferred Balance as on

No. Balance as on Adjustments from P & L Credited Disb.during to P&L 31.03.2011

01.04.2010 during the year Appropriation the year Appropriation

1 Watershed Development Fund 1102,83,73 865,86,01 0 81,25,55 151,25,40 1,01,14 1897,68,75

2 Micro Finance Development and

Equity Fund (Refer Note B- 8 of

Schedule 18) 138,53,41 20,00,00 0 11,29,46 19,30,15 11,40,75 139,11,97

3 Interest Differential Fund -

(Forex Risk) 145,23,57 12,46,16 0 0 0 0 157,69,73

4 Interest Differential Fund -

(Tawa) 11,55 0 0 0 1,55 0 10,00

5 Adivasi Development Fund 20,28 7,60,03 0 0 2,50,00 0 5,30,31

6 Tribal Development Fund 1150,82,67 51,89 0 0 96,83,63 0 1054,50,93

7 Financial Inclusion Fund

(Refer Note B- 8 of Schedule 18) 45,10,45 13,05,23 0 4,15,86 9,20,90 0 53,10,64

8 Financial Inclusion Technology Fund

(Refer Note B- 8 of Schedule 18) 52,20,70 10,40,36 10,00,00 4,34,39 54,00,37 0 22,95,08

9 Farmers Technology Transfer Fund 100,00,00 1,00,00 33,55,54 0 33,55,54 0 101,00,00

Total 2735,06,36 930,89,68 43,55,54 101,05,26 366,67,54 12,41,89 3431,47,41

Previous year 2101,80,69 691,61,39 64,58,41 72,76,77 139,99,41 55,71,50 2735,06,35

Schedule 6 – Deposits(` in '000)

Sr. Particulars As on As on

No. 31.03.2011 31.03.2010

1 From Central Government 0 0

2 From State Governments 0 0

3 From Others

a) Tea / Rubber / Coffee Deposits 228,29,61 123,73,69

b) Term Deposits 48,46,15 381,35,32

c) Commercial Banks (Deposits under RIDF) 67877,63,52 59868,64,77

d) Short Term Co-operative Rural Credit Fund 14622,28,25 9622,28,25

Total 82776,67,53 69996,02,03

Schedule 7 – Bonds and Debentures(` in '000)


No. 31.03.2011 31.03.2010

1 SLR Bonds 98,99,70 188,63,09

2 Non Priority Sector Bonds 21682,50,00 14876,00,00

3 Capital Gains Bonds 7,52,70 361,64,40

4 Bhavishya Nirman Bonds 4975,19,52 4554,11,06

5 NABARD Rural Bonds 23,99,57 23,99,57

Total 26788,21,49 20004,38,12





99

Schedule 8 – Borrowings

(` in '000)

Sr. Particulars As on As onNo. 31.03.2011 31.03.2010

1 From Central Government 123,97,71 146,76,07

2 Reserve Bank of India 0 0

3 From Others :

(a) In India

(i) Certificate of Deposits 136,86,14 379,45,90

(ii) Commercial Paper 6447,64,81 2679,71,76

(iii) Borrowing under Collateralised Borrowing Lending Obligation 0 214,82,34

(iv) Term Money Borrowings 110,16,00 762,50,00

(v) Commercial Banks 0 500,00,00

(vi) Borrowing aginst STD 360,00,00 0

(b) Outside India

(i) From International Agencies 502,64,44 494,53,61

Total 7681,29,10 5177,79,68

Schedule 9 – Current Liabilities and Provisions(` in '000)


No. 31.03.2011 31.03.2010

1 Interest / Discount Accrued 3527,97,31 2489,39,46

2 Sundry Creditors 401,73,28 972,40,01

3 Subsidy Reserve (Co-finance,Cold Storage) 93,89 40,15

4 Subsidy Reserve - CSAMI under RIDF 1,45,00 91,80

5 Provision for Gratuity (Refer Note B- 19 of Schedule 18) 17,44,81 1,62,25

6 Provision for Pension (Refer Note B- 19 of Schedule 18) 934,44,01 690,04,64

7 Provision for Encashment of Ordinary Leave (Refer Note B- 19 of Schedule 18) 5,07,12 -9,91,64

8 Unclaimed Interest on Bonds with RBI 0 6,54

9 Unclaimed Interest on Bonds 3,90,27 4,37,41

10 Unclaimed Interest on Term Deposits 41,96 8

11 Term Deposits Matured but not claimed 5,48,20 0

12 Bonds matured but not claimed 20,06,38 12,32,18

13 Application money received pending allotment of Bonds 50 15,64,32

14 Provisions and Contingencies

(a) Amortisation of G. Sec. - HTM 0 90,90,80

(b) For Standard Assets 594,57,00 594,57,00

(c) Depreciation in value of investments - equity 3,36,93 1,44,36

(d) Countercyclical Provisioning Buffer (Refer Note B- 27 of Schedule 18) 25,51,00 0

(e) Sacrifice in interest element of restructured loans 0 8,00

(f) Provision for Other Assets & Receivables 3,72,14 35,48

Total 5546,09,80 4864,62,84

Schedule 10 – Cash and Bank Balances(` in '000)

Sr. Particulars As on As onNo. 31.03.2011 31.03.2010

1 Cash in hand 7 12

2 Balances with :

a) Reserve Bank of India 38,85,26 25,45,41

b) Others

(I) In India

(i) Other Banks in India

a) On Current Account 801,32,40 533,94,82

b) Deposit with Banks 90,02,46,14 9000,00,00

(ii) Remittances in Transit 694,44,37 68,93,40

(iii) Collateralised Borrowing and Lending Obligations 228,18,56 0

(II) Outside India 0 0

Total 107,65,26,80 9628,33,75





100

Sr. Particulars as on as on(` in '000)

Sr. Particulars as on as on

No. 31.03.2011 31.03.2010

1 Government Securities

a) Securities of Central Government (Refer Note B-7 of Schedule 18) 2548,31,03 1991,50,09

[Face Value ` 2599,65,70 (` 1979,65,70)]

[Market Value ` 2563,67,09 (` 1971,99,04)]

b) Treasury Bills 0 0

2 Other Approved Securities 0 0

3 Equity Shares in :

(a) Agricultural Finance Corporation Ltd. 1,00,00 1,00,00

[1,000 (1,000) - Equity shares of ` 10,000 each]

(b) Small Industries Development Bank of India 48,00,00 48,00,00

[1,60,00,000 (1,60,00,000) - Equity shares of ` 10 each]

(c) Agriculture Insurance Company of India Ltd. 60,00,00 60,00,00

[6,00,00,000 (6,00,00,000) - Equity shares of ` 10 each]

(d) Multi Commodity Exchange of India Ltd. 1,25,00 1,25,00

[1562500 (12,50,000) - Equity shares of ` 10 each]

including 312500 Bonus shares allotted during the year

(e) National Commodity and Derivatives Exchange Ltd. 16,87,50 13,98,04

[56,25,000 (53,61,850) - Equity shares of ` 10 each]

(f) Other Equity Investments

(i) Coal India Ltd. ` 42,60

[17389 (NIL) - Equity shares of ` 10 each]

(ii) Power Grid Corporation of India Ltd. ` 25,73


(iii) Manganese Ore India Ltd. ` 43,95


(iv) Punjab & Sindh Bank ` 9,55

[7958 (NIL) - Equity shares of ` 10 each] 1,21,83 0

4 Debentures and Bonds

(a) Special development Debentures of SCARDBs (Refer Note B- 14 of Schedule 18) 13461,16,56 13413,59,90

(b) Non Convertible Bond 225,00,00 0

5 Shareholding in subsidiaries and Joint Venture

(i) NABARD Financial Services Ltd. - ` 8,40,00,000


(ii) Agri-Business Finance [Andhra Pradesh] Ltd. - ` 5,20,00,000


(iii) Agri Development Finance [Tamil Nadu] Ltd. - ` 5,20,00,000 18,80,00 15,60,00


(iv) NABARD Consultancy Services Pvt. Ltd. 5,00,00 5,00,00


6 Others

(a) Commercial Paper 1861,99,91 744,16,51

[Face Value `.1950,50,00 ( `.785,00,00)]

(b) Certificate of Deposit

[Face Value `.700,00,00 (NIL)] 6,80,42,26 0

(c) Units of Liquid Mutual Funds 390,11,34 900,00,00

(Refer Note B-22 of Schedule 18)

(d) SEAF - India Agri - Business Fund 37,50 0

(e) APIDC - Ventureast Life Fund III 4,98,00 0

(f) BVF (Bio-Tech Venture Fund) - APIDC-V Investment 5,00,00 5,00,00

Total 193,29,50,93 17199,09,54

Schedule 11 – Investments





101

Schedule 12 – Advances(` in '000)


No. 31.03.2011 31.03.2010

1 Refinance Loans

a) Production & Marketing Credit 33884,82,33 24073,45,36

b) Conversion Loans for Production Credit 193,21,67 0

c) Medium Term Investment Credit- Non-Project loans 0 0

d) Liquidity Support 0 20,00,00

e) Other Investment Credit :

i) Medium Term and Long Term Project Loans (Refer Note B-14 of Schedule 18) 25435,26,23 22328,22,89

ii) Long Term Non-Project Loans 167,20,61 198,66,93

iii) Interim Finance 0 1,43,00

2 Direct Loans

a) Loans under Rural Infrastructure Development Fund 66077,96,22 60255,45,15

b) Other Loans:

i) Co-operative Development Fund 3,11,68 3,13,05

ii) Micro Finance Development Equity Fund 89,23,20 85,76,60

iii) Watershed Development Fund 32,09,56 29,35,54

iv) Tribal Development Fund 3,47,16 1,01,84

v) KfW UPNRM 53,11,82 11,74,20

vi) Farm Innovation & Promotion Fund 40,75 39,80

vii) NFS Promotional Activities 50,00 0

c) Co-Finance Loans (Net of provision) 87,58,72 83,60,32

Total 12,60,27,99,95 10,70,92,24,68

Schedule 13 – Fixed Assets(` in '000)


No. 31.03.2011 31.03.2010

1 LAND : Freehold & Leasehold (Refer Note B-13 of Schedule 18) Opening Balance 146,12,13 144,51,36

Additions/adjustments during the year 1,96,16 1,60,77

Closing Balance (at cost) 148,08,29 146,12,13

Less: Amortisation of Lease Premia 40,59,65 38,60,33

Book Value 107,48,64 107,51,80

2 PREMISES (Refer Note B-13 of Schedule 18) Opening Balance 259,08,11 258,02,09



Less: Depreciation to date 156,33,58 144,81,04

Book Value 107,08,88 114,27,06

3 FURNITURE & FIXTURES Opening Balance 57,24,47 56,27,21


Sub-Total 58,67,70 57,45,04

Less: Cost of assets sold/written off 13,56 20,57



Book Value 2,76,19 2,95,24

4 COMPUTER INSTALLATIONS & OFFICE EQUIPMENTS Opening Balance 68,22,68 66,14,02


Sub-Total 77,08,04 72,78,50

Less: Cost of assets sold/written off 4,08,59 4,55,83



Book Value 10,31,17 8,21,97

5 VEHICLES Opening Balance 4,39,48 4,76,03

Additions/adjustments during the year 1,63,09 71,75

Sub-Total 6,02,57 5,47,78

Less: Cost of assets sold/written off 1,59,27 1,08,30



Book Value 1,83,75 1,75,76

Total 229,48,63 234,71,83





102

Sr. Particulars 2010-11 (` in '000)

Sr. Particulars 2010-11 2009-10

No.

1 Interest Paid on

a) Loans from Central Government 10,21,19 24,32,78

b) Bonds (Refer Note B- 5 of Schedule 18) 1680,25,58 1623,91,44

c) Tea / Coffee / Rubber Deposits 10,86,63 5,74,19

d) Term Money Borrowings 21,06,65 8,24,28

e) Term Deposits 22,78,08 37,67,22

f) Financial Inclusion Fund 4,15,86 2,50,37

g) Financial Inclusion Technology Fund 4,34,39 3,01,03

h) Borrowings from International Agencies 22,58,86 23,28,39

i) Commercial Paper (Refer Note B- 5 of Schedule 18) 247,82,46 128,50,31

j) Borrowing aginst ST Deposit 31,11,00 0

k) KfW UPNRM - Accompanying measures 1,07 25

l) Short Term Cooperative Rural Credit Fund 259,76,37 76,52,83

m) Deposits under RIDF 3714,32,70 2872,36,36

n) Cattle Development Programme (UP & Bihar) 18,26 14,19

o) Watershed Development Fund 81,25,55 62,14,80

p) Micro Finance Development and Equity Fund 11,29,46 5,10,57

q) Indo German Watershed Development Programme - Andhra Pradesh 71 1,50

r) Indo German Watershed Development Programme - Rajasthan 1,78 68

s) KfW - NB Indo German Watershed Development Programme -

Phase III - Maharashtra 5,80 15,74

t) KfW - NB - IX Adivasi Development Programme 18,84 5,24

u) Indo German Watershed Development Programme - Gujarat 53 1,35

v) Corporate Borrowings from Banks and FIs in India 21,35,58 44,28,77

w) Rural Innovation Fund 4,14,13 4,71,54

x) Livelihood Advancement Business School RF Project -

Sultanpur, Uttar Pradesh 2,08 3,62

y) Multi Activity Approach for Poverty Alleviation BAIF Project -

Sultanpur, Uttar Pradesh 4,14 3,35

z) Livelihood Advancement Business School RF Project -

Rae Bareli, Uttar Pradesh 5,62 6,36

aa) Multi Activity Approach for Poverty Alleviation BAIF Project -

Rae Bareli, Uttar Pradesh 11,08 6,26

ab) Commitment Charges -KfW UPNRM Borrowings 20,74 0

ac) Deposits / Borrowings 3 7,48

ad) Discount Cost Paid on Certificate of Deposits 6,29,72 45,05,22

2 Discount on Collateralised Borrowing and Lending Obligations 26,59,91 9,50,04

3 Swap Charges 6,93,25 6,69,26

4 Discount, Brokerage, Commission & issue exp. on Bonds and Securities 5,78,80 4,20,16

Total 6193,86,85 4988,45,58

Sr. Particulars as on as on (` in '000)


No. 31.03.2011 31.03.2010

1 Accrued Interest 1815,75,35 1496,44,47

2 Deposits with Landlords 1,48,04 1,25,46

3 Deposits with Government Departments and Other Institutions 2,97,86 2,82,21

4 Housing loan to staff 140,22,37 124,06,19

5 Other Advances to staff 65,08,79 61,30,39

6 Advances to Landlords 1,03 60

7 Capital Work in Progress [Purchase of Staff Quarters & Office Premises] 51,48,84 29,76,19

8 Sundry Advances 38,58,47 34,45,06

9 Advance Tax (Net of Provision for Income Tax) 130,80,93 51,56,47

10 Deferred Tax Assets [Refer Note B-11 of Schedule 18] 233,15,00 317,80,00

11 Expenditure recoverable from Government of India/International Agencies. 5,35,57 2,80,77

12 Discount Receivable 35,07,89 15,45,60

Total 2520,00,14 2137,73,41

Schedule 14 – Other Assets

Schedule 15 – Interest & Financial Charges





103

Schedule 16 A – Establishment and Other Expenses

Sr. Particulars As on As on(` in '000)


No. 31.03.2011 31.03.2010

1 Commitments on account of capital contracts remaining to be executed 37,81,29 60,44,33

Sub Total "A" 37,81,29 60,44,33

2 Contingent Liabilities

(i) Claims against the Bank not acknowledged as debt.

(Refer Note B-21 of Schedule 18) 0 3,36,60

Sub Total "B" 0 3,36,60

Total (A + B) 37,81,29 63,80,93

Sr. Particulars 2010-11 2(` in '000)

Sr. Particulars 2010-11 2009-10No.

1 Salaries and Allowances (Refer Note B- 15 of Schedule 18) 5,86,57,40 2,50,33,22

2 Contribution to / Provision for Staff Superannuation Funds 3,27,61,90 84,86,65

3 Other Perquisites & Allowances 22,96,15 19,06,51

4 Travelling & Other allowances in connection with Directors' &

Committee Members' Meetings 13,35 19,77

5 Directors' & Committee Members' Fees 1,08 1,46

6 Rent, Rates, Insurance, Lighting, etc. 20,82,98 19,62,10

7 Travelling Expenses 24,49,56 23,38,96

8 Printing & Stationery 2,81,21 2,80,43

9 Postage, Telegrams & Telephones 8,48,85 6,06,28

10 Repairs 6,55,87 4,71,58

11 Auditors' Fees 8,06 7,67

12 Legal Charges 17,86 29,69

13 Miscellaneous Expenses 40,77,59 25,57,97

14 Expenditure on Miscellaneous Assets 44,37 41,63

15 Expenditure on Study & Training 33,46,06 24,80,27

[Including ` 7,58,70,397(` 5,97,79,097) pertaining to

establishment expenses of Regional Training Centers]

16 Expenditure on promotional activities under

(i) Cooperative Development Fund 6,05,32 3,83,04

(ii) Micro Finance Development and Equity Fund 11,40,75 10,01,05

(iii) Watershed Development Fund 1,01,14 44,70,44

(iv) Farm Innovation and Promotion Fund 2,39,20 96,94

(v) Exp. for NFS Promotional Measures/ Activities 27,52,58 23,40,86

17 Wealth Tax 2,28,60 2,81,22

Total 11,26,09,88 5,47,97,74

Sr. Particulars 2010-11 (` in '000)

Sr. Particulars 2010-11 2009-10No.

Provisions for :

1 Amortisation of G. Sec 0 18,18,16

2 Standard Assets (Refer Note B- 9 of Schedule 18) 0 1,01,50,00

3 Non Performing Assets 32,90,00 17,60,23

4 NB Gen Advices (-)53,24 0

5 Depreciation in Investments G.Sec 0 0

6 Depreciation in Value of Investment Account - Equity (-)5,08 (-)67,92

7 Sacrifice in interest element of restructured Accounts (-)8,00 (-)4,46,00

8 Other Assets / Receivable 3,36,66 47,59

Total 35,60,34 132,62,06

Schedule 16 B – Provisions

Schedule 17 – Commitments and Contingent Liabilities





104

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Preparation

1.1 The accounts are prepared on the historical cost

convention and comply with all material aspects

contained in the National Bank for Agriculture and Rural

Development Act, 1981 and Regulations thereof,

applicable Accounting Standards (AS) issued by the

Institute of Chartered Accountants of India (ICAI) and

regulatory norms prescribed by the Reserve Bank of

India (RBI). Except otherwise mentioned, the accounting

policies have been consistently applied by National

Bank for Agriculture and Rural Development (NABARD

/ the Bank) and are consistent with those used in the

previous year.

1.2 Preparation of financial statements as per

Generally Accepted Accounting Policies (GAAP) requires

the management to make several assumptions and

estimates that affect reported results and the reported

state of affairs of the Bank; the example of such cases

include the estimated life of fixed assets, liability on

account of employee retirement benefits, provision for

anticipated losses, etc. Actual results could differ from

such estimates. Such differences are recognized in the

year of outcome of such results.

2. Income and expenditure

2.1 Income and expenditure are accounted on

accrual basis except the following, which are accounted

on cash basis:

a. Interest on non-performing assets 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 ` 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 respective assets. Subsequent

expenditure incurred on existing assets is capitalised only

when it increases the future benefit from the existing assets

beyond its previously assessed level of performance.

3.2 Expenditure incurred on assets purchased for

the value not exceeding ` 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 @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, whichever is

higher.

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%

Schedule 18

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS FOR THE YEARENDED MARCH 31, 2011





105

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”).

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

car ried at cost and provision for depreciat ion/

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 classif ied 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 ` 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 restructuring/rescheduling of

advances, the difference between the present value of

future interest as per the original agreement and the

present value of future interest as per the revised

agreement is provided for, at the time of restructuring/

rescheduling.

6.3 Advances are stated net of provisions towards

Non-performing Advances.

7. Foreign Currency Transactions

7.1 Foreign currency borrowings, which are covered

by hedging agreements, are marked to market at every

reporting date, the resultant gain, if any, is ignored and

loss, if any, is provided for. The liability towards foreign

currency borrowings at the prevailing exchange rate on

the reporting date is mentioned under the Balance sheet

as a contra entry.

7.2 Profit on cancellation of or renewal of currency

SWAP agreement, if any, is accounted for on the final

settlement of agreement; however, loss on such

transactions is provided at the market rates, as on the

date of Balance Sheet.

8. Retirement Benefits

8.1 The Bank has a Provident Fund Scheme

managed by RBI. Contribution to the Fund is made on

actual basis.





106

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.

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,





107

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 THEACCOUNTS

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. Income under the head ‘Income from

Investment Operations / Deposits’ includes ‘Discount

and Commission’, which was hitherto shown separately

in the Profit and Loss A/c.

5. Subvention received/receivable from GOI

amounting to ` 989.34 crore (` 794.67 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 ` 54.49 crore

(` 35.15 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 securit ies pledged with Clearing

Corporation of India Limited as collateral security for

Business segments:

(` in crore)

Particulars Face Value Book Value

Pledged for Business 55.00 54.81

Segment (Securities) (50.00) (49.76)

Pledged for Business Segment 2257.00 2208.63

(Collateralised Borrowing and (1922.00) (1933.87)

Lending Obligation)

8. Interest at the rate of 6.00% (6.00%) per

annum on unutilised 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 8.80% (7.68%) 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. The said interest is

calculated based on the mid-month average outstanding

of the respective funds, which was hitherto calculated

on the closing balance of the respective funds.

9. Provision for Standard Assets which was

hitherto provided at 0.50% on Direct Loans to State

Governments and at 0.75% on Loans Guaranteed by

State Government is now being provided as per the

IRAC norms of RBI. The continuation of earlier

methodology would have been resulted in an additional

provision of ` 81.63 crore for the current year.

10. Pending receipt of confirmation of balance of

Provident Fund Account in respect of employer’s

contribution as on March 31, 2011 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.

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 ` 84.65 crore between net deferred tax assets of

` 233.15 crore and ` 317.80 crore as at March 31,

2011 and March 31, 2010 respectively; as detailed

below:





108

(` in crore)

Sr. Deferred 31 March 31 March

No. Tax Assets 2011 2010

1 Provision for Retirement 181.18 274.85

Benefits made in the books but

allowable for tax purposes on

payment basis

2 Depreciation on Fixed Assets 21.77 22.35

3 Amortisation of G Sec 30.20 20.60

Total 233.15 317.80

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 ` 29.88 crore

(` 33.82 crore) paid towards Office Premises and Staff

Quarters for which conveyance is yet to be completed.

14. Pursuant to the directives of RBI, the project

loans provided to SCARDBs by way of subscription to

the Special Development Debentures (SDDs) floated by

these agencies, are treated as under:

a. classified as Investments and shown in Schedule

– 11 under the head ‘Debenture and Bonds’, which

was hitherto shown as part of ‘Medium Term and Long

Term Project Loans’, in Schedule – 12

b. Interest earned on the same is shown as a part

of ‘Interest received on Loans and Advances’ in the

Profit and Loss Account, treating them as ‘deemed

advances’.

c. Deemed Advances for the purpose of IRAC

norms, Income recognition, capital adequacy and

computation of ratios etc.

d. The value of Allotment Letters / Debenture

Scrips, yet to be received, as at the year end, aggregates

to ` 238.15 crore (` 30.12 crore)

15. The salary and allowances of the employees

of the Bank has been revised with effect from 01

November 2007. Pursuant to the salary revision, an

amount of ` 277.09 crore is reckoned towards arrears

of salary of which ` 177.34 crore pertains to the period

November 2007 to March 2010 and an additional

amount of ` 216.09 crore has been reckoned towards

superannuation benefi ts of the employees, on

estimated basis.

16. The tax liability of the bank for the AY

2002-03 amounting to ` 373.15 crore was assessed by

the Income Tax department and fully paid by the bank.

However, the bank has filed appeal against the taxability

of NABARD for the AY 2002-03 with Income Tax

Appellate Tribunal.

17. The bank has created two new funds out of its

post tax profi t viz. ‘Producers’ Organizations

Development Fund’ and ‘Rural Infrastructure Promotion

Fund’ with a corpus of ` 50 crore and ` 25 crore

respectively during the year.

18. The Bank has transferred the outstanding

balances of the following funds to Reserve Fund:

a. Foreign Currency Risk Fund - ` 147.06 crore

b. Soft Loan Assistance Fund for - ` 10 crore

Margin Money

c. Agriculture and Rural Enterprise - ` 5 crore

Incubation Fund

19. Disclosure required under AS 15

(Revised) on “Employee Benefits” is

as under:

19.1 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.





109

a. Reconciliation of opening and closing balances of defined benefit obligations:

(` in crore)

Particulars Pension Gratuity Leave

Encashment

Present value of defined benefit obligation at 958.76(892.01) 221.20(250.53) 117.63(115.51)

the beginning of year

Current Service Cost 22.76(20.65) 16.90 (15.27) 6.54(3.73)

Interest Cost 79.10(66.90) 18.25 (18.79) 9.70(8.66)

Actuarial (gain)/ loss 207.42 (-10.01) 8.16(-25.60) 17.67(2.19)

Benefits paid -45.01(-10.79) -21.94(-37.79) -6.66(-12.47)

Present value of defined benefits 1223.03(958.76) 242.57(221.20) 144.88(117.63)

obligations at the year end

b. Amount recognized in the balance sheet as on 31 March 2011:

(` in crore)

Particulars Pension Gratuity Leave Encashment

(Partly Funded) (funded) (Funded)

Present value of defined benefits obligations 1223.03(958.76) 242.57(221.20) 144.88(117.63)

as at the year end

Fair value of plan assets as at the year end 288.11(268.77) @ 227.85(220.00) 143.66(127.55) $

Liability recognized in the Balance 934.92(689.99) 14.72(1.20) 1.22(-9.91)

Sheet as at the year end

@ Represents the Bank’s contribution towards PF for pension optees available with RBI.

$ Represents the amount invested with Insurance companies towards the Liability for Leave Encashment.

c. Expenses recognized in the Profit and Loss Account during the year:

(` in crore)


Encashment

Current Service Cost 22.76(20.65) 16.90(15.27) 6.54(3.73)

Interest Cost 79.10(66.90) 18.25(18.79) 9.70(8.66)

Actuarial (gain)/ loss 172.83(-10.01) 8.16(-25.60) 17.67(2.19)

Expected return on Plan Assets - -16.92(0.00) -12.26(-14.20)

Expense recognized in the statement of Profit & Loss 274.69(77.54) 26.39(8.46) 21.65(-0.38)

d. Actuarial assumptions:


Encashment

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%





110

19.2 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.

19.3 The aforesaid liabilities include liabilities of

employees deputed to subsidiaries.

19.4 The above information is certified by the actuary

and the provision for pension is recognized in the profit

and loss account after considering the outstanding

balance of the Bank’s contribution to the Provident

Fund of pension optees.

19.5 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 ` 11.87 crore (` 11.69 crore)

20. 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.

21. The movement in Contingent Liability as

required in AS 29 “Provisions, Contingent Liabilities

and Contingent Assets” is as under:

(` in crore)

Particulars 2010-11 2009–10

Opening Balance 3.37 3.37

Addition during the year 0.00 0.00

Deletion during the year 3.37 0.00

Closing Balance 0.00 3.37

22. Prior period items included in the Profit and

Loss account are as follows:

(` in crore)

Sr. Particulars 2010-11 2009–10

No.

1 Depreciation 2.895 4.038

Total 2.895 4.038

23. Capital adequacy ratio of the Bank as on 31 March

2011 is 21.76% (24.95%) as against a minimum of

9% as stipulated by RBI.

24. NPA on staff loans:

(` in crore)

Particulars 2010-11 2009-10

Opening Balance 0.08 0.07

Addition during the year 0.00 0.03

Written Back during the year 0.04 0.02

Closing Balance 0.04 0.08

25. Investments in Mutual Funds are as under:

(` in crore)

Sr. Name of the As at March 31, 2011 As at March 31, 2010

No. Mutual Fund No. of units Book Market No. of units Book MarketValue Value Value Value

1 Kotak Mahindra 31178095.5170 50.01 50.01 44148228.8210 50.00 50.012 ICICI Prudential 2069242.3680 30.01 30.01 2919994.9850 50.00 50.013 Canara Robeco 25172008.7263 30.01 30.01 71988360.6304 100.00 100.054 IDFC 25159975.5110 30.01 30.01 45799983.5330 50.00 50.015 UTI –Money Market 310661.2930 50.01 50.01 969829.4780 100.00 100.036 Tata 276239.8430 50.01 50.01 294404.7780 50.00 50.007 DWS 2356602.6900 30.01 30.01 0.0000 0.00 0.008 SBI 19254837.7780 30.01 30.01 0.0000 0.00 0.009 IDBI 285224.8670 30.01 30.01 0.0000 0.00 0.0010 Peerless 28065186.0720 30.01 30.01 0.0000 0.00 0.0011 Taurus 284381.6460 30.01 30.01 0.0000 0.00 0.0012 UTI- Treasury advantage 0.0000 0.00 0.00 809238.4970 100.00 100.0913 Birla Sun life 0.0000 0.00 0.00 28607635.3200 50.00 50.0114 Life Insurance Corporation 0.0000 0.00 0.00 80888127.7770 100.00 100.0115 Baroda Pioneer 0.0000 0.00 0.009 6420619.9960 100.00 100.0216 PRINCIPAL 0.0000 0.00 0.00 34310340.1970 50.00 50.0117 Deutsche 0.0000 0.00 0.00 46191646.2350 50.00 50.0118 L&T 0.0000 0.00 0.00 33727478.7790 50.00 50.01

Total 390.11 390.11 900.00 900.27





111

26. As per the information available with the Bank,

there are no dues payable under Micro, Small and

Medium Enterprises Development Act 2006.

27. In terms of RBI circular No. DBOD.No.BP.BC.87/

21.04.048/2010-11 dated 21 April 2011, the excess

amount of ` 25.51 crore of provision held for achieving

Provision Coverage Ratio as on 30 September 2010 has

been transferred to “Countercyclical Provisioning buffer”.

28. Figures in brackets pertain to previous year.

29. The following additional information is disclosed

in terms of RBI circulars No.RBI/2009–2010/49

(DBOD.FID.FIC.2/01.02.00/2010–11) dated 01 July 2010.

29.1 Capital

(a) Capital to Risk–weighted Assets Ratio

(CRAR)

(Per cent)

Particulars 31 March 31 March

2011 2010

CRAR 21.76 24.95

Core CRAR 20.43 23.47

Supplementary CRAR 1.33 1.48

(b) Subordinated Debt

(` in crore)


2011 2010

Amount of subordinated

debt raised and outstanding Nil Nil

as Tier II Capital

(c) Risk weighted assets

(` in crore)


2011 2010

On – Balance Sheet Items 63515.55 49921.32

Off – Balance Sheet Items 20.30 25.18

(d) Pattern of Capital contribution as on

the date of the balance sheet

(` in crore)

Contributor 31 March 2011 31 March 2010

Reserve Bank of India 20 1.00% 1,450 72.50%

Government of India 1,980 99.00% 550 27.50%

Total 2000 2000

Note : Pursuant to notification No.F.No 11/16/2005-BOA dt 16.09.2010, issued

by the Department of Financial Services, Ministry of Finance, Government of

India, 71.50% of Share Capital of NABARD held by RBI has been transferred

to Government of India.

29.2 Asset Quality and Credit

Concentration [Excluding Staff

Advances]

(a) Net NPA position


2011 2010

Percentage of Net NPAs to 0.02136 0.01559

Net Loans & Advances

(b) Asset classification

(` in crore)

Classification 2010-11 2009-10

Amount (%) Amount (%)

Standard 139459.40 99.950 120487.10 99.958

Sub-standard 0.00 0.000 6.71 0.006

Doubtful 68.13 0.049 44.02 0.036

Loss 1.02 0.001 0.00 0.000

Total 139528.56 100.000 120537.13 100.000

(c) Provisions made during the year

(` in crore)

Provisions against 2010-11 2009-10

Standard Assets 0.00 101.50

Non Performing Assets 32.90 17.60

Investments (Net) 1.93 (-)0.68

Income Tax 460.00 647.00

Total 494.83 765.42

(d) Movement in Net NPAs

(` in crore)


(A) Net NPAs as at 32.72 30.31

beginning of the year

(B) Add: Additions during the year 19.40 8.35

(C) Sub-total (A+B) 52.12 38.66

(D) Less: Reductions during the year 22.32 5.93

(E) Net NPAs as at the end of 29.80 32.72

the year (C-D)





112

(e) Credit exposure as percentage to Capital Funds and as percentage to Total Assets

Category 2010-11 2009-10

Credit Exposure as % to Credit Exposure as % to

Capital Funds Total Assets Capital Funds Total Assets

I Largest Single Borrower 128.67 11.08 145.41 13.57

II Largest Borrower Group Not Applicable Not Applicable

III Ten Largest Single Borrowers for the year 378.64 32.59 379.27 35.40

IV Ten Largest Borrower Groups Not Applicable Not Applicable

(f) Credit exposure to the five largest industrial sectors as percentage to total loan assets: Not Applicable

29.3 Liquidity

(a) Maturity pattern of Rupee Assets and Liabilities

(b) Maturity pattern of Foreign Currency Assets and Liabilities

(` in crore)

Sr. Item Less than or More than 1 More than More than More than Total #

No. equal to year upto 3 3 years upto 5 years upto 7 years

1 year years 5 years 7 years

1 Rupee Assets 68088.65 40360.96 31910.59 13478.17 4410.44 158248.82

(51280.08) (35053.14) (28992.26) (15363.61) (5007.03) (135696.12)

2 Foreign currency assets 0.00 0.00 0.00 0.00 0.00 0.00

(0.00) (0.00) (0.00) (0.00) (0.00) (0.00)

Total Assets 68088.65 40360.96 31910.59 13478.17 4410.44 158248.82

(51280.08) (35053.14) (28992.26) (15363.61) (5007.03) (135696.12)

3 Rupee Liabilities 36715.00 39438.72 29124.49 18524.70 33943.27 157746.17

(22607.89) (35939.57) (24755.17) (18416.73) (33482.22) (135201.58)

4 Foreign currency liabilities 39.92 79.75 79.74 64.82 238.42 502.65

(10.15) (64.71) (109.06) (109.07) (201.55) (494.54)

Total Liabilities 36754.92 39518.47 29204.23 18589.52 34181.69 158248.82

(22618.04) (36004.28) (24864.23) (18525.80) (33683.77) (135696.12)

# Net of provision made as per RBI directives on Standard Assets as well as for diminution in value of Investments aggregating

to ` 623.45 crore (` 596.01 crore)

29.4 Operating results


(a) Interest income as a percentage to average working funds 6.22 6.19

(b) Non interest income as a percentage to average working funds 0.10 0.10

(c) Operating profit as a percentage to average working funds 1.25 1.80

(d) Return on average Assets (%) 0.88 1.23

(e) Net Profit per Employee (Rs. in crore) 0.27 0.33

29.5 Movement in the provisions

(a) Provision for Non Performing Assets (Loan Assets)

(` in crore)


Opening balance as at the beginning of financial year 31.96 14.40

Add: Provision made during the year (Incl. provision for PCR) 23.73 18.64

Less: Write off, write back of excess provision 16.34 1.08

Closing balance at the close of financial year 39.35 31.96





113

(b) Provision for depreciation in investments

(` in crore)

Particulars 2010-11

A Opening balance as at 1.44

the beginning of the financial year (2.12)

B Add

(i) Provisions made during the year 2.08

(0.00)

(ii) Appropriation, if any, from 0.00

Investment Fluctuation (0.00)

Reserve Account during the year

C Sub Total [A+B(i)+B (ii)] 3.52

(2.12)

D Less

(i) Write off, Write Backs of 0.15

excess provision (0.68)

(ii) Transfer, if any, 0.00

to Investment Fluctuation (0.00)

Reserve Account

Sub Total [D] 0.15

(0.68)

E Closing balance as at 3.37

the close of financial year (C-D) (1.44)

29.6 Restructured accounts

During the current financial year five loan accounts

outstanding to the extent of ` 22.10 crore have been

rescheduled. All the said five loans are classified as

Standard Asset. There is no Interest sacrifice on these

reschedulements.

The interest sacrifice on loans restructured during FY

2005-06 amounted to ` 31.08 crore. Interest sacrifice

is reviewed at each balance sheet date and necessary

provision is made or reversed. Accordingly, ` 0.08 crore

(` 4.46 crore) was written back during the current

financial year.

29.7 Assets sold to securitisation company/

reconstruction company : NIL (NIL)

29.8 Forward Rate Agreements and Interest

Rate Swaps : NIL (NIL)

29.9 Interest Rate Derivatives : NIL NIL)

29.10 Investments in Non Government

Debt Securities : NIL (NIL)

29.11 Corporate Debt Restructuring (CDR)

There are no loan accounts subjected to

Corporate Debt Restructuring during the

current year.

29.12 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 93.63 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

` 592.10 crore and the value of outstanding principal

liability in the books of account stood at contracted

value i.e. ` 502.64 crore. The quantitative disclosure

in this regard is as under:

(` in crore)

Sr. Particulars Currency Interest Rate

No. Derivatives Derivatives

1 Derivatives

(Notional Principal amount)

A) For Hedging 592.10 NA

(563.66)

B) For Trading NA NA

2 Marked to Market Positions [1]

a) Asset (+) 89.45 NA

(69.12)

b) Liability (-) 0.00 NA

(0.00)

3 Credit Exposure [2] 121.25 NA

4 Likely impact of one percentage

change in interest rate (100*PV01)

a) on hedging derivatives 14.00@ NA

b) on trading derivatives NA NA

5 Maximum and Minimum of NA NA

100*PV01 observed during the year

a) on hedging NA NA

b) on trading NA NA

@ If MIBOR rate decrease by 100 bps across tenure MTM gain

would be reduced by ` 14 crore





114

(` in crore)

Name of the Party Nature of Nature of Amount of Outstanding

Relationship Transaction transaction

during the year

Shri U C Sarangi Key Management Remuneration 0.18 –

Personnel-Ex-Chairman including perquisites (0.26)

Dr. K G Karmakar Key Management Remuneration 0.24 –

Personnel-Managing Director including perquisites (0.30)

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.

29.15 Issuer categories in respect of investments made

(` in crore)

Sr. Issuer Amount Investment 'Below 'Unrated' 'Unlisted'

No. made investment Securities Securities

through grade' held

private Securities

placement held

(1) (2) (3) (4) (5) (6) (7)

1 PSUs 80.34 79.13 – 19.13 79.13

(60.00) (60.00) (16.23) (60.00)

2 FIs 123.00 123.00 – – 48.00

(48.00) (48.00) (48.00)

3 Banks – – – – –

4 Private Corporate 150.00 150.00 – – –

(0.00) (0.00)

5 Subsidiaries/Joint ventures 23.80 23.80 – 23.80 23.80

(20.60) (20.60) (20.60) (20.60)

6 Others (Net of Provision) 2262.47 10.35 – 10.35 2262.47

including Mutual Funds (1663.96) (21.23) (21.23) (1663.96)

7 Provision held 3.37 – – – 3.37

towards depreciation (1.44) (1.44)

Total 2636.24 386.28 0.00 53.28 2410.03

(1794.00) (149.83) (0.00) (41.83) (1794.00)

29.13 Exposures where the FI had exceeded

prudential exposure limits during the

year : NIL (NIL)

29.14 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 - Ex-Chairman

2. Dr. K G Karmakar - Managing Director





115

29.16 Non performing investments: NIL (NIL)

29.17 Disclosure on Repo transactions

(` in crore)

Particulars Minimum Maximum Daily average Outstanding

outstanding outstanding outstanding as on

during the year during the year during the year 31 March 2011

Securities sold under repo 0.00 0.00 0.00 0.00

(0.00) (0.00) (0.00) (0.00)

Securities purchased under 0.00 0.00 0.00 0.00

reverse repo (476.02) (476.02) (1.30) (0.00)

29.18 Concentration of Deposits, Advances,

Exposure and NPAs

(a) Concentration of Deposits

(` in crore)

Total Deposits of twenty 73671.25(57661.54)

largest depositors

Percentage of Deposits of 89.00%(82.38%)

twenty largest depositors to

Total Deposits of the Bank

(b) Concentration of Advances

(` in crore)

Total Advances to twenty 75077.75(67384.61)

largest borrowers

Percentage of Advances to twenty 53.81%(55.82%)

largest borrowers to

Total Advances of the Bank

(c) Concentration of Exposure

(` in crore)

Total Exposure to twenty largest 75077.75(67384.61)

borrowers/ customers

Percentage of Exposure to twenty 50.32%(51.94%)

largest borrowers/customers to

Total Exposure of the bank on

borrowers/customers

(d) Concentration of NPAs

(` in crore)

Total Exposure to Top four NPA accounts 50.71(32.02)

29.19 Sector-wise NPAs

Sr. Sector Percentage of NPAs

No to Total Advances

in that sector

1 Agriculture and 0.00(0.00)

allied activities

2 Industry (Micro & Small, 54.46(43.88)

Medium and Large)

3 Services 0.00(0.00)

4 Personal Loans 0.00(0.00)

29.20 Movement of Gross NPAs

Particulars Amount in

` crore

Gross NPAs as on 1st April of 50.73(44.71)

par ticular year (Opening Balance)

Additions (Fresh NPAs) during the year 25.66(8.87)

Sub-total (A) 76.39(53.58)

Less:-

(i) Upgradations 5.40(0.00)

(ii) Recoveries (excluding recoveries 1.84(2.85)

made from upgraded accounts)

(iii) Write-offs 0.00(0.00)

Sub-total (B) 7.24(2.85)

Gross NPAs as on 31st March of

following year (closing balance) (A-B) 69.15(50.73)

29.21 Overseas Assets, NPAs and

Revenue: NIL (NIL)

29.22 Off-balance sheet SPVs sponsored (which

are required to be consolidated as per

accounting norms) : NIL (NIL)





116

(b) Information on Primary Business Segment

(` in crore)

Direct Finance Refinance Treasury Unallocated Total

Segment Revenue 4,085.61 4,086.49 943.24 86.68 9,202.01

(3,295.94) (3,393.58) (1,255.69) (19.59) (7,964.80)

Segment Results 268.69 1,567.59 912.21 -924.63 1,823.86

(372.12) (1,198.23) (1,227.10) (-525.00) (2,272.45)

Total carrying amount of 66,409.32 74,643.27 15,316.71 2,502.96 1,58,872.26

Segment Assets (60,519.42) (61,222.81) (12,985.48) (1,564.42) (1,36,292.13)

Total carrying amount of 68,908.87 69,320.39 266.47 20,376.54 1,58,872.26

Segment Liabilities (60,642.12) (55,128.33) (239.82) (20,281.86) (1,36,292.13)

Other Items :

Cost to acquire Segment 0.00 0.00 0.00 18.22 18.22

Assets during the year (0.00) (0.00) (0.00) (11.21) (11.21)

Amor tization & Depreciation 0.00 0.00 0.00 22.58 22.58

(0.00) (0.00) (18.18) (23.29) (41.48)

Non Cash Expenses 32.90 (-)0.08 (-)0.05 100.21 132.98

(17.96) (96.37) (-0.68) (73.34) (186.99)

(c) Since the operations of the Bank are confined to India only there is no reportable

secondary segment.

30. Previous year's figures have been regrouped / rearranged wherever necessary.





29.23 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.

iii) Treasury: Includes investment of funds in treasury

bills, short-term deposits, government securities,

etc.

iv) Unallocated: Includes income from staff loans and

other miscellaneous receipts and expenditure

incurred for the developmental role of the bank and

common administrative expenses.





117

National Bank for Agriculture and Rural Development

Cash Flow for the year ended 31 March 2011(` in '000)


(a) Cash flow from Operating activities

Net Profit as per Profit and Loss a/c before tax 1823,86,02 2272,45,27

Adjustment for:Depreciation 22,57,98 23,29,36

Provisions and Amortisations 2,78,34 17,97,83

Provision for Non performing Assets 32,90,00 17,60,24

Provision for Standard Assets 0 1,01,50,00

Provision for sacrifice in interest element of Restructured Loan (-)8,00 (-)4,46,00

Profit / Loss on sale of Fixed Assets 4,64 (-)20,91

Interest credited to various Funds

(including addition/ adjustment made to Interest Differential Fund) 118,36,63 91,59,97

Other Expenses 0 0

Income from Investment (including Discount Income) (-)938,79,85 (-)1255,68,93

Expenditure from various Funds (-)5492,54,83 (-)12801,23,53

Operating profit before changes in operating assets (-)4430,89,07 (-)11537,16,70

Adjustment for net change in:

Current Assets (-)373,55,50 4037,11,93

Current Liabilities 6,81,46,96 679,38,95

Increase in Loans and Advances

(Including Housing Loan & Other Advances to Staff (-)19035,55,28 (-)21785,29,44

Cash generated from operating activities (-)23158,52,89 (-)28605,95,26

Payment of Income Tax (-)539,24,46 (-)793,21,30

Net cash flow from operating activities (A) (-)23697,77,35 (-)29399,16,56

(b) Cash flow from Investing activities

Income from Investment (including Discount Income) 943,23,85 1255,68,93

Increase / Decrease in Fixed Asset (-)17,39,41 (-)10,63,15Increase / Decrease in Investment (-)2087,23,63 (-)808,31,58

Net cash used / generated from investing activities (B) (-)1161,39,19 436,74,20

(c) Cash flow from financing activities

Grants / contributions received 3925,65,16 12928,14,79

Proceeds of Bonds 6783,83,37 (-)3699,24,94

Increase / Decrease in Borrowings 2503,49,41 1584,85,53

Increase / Decrease in Deposits 12780,65,51 1786889,68

Net cash raised from financing activities (C) 25993,63,45 28682,65,06

Net increase in cash and cash equivalent (A)+(B)+(C ) 1134,46,91 (-)279,77,29

Cash and Cash equivalent at the beginning of the year 628,33,75 908,11,05

Cash and cash equivalent at the end of the year 17,62,80,66 6,28,33,75

1. Cash and cash equivalent at the end of the year includes : 2010-2011 2009-2010

Cash in hand 7 12

Balance with Reserve Bank of India 38,85,26 25,45,42

Balances with other Banks in India 8,01,32,40 5,33,94,81

Remittances in Transit 6,94,44,37 68,93,40

Inter fund transfer 0 0

Collateralised Borrowing and Lending Obligations 2,28,18,56 0

Total 17,62,80,66 6,28,33,75

Previous year's figures have been regrouped/ rearranged to conform to the current year's presentation, wherever necessary.









118

Consolidated Balance Sheet

Profit and Loss Account

&

Cash Flow

of

NABARD

&

its Subsidiaries(NABCONS, ADFT, ABFL, NABFINS)

2010-2011





119


HO : 501, Sujata, off Narsi Natha Street, Mumbai - 400 009,

Tel : 23443549, 23437853, Fax : 23415455,

Website : www.pparikh.com


Auditors' Report on Consolidated Financial Statements

To the Board of Directors


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, 2011, 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 have 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 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 of 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 ` 192.23 crore and ` 23.51 crore respectively. The financial statements in respect of three

subsidiaries viz. Agri Development Finance (Tamil Nadu) Ltd., NABARD Consultancy Services Limited and Agri-Business

Finance (AP) Ltd., 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 given 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.

i. in the case of the Consolidated Balance Sheet, of the state of affairs of the Bank as at March 31, 2011;

ii. 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

iii. 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 For and on behalf of

Date: May 30, 2011 P. Parikh & Associates


Firm Registration No. 107564W

Ashok Rajagiri

Partner,

Membership No.: 046070





120


Consolidated Balance Sheet as on 31 March 2011

(` in '000)

Particulars As on 31.03.2011 As on 31.03.2010

FUNDS AND LIABILITIES

Capital 20,00,00,00 20,00,00,00

Reserve Fund and Other Reserves 1,18,88,71,64 1,06,95,52,59

National Rural Credit Funds 1,60,45,00,00 15983,00,00

Funds Out of Grants received from International Agencies 1,38,89,56 149,87,64

Gifts, Grants, Donations and Benefactions 26,01,94,77 47,08,08,54

Other Funds 34,31,47,40 27,35,11,98

Minority Interest 21,69,85 13,42,23

Deposits 8,27,76,67,53 6,99,96,02,03

Bonds and Debentures 2,67,87,24,84 2,00,04,38,12

Borrowings 76,81,29,09 51,76,83,03

Current Liabilities and Provisions 56,05,55,85 48,87,86,69

TOTAL FUNDS AND LIABILITIES 15,89,78,50,53 13,63,50,12,85

PROPERTY AND ASSETS

Cash and Bank Balances 1,08,81,89,37 96,94,91,33

Investments 1,93,05,80,92 37,64,99,64

Advances 12,60,31,30,66 12,05,12,26,31

Fixed Assets 2,29,99,83 2,34,98,90

Other Assets 25,29,49,75 21,42,96,67

TOTAL PROPERTY AND ASSETS 15,89,78,50,53 13,63,50,12,85




FRN. 107564W





Date : May 30, 2011







121


Consolidated Profit and Loss Account for the year ended 31 March 2011

(` in '000)


Income:

Interest Received on Loans and Advances 8170,20,18 66,54,03,24

Income from Investment operations 946,91,62 1259,46,96

Other Receipts 107,08,08 66,84,46

TOTAL INCOME 92,24,19,88 79,80,34,66

Expenditure:

Interest and Financial Charges 6194,38,06 49,88,46,50

Establishment and other expenses 1135,57,54 5,54,72,01

Depreciation 22,67,16 23,33,50

Provisions 35,79,92 1,32,71,75

TOTAL EXPENDITURE 7388,42,68 5,69,92,376

Profit before Income Tax 1835,77,20 2281,10,90

Provision for Income Tax 463,67,98 649,54,88

Deferred Tax Asset Adjustment 84,93,30 67,17,34

Short / (Excess) provision for Income Tax in earlier years 0 0

Profit after Tax 1287,15,92 1564,38,68

Share of Profit / Loss in Subsidiaries attributable to Minority Interest 88,93 71,51

Profit available for Appropriation 1286,26,99 1563,67,17

Appropriations:

Profit as above 1286,26,99 1563,67,17

Add: Withdrawals from various funds against expenditure debited to

P/L A/c / transfer of funds which have been closed 202,67,59 70,34,45

Total Profit Available for Appropriation 1488,94,58 1634,01,62

Transferred to:

Special Reserve u/s 36(I)(viii) of the Income Tax Act, 1961 360,00,00 350,00,00

National Rural Credit (Long Term Operations) Fund 50,00,00 400,00,00

National Rural Credit (Stabilisation) Fund 10,00,00 10,00,00

Co-operative Development Fund 6,05,32 3,83,03

Research & Development Fund 17,67,49 9,82,99

Investment Fluctuation Reserve 116,07,65 30,00,00

Producers' Organisation Development Fund 50,00,00 0

Rural Infrastructure Promotion Fund 25,00,00 0

Financial Inclusion Technology Fund 10,00,00 0

Farmers Technology Transfer Fund 2,34,20 64,58,41

Farm Innovation and Promotion Fund 33,55,54 96,94

MFDEF Reserve Fund 0 80,00,00

Reserve Fund 808,24,38 684,80,26

Total 1488,94,58 1634,01,63





122

Additional Notes to Consolidated Accounts

1. Consolidation has been done pursuant to the listing agreement with stock exchange.

2. Financial statement in respect of Agri Development Finance (Tamilnadu) Ltd, 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 52.10

Agri Business Finance (AP) Ltd. India 47.82*

NABARD Financial Services Limited India 52.47

NABARD Consultancy Pvt. Ltd. India 100.00

*NABARD controls the Board of Directors of Agri Business Finance (AP) Ltd.and hence considered as a subsidiary.

4. The financial statements of the company and its subsidiary companies are combined on a line to line basis by adding together expenses

after fully eliminating intra-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 ` 22.67 crore (23.34 crore) included in the Consolidated

Financial Statement, 0.14% (0.18%) 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:

(` in crore)

Financial Year 2010-11 Direct Refinance Treasury Unallocated Total

(Consolidated) Finance

Segment Revenue 4090.85(3298.75) 4086.49(3298.75) 943.24(1255.69) 103.63(32.32) 9224.20(7980.35)

Segment Results 271.38(374.13) 1567.59(1198.23) 912.21(1227.10) -915.41(-518.36) 1835.77(2281.11)

Total carrying amount of

Segment Assets 66434.55(60538.90) 74643.27(61222.81) 15316.71(12985.48) 2583.97(1602.94) 158978.51(136350.13)

Total carrying amount of

Segment Liabilities 68934.10(60661.60) 69320.39(55128.33) 266.47(239.82) 20457.56(20320.38) 158978.51 (136350.13)

Other Items : – – – – –

Cost to acquire Segment

Assets during the year – 0.00 (0.10) 18.54(11.27) 18.54(11.37)

Amortization & Depreciation 0.06(0.03) 0.00(0.00) 0.00(18.18) 22.61(23.30) 22.67(41.52)

Non Cash Expenses

(other than above) 33.10(18.06) -0.08(96.37) -0.05(-0.68) 100.21(73.34) 133.18(187.09)

Note: There are no reportable secondary segments for the bank and its subsidiaries

8. Previous Year figures have been regrouped / rearranged wherever necessary




FRN. 107564W





Date : May 30, 2011







123


Consolidated Cash Flow Statement for the year ended 31 March 2011(` in '000)

Particulars During 2010-11 During 2009-10

(a) Cash flow from Operating Activities

Net profit as per P & L a/c before tax 1835,77,20 2281,10,90

Depreciation 22,67,16 23,33,50

Provisions and Amortisations 2,78,34 17,97,83

Provision for Non performing Assets 32,90,00 17,60,24

Provision for Standard Assets 0 101,50,00

Provision for Sacrifice in interest element of restructured loan (-)8,00 (-)4,46,00

Interest credited to various funds 118,36,63 91,59,97

Other expenses 0 (-)58

Income from Investment (-)938,79,85 (-)1255,68,93

Profit / Loss on sale of Fixed Asset 4,64 (-)20,90

Expenditure from various funds (-)5492,54,83 (-)12801,23,53

Operating profit before working capital changes (-)4418,88,71 (-)11528,47,50

Adjustment for net change in:

Current Assets (-)377,80,87 4033,86,71

Current liabilities 717,32,21 698,41,86

Increase/Decrease in Loans and Advances (-)19087,50,88 (-)21790,01,01

Cash generated from operating activities (-)23166,88,25 (-)28586,19,94

Payment towards Income tax (-)541,65,19 (-)795,74,81

Net cash flow from operating activities (A) (-)23708,53,44 (-)29381,94,75

(b) Cash flow from Investing Activities

Income from Investment 943,23,85 1255,68,93

Increase / Decrease of Fixed Assets (-)17,72,70 (-)10,80,04

Increase / Decrease in Investments (-)2087,33,45 (-)808,60,63

Net cash used in investing activities (B) (-)1161,82,30 436,28,26

(c) Cash flow from Financing Activities

Proceeds of Bonds 6793,53,37 (-)3699,24,94

Increase / Decrease in Borrowings 2555,88,70 1591,33,43

Increase / Decrease in Deposits 12762,20,26 17863,32,63

Grants / contributions received 3925,65,06 12928,20,41

Dividend paid (-)58,30 (-)58,50

Net cash raised from financing activities (C) 26036,69,09 28683,03,03

Net increase in cash and cash equivalent (A)+(B)+(C) 1166,33,35 (-)262,63,45

Cash and cash equivalent at the beginning of the period 649,24,34 911,87,80

Cash and cash equivalent at the end of the period 1815,57,69 649,24,34

Cash and cash equivalent at the end of the period includes : 2010-11 2009-10

Cash in hand 10 22

Balance with Reserve Bank of India 38,85,26 25,45,42

Balances with other Banks in India 854,09,40 554,85,30

Remittances in Transit 694,44,37 68,93,40

Collateralised Borrowing and Lending Obligations 228,18,56 0

Total 1815,57,69 649,24,34









124

E-mail Addresses of NABARD Head Office Departments at Mumbai

Chairman's Secretariat [email protected]

Executive Director (S.K.Mitra)'s Secretariat [email protected]

Executive Director(Amaresh Kumar)'s Secretariat [email protected]

Executive Director(B.S. Shekhawat)'s Secretariat [email protected]

Accounts Department [email protected]

Central Vigilance Cell [email protected]

Corporate Planning Department [email protected]

Central Statistical Information Dept. [email protected]

Department of Economic Analysis & Research [email protected]

Department of Co-operative Revival & Reforms [email protected]

Department of Information Technology [email protected]

Department of Supervision [email protected]

Development Policy Department-Farm Sector [email protected]

Development Policy Department-Non-Farm Sector [email protected]

Finance Department [email protected]

Financial Inclusion Department [email protected]

General Administration Department [email protected]

Rajbhasha Prabhag [email protected]

Human Resources Development Department [email protected]

Human Resources Management Department [email protected]

Inspection Department [email protected]

Institutional Development Department [email protected]

Investment Credit Department [email protected]

Law Department [email protected]

Micro Credit Innovations Department [email protected]

Premises Department [email protected]

Production Credit Department [email protected]

Secretary's Department [email protected]

Public Relations [email protected]

State Projects Department [email protected]

Technical Services Department [email protected]

Repositioning Department [email protected]

Nabcons [email protected]

Telephone Nos.

Reception : 022-26539895/96/99;

PRO : 022-26530071;

Protocol & Security : 022 - 26539046





125

Regional Offices / Cell / Training Establishments

REGIONAL OFFICES

ANDAMAN & NICOBAR

NABARD Complex

VIP Road

Port Blair - 744 103

Tel No. : (03192) 233308

Fax No. : (03192) 237696

E-mail : [email protected]

ANDHRA PRADESH

1-1-61, RTC Cross Roads

Musheerabad

Hyderabad - 500 020

Tel No. : (040) 27685555, 27612651

Fax No. : (040) 27611829


ARUNACHAL PRADESH

Bank Tinali, VIP Road

Opposite State Bank of India

Itanagar - 791 111

Tel No. : (0360) 2215967

Fax No. : (0360) 2212675

E mail : [email protected]

ASSAM

Opposite Assam Secretariat

G.S. Road, Post Box No.1

Dispur, Guwahati - 781 006

Tel No. : (0361) 2235661

2238004 to 025

Fax No. : (0361) 2235657


[email protected]

BIHAR

Maurya Lok Complex

Block ‘B’, 4th & 5th floor

Dak Bungalow Road

Patna - 800 001

Tel No. : (0612) 2223985

Fax No. : (0612) 2238424


[email protected]

CHHATTISGARH

1st & 2nd Floor, Pithalia Complex

K.K. Road, Fafadih Chowk

Raipur - 492 009

Tel No. : (0771) 2888496/99

Fax No. : (0771) 2884992


[email protected]

GOA

Third floor, Nizari Bhavan

Menezes Braganza Road

Panaji - 403 001

Tel No. : (0832) 2220490, 2430504

Fax No. : (0832) 2223429


GUJARAT

NABARD Tower

Opp. Municipal Garden

Usmanpura

Ahmedabad - 380 013

Tel No. : (079) 27552257-59

Fax No. : (079) 27551584


HARYANA

Plot No.3, Post Box No. 7

Sector - 34 'A'

Chandigarh - 160 022

Tel No. : (0172) 5046703, 5046728

Fax No. : (0172) 5046784


HIMACHAL PRADESH

NABARD Bhavan, Block No. 32

S.D.A. Complex, Kasumpti

Shimla - 171 009

Tel No. : (0177) 2624373

2624379

Fax No. : (0177) 2622271


[email protected]

JAMMU & KASHMIR

B-II, 4th South Block

Bahu Plaza Complex, P.B. No. 2

Jammu - 180 012

Tel No. : (0191) 2472355, 2472620

Fax No. : (0191) 2472337


JHARKHAND

Opp. Adivasi College Hostel

Karamptoli Road

Ranchi - 834 001

Tel No. : (0651) 2361107

Fax No. : (0651) 2361108


KARNATAKA

113/1, Jeevan Prakash Annexe

J.C. Road, P. B. No. 29

Bengaluru - 560 002

Tel No. : (080) 22225241/44

Fax No. : (080) 22222148


[email protected]

KERALA

Punnen Road, Statue

P. B. No. 220

Thiruvananthapuram - 695 001

Tel No. : (0471) 2323529, 2323590

Fax No. : (0471) 2324358


MADHYA PRADESH

E-5, Arera Colony, Bittan Market

Ravishankar Nagar Post Office

Bhopal - 462 016

Tel No. : (0755) 2463341/69

2466695

Fax No. : (0755) 2466188


[email protected]

MAHARASHTRA

54, Wellesley Road

Post Box No. 5, Shivaji Nagar

Pune - 411 005

Tel No. : (020) 25541083

25542090

Fax No. : (020) 25542250


MANIPUR

Leiren Mansion

Opposite Lamphel Supermarket

Lamphelpat, Imphal - 795 004

Tel No. : (0385) 2410706, 2416192

Fax No. : (0385) 2416191


MEGHALAYA

'U' Pheit Kharmihpen Building

Plot No.28(2), 2nd & 3rd Floor

Dhankheti, Shillong - 793 003

Tel No. : (0364) 2221602, 2503499

2501518

Fax No. : (0364) 2227463


[email protected]

MIZORAM

Ramhlun Road (North)

Bawngkawn

Aizawl - 796 014

Tel No. : (0389) 2343428, 2305290

Fax No. : (0389) 2340815


NAGALAND

NSCB Head Office Administrative

Bldg, 4th Floor, West Wing

Khermahal, Circular Road

Dimapur - 797 112

Tel No. : (03862) 234063, 235600

235601

Fax No. : (03862) 227040


NEW DELHI

NABARD Tower

24 Rajendra Place

New Delhi - 110 125

Tel No. : (011) 25818733

25721723

Fax No. : (011) 41539187

41539185


ORISSA

'Ankur', 2/1, Nayapalli Civic Centre

Bhubaneswar - 751 015

Tel No. : (0674) 2553884

Fax No. : (0674) 2552019


[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


RAJASTHAN

3, Nehru Place

Tonk Road, Post Bag No. 104

Jaipur - 302 015

Tel No. : (0141) 2740821, 2743416

Fax No. : (0141) 2742161






126

TRIPURA

Palace Compound (East)

Uzirbari Road, Post Box No.9

Agartala - 799 001

Tel No. : (0381) 2229644

2229633

Fax No. : (0381) 2224125


UTTAR PRADESH

11, Vipin Khand

Gomti Nagar

Lucknow - 226 010

Tel No. : (0522) 2304530

Fax No. : (0522) 2304531


CELL

SRINAGAR

Opp. Amar Singh College Gate

Gogji Bagh

Srinagar - 190 008

Tel No. : (0194) 2310280

Fax No. : (0194) 2310479

TRAINING ESTABLISHMENTS

BOLPUR

Regional Training College

NABARD, Bolpur Lodge

Bolpur – 731 204

Birbhum (West Bengal)

Tel No. : (03463) 252812, 252783

Fax No.: (03463) 252295


MANGALORE

Regional Training College

NABARD, Post Box No. 1117

Manjusha Building

Above Automatrix Showroom

Near KSRTC Bus Stand

Bejai Church Road

Bejai, Mangalore - 575 004

Tel No. : (0824)2225836, 2225844

Fax No.: (0824)2225835


LUCKNOW

Bankers Institute of Rural Development

Section 'H', L.D.A. Colony

Kanpur Road

Lucknow - 226 012

Tel No. : (0522) 2421137/54, 2421055

Fax No.: (0522) 2421047, 2421176


[email protected]

LUCKNOW

National Bank Staff College

Sector 'H', LDA Colony

Kanpur Road

Lucknow - 226 012

Tel No. : (0522) 2421052

Fax No.: (0522) 2421035


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


HYDERABAD

Zonal Training Centre

NABARD, 10-1-128/4

NABARD Officers’ Quarters

Masab Tank

Hyderabad - 500 028

Tel No. : (040) 23375006

Fax No.: (040) 23375007


SIKKIM

Om Nivas, Church Road

Post Box No. 46

Gangtok - 737 101

Tel No. : (03592) 203015, 220478

Fax No. : (03592) 204062


[email protected]

TAMIL NADU

48, Mahatma Gandhi Road

Post Box No.6074, Nungambakkam

Chennai - 600 034

Tel No. : (044) 28276088, 28304444

Fax No. : (044) 28275732


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


[email protected]

WEST BENGAL

‘Abhilasha’, 2nd floor

Post Box No.9083, 6, Royd Street

Kolkata - 700 016

Tel No. : (033) 22552255, 22667943

Fax No. : (033) 22494507


[email protected]





127

LIST OF ABBREVIATIONS

AS Accounting Standards

AAGR Average Annual Growth Rate

A & N Islands Andaman & Nicobar Islands

AACS As Applicable to Co-operative Societies

ACABC Agri Clinic and Agri Business Centres

ACB Audit Committee of the Board

ACE APRACA Centre of Excellence

ACSTI Agriculture Co-operative Staff TrainingInstitute

ADFC Agriculture Development FinanceCompany

ADWDRS Agricultural Debt Waiver and Debt ReliefScheme, 2008

AEZ Agricultural Export Zone

AFC Agricultural Finance Corporation Ltd.

AFI Alliance for Financial Inclusion

AFPRO Action for Food Production

AFS Available for Sale

AgDSM Agriculture Demand Side Management

AGMARKNET Agricultural Marketing InformationNetwork

AH Animal Husbandry

AIBP Accelerated Irrigation BenefitProgramme

AIDIS All India Debt and Investment Survey

ALCO Asset Liability Management Committee

ALM Asset Liability Management

AM Accompanying Measures

AMI Agriculture Marketing Infrastructure

AML Anti-Money Laundering

APCOB-CTI Andhra Pradesh State CooperativeBank-Cooperative Training Institute

APMC Agricultural Produce Market Committee

APRACA Asia-Pacific Rural and Agricultural CreditAssociation

ARWIND Assistance to Rural Women in Non-FarmDevelopment

ASP Application Service Provider

ATM Automated Teller Machine

BADP Border Area Development Programme

BAIF Bharatiya Agro Industries Foundation

BC Business Correspondents

BCG Boston Consultancy Group

BEE Bureau of Energy Efficiency

BESCOM Bangalore Electric Supply Company

BF Business Facilitators

BIRD Bankers Institute of Rural Development

BNB Bhavishya Nirman Bonds

BoS Board of Supervision

BPL Below Poverty Line

C-PEC Centre for Professional Excellence in Co-operatives

CA Chartered Accountant

CAC Concurrent Audit Cell

CAGR Compound Annual Growth Rate

CARE Credit Analysis & Research Limited

CAS Common Accounting System

CAT Capacity Building for Adoption ofTechnology

CB Commercial Banks

CBP Capacity Building Phase

CBS Core Banking Solution

CCS Co-operative Credit Structure

CD Certificate of Deposit

CDF Co-operative Development Fund

CDM Clean Development Mechanism

CDP Cattle Development Projects

CEO Chief Executive Officer

CER Certified Emission Reduction

CFA Chartered Financial Analyst

CFSA Committee on Financial SectorAssessment

CIBIL Credit Information Bureau (India)Limited

CISS Capital Investment Subsidy Scheme

CMA Credit Monitoring Arrangement

CMIE Centre for Monitoring of IndianEconomy

CMR Centre for Micro-finance Research

CP Commercial Paper

CPI Consumer Price Index

CPI-AL Consumer Price Index for AgriculturalLabour

CPI-RL Consumer Price Index for Rural Labour

CPIS Coconut Palm Insurance Scheme

CRAR Capital to Risk-Weighted Assets Ratio

CRIDA Central Research Institute for DrylandAgriculture

CRISIL Credit Rating Information Services ofIndia Limited

CRR Cash Reserve Ratio

CS Capital Support/Company Secretary

CSA Co-operative Societies Act

CSP Customer Service Provider

CTFC Certified Trainer in Financial Co-operatives

CTI Co-operative Training Institute

CUC Carcass Utilisation Centre

CVC Central Vigilance Cell

DADI District Agricultural Development Index

DAHDF Department of Animal Husbandry,Dairying and Fisheries

DAP Di-Ammonium Phosphate/Development Action Plan

DCCB District Central Co-operative Bank

DDM District Development Manager

DDSD Demand Driven Skill Development





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DEDS Dairy Entrepreneurship DevelopmentScheme

DLMRC District Level Monitoring and ReviewCommittee

DLT District Level Trainers

DPR Detailed Project Reports

DRDA District Rural Development Agency

DRIP District Rural Industries Project

DTL Demand and Time Liabilities

DTP Development of Tribal Population

DVCF Dairy Venture Capital Fund

ENZEN Enzen Global Solutions Private Limited

EoI Expression of Interest

ERP Enterprise Resource Planning

EXCOM Executive Committee

FC Farmers’ Clubs/Financial Co-operation

FCI Food Corporation of India

FIF Financial Inclusion Fund

FIMMDA Fixed Income Money Market andDerivatives Association of India

FINO Financial Information Network &Operations Ltd.

FIP Full Implementation Phase

FIPF Farm Innovation and Promotion Fund

FITF Financial Inclusion Technology Fund

FLCC Financial Literacy and CreditCounselling Centres

FR Flash Reports

FRC Farmers’ Resource Centre

FSS Farmers’ Service Societies

FTRDC Farmers’ Training and RuralDevelopment Centres

FTTF Farmers’ Technology Transfer Fund

GAAP Generally Accepted Accounting Policies

GCC General Credit Card

GCF Gross Capital Formation

GDP Gross Domestic Product

GDS Gross Domestic Savings

GFCE Government Final ConsumptionExpenditure

GIZ Deutsche Gesellschaft fur InternationaleZusammenarbeit

GLC Ground Level Credit

GoI Govt. of India

GTZ Deutsche Gesellschaft fur TechnischeZusammenarbeit

HFT Held for Trading

HO Head Office

HPC High Power Committee

HR Human Resource

HRM Human Resource Management

HTM Held to Maturity

HWG Handloom Weavers’ Groups

IARI Indian Agricultural Research Institute

IAS Indian Administrative Service

ICAI Institute of Chartered Accountants ofIndia

ICM Institutes of Cooperative Management

ICRA Investment Information and CreditRating Agency of India

ICRISAT-WWF International Crops Research Institute forthe Semi-Arid Tropics - World WideFund for Nature

ICT Information and CommunicationsTechnology

IDRBT Institute for Development & Research inBanking Technology

IEC Information, Education, Communication

IES Indian Economic Service

IFAD International Fund for AgricultureDevelopment

IGWDP Indo-German Watershed DevelopmentProgramme

IIBM Indian Institute of Bank Management

IIM Indian Institute of Management

IIMPS Invest India Micro-Pension Services

IIT Indian Institute of Technology

IMF International Monetary Fund

IPDSS Institutional Protection and DepositSafety Scheme

IR Inspection Reports

IRR Internal Rate of Return

IRV Individual Rural Volunteers

ISAP Indian Society of Agri-businessProfessionals

ISEC Institute for Social and EconomicChange

ISMW Indian School of Micro-Finance forWomen

ISRO-VSAT Indian Space Research Organisation -Very Small Aperture Terminal

ISS Investment Specific Studies

IT Information Technology

ITI Integrated Training Institute

IWDP Integrated Watershed DevelopmentProgramme

JCC Joint Consultative Committee

JLG Joint Liability Groups

JLTC Junior Level Training Centres

JNNSM Jawaharlal Nehru National Solar Mission

KADFC Karnataka Agriculture DevelopmentFinance Company Ltd.

KCC Kisan Credit Card

KfW Kreditanstalt fur Wiederaufbau (GermanDevelopment Bank)

KVIC Khadi and Village Industries Commission

KVK Krishi Vigyan Kendras

KYC Know Your Customer





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LABS Livelihood Advancement BusinessSchool

LAMPS Large-sized Adivasi Multipurpose Society

LBSNAA Lal Bahadur Shastri National Academyof Administration

LPA Long Period Average

LT Long Term

LTCCS Long Term Co-operative Credit Structure

M-CRIL Micro-Credit Ratings InternationalLimited

MAAPA Multi-activity Approach for PovertyAlleviation

MBA Master of Business Administration

MC Management Committee

MDMI Manpower Development & ManagementInstitute

MEDP Micro-Enterprise DevelopmentProgramme

MF Micro-Finance

MFDEF Micro-finance Development and EquityFund

MFI Micro Finance Institution

Mha million hectares

MIS Management Information System

MNAIS Modified National Agricultural InsuranceScheme

MNRE Ministry of New and Renewable Energy

MoA Ministry of Agriculture/Memorandum of Agreement

MOP Muriate of Potash

MoSPI Ministry of Statistics and ProgrammeImplementation

MoU Memorandum of Understanding

MPLADS Member of Parliament Local AreaDevelopment Scheme

MSME Micro, Small and Medium Enterprises

MSP Minimum Support Price

MSTP Million Shallow Tubewell Programme

MT Medium Term / Metric Tonne

MU Mother Units

Nabcons NABARD Consultancy Services Pvt. Ltd.

NABFINS NABARD Financial Services Ltd.

NAFSCOB National Federation of State CooperativeBanks

NAIS National Agricultural Insurance Scheme

NBFC Non-Banking Finance Company

NBSC National Bank Staff College

NBTC National Bank Training Centre

NCCT National Council for CooperativeTraining

NCOF National Centre of Organic Farming

NE North Eastern

NEDFi North Eastern Development FinanceCorporation Ltd.

NER North-Eastern Region

NFS Non-Farm Sector

NFSM National Food Security Mission

NGO Non-Governmental Organisation

NHEP New High Energy Efficiency Pumpset

NHM National Horticulture Mission

NIDA National Infrastructure DevelopmentAssistance

NIRB National Institute of Rural Banking

NLUP New Land Use Policy

NMCP National Manufacturing CompetitivenessProgramme

NMMI National Mission on Micro Irrigation

NPA Non Performing Asset

NPDP National Pulses DevelopmentProgramme

NPOF National Project on Organic Farming

NPRI National Programme on RuralIndustrialisation

NPS New Pension System

NPW Net Present Worth

NRC(LTO) National Rural Credit (Long TermOperations)

NRMC Natural Resources Management Centre

NRC(Stab.) National Rural Credit (Stabilisation)

ODI Organisational Development Initiative

OP Occasional Paper

OPP Oilseeds Production Programme

OS Operating System

PACS Primary Agricultural Credit Societies

PAT Profit After Tax

PBT Profit Before Tax

PCARDB Primary Co-operative Agriculture andRural Development Bank

PDAI Primary Dealers Association of India

PFCE Private Final Consumption Expenditure

PFRDA Pension Fund Regulatory &Development Authority

PGDRB Post Graduate Diploma in Rural Banking

PIA Project Implementing Agency

PLP Potential Linked Credit Plan

POS Point of Sale

PPID Pilot Project for Integrated Developmentof Backward Blocks

PPP Public Private Partnership

PRI Panchayat Raj Institution

PUCB Primary Urban Co-operative Bank

PVCF Poultry Venture Capital Fund

RBI Reserve Bank of India

RCMB Risk Management Committee of theBoard

RCS Registrar of Co-operative Societies

REDP Rural Entrepreneurship DevelopmentProgramme





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RFA Revolving Fund Assistance

RFI Rural Financial Institutions

RFIP Rural Financial Institutions Programme

RGCT Rajiv Gandhi Charitable Trust

RGMVP Rajiv Gandhi Mahila Vikas Pariyojana

RICM Regional Institute of CooperativeManagement

RIDF Rural Infrastructure Development Fund

RIF Rural Innovation Fund

RLP Realistic Lending Programme

RML Reuters Market Light

RNFS Rural Non-Farm Sector

RO Regional Office

RRB Regional Rural Bank

RSVY Rashtriya Sam Vikas Yojana

RTC Regional Training College

RTI Right to Information

RUDSETI Rural Development and SelfEmployment Training Institute

R&D Research and Development

SAO Seasonal Agricultural Operations

SAS Situation Assessment Survey

SAU State Agricultural University

SBI State Bank of India

SBLP SHG-Bank Linkage Programme

SBPC Standardised Banking Programme forCo-operatives

SCARDB State Co-operative Agriculture and RuralDevelopment Bank

SCB State Co-operative Bank

SCC Swarojgar Credit Card

SC/ST Scheduled Caste/Scheduled Tribe

SDC Swiss Agency for Development and Co-operation

SDD Special Development Debentures

SDP Skill Development Programmes

SF/MF Small Farmers/Marginal Farmers

SGSY Swarnjayanti Gram Swarozgar Yojana

SHG Self Help Group

SHLS Solar Home Lighting System

SHPI Self Help Promoting Institution

SIDBI Small Industries Development Bankof India

SLIC State Level Implementation Committee

SLR Statutory Liquidity Ratio

SLSMC State Level Sanctioning and MonitoringCommittee

SLTF State Level Task Force

SMS Short Messaging Service

SOFTCOB Scheme of Financial Assistance forTraining of Co-operative BanksPersonnel

SPV Special Purpose Vehicles

SRI System of Rice Intensification

SRTO Small Road Transport Operators

SS Special Studies

SSI Sustainable Sugarcane Initiatives

ST Short Term

STCCS Short Term Co-operative CreditStructure

STCRC Fund Short Term Co-operative Rural Credit(Refinance) Fund

STD Short Term Deposit

ST(SAO) Short Term (Seasonal AgriculturalOperations)

ST(OSAO) Short Term (Other than SeasonalAgricultural Operations)

SWC State Warehousing Corporation

SWOT Strength, Weakness, Opportunities,Threats

TA/DA Travelling Allowance/Daily Allowance

TC Technical Component

TDF Tribal Development Fund

TE Training Establishment

TF Task Force

TFO Total Financial Outlay

TMB Term Money Borrowings

TPDS Targeted Public Distribution System

ToR Terms of Reference

TSSPS Tripura State Support Project on SHG

UNDP United Nations DevelopmentProgramme

UPNRM Umbrella Programme on NaturalResources Management

USAID US-Agency for InternationalDevelopment

USQ Unstarred Question

UT Union Territory

VA Voluntary Agency

VC Video Conferencing

VDP Village Development Programme

VOC Vehicle Operating Cost

VSAT Very Small Aperture Terminal

VWC Village Watershed Committee

WBCIS Weather Based Crop Insurance Scheme

WDC Women Development Cell

WDF Watershed Development Fund

WOTR Watershed Organisation Trust

WPI Wholesale Price Index

ZTC Zonal Training Centre









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C-24, G Block, Bandra-Kurla Complex, Bandra ( East ), Mumbai - 400 051

website : http://www.nabard.org.





Documents

National Bank for Agriculture and Rural Development-11