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To augment capital formation inagriculture for ensuring sustainabilityLTRCF was created. For the year 2ol8-19an amount of Rs 15,ooo crore exclusivelyfor Cooperative Banks and Regional RuralBanks (RRBs) is made available.

2. Interest rate on refinance fromNABARD will be 4.7o % p.a. (with half-yearly rests), subject to revision byNABARD from time to time. Banks haveto ensure that the benefit of concessionalinterest is passed on to the ultimateborrower.

3. Operational guidelines as indicated inthe Annexure need to be complied withscrupulously by the Banks.

4. The Circular is also available onNABARD website www. nabard.org underthe tab information centre.

5. Please acknowledge receipt.

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IrFi"RE flquat3itrfufai"ifeNational B ank for Agriculture and Rural Development

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DepartmentOfRefinance

PlotNo.C-24,`G'Block,Bandra-KurlaComplex,Bandra(E),Mumbai-4ooo51.Tel:o2226524926.Fax:o222653oogo.E-mail:dor@nabard.org

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AnnexureOperational Guidelines - Long Term Rural Credit Fund 2ol8-19

(LTRCF)1. IntroductionDoubling of Farmer's income by 2o22, which is a national priority would be achievedby creating conducive eco system which in turn would be accentuated only by makinglong term investments in agriculture and allied activities. Providing affordable creditwill encourage farmers to go for such investments and to create a self-sustainable andvibrant rural economy.

Capital formation in Agriculture is critical for boosting agriculture production andproductivity. This also protects farmers from uncertainty due to weather, climatechange and provide them with a sustainable income flow. Apart from that, capitalformation in allied activities enable farmers to have a perennial source of income andalso increase their resilience.

In order to give a boost to long term investment credit, Government of India has setup a ``Long Term Rural Credit Fund" with NABARD for providing long term refinancesupport for investment credit in agriculture and allied activities exclusively forCooperative Banks and Regional Rural Banks (RRBs).

The salient features of the scheme and important terms and conditions of providingrefinance are as under:

2.. Eligible institutionsAll Regional Rural Banks which are eligible to avail refinance facilities from NABARDwill be eligible for refinance under this line of credit, subject to their satisfying theeligibility criteria for refinance as may be stipulated by NABARD from time to time.

3. Eligibility criteriaTheelig.ibilitycriteriaasspecifiedinourpolicyguidelinesonreflnanceenumeratedinour Circular No. 75 / DOR - 21 / 2ol8 dated 11 April 2ol8 will be applicable fordeciding the eligible quantum of refinance for a Bank.

4. Activities coveredTerm loan extended to all eligible investment activities under agriculture. Thelist of eligible activities which can be considered for refinance are as under:

Minor Irrigation, Land Development, Farm Mechanisation, Dairy, AnimalHusbandry, Fisheries, Plantation and Horticulture, Forestry, Agri Clinics and AgriBusiness Centres, Storage/Market yard etc.

The list indicated is illustrative cmd not exhaustive. Activities not mentioned heremeg also be covered if they lead to capitalfiormation in agriculture.However, short term loans, loans for non-farm sector activities, rural housing, servicesector activities etc. will not be eligible for refinance under LTRCF. Loans to Self HelpGroups are also excluded as they are covered under refinance scheme for NRLM /Interest Subvention Scheme

*

5. Extent of refinanceThe extent of refinance for the States in North Eastern Region (Assam, ArunachalPradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim), Hilly Region(Jammu & Kashmir, Himachal Pradesh, Uttarakhand), Eastern Region (West Bengal,Odisha, Bihar, Jharkhand and Andaman & Nicobar Islands), Lakshadweep andChhattisgarh will be loo% of eligible bank loans for all purposes. For other regionsthe extent of refinance will be:

(a) 1oo% for all thrust areas (as indicated in our refinance policy)

a) 95% for all other diversified purposes.

6. Automatic Refinance FacilityAutomatic Refinance Facility will be extended without any upper ceiling` of bank loanor Total Financial Outlay for all projects under agriculture sector. In case any bankintends to avail refinance under pre-sanction procedure, they may submit projects toNABARD.

7. Interest rate7.1 Loans to borrowersBanks shall extend loans to farmers at concessional rate of interest against whichrefinance is being availed under LTRCF.

7.2 Refinance from NABARDThe interest rate on refinance from NABARD will be 4.7o% p.a. (with half yearly rests)subject to revision by NABARD from time to time. Banks are required to pass on thebenefit to the ultimate borrower.

7.3 Penal interestIn the event of default, penal interest rate at 2% over and above the interest rate atwhich refinance was disbursed, will be charged on the defaulted amount and for theperiod of default.

8. Repayment period

The repayment period for refinance will be 5 years to be repaid on half-yearly basis on31 January and 31 July every year. Interest payment will be on half yearly basis on oiFebruary and ol August every year.

9. Maintenance of recordsRefinance extended under the LTRC Fund has to be accounted for separately andnecessaryrecords,includinginterestrateschargedtoborrowersshouldbemaintainedfor the purpose. The banks have to provide all information like average amount ofloan, interest rate charged, processing fee charged etc. as and when called for byNABARD..

1o. A]1 the other existing terms and conditions, laid down in our operationalguidelines, for availing of refinance will be applicable under the scheme.

'`-V

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