Direct Credit Direct credit from NABARD constitutes loans to State Governments.

Supporting Cooperatives In order to strengthen the owned funds position of cooperative credit institutions and therebyincreasing their capacity to leverage larger resources, NABARD provides loans to StateGovernments to contribute to the share capital of these institutions. Rural Infrastructure Development With the objective of assisting State Governments in the completion of ongoing ruralinfrastructure projects and to take up new infrastructure projects, the Rural InfrastructureDevelopment Fund (RIDF) was set up with NABARD in 1995-96 with contributions fromCommercial banks by way of deposits. The shortfall in agri/priority sector lending wasdeposited by the commercial banks with NABARD as part of their contribution to the RIDF. Thetotal corpus covering RIDF I (1995-96) to X (2004-05) is Rs. 42,000 crore. Sanctions under alltrenches of RIDF as on 31 March 2005 were Rs.42948.51 crore against which thedisbursements were Rs. 25384.02 cr. Anticipated Benefits It is anticipated that the projects sanctioned upto 31 March 2005 under RIDF would result in:Creation of additional irrigation potential in 92.47 lakh ha.Addition of 178000 km of rural road network & 331000 meter bridge lengthContribution to the GDP to the tune of Rs. 11058 croreGeneration of recurring employment of 48.01 lakh jobs and non-recurring employment of 13681 lakh man days due to increased irrigationGeneration of nonrecurring employment expected from non-irrigation projects: 23238 lakhperson days Co-financing To ensure substantial credit flow to agriculture and rural sector and to instill confidence inbanks for financing hitech/export oriented agriculture projects involving large financialoutlays/sunrise technologies, etc., NABARD has entered into agreements for co-financing with12 Commercial Banks thereby sharing the credit risks with partner banks. Under this arrangement, projects have been sanctioned in areas like floriculture, organicfarming, milk processing, ethanol production, infrastructure development and forestry . Bulk-lending/ Revolving Fund Assistance NABARD provides bulk-lending facilities to NGOs. As on 31.3.2005, 30 agencies have beensanctioned assistance of Rs 27.07 crore against which Rs.15.18 crore has been disbursed. Production Credit This is a short-term refinance facility, aimed at supporting

Agricultural production operations and marketing of crops by farmers and farmerscooperativesMarketing and distribution of inputs like fertilizers, seeds and pesticidesProduction and marketing activities of village cottage industries, handicrafts, handlooms,powerlooms, artisans, small scale and tiny industries and other rural non-farm enterprisesEligible institutions for this facility are State Cooperative Banks (SCBs) and Regional RuralBanks (RRBs). The period of credit is 12 months. Short Term Credit 1. Seasonal Agricultural Operations (SAO ) New line of credit for financing short-term agricultural /allied andmarketing activities To provide liquidity to the cooperative banks and to boost credit flow to the agriculture sector,a new line of credit was introduced in 2003-04 encompassing loans for agricultural purposesagainst security of gold and security other than charge on crops, working capital credit forallied agriculture activities, working capital credit for procurement and distribution of agriculture inputs, marketing of agriculture/allied products, collection and marketing of minorforest produce etc and short-term credit support provided to cultivators for higher scales of finance for commercialisation of agriculture, exports and value addition. 2. Marketing of Crops With a view to improve the flow of marketing credit to cultivators for augmenting their holdingcapacity and checking incidence of distress sale, NABARD encourages cooperative banks andRRBs to finance marketing of crops, through its refinance facility for this purpose. Each drawalagainst the sanctioned credit limit is repayable within a maximum period of 12 months. 3. Distribution of agri inputs With a view to ensuring timely supply of agri inputs like fertilizers, pesticides etc. a line of credit is made available to cooperative banks for financing Apex/Primary Societies for stockingand distribution of agri inputs by way of sanction of yearly limits. Each drawal is repayablewithin a period of 120 days. 4. Pisciculture Activities Refinance facilities is extended to cooperative banks and RRBs for meeting the working capitalrequirements of farmers in pisciculture activities by way of sanction of ST credit limits. Eachdrawal is repayable within 12 months.

5. Other than SAO (OSAO) Refinance is available to cooperative banks for financing the working capital requirement of PWCS/Apex Weavers' Society, working capital requirements of industrial societies, financingindividual rural artisans, etc. Each drawal against the sanctioned credit limit is repayablewithin 12 months. OSAO refinance is available to RRBs for financing production and marketingactivities of artisans, village industries and also for financing persons belonging to weakersections engaged in trade/business/services. Refinance support is also available to commercialbanks for financing the working capital requirements of PWCS. Refinance support is available to SCBs and CBs for meeting working capital requirements of State Handloom Development Corporations (SHnDCs).

Special Initiatives Special line of credit for oilseeds and pulses productionSpecial line of credit for development of tribals in predominantly tribal areasLiquidity support to cooperative banks and RRBs for providing relief to farmers in distress andfarmers in arrearsRevision in methodology for fixing scale of finance Refinance against Investment Credit This is a long-term refinance facility. It is intended to create incomegenerating assets in the following: Agriculture and allied activitiesArtisans, small scale industries, tiny sector, village and cottage industries, handicrafts,handlooms, powerlooms, etc.Activities of voluntary agencies and self help groups working among the rural poor The credit is normally provided for a period of 3 to 15 years. Investment

credit leads to capital formation through asset creation. It induces technologicalupgradation resulting in increased production, productivity and incremental income to farmersand entrepreneurs. Eligible Institutions SCARDBs, SCBs, RRBs, CBs, Scheduled Primary Urban Cooperative Banks, North EastDevelopment Finance Corporation Ltd. (NEDFI) and NBFCs are eligible from NABARD for theirinvestment credit in the rural sector. Eligible Purposes Some of the major purposes covered under Investment credit are Minor Irrigation, farmmechanisation, plantation/ horticulture, animal husbandry, storage/market yards, fisheries,post-harvest management, food/agro processing, non-farm sector including rural industries,microfinance, purchase of land (for small/marginal Farmers, share croppers etc.), rural housingand disbursements under poverty alleviation programmes like SGSY and SC/ST Action Plan etc.Hi-tech projects and agri-export zones are identified as thrust areas and NABARD helps intechno-financial appraisal of such projects besides providing refinance. In recent years, refinance support has been extended to new activities like financing of dieselgenerator sets in Madhya Pradesh and LPG kits to rural households all over the country. Criteria The technical feasibility of the project, financial viability and generation of incremental incometo ultimate borrowers thereby enabling them to have a reasonable surplus after repayment of the loan installments are the necessary conditions to be satisfied for sanctioning investmentcredit. The period of loan ranges between 3 and 15 years depending on the purpose for whichit is provided.

The beneficiaries of the programme are individuals / group of individuals, SHGs, proprietory /partnership concerns, companies, state-owned corporations or cooperative societies. The refinance is usually 90% to 100% of the loan amount. The balance, wherever applicable,will be met by the banks or the concerned state governments or the Government of India inthe case of SCARDBs. With a view to ensure credit flow to certain thrust areas, such as specialcategory beneficiaries like SC/ST members, self help groups, etc., the quantum of refinance isenhanced to 100%. Interim Finance SCARDBs are being extended interim finance in order to enable them to provide investmentcredit to ultimate borrowers for eligible purposes and avail refinance within 3 months againstthe same