Functions of Department INVESTMENT CREDIT DEPARTMENT 1 Powers and Duties of Officers and Employees Powers Refinance : Project proposals

falling beyond the delegated power sof Regional Office are received at Head Office. Those projects are scrutinised by the Department and put up to Management Committee for perusal and sanction. Cofinance : The power to sanction the cofinance project is vested with the Management Committee. Release of assistance under cofinancing arrangement is vested with the Chief General Manager of the Department. Duties Officers generally discharge supervisory functions. The normal course followed is that cases emanate from clerks and terminate at various levels as per the requirement. However, depending on the importance and urgency, cases emanate from officers at any level and terminate at higher level including the Chairperson. There are 6 Sections in the department. They are: Project Policy Section (PPS), Government Sponsored Programme Section (GPS), Monitoring Section (MON), Co-financing Cell (CFC), Zones, Special Studies Cell (SSC) and Administration section (ADMN). The Section wise duties are as under : PPS : Formulation of loaning policy including eligibility & scrutiny for investment refinance credit, delegation of powers and other policy issues concerning investment credit refinance. GSP : Scheme formulation, policy matters, subsidy release, monitoring and related works in respect of Centrally Sponsored Subsidy Schemes implemented through NABARD MON : Performance budgeting on Investment credit to all States / UTs, Review of performance and monitoring of MIS CFC : Cofinancing of projects involving large financial outlays; longer gestation / repayment period involving sunrise technologies and other thrust areas & national priorities ZONES : Processing, investment credit schemes, interim finance proposals & reschedulement of loans outstanding of cooperative banks for sanction, compilation of unit cost norms of various States/ UTs and all other associated works on MIS SSC : Annual Budgeting of Investment Specific & Scheme Specific Studies, Scrutiny of study reports from all States/ UTs & consolidation of the findings and its publication for client institutions and associated works ADM : All administrative and disciplinary works pertaining to the Department including administrative budgeting. 2 Procedure followed in the decision making process, including channel of supervision The channel of supervision in the Department is as under : CHIEF GENERAL MANAGER General Manager Project Policy Section & General Manager General Manager

Government Sponsored Programmes

Zones (East, West, North, South) Monitoring & Special Study Cell

Administration Co - financing

DGM (One) AGM (Four) AM (Two) Clerk (Three)

DGM (Two) AGM (Four) Manager (One) AM (Two) Clerk (Four)

AGM (One) Manager (One) AM (Two) Clerk (Two)

The normal procedure followed is that cases emanate from clerks and terminate at various levels as per the requirement (depending on the importance and urgency of the case). HO Department is mostly a policy department. Operations are done in Regional Offices. All policy decisions are taken at the level of the Management committee, Managing Director / Chairperson. 3 Norms for Discharge of NABARD's Function 1 Refinance 1.2. Eligible Institutions NABARD can give refinance assistance to SCARDBs, SCBs or a scheduled bank or any other financial institution, approved by Reserve Bank of India (RBI). Under the category of any other financial institution, North East Development Finance Corporation (NEDFi), Agriculture Development Finance Corporations (ADFCs) and Primary Urban Cooperative Banks (PUCBs), have so far been approved by RBI. 1.3 Eligible Purposes NABARD provides refinance for both Farm Sector and Non - Farm Sector activities. Farm Sector activities are supported irrespective of location of the project. In case of Non-Farm Sector activities, NABARD can provide refinance for such activities in rural areas / other areas which can be treated as rural areas as defined in the NABARD Act, 1981 (i.e. any area with population upto 50,000 is at present considered as rural area). However, agro-processing / agro- industries irrespective of their location and also irrespective of the amount of investment in plant and machinery are eligible for refinance from NABARD. Further, as far as other Non - Farm Sector activities are concerned, industrial units which qualify as Small Scale Industries, Rural Housing, Small Road and Water Transport Operators, Health Care units, and other Service Sector activities are eligible for refinance from NABARD. Business activities are not eligible for refinance unless they are financed under Govt. Sponsored Programmes like SGSY, SC/ST Action Plan etc. 1.4. Quantum of Refinance Refinance is granted on reimbursement basis. It is extended to financial institutions at various rates as a percentage of bank's non-overdue loans disbursed. The quantum of refinance for both ARF and Projects under Pre-sanction procedure is identical as indicated in Annexure -I. 1.5 Rate of interest on refinance Rate of interest on refinance is reviewed from time to time taking into account the cost of funds, market conditions etc. The prevailing rate of interest (effective from. 16.3.2005) is indicated in Annexure II. 1.6 Delegation of Powers

Details about the delegation of powers are given in Annexure III. 2 CO-FINANCING 2.1 Co-financing Arrangement Co-financing has to be done in association with at least one full fledged bank. 2.2 Eligible Projects NABARD co-finances projects with the folowing features:

projects in geographical areas and sectors to which adequate credit is not flowing, projects involving sunrise technologies where risk perceptions of banks are very high, projects belonging to thrust areas where NABARD has an important role to play, projects with outlay and long gestation period which keep banks away projects requiringlonger repayment period.

2.3 Delegation of Powers for Sanction Power for sanction of projects under co-financing is vested with Management Committee (MC). On clearance by the MC, the proposals are put up for on file sanction to Managing Director. The powers for release of funds under co-financing arrangements have been delegated to the CGM, ICD, HO. 2.4. Rate of Interest Rate of Interest to the ultimate borrower will be decided in consultation with the bank which will be co-financing the projects. II GENERAL REFINANCE AGREMENT ( GRA ) Banks availing refinance from NABARD are expected to enter in to General Refinance Agreement ( GRA ). NABARD is in possession of 309 GRAs. Agency-wise details are as follows: Sl No 1 Commercial Banks 2 RRBs 3 State Co -op Banks 4 SCARDBs 5 PUCBs Total Cofinancing Under cofinancing, NABARD is holding the following documents : S.No. 1 2 3 Items Memorandum of Understanding (MoUs) with Cofinancing Banks Term Loan Agreement with Cofinancing Banks/ Promoters Interse Agreement with Cofinancing Banks No. 14 4 4 Agency No of GRAs entered 55 196 29 20 9 309

III LOAN POLICY The salient aspects of the loan policy in respect of NABARD's refinance operations under Section 25 of NABARD Act and direct lending by way of Co-financing under Section 30 of NABARD Act, are indicated below: (A) Refinance 1. Statutory Provision Section 25 of NABARD Act, 1981 stipulates that NABARD may provide refinance to eligible financial institutions and reschedule the payment of such loans for a maximum period of 25 years for promoting agriculture and rural development. 2. Eligible Institutions Under Section 25 of Act, ibid, NABARD can give refinance assistance to SCARDBs, SCBs or a scheduled bank or any other financial institution, approved by Reserve Bank of India (RBI). Under the category of any other financial institution, North East Development Finance Corporation (NEDFi), Agriculture Development Finance Corporations (ADFCs) and Primary Urban Cooperative Banks (PUCBs), have so far been approved by RBI. 3. Eligible Purposes NABARD provides refinance for both Farm Sector and Non - Farm Sector activities. Farm Sector activities are supported irrespective of location of the project. In case of Non-Farm Sector activities, NABARD can provide refinance for such activities in rural areas / other areas which can be treated as rural areas as defined in the NABARD Act, 1981 (i.e. any area with population upto 50,000 is at present considered as rural area). However, agro-processing / agro- industries irrespective of their location and also irrespective of the amount of investment in plant and machinery are eligible for refinance from NABARD. Further, as far as other Non - Farm Sector activities are concerned, industrial units which qualify as Small Scale Industries, Rural Housing, Small Road and Water Transport Operators, Health Care units and other Service Sector activities are eligible for refinance from NABARD. Business activities are not eligible for refinance unless they are financed under Govt. Sponsored Programmes like SGSY, SC/ST Action Plan etc. 4. Thrust Areas for Refinance Support The thrust areas for refinance support are as follows: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Minor Irrigation Land Development/ Dry Land Farming/ Watershed Development Farm Mechanisation Plantation & Horticulture Poultry / Dairy / Other Animal Husbandry Activities Fisheries Bio-gas Forestry Storage / Market Yard Non Farm Sector (Small Scale Industry & Tiny Cottage Village Industries) Self Help Groups Self Employed / Professionals Small Road and Water Transport Operators Agri-clinics & Agri Business Centres Financing in Agri Export Zones / Contract Farming/ Organic Farming Agro Processing Non Conventional Energy Rural Housing Govt. Sponsored Programmes

5. Nature of Accommodation NABARD provides refinance assistance to the banks under two windows namely, 1. Automatic Refinance Facility and

2.

Pre-Sanction Procedure.

I. Automatic Refinance Facility (ARF) Automatic Refinance Facility was introduced to enable the banks to obtain financial accommodation from NABARD, without going through the detailed procedure of pre-sanction formalities. The banks are expected to appraise the proposals in respect of the technical feasibility and financial viability at their own level and finance the borrowers. The banks then claim refinance from NABARD on the basis of a declaration ( Drawal Application ), indicating the various purposes for which refinance has been claimed and the loan amount disbursed. Disbursements made by the banks prior to the date of submission of the drawal application can be considered for provision of refinance. The salient features of ARF to Commercial Banks, Co-operative Banks, RRBs etc. are as under: a. Commercial Banks Farm Sector

Banks can submit drawal applications under Automatic Refinance Facility for farm sector upto the following limits: i) Financial outlay of the project not exceeding Rs.30 lakh, ii) Refinance assistance not exceeding Rs. 20 lakh. Non-farm Sector Commercial Banks can claim refinance for Non-farm Sector upto a refinance limit of

Rs.50 lakhs without any ceiling on project outlay. b . Cooperative Banks and Regional Rural Banks Farm Sector Banks can submit drawal applications under Automatic Refinance Facility for farm sector upto the following limits: i) Financial outlay of the project not exceeding Rs.30 lakh, ii) Refinance assistance not exceeding Rs. 20 lakh. Non Farm Sector i) For RRBs/SCBs/Scheduled PCBs, the refinance limit is Rs.20.00 lakh without any ceiling on the total financial outlay. ii) For SCARDBs, the refinance limit will be Rs.20.00 lakh with a ceiling of Rs.30.00 lakh on the total project financial outlay. II. Pre-sanction Procedure The refinance assistance to all agencies above the cut off level of ARF is provided under Pre-sanction Procedure. The banks have to submit the projects for approval of NABARD. NABARD appraises these projects to determine its technical feasibility, financial and economic viability and bankability. On being satisfied about the same, NABARD sanctions refinance for the projects. The banks are required to accept the terms and conditions of sanction of refinance in respect of each specific scheme sanctioned by NABARD. Disbursements made by Banks prior to the date of submission of the drawal application can be considered for provision of refinance under the project.

6. Area Development Projects (ADPs) Keeping in view the potential and the demand for a particular type of projects in a particular area, Area Development Projects are prepared in consultation with the line departments of the State Govt. and the bankers in the area. Under the ADP, Targets are decided and achievements monitored at periodical intervals. The financing norms, quantum of refinance and rate of interest would be the same as applicable to each of the activity as specified under existing guidelines. 7. Rephasement of Scheme The Schemes will have a definite time frame and project outlay i.e. phasing. There could be possibility of need for revising any one of such parameters or both the parameter. This revision is called Rephasing. The banks could approach NABARD for rephasing as and when such need arises and keeping in view the merits of the case, bankability, technical feasibility, financial viability etc. NABARD will permits such rephasing. 8. Quantum of Refinance The refinance assistance is extended to financial institutions at various rates ranging from 90 % to 100% of bank loans disbursed as detailed in Annexure - I. The quantum of refinance for both ARF and Projects under Presanction procedure is identical. 9. Type of Accommodation NABARD provides refinance to banks by way of loans to all financial institutions except SCARDBs. All assistance to SCARDBs is provided through contribution to the debentures i.e. Special Development Debentures (SDDs) floated by these institutions. The SDDs floated by SCARDBs are contributed by NABARD to the extent of 90 to 100%. 10. Interim Accommodation to SCARDBs NABARD also provides interim financial accommodation to SCARDBs for acquiring effective mortgages before the flotation of Special Development Debentures (SDDs). The interim accommodation for SDDs is required to be converted to Special Development Debentures (SDDs) within a period of 3 months from the date of its disbursement. 11. Eligibility criteria for drawal of refinance The banks can draw refinance from NABARD to the extent of their non-overdue outstandings as per the eligibility norms fixed by NABARD. Eligibility criteria for drawal of refinance from NABARD by various institutions are fixed and reviewed from time to time. 12. Committed Expenditure Banks are eligible for availing refinance on the basis of their NPAs level / performance in recovery during the previous years. In the event of the eligibility of any bank being less than the committed expenditure, a policy has been put in place to take care of the needs of their committed expenditure by ensuring NABARD refinance to the bank. The rationale of such a policy is not to deny credit support for those units which had been disbursed installments of loan prior to the bank coming under restricted category so that the investment does not become infructuous. In keeping with the same spirit, there is need for NABARD to support the banks with no eligibility or restricted eligibility to enable them to meet the committed expenditure. ROs can release refinance to such banks, on a case to case basis, on submission of complete information in the prescribed format. 13. Rate of interest on refinance Rate of interest on refinance is reviewed from time to time taking into account the cost of funds, market conditions etc. The prevailing rate of interest (effective from. 16.3.2005) ranges from 5% to 6.75%. Details are furnished in Annexure -II. 14. Unit cost

The normative / indicative unit cost of various Farm Sector investments is decided by the 'State Level Standing Committee on Unit Cost' which functions in each Regional Office of NABARD. The committee consists of representatives from financing banks and the concerned State Government Departments. The working capital component in respect of first operating cycle is capitalised to the extent considered necessary and forms part of the unit cost. The unit costs are reviewed twice in a year. Since the Committee fixes the average unit costs, the banks have been given full freedom to vary the unit cost, according to the local needs. As for Non-Farm Sector activities are concerned the unit costs are fixed at district level by the District Consultative Committee (DCC). 15. Security Security to be obtained from various institutions for providing refinance by NABARD is indicated in Sec. 28 of NABARD Act, 1981. a. Scheduled Commercial Banks, Regional Rural Banks and PUCBs In case of Scheduled Commercial Banks, Regional Rural Banks and Primary Urban Cooperative Banks (PUCBs) the need for submitting Government Guarantee or any other security has been waived by the Board of Directors. b. State Cooperative Banks (SCBs) In case of State Cooperative Banks, refinance accommodation is to be provided by NABARD against Government Guarantee. However, Board has the powers to relax Government Guarantee for SCBs satisfying certain requirements. c. State Cooperative Agriculture and Rural Development Banks (SCARDBs) All kinds of financial accommodations provided to SCARDBs are required to be unconditionally guaranteed by the concerned State Government. d. Securities obtained by FIs to be held in trust for NABARD Under Sec. 29 of NABARD Act, 1981, all sums received by a borrowing institution in repayment or realisation of loans and advances refinanced either wholly or partly by NABARD shall be deemed to have been received in trust for National Bank and shall be repaid to NABARD on due dates to the extent of outstanding borrowings from NABARD. Similarly, under Sec. 29 (2), all securities held or which may be held by the borrowing institution, shall be held by such institution, in trust for NABARD. 16. Documentation All financial institutions borrowing from NABARD are required to execute a General Refinance Agreement with NABARD. 17. Repayment period The repayment period at ultimate borrower level is fixed based on the economic life of the asset and the surplus generated out of the investment. Accordingly, and also as a matter of practice, the maximum period for repayment at ultimate borrower level is fixed not exceeding 15 years. The refinance is expected to be repaid on the due date prescribed by NABARD. As a general policy, the repayment period fixed in respect of NABARD refinance, does not exceed the repayment fixed by the bank to it's ultimate borrower. However, SCARDBs are allowed 2 more years over and above the repayment period fixed for the ultimate borrowers. As a general principle, all recoveries due from the ultimate borrowers are required to be repaid to NABARD and the banks' own share to be recovered by the banks only after NABARD refinance has been fully repaid. Banks are required to repay the dues to NABARD on the due dates irrespective of the recovery from the ultimate borrower. As a matter of convenience, the Commercial banks are allowed to repay refinance under Farm - Sector ( ARF ) over a uniform repayment period of 5 years, irrespective of the nature of activity and the actual repayment schedule fixed for the ultimate borrower. The due dates for recovery of loans from our client institutions other than SCARDBs are as under: All repayments received by banks against loans refinanced Repayment of Refinance

i. ii.

From 1 January to 30 June of each year From 1 July to 31 December of each year

31st July each year 31st January of next year

In case of SCARDBs, the due dates for redemption of special development debentures have to be calculated from the date of floatation. However, for convenience, the SCARDBs have been given the option for having fixed due dates for repayment. The due dates fixed at present are as under: Sr. No. 1 2 Between 1 July and 31 December Between 1 January and 30 June 31 July of the following year and / or 31 January of 2nd following year 31 January and / or 31 July of following year All repayments received by banks against loans refinanced Due date for repayment

Repayment schedule is prepared based on the option exercised by the SCARDB. 18. Commitment Charges In the event of the bank not availing of refinance as per the prescribed time schedule indicated in the sanction letter, NABARD is entitled to require the bank to pay commitment charges on the shortfall of drawals at 1/3 of 1% per annum at the end of each year on a cumulative basis as indicated in the General Refinance Agreement. 19. Credit Exposure Norms Board of Directors have fixed maximum exposure of refinance to a client institution. These exposure limits are reviewed from time to time. The exposure limit for the year 2005-06 has been fixed at a level not exceeding 50% of the capital funds of NABARD as on 31 March 2005 for each of the client financial institution. 20. Security in lieu of Govt. Guarantee : Normally, SCBs and SCARDBs are extended refinance against State Govt. Guarantee. In case of SCBs, the requirement of Govt. Guarantee is waived under certain circumstances. However, in case, the SCBs and SCARDBs are unable to obtain Govt. Guarantee for release of refinance, following options could be exercised by them. i) The banks can offer approved securities as security in lieu of Govt. Guarantee. ii) Alternatively, the banks can offer FDRs issued by the Scheduled Commercial Banks as security in lieu of Govt. Guarantee. This will be permitted on a case-to-case basis. 21. Delegation of Powers ROs have been delegated power to sanction projects with outlays up to Rs2.00 crore and permit drawal against sanctioned schemes for any amount. ROs have also been permitted to allow drawals for unrestricted amount under ARF. 22. Reschedulement - Relief Measures to borrowers affected by natural calamities Borrowers affected by natural calamities may be given the facility of postponing/rescheduling of current demand by extending the period of loan. In other words, in areas affected by natural calamities, the recovery of loan instalments representing only the current demand due from the concerned borrower, may be allowed to be postponed by one year. Care should be taken to ensure that the repayment period for the loan, after postponement of current demand, does not exceed the economic life of the asset. In no case an overdue instalment be postponed. Besides, the facility should be extended only to those borrowers who have actually suffered loss. At present this facility is extended to the borrowers belonging to Co-operative banks and Regional Rural Banks. Corresponding to the postponement allowed at the borrowers level, NABARD will also allow

postponement of current demand on repayment of refinance. 23. Short Term Accommodation to SCARDBs Short term accommodation to SCARDBs has been introduced on a pilot basis in Kerala under section 25(1) (d) of NABARD Act, 1981. The power to sanction the Short Term limit and permitting drawals to SCARDBs is vested with ROs. 24. Prudential Norms The loans and advances made under Section 25 of NABARD Act, 1981 are subject to prudential norms. 25. Fair Practices Code for Lenders NABARD has put in a policy for Fair Practices Code for Lenders. 26. Connected Lending The instructions issued by RBI on Connected Lending are not applicable to refinance operations. 27. Management Information System (MIS) The Regional Offices are required to furnish data periodically to Head Office to facilitate monitoring and to keep the management informed about the progress made in release of refinance and various activities of the bank. 28. Evaluation Fee The bank may charge the borrower a "once-and-for-all" evaluation fee of 1% of the cost of investment. However, this fee could be waived by the banks at their discretion, based on merits of each case. 29. Rate of interest to ultimate borrowers As per the directives / guidelines issued by the RBI, from time to time. 30. Margin Requirements from ultimate borrower level This will be as per the guidelines issued by RBI and NABARD. As per extant instructions, for agriculture loans up to Rs.50,000/ and agri-clinics/ agri-business centre loan up to Rs.5.00 lakh banks may not insist on any margin. For amounts in excess of Rs.50,000/ or Rs.5.00 lakh, as the case may be, the margin money requirement will be as under : Category of farmers Minor Irrigation Small farmers (as per NABARD definition Medium Farmers Other Farmers 10%* 10 % **for Pumpset and 15%** for other purposes 5% 10%* 15%** Borrower's Contribution Diversified investments 5%

* 7% for 2 or more farmers in a group loan. ** 10% for 2 or more farmers in a group loan. 1. 2. Subsidy, if any, available to the beneficiary is to be reckoned towards his contribution. Share capital held in the borrowing Co-operative Society to be taken into account while determining the

down payment. The Corporate bodies, public trusts, etc., shall contribute a minimum of 25% of the investment cost as down payment. 31. Security to be obtained from ultimate borrowers: This will be as per the guidelines issued by RBI. (B) CO-FINANCING 1. Introduction NABARD in association with a full fledged bank/s provides co-finance/direct finance facilities to the borrowers in exceptional circumstances. The following factors may define exceptional circumstances calling for NABARD's intervention: 1. 2. 3. 4. 5. Geographical areas and sectors to which credit is not flowing for various reasons; Projects involving Sunrise technologies where risk perception of banks is very high ; Thrust areas where NABARD has an important role to play ; Areas / projects where large outlays and long gestation period keep the banks away. Projects having longer repayment period.

2. Receipt of the proposal The promoter should submit his/her proposal through a co-financing bank (Scheduled Commercial bank) or directly by NABARD. The objective of having a full-fledged bank is to ensure, besides, proper scrutiny and borrowers appraisal at ground level, the services like normal banking facilities. In case any promoter submits a proposal directly to the RO, he/she should be advised to identify a co-financing bank, along with their firm commitment for co-financing the proposal and confidential credit report of the promoter/ borrower. 3. Preliminary scrutiny RO should undertake preliminary scrutiny of the proposal and forward the same to HO. If the bank has already appraised the project, one copy of the appraisal report should also be furnished to NABARD, HO. 4. Desk appraisal On receipt of the information from Bank/ NABARD RO, a detailed desk appraisal will be carried out at HO and if the proposal fulfills the basic requirements, a Joint field study to assess the viability of the project will be taken up. The appraisal team will be comprising of HO officials along with representatives of co-financing bank and NABARD, RO. Any information gaps observed during desk appraisal has to be complied with by co-financing bank/ promoter. RO is to coordinate with the bank/promoters to keep the necessary information required by the appraisal team for taking up the study. Co-financing bank has to furnish their comments on the credit worthiness of the promoters. 5. Appraisal Report Based on the findings of the field study, a draft appraisal report / techno economic feasibility report (TEFR) with detailed financial appraisal will be prepared by HO and forwarded to co-financing bank/s for their acceptance or suggestions, if any. 6. Extent of NABARD's Involvement At present NABARD will share up to 60% of the bank loan to be provided to the borrower in association with Commercial banks/ other banks. 7. Sanction On receipt of cofinancing bank's consent, the TEFR will be placed before the Management Committee for its

approval and sanction of our share in term loan. Only on sanction by M.C., HO will issue the sanction letter to the co-financing bank with a copy to RO and the promoter. The co-financing banks sanction the entire term loan inclusive of NABARD's share and communicate their sanction to party and NABARD. 8. Documentation As per the guidelines of Indian Banks Association for consortium financing project specific documents are prepared at HO level which include: Inter-se Agreement; Term Loan Agreement; Joint Deed of Hypothecation; Resolution of the Board of the Company, if applicable and Any other document considered necessary

9. Disbursement After the execution of documents, the co-financing bank may communicate to NABARD HO a specific date for release of funds to promoters so as to effect the disbursement simultaneously, alternatively the co-financing bank may disburse entire amount as per requirement of the promoter and submit the claim for reimbursement of the share of NABARD in the term loan. 10. Delegation of Powers for Sanction As per the existing arrangement for sanction of projects under co-financing, powers are vested with Management Committee (MC). 11. Monitoring & follow up Monitoring of the projects will be undertaken by RO/HO in association with the co-financing bank or independently. 12. Rate of Interest Rate of Interest to the ultimate borrower will be decided in consultation with the bank which will be co-financing the projects. 13. Margin / Borrower's Contribution Margin (i.e.. borrower contribution) under the co-financing arrangement will be as per the guidelines issued by RBI from time to time. 14. Delegation of Powers As per the existing arrangement for sanctioning of loans under co-finance arrangement, powers for sanctioning of projects / schemes will be with Head Office. ANNEXURE I Quantum of Refinance to be released by NABARD with effect from 10 October 2002. Sr.No. Purpose/Sector Quantum of Refinance (as a % to Bank Loan) -Agency wise SCARDB I a North Eastern Region and Sikkim SC/ST Action Plan,Wasteland 100 100 100 100 SCB RRB CB

Development, Dryland Development,SHGs, AEZs, ARWIND, MAHIMA, Agri Clinics Agri Busness Centres b c d II. 1 Non Farm Sector Minor Irrigation All other purposes Other Regions SC/ST Action Plan, ARWIND, MAHIMA, SHGs, AEZs, Agriclinics Agri Business Centres Wasteland development schemes where individuals are the beneficiaries i. Nursery Schemes ii. Farm Forestry iii. Tree Patta Scheme (b) (c) Dryland Development Forestry programmes sanctioned to corporate bodies including Forest Development Corporations Minor Irrigation {Schematic as well as ARF(FS)} Government sponsored programmes like SGSY including ISB Component Diversified purposes (schematic as well as ARF) Farm Mechanisation (including power tillers) Work Animals, Animal Driven Carts & Biogas Non-farm activities (including pre sanction) 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 90 100 100 100 100 100 95 95 100 95 90 100 95 90 100 95 90

2(a)

3 4 5 6 7 8

95 95 90 95 / 90 90 100

95 90 90 90 90 90

95 90 90 90 90 90

95 90 90 90 90 90

NOTE 1. 2. 3. 4. 5. Farm Mechanisation @ 95% of bank loan to SCARDBs in certain defined states/ areas. (Viz; Bihar, Jharkhand, Orissa, M P, Chhattisgarh, Eastern U P & WB ) In case of externally aided projects, the percentage of refinance as specified in the relative agreements and as indicated in the sanction letter will apply. District Rural Industries Programme (DRIP)/Area Programme for Rural Industrialisation (APRI) areas to have 100% refinance for NFS for all agencies upto ARF limit. Area Development Plans (ADPs) will be eligible for refinance as per purposes/sectors indicated above. For eligible term loans in Tsunami affected areas, refinance at 100% will be provided.

ANNEXURE - II Rate of Interest on Refinance effective from 16 March 2005 (DPD-FS circular dated 30 March 2005)

A. NE REGION ALL ACTIVITIES Loan Size All Loans (irrespective of size) CBs/PCBs/ ADFC 6.00 RRBS 6.00 SCBs/SCARDBs 6.00

B. Minor Irrigation,Dryland Farming, Land Development, Wasteland Development,SGSY,SHG, SC/ST Action Plan, Organic Farming, Contract Farming under AEZ, Aromatic and Medicinal Plants,Farm Mechanisation Loan Size CBs/PCBs/ ADFC Upto Rs.50000 Above Rs.50000 6.00 6.25 6.00 6.25 6.00 6.25 RRBS SCBs/SCARDBs

C. Agriclinics/Agribusiness Centres : 6% for all sizes of loans. D. NFS - 6%, 6.25% and 6.5% for all the three Slabs as detailed below. E. Other purposes including Cold Storages and Rural Godowns Loan Size CBs/PCBs/ ADFC Upto Rs.50000 Rs.50001 - Rs.2 lakhs Above Rs.2 lakhs 6.00 6.25 6.75 6.00 6.25 6.75 6.00 6.25 6.75 RRBS SCBs/SCARDBs

Note : (i) Joint Liability Groups (w.e.f. 19.1.2005) - 5% (ii) Special programme for Tsunami affected areas - 4.25%(w.e.f. 26.12.2004) (iii) Self Help Groups - 6% for refinance to MFIs (w.e.f. 18.3.2005) Rate of Interest on Interim Finance The present rate of interest on interim finance to SCARDBs is 7.5% p.a. ANNEXURE - III Delegation of Powers to Regional Offices - Sanction of Refinance under Schematic Lending and ST to SCARDBs The Chairperson in exercise of powers vested under regulation 11(2) of the National Bank for Agriculture and Rural Development, General Regulations 1982, has approved the delegation of powers to the officers in charge and other officers at ROs/ Sub-offices. 2. The delegation of powers under schematic lending for all types of borrowers will be as under : A. Sanction of Schemes (Rs in Lakh)

GM Particulars/ Purpose i] ARF ii] All other Schemes irrespective of purpose including schemes of SCARDBs (SDDs) iii] Interim Finance CGM (OIC) Unrestricted 200 Unrestricted 150 150 GM

DGM DGM (OIC) Unrestricted 100 60 60 20 --AGM

1,000

500

500

100

--

--

B. Committee for Sanction at RO A Committee approach for sanctions of schemes should be followed as under : The Chairman of the Committee --- CGM Members- 2 GMs (1 from ICD and 1 from other Department) and 2 DGMs, (1from ICD and 1 from other Department). Quorum - 3 CGM, GM- ICD, DGM (other than ICD) Note: 1. 2. 3. The senior most Technical Officer of the concerned discipline may participate in the meetings, as a 'special invitee'. Where only one GM is available, an additional DGM outside ICD may be co-opted. Similar Committees may be constituted in ROs headed by GMs/DGMs.

Note:(i) All innovative and agro processing schemes involving imported technology have to be forwarded to HO for sanction. (ii) The sanctioning powers for soft loan assistance for margin money will continue as per existing norms/instructions. C. Rephasements of Schemes* Particulars i] Rephasement of schemes where refinance commitments or parameters are not revised ii] Rephasement of schemes where financial outlay is revised or other change in conditions of sanction CGM/ GM/ DGM/ OIC Without restriction on number of times and years DGM Maximum three years extension of original phasing AGM Twice with maximum 2 years extension of original phasing

* By sanctioning authority within the delegated powers as at (i) & (ii).

D. Release of Refinance (Rs. in lakh) GM Particulars CGM (OIC) GM DGM (OIC) DGM AGM

i] Applications under ARF ii] Drawal under sanctioned schemes

Unrestricted Unrestricted

Un-restricted

Un-restricted

Un-restricted

60

20

Un-restricted

Un-restricted

Un-restricted

60

--

RO In-charge : Unrestricted iii] Approval of floatation on Special Development In the absence of OIC, GM/ DGM may approve, which will be ratified by the OIC on his Debentures (SDDs) return. and release of NABARD's contribution/ release of interim finance. 3. ST to SCARDBs* Sr. No. 1 Sanction of ST Credit Limits to SCARDBs Nil Unrestricted. (In the absence of regular OIC, the OIC looking after the interest of the RO will exercise the power subject to ratification by the regular OIC). DGM. Unrestricted amount within the sanctioned limit. * The sanction of short term credit limits as above will be done by the Sanctioning Committee as envisaged in ICD Circular dated 15 March 2004. 4. The appraisal team may present the schemes to the Committee and based on the recommendation of the Committee, the officers in various grades in the RO will sanction schemes, as per the powers delegated to them. The Committee should meet as frequently as possible so as to sanction the schemes within the time limit prescribed for the purpose. 5. The delegated powers need to be exercised judiciously and all the norms stipulated for sanction of refinance and allowing operations thereunder should be followed scrupulously. All projects beyond the sanctioning powers of the in-charge of the RO should be forwarded to the HO. 6. To ensure that the delegated powers are judiciously exercised, the existing system of test check of sanction and release of refinance, by the higher authorities will have to be scrupulously followed. Accordingly, 10% of the sanctions / release may be test checked by the next higher authority and a certificate to that effect may be furnished in the MDO. Further, RO will have to certify in the monthly returns of sanction of schemes, that all the schemes have been sanctioned only after they have been duly recommended by the Committee. 7. The above delegation of powers had come into effect from 01 April 2004.(ST to SCARDBs w.e.f 5 July 2005). Particulars Present delegation to CGM/OIC Revised delegation to CGM/OIC

2 Release of refinance under the sanction at (1) above.

Nil

Introduction NABARD's credit functions cover planning, dispensation and monitoring of credit. This activity involves: Framing policy and guidelines for rural financial institutions Providing credit facilities to issuing organizations Preparation of potential-linked credit plans annually for all districts for identification of credit potential Monitoring the flow of ground level rural credit