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NABARD extends Rs 20,500 crores special liquidity facility to co-op banks & RRBs

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Nabard extends ₹20,500-cr special liquidity facilityOn May 18, 2020 The National Bank for Agriculture and Rural Development(NABARD) has informed that it has extended Rs 20,500 crores special liquidity facility to  co-operative banks(co-op– Rs 15,200 crores) and Regional Rural Banks(RRB’s– Rs 5,300 crores) in various States. This is against the Rs 5,000 crores lent during the 1st quarter of 2019.

  • This amount is part of the Rs 25,000 crores of special refinance facility provided by the Reserve Bank of India(RBI) to NABARD for refinancing RRBs, cooperative banks and MicroFinance Institutions (MFIs).

Special liquidity facility

It aims to increase the resources of the Cooperative banks and RRBs to enable them to extend credit to farmers for taking up pre-monsoon and kharif(summer sown crops) 2020 operations.

Major Highlights

Special Refinance Facility 

i.Of the Rs 25,000 crores special refinance facility provided by the RBI, NABARD had allocated Rs 23,000 crores for lending to cooperative banks and RRBs, and Rs 2,000 crores for MFIs. Of the Rs 2,000 crores, Rs 1,550 crores has already been disbursed to MFIs.

ii.Besides NABARD, the RBI had announced to provide a special facility worth Rs 15,000 crores to Small Industries Development Bank of India (SIDBI) and Rs 10,000 crores to the National Housing Bank (NHB).

Government’s package

i.As part of the government’s overall Rs 20 lakh crores special COVID-19 package, Union finance minister Nirmala Sitharaman announced that NABARD will extend additional refinance support of Rs 30,000 crores for crop loan requirements of Rural Co-operative Banks and RRBs.

ii.This is over and above the Rs 90,000 crores to be provided by NABARD through the normal refinance route during this year.

iii.This front-loaded on-tap refinance facility to 33 State Co-operative banks, 351 District Co-operative Banks, and 43 RRBs will be available on tap, based on their lending .

Programme- NABARD announced that cooperative banks and RRBs have initiated a programme of saturation of Kisan Credit Cards(KCC) and about 12 lakh new KCC cards have been issued by them during the last two months. A total of 4.2 crores KCCs have been issued by Cooperative banks & RRBs as on 31 March.

Constituency of Nirmala Sitharaman– Rajya Sabha (Karnataka)

It is a development financial institution, promoting sustainable and equitable agriculture and rural development.
Headquarters– Mumbai, Maharashtra
Chairman– Harsh Kumar Bhanwala