The state-run National Bank for Agriculture and Rural Development (Nabard) has launched a repositioning exercise to explore new opportunities and diversify its operations. In an interview with Sanjay Jog, Nabard Chairman Umesh Chandra Sarangi talks about the challenges faced by the institution and its plans. Excerpts:
How Nabard has weathered challenges?
Accelerating and expanding the pace of development has been a major challenge. It had many successful pilots, but raising them to larger level was not happening for a long time. In the last three years, that challenge has been met successfully.
The area under the watershed development programme has gone up four times covering as many as 15 states and over 3,000 villages. The intervention for tribal development has been scaled up by almost five times, covering 11 states and nearly 1.5 lakh tribal families. Loan outstandings crossed Rs 1 lakh crore at the end of 2009-10.
What has been Nabard’s role in boosting infrastructure development, especially in rural areas?
The Rural Infrastructure Development Fund (RIDF) has advanced Rs 50,000 crore in the last three years to various state governments and the pace of implementation of works under RIDF has increased. RIDF loans to states rose to Rs 12,388 crore in 2009-10 from Rs 10,459 crore in 2008-09. RIDF loans totalling Rs 18,500 crore were sanctioned and disbursed in the last four years to the National Rural Roads Development Agency for the rural roads component under Bharat Nirman. A large number of irrigation project, roads, schools, hospitals and drinking water supply schemes have been completed. States are using RIDF as part of their planned programme and are giving focused attention to timely and quality implementation.
What is the present status of cooperative banks?
After the recapitalisation of cooperative banks in terms of the recommendations of the Vaidyanathan Task Force and the release of debt waiver money, cooperative banks have performed creditably well for agriculture credit disbursement during 2009-10. Against the backdrop of resurgence in agriculture credit, cooperative banks disbursed Rs 42,000 crore in 2009-10, as against Rs 34,000 crore in 2008-09.
The financial health of cooperative banks and regional rural banks (RRBs) has improved. Nearly 14 states have amended the Cooperative Societies Act. From primary societies to state cooperative banks are undergoing reforms and recapitalisation in these states in accordance with the Vaidyanathan panel report.
Can you throw light on the self-help group (SHG)-bank linkage programme ?
During 2009-10, a grant of Rs 25 crore to 268 NGOs was sanctioned for promotion and linkage of 50,000 SHGs, taking the cumulative sanction to Rs 89 crore for promoting around 3,42,000 SHGs.
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What is Nabard’s repositioning exercise?
To explore new opportunities in changing times and the ability to play a more effective role, Nabard has started a repositioning exercise in consultation with Boston Consulting Group (BCG). BCG will find out inherent deficiencies, suggest strategies for improving efficiency and also suggest new areas to improve Nabard’s resources to undertake agriculture and rural development on a bigger scale. BCG is expected to give its report by December.
What are Nabard’s initiatives to address the issues arising out of climate change?
To be able to handle further challenges under a changing environment and meet challenges emanating from climate change, Nabard is looking into ecologically fragile regions and taking initiatives to implement projects to enable farmers to mitigate the impact of climate change in their lives, livestocks and crop production. Pilot projects in 25 villages of Maharashtra will be taken up to guide farmers how to cope with climate change.