The state-run National Bank for Agriculture and Rural Development (Nabard) indicated that it has not rule out diversifying into banking.
However, Nabard Chairman Umesh Chandra Sarangi said it would remain a facilitator for rural prosperity and was focused on improving its efficiency as a development bank. “It would not compromise on its primary mandate to provide and regulate credit for promotion and development of agriculture and rural development.”
Although floating a bank was not on Nabard’s agenda, Sarangi said the bank was not averse to it. “Nabard has played a major role in refinance to agriculture and rural development and it is not keen to dilute its work and play a second fiddle. One thing is quite clear that Nabard’s present status of a development bank should not be affected if it diversifies into banking,” Sarangi explained.
“An internal committee has submitted its report, and based on it, Nabard will make changes in co-financing. So far, Nabard, along with commercial banks, has provided Rs 200 crore under co-financing, primarily to new-age industries,” he added.
Sarangi said Nabard would look forward to product diversification after receiving the report from Boston Consulting Group on its repositioning by December.
Nabard’s investments in production credit and crop loans to cooperative banks and regional rural banks increased to Rs 24,216 crore in 2009-10 against Rs 16,803 crore in 2008-09.