The National Bank for Agriculture and Rural Development (Nabard) is planning to change the refinance norm for district co-operative banks and regional rural banks, said MVS Chalapathi Rao, managing director, Nabard.
Rao was talking to media persons at a press conference. At present the refinance limit is linked to the 'recovery rate', while according to the proposed plan it will be linked to the non-performing assets (NPA).
Last year Nabard had changed the refinance norm for commercial banks. According to the changed norms for commercial banks, for banks having NPAs up to 15 per cent, the refinance level is unrestricted.
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However, for banks having NPA levels more than 15 per cent, the refinance level is restricted to the extent of the amount recovered in the year ending June of the previous year or lending during the year ending March 31 of the year, or the average amount recovered or lent during the previous three years whichever is higher.
Rao, though have not disclosed the new norm for the co-operative banks, said that it will be along the similar lines of the regulations for the co-operative banks.
Nabard chairman Y C Nanda declined to accept that the recent gilts market scam in which co-operative banks were involved is due to lack of supervision. "It is rather our supervision which unearthed the problem in the Nagpur District Co-operative Bank," Nanda said.
He, however, added that they are planning to improve the on-site surveillance system, train the officers of co-operative banks and their own staff to avert the same kind of crisis in future.