With its borrowing capacity nearing the authorised limit, National Bank for Agriculture and Rural Development (Nabard) has sought capital infusion of Rs 5,000 crore from the government for business growth during 2012-17.
Chairman Prakash Bakshi told Business Standard the thrust on increasing lending to the agriculture sector and scaling up rural development plans meant a substantial increase in the bank's capital needs. It has sought the additional capital for balance-sheet expansion through refinancing operations and funding cooperative bodies.
Nabard expects its balance sheet to touch Rs 178,000 crore by the end of March, compared with about Rs 158,800 crore a year earlier. For every Rs 1,000-crore extra capital, its borrowing capacity would increase 10 times.
The bank's total market borrowings stood at Rs 34,747 crore in March 2011, and accounted for 21.87 per cent of its total resources. Its paid-up capital was Rs 2,000 crore, against the permitted Rs 5,000 crore. Its total income in 2010-11 stood at Rs 9,202 crore, against Rs 7,965 crore in 2009-10. While the profit after tax was Rs 1,279 crore in 2010-11, down from Rs 1,558 crore in 2009-10, the capital adequacy ratio was 21.76 per cent in March 2011, compared with 24.95 per cent a year earlier.
On expanding the coverage of the core banking platform, Bakshi said after commercial banks, 82 regional rural banks using the platform were now ready to go on-line. Till cooperative bodies are not on the core banking platform, these are not allowed online financial transactions. These bodies have realised that unless the core banking platform is adopted, these may lose customer base and government business.
The thrust of the financial inclusion programme is on electronic platform-based transactions.
Nabard has begun work on establishing core banking solutions at more than 400 state and district central cooperative banks. It has roped in WIPRO and Tata Consultancy Services for rolling out CBS at its branches.
The next phase would involve bringing about 53,000 primary agriculture credit societies on to this platform. Bakshi said this may help these to function as business correspondents in the future.
