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ANNUAL REPORT 2011-12
Letter of Transmittal
CHAIRMAN Ref.No.NB.Secy./ 748 / AR-1/2012-13
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT Plot: C-24/G, Bandra-Kurla Complex Post Box: 8121, Bandra (East) Mumbai - 400 051
12 July 2012 21 Ashadha 1934 (Saka) The Secretary Government of India Ministry of Finance Department of Financial Services New Delhi- 110 001 The Governor Reserve Bank of India Central Office Mumbai- 400 001 Dear Sir In pursuance of Section 48(5) of the National Bank for Agriculture and Rural Development Act, 1981, I transmit herewith the following documents : i. A copy of the audited Annual Accounts for the year ended 31 March 2012 alongwith a copy of the Auditors Report andst
ii. Two copies of the Annual Report of the Board of Directors on the working of st National Bank during the year ended 31 March 2012.
Yours faithfully
Prakash Bakshi
Board of DirectorsDr. Prakash Bakshi Chairman
Directors appointed under Section 6(1)(b) of the NABARD Act, 1981
Shri J. K. Batish
Prof. Trilochan Sastry
Prof. M. L. Sharma
Directors appointed under Section 6(1)(c) of the NABARD Act, 1981
Shri H. R. Khan
Prof. Dipankar Gupta
Directors appointed under Section 6(1)(d) of the NABARD Act, 1981
Shri P . K. Basu
Shri S. Vijay Kumar
Shri Umesh Kumar
Directors appointed under Section 6(1)(e) of the NABARD Act, 1981
Shri K. Jayakumar
Shri D. B. Gupta
Shri Shaleen Kabra
Page No. NABARD at a Glance Key Data References Principal Officers Highlights.....................................................................................................................................................................................i I. Rural Economic Environment..........................................................................................................................................1 Economic Scenario ..............................................................................................................................................................1 Agriculture & Rural Economy ..............................................................................................................................................5 II. Business Operations........................................................................................................................................................19 Production Credit ......................................................................................................................................................19 Investment Credit ........................................................................................................................................................24 Financing Rural Infrastructure......................................................................................................................................33 Rural infrastructure Development Fund.......................................................................................................................34 New Business Initiatives............................................................................................................................................... 42 III. Development and Promotional Initiatives...................................................................................................................45 Credit Planning ...........................................................................................................................................................45 Farm Sector ................................................................................................................................................................45 Rural Non-Farm Sector................................................................................................................................................58 Financial Inclusion ......................................................................................................................................................59 Micro-Finance .............................................................................................................................................................62 NABARD Consultancy Services...................................................................................................................................67 Research and Development Activities..........................................................................................................................68 IV. Capacity Building of Client Institutions......................................................................................................................75 Institutional Development............................................................................................................................................75 Supervision of Banks ..................................................................................................................................................89 V. Organisation, Corporate Governance and Management ........................................................................................93 Management ..............................................................................................................................................................93 Human Resources Management .................................................................................................................................94 Administration and Other Matters................................................................................................................................96 VI. Financial Performance & Management of Resources ..........................................................................................101 Sources of Funds .....................................................................................................................................................101 Uses of Funds ...........................................................................................................................................................103 Income and Expenditure ..........................................................................................................................................105 Annual Accounts 2011-12 ...................................................................................................................................................107 Auditors Report .............................................................................................................................................. 108 Balance Sheet ................................................................................................................................................. 109 Profit and Loss Account .................................................................................................................................. 110 Schedules to Balance Sheet ............................................................................................................................. 111 Cash Flow Statement ....................................................................................................................................... 133 Consolidated Financial Statements 2011-12 .................................................................................................... 134 E-mail Addresses of NABARD Head Office Departments at Mumbai ............................................................... 140 Regional Offices/Cell/Training Establishments .................................................................................................. 141 Abbreviations .........................................................................................................................................................................143
Contents
Boxes1.1: Measures adopted to Contain Inflation and Food Inflation................................................................... 4 1.2: Supply-side Constraints.................................................... 8 2.1: Rural Infrastructure Promotion Fund (RIPF)................... 42 2.2: Application Service Provider (ASP) Model of CBS................................................................. 43 3.1: Impact Evaluation Findings of Watershed Projects......... 46 3.2: New model in wadi........................................................ 48 3.3: Pilot Project on Mobile Kisan Credit Card...................... 49 3.4: UPNRM Projects A success story of Kamadhenu project in Chittoor district............................................... 56 3.5: Vocational training through micro-loan: PanIIT-NABARD model.................................................. 58 3.6: From Red Light to a Ray of light through JLG in Munger, Bihar..................................................... 64 3.7: Salient features of Scheme for Promotion of Women SHGs in backward districts of India and Left Wing Extremism Affected districts of India............................... 66 4.1: GoI Revival Package for STCCS : Impact Assessment Study............................................... 85
TablesTable 1.1 Table 1.2 Table 1.3 Table 1.4 Table 1.5 Table 1.6 : Economic Indicators............................................. 1 : Sectoral Growth Rates of GDP............................. 2 : Drivers/Causes of Inflation in India....................... 3 : Trends in Exports and Imports.............................. 5 : Trends in Rainfall and Water Storage.................... 6 : Compound Growth Rates of Area, Production, and Yield of Principal Crops during 1980-1990, 1990-2000 and 2000-2012 .......................................................... 7 : Requirement & Availability of Seeds in India........ 8 : Production and consumption of fertiliser.............. 9 : Agency-wise Ground level Credit Flow............... 10 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6 Table 4.7 Table 4.8 Table 4.9 Table 3.6 Table 3.7 Table 4.1 Table 3.3 Table 3.4 Table 3.5 : The progress under FIF & FTTF......................... 61 : Progress of the Micro-Finance Programme......... 62 : Grant Assistance Extended to various Partners in SHG-Bank Linkage Programme........................................... 63 : Comparative Position of Income earned from Consultancy................................... 68 : Training of RFI Personnel................................... 72 : Growth of Short-Term Co-operative Credit Structure ................................................. 75 : Growth of Long-Term Co-operative Credit Structure.................................................. 76 : Working Results of Co-operative Banks ............. 76 : Accumulated Losses .......................................... 76 : Region-wise Working Results of SCB.................. 77 : Region-wise Working Results of DCCB .............. 77 : Region-wise Working Results of SCARDB ......... 78 : Region-wise Working Results of PCARDB.......... 78 : Composition of NPA of Co-operative Banks....... 79
Table 1.7 Table 1.8 Table 1.9
Table 1.10 : Sub-sector-wise Ground Level Credit Flow for Agriculture & Allied Activities................ 11 Table 1.11 : Production of Major Crops................................. 11 Table 1.12 : Production, Consumption and Exports of Major Plantation Crops ..................... 12 Table 1.13 : Area and Production of Major Horticulture Crops.............................................. 13 Table 1.14 : Agency-wise, Year-wise Kisan Credit Cards Issued ........................................... 15 Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 2.5 Table 2.6 Table 2.7 Table 2.8 : Short term refinance (production credit) for the last five years .......................................... 19 : Sanction of ST(SAO) Credit Limits to SCB for the year 2011-12.................................. 20 : Sanction of ST(SAO) Credit Limits to RRB for the year 2011-12.................................. 22 : Rates of Interest on Refinance............................ 24 : Agency wise disbursement of Refinance ........... 26 : Region-wise Disbursement of Refinance............. 27 : Sector-wise Disbursement of Refinance.............. 28 : Sector-wise Projects and Amounts Sanctioned under RIDF XVII.............................. 35
Table 4.10 : Percentage of Recovery of loans to Demand ............................................... 79 Table 4.11 : Frequency Distribution of Co-operative Banks According to Range of Loan Recovery Percentage................................. 80 Table 4.12 : Frequency Distribution of States/UTs according to Level of Loan Recovery of SCBs and DCCBs.............................................. 80 Table 4.13 : Frequency Distribution of States/UTs according to Levels of Loan Recovery of SCARDBs and PCARDBs............................... 81 Table 4.14 : Elected Boards under Supersession.................... 81 Table 4.15 : Indicators of Performance .................................. 86 Table 4.16 : Region-wise Working Results of RRB ................. 87 Table 4.17 : Frequency Distribution of States According to Levels of Recovery of RRB............ 87 Table 4.18 : Status of Financial Inclusion - RRB..................... 88 Table 5.1 Table 5.2 Table 6.1 Table 6.2 : Promotions effected during the year................... 95 : Total Staff Strength............................................. 95 : Sources of Funds.............................................. 101 : Uses of Funds................................................... 104
Table. 2.9 : Activity-wise Cumulative Sanctions.................... 37 Table 2.10 : Allocations, Sanctions and Disbursements.......... 38 Table 2.11 : Utilisation Percentage of RIDF (I TO XVII) ......... 39 Table 2.12 : Cumulative Economic and social benefits........... 39 Table 2.13 : State-wise Expected Benefits under RIDF........... 40 Table 3.1 Table 3.2 : Externally Aided on-going Projects..................... 53 : Progress under UPNRM...................................... 55
ChartsChart 1.1 : Monthly Inflation Rates for Major Subgroups of WPI (2011-12)............................... 3 Chart 1.2 : Share of Agriculture & Allied Sector in Total Gross Capital Formation........................... 14 Chart 1.3 : GCF in agriculture as a percentage of GDP orinating in agriculture.......................... 15 Chart 2.1 : Financial Support by NABARD......................... 19 Chart 2.2 : Agency-wise Share in Refinance Disbursement..................................... 26 Chart 2.3 : Region-wise Share in Refinance Disbursement..................................... 27 Chart 2.4 : Tranche-wise Allocations - RIDF I to XVII.......... 34 Chart 2.4 : Sector-wise Cumulative Share in amount Sanctioned............................................ 36
Sources of Fund Capital 2012
NABARD AT A GLANCE(` crore) 2011 Net Accretion 3,0002,000 1,000 Uses of Funds 2012 2011 Net Utilisation Cash and Bank Balances Collateralised Borrowing and Lending Obligation 8,313 231 10538 228 (-)2,225 3
Reserves & Surplus
13,408
11,863
1,545
Investments in NRC(LTO) Fund 14,479 14,468 11 a) GOI Securities b) ADFC Equity c) AFC Equity NRC (Stabilisation) Fund 1,579 1,577 2 d) SIDBI Equity e) AICI Ltd. Deposits 291277 14 f) NCDEX Ltd. & MCX Ltd. g)Nabcons Bonds and Debentures 38,584 26,788 11,796 h) Mutual Fund/VCF i) Biotech Venture Fund Borrowings from GoI 85 124 (-)39 j) Treasury Bills k) Commercial Paper Borrowings JNN Solar Mission 33 0 33 l) Non Convertible Bonds m)Equity Shares of Other Institution n) Debentures in Nature of Advance o) Certificate of Deposits Certificate of Deposits 1,281 137 1,144 2,147 36 1 48 60 34 5 0 26 58 1,037 375 1 2,548 19 1 48 60 18 5 390 10 0 1,862 225 1 (-)401 17 0 0 0 16 0 (-)390 16 58 (-)825 150 0
Foreign Currency Loan
503
503
0
12,344 13,461 (-)1,117 2,038 680 1,358
Loans and Advances a) Production & Marketing Credit b) Conversion of Production Credit into MT Loans c) MT & LT Project Loans 48,338 129 30,762 2 140 2,323 70,860 33,885 193 25,432 0 167 182 66,078 88 230 2,520 14,453 (-)64 5,327 2 (-)27 2,141 4,782 (-)16 (-)5 (-)50 23,203
Commercial Paper
2,245
6,448
(-)4,203
Term Money Borrowings
182
110
72
RIDF Deposits
75,107
67,878
7,229
d) Interim finance e) LT Non Project Loans
STCRC Fund
20,000
14,622
5,378
f) Other Loans g) RIDF Loans
Other Liabilities
6,345
5,546
799
h)Co-finance 72 (Net of Provision) Fixed Assets Others Assets Total 225 2,470
Other Funds
4,953
6,171
(-)1218
Total
1,82,0751,58,872
23,203
1,82,0751,58,872
KEY DATA REFERENCESParticulars Unit Numerical Value 2010-11 2011-12
Amount (` crore) 2010-11 2011-12
Economic Indicators Overall GDP 1 % Growth 8.4 6.5 Agri GDP 1+ % Growth 7.0QE 2.8RE Share of Agri GDP in total GDP % 14.5QE 13.9AE South-west Monsoon % deviation from normal 2 1 GLC % increase 21.79 8.70 4,68,291 5,09,040 Foodgrains production million tonnes 244.80 252.603rd AE Oilseeds production million tonnes 32.50 31.203rd AE Sugarcane production million tonnes 342.40 345.703rd AE Cotton production million bales++ 33.00 35.003rd AE KCC Issued million 10.16 10.07 43,370 54,269 Development Initiatives Watersheds No.66 41 FIPF- projects No. 45 41 Tribal development projects No. 126 98 374 291 FTTF No. of projects 512 395 45 45 Farmers Club No. of clubs 21,903 2,5243 NABARD-KfW Projects No. 8 8 41 136 RIF- promotional programmes No. of projects 122 108 11 8 REDP No. 3,327 9,852 12 13 SCC Issued lakh 1.20 0.94 514 496 FITF & FIF No. of projects - SHG Loan Disbursed* lakh 15.86 11.96 14,453 14,548 Consultancy Assignments - Contracted No. of projects 62 88 24.13 26.87 R&D Fund - Sanction No. of projects 1.09 17.67 Business Operations Financial Support by NABARD 60,48382,339 Refinance - ST Credit ST (SAO) - SCB No. 21 23 23,759 33,996 -RRB No. 81 80 9,799.69 13,926 Weavers - SCB No. 3 3 216 190 ST (OSAO) - RRB 600 677 Refinance - Investment Credit 13,486 15,422 Farm Sector 5,055 6,525 NFS 3,446 3,574 SHG 2,545 3,073 Co-financing projects No. 8 3 12 14 RIDF Loans - Sanction No. of projects 41,779 18,162 18,315 20,701 - Disbursement 12,060 14,927^ Performance of RFI ST Co-operatives SCB in profit @ No. 29 29 491 521 DCCB in profit @ No. 324 317 1,691 1,457 LT Co-operatives SCARDB in profit @ No. 10 5 401 367 PCARDB in profit @ No. 295 329 401 367 ST Co-operatives - NPA Position SCB - NPA @ % to loan O/S 8.84 9.01 4,352 5,719 DCCB - NPA @ % to loan O/S 12.96 11.61 16,396 15,247 LT Co-operatives - NPA Position SCARDB - NPA@ % to loan O/S 45.06 44.81 5,648 6,116 PCARDB - NPA @ % to loan O/S 5187 51.96 4,889 4,834 RRB RRB in profit No. 75 79 2,421 2,469 RRB - NPA Position % to loan O/S 3.75 4.14 Inspection of banks@@ No.302 319 CCB@@ No.260 240 RRB@@ No.42 48 Financial Performance & Management of Resources Total Working Funds 1,58,872 1,82,075
QE: Quick Estimate RE : Revised Estimate P : Provisional 1 : At Factor Cost at 2004-2005 prices + : Includes agriculture, forestry and fishing ++ : Of 170 kgs each @@ : Statutory Inspections ^ : inclusive of warehousing refinance to Banks @ : Data pertains to financial years 2009-10 & 2010-11 AE : Advanced Estimate. *: Data pertain to 2009-10 & 2010-11
PRINCIPAL OFFICERS(31 March 2012) EXECUTIVE DIRECTORS
S. K. Mitra
V. Ramakrishna Rao
B. S. Shekhawat
CHIEF GENERAL MANAGERS (Rural Development Banking Service)
C.K. Gopalakrishna
P . Satish
K.C. Shashidhar (Kerala)
Dr. Venkatesh Tagat
P . Mohanaiah (Andhra Pradesh)
M.V. Ashok (Maharashtra)
K.K. Gupta (Odisha)
S. Akbar (Madhya Pradesh)
A. K. Srivastava
K. Muralidhara Rao
Dr. S. L. Kumbhare
J. G. Menon
V. Mohan Doss (Bihar)
Niraj Kumar Gupta
A. D. Ratnoo (Rajasthan)
K. S. Padmanabhan
R. Amalorpavanathan (BIRD, Lucknow)
Mahinder Kumar
N. Krishnan (Uttar Pradesh)
Dr. Rajender Singh
A. K. Mukhopadhyay (NRMC)
S. N. A. Jinnah (Karnataka)
K. Jindal (Punjab)
K. Sayeed Ali (Haryana)
H. R. Dave (Gujarat)
M. K. Mudgal
Smt.. L. Venkatesan (Tamil Nadu)
Dr. S. Saravanavel (Jharkhand)
A Lahiri
K. R. Nair
S. C. Rabra (Jammu & Kashmir)
Naresh Gupta (Himachal Pradesh)
S. K. Bansal (Chhattisgharh)
A. P . Sandilya
D. V. Deshpande (Bihar)
S. Selvaraj (Uttarakhand)
K. Venkateswara Rao
M. I. Ganagi
R. M. Kummur
G. R. Chintala (New Delhi)
Subrata Gupta
Jiji Mammen (Rajasthan)
S. Padmanabhan (West Bengal)
CHIEF GENERAL MANAGERS (Legal/Technical Service)
U. N. Srivastava (Legal)
Neeraj Kumar (Technical)
Dr. R. N. Kulkarni (Economic)
J. S. Pynadath (Technical)
OFFICERS-IN-CHARGE OF REGIONAL OFFICES/ CELL TRAINING INSTITUTIONS
R. K. Das (Mizoram)
M. M. Baheti (BIRD, Mangalore)
Dr. U. S. Saha (Nagaland)
Dr. S. D. Kulkarni (Goa)
R. K. Mishra (BIRD, Bolpur)
S. Athirstavel (Andaman & Nicobar Islands)
P . C. Chaudhri (Sikkim)
S. V. Nemlekar (Manipur)
N. Remesh (Tripura)
M. T. Wankhede (Meghalaya)
S. N. Chalia (Arunachal Pradesh)
Des Raj (Srinagar Cell)
HighlightsEconomic Environment1. Indian economy, one of the key drivers of global growth, had a relatively slower GDP growth at 6.5 per cent in 2011-12 which can be attributed to the slowdown in the world economy, as well as to domestic factors such as inflation, tight monetary policy and cutting back on the fiscal stimulus. Lower growth of 6.5 per cent in the economy was mainly on account of slippage in the manufacturing sector growth (3.9 per cent as against 7.2 per cent in 2010-11) as also agriculture sector (2.8 per cent against 7.0 per cent in the preceding year). With near double-digit growth, it was the services sector which held Indias growth performance together. 2. Growth of consumption expenditure and gross fixed capital formation in real terms was 6.0 per cent and 5.6 per cent, respectively, during 2011-12, compared to 8.1 per cent and 7.5 per cent, in 201011. Consumption expenditure grew, though at a lesser rate, mainly due to largely consistent private consumption. 3. Headline inflation, after remaining persistently high over the past two years showed signs of moderation towards the end of 2011-12. Financial year 2011-12 started off with a headline inflation of 9.7 per cent, which briefly touched double digits in September 2011, before coming down to 6.6 per cent in January 2012. The shift in the nature and causes of inflation in India was a natural fallout of the structural changes that the economy had undergone. Both domestic and global factors determined the inflationary trend. However, the inflationary pressures during 2011-12 in India was due to the interplay of a number of immediate and some underlying long-term factors such as high price of primary articles driven by vegetables, eggs and meat brought about by changing dietary pattern, increasing global commodity prices, etc. 4. Agricultural exports increased from `1,13,117 crore during 2010-11 to `1, 41,095 crore during 201112, registering a growth of 24.73 per cent. Increase in agricultural exports has been mainly due to higher i exports of basmati rice, raw tobacco, meat and meat preparations, castor oil and tea. 5. Moderate growth rate of agriculture (2.8 per
cent) was in the backdrop of several constraints which are long term in nature. Evidence shows that besides tackling low growth in the agriculture sector, dealing with high and increasing volatility in the wake of climate change, is going to be a major policy challenge. Moreover, Indian agriculture growth has been varying considerably at the state level, implying that uniform prescriptions across the states may not work. 6. Small farmers, who form 83 per cent of the
numbers, now operate about 41 per cent of the total area, indicating that the base of Indian agriculture is getting smaller. Estimates suggest that with 51 per cent share in the value of agriculture output, small holders contribute significantly to food security. Therefore, the biggest challenge today is ensuring that the small holders do not get marginalised and excluded from the benefits of the growth process. 7. Since a large part of agriculture depends on
rainfall, receiving 899.9 mm of rainfall which was 1.0 per cent more than the Long Period Average (LPA) during the South-West monsoon (June-September) 2011, was a positive feature. Reservoirs also showed normal levels of water availability. 8. Production of food grains during 2011-12 was
at an all time record level of 252.56 (3rd Advanced Estimate) million tonnes mainly due to increase in production of rice and wheat. This happened despite a decline in overall area under food grains during 2011-12 (1,254.92 lakh ha.) as compared to 2010-11(1,267.65 lakh ha.). The decline was due to a shortfall in the area under jowar in Maharashtra, Rajasthan and Gujarat; bajra in Maharashtra, Gujarat and Haryana; and in pulses in Maharashtra, Uttar Pradesh, Andhra Pradesh and Rajasthan. The area under coarse cereals and oilseeds has also come down as compared to the previous year.
9.
With urbanisation and economy growing in
` 5,09,040 crore as on 31 March 2012, achieving 107.2 per cent of the target. Commercial banks, Cooperative banks and Regional Rural Banks disbursed ` 3,68,616 crore, `86,185 crore and `54,239 crore, respectively, constituting 72 per cent, 17 per cent and 11 per cent of the total credit flow during 2011-12. 15. The share of Gross Capital Formation (GCF)
the range of 7 to 8 per cent, there has been a shift in the demand from cereals to non-cereal food items like pulses, edible oils, fruits, vegetables, dairy products, meat and fish. These accounted for 70 per cent of the wholesale price index (WPI) basket for primary food items. The food inflation during the year were largely due to the constraints experienced in increasing the supply of these commodities in the short run, as compared to their demand. 10. On the agricultural inputs side, seed sector
in agriculture & allied sector in total GCF over the past few years has been hovering between 6 and 8 per cent as compared to about 18 per cent observed in early 1980s, implying that the non-agriculture sectors have been receiving higher investment resulting in growth disparities. This is in line with the falling share of agriculture in the overall GDP , which is in conformity with the development patterns observed elsewhere. Yet keeping in view the high population pressure on agriculture, the need for substantial increase in investment felt. Capital in agriculture in is being increasingly formation agriculture
exhibited an improved performance. During 2010-11, 277.3 lakh quintals of certified/ quality seeds were distributed. Production of breeder and foundation seed reached 1.19 and 17.53 lakh quintals, respectively during 2010-11, registering 13.53 and 7.8 per cent growth over the previous year. 11. During 2010-11, an irrigation potential of
566.24 thousand hectares has been created by States from major, medium and minor irrigation projects under the Accelerated Irrigation Benefit Programme (AIBP). 12. Despite making efforts to develop irrigation,
( `1,42,254 crore in 2010-11) now primarily relies on private investment. Considering that public investment has an enabling effect on private investment, the stagnant share of the former is a matter of concern. 16. Kisan Credit Card (KCC) scheme introduced
ensuring adequate water availability for agriculture is becoming an increasingly important concern. The efficiency of surface water irrigation has been on the decline, while groundwater, the major source of irrigation, suffers from over-exploitation in most of the States resulting in steep decline in the groundwater table. 13. Nearly, 65 per cent of agriculture is rain-fed
in 1998-99 has facilitated smooth flow of credit to farmers. During 2011-12, 10.07 million KCCs were issued by banks with sanctioned credit limit of ` 54,269 crore. Of the 113.91 million credit cards issued cumulatively, commercial banks issued 53.06 million cards (46.58%) followed by Co-operative Banks with 43.66 million cards (38.33%) and Regional Rural Banks with 17.19 million cards (15.09%). 17. 8.0, Minimum Support Price (MSP) for common 14.73, 6.67, 10.41 and 13.79 per cent,
and located in resource poor regions. These regions are home to a majority of small and resource poor farmers whose contribution to food and nutrition security has been acknowledged. Therefore, there is a need for greater understanding of rain-fed agriculture and framework for its development. 14. Agriculture credit growth as a facilitator, has
paddy, wheat, arhar, moong and urad increased by respectively, during 2011-12 over 2010-11. There was no change in the MSP of cotton. The procurement of rice and wheat as on March 1, 2012 at 26.8 million tonnes and 28.3 million tonnes, respectively, represented a decline of (-) 21.63 per cent and increase of 25.78 per cent as compared to the corresponding date last year. ii
been consistent during the past few years. As against the target of `4,75,000 crore of credit flow to agriculture for 2011-12, the banking system disbursed
18. GDP.
The significance of agriculture sector in Its wide-ranging impact on reducing
growth is well-recognised The structural concer ns and other issues brought out above, have a critical bearing on the policies and per formance of NABARD.
India is not merely restricted to its contribution to pover ty, tackling inflation and achieving inclusive
Business Operations19. The total financial support extended by per cent in Eastern Region and 55 per cent in the rest of the country. 23. With a view to augmenting ST-SAO Refinance NABARD during 2011-12 stood at `82,339.48 crore, registering a growth of 36.13 per cent over 2010-11.
Production Credit20. The total production credit disbursed, as on 31 March 2012, was ` 48,981 crore. During 2011-12, ST-SAO credit limits were sanctioned to 23 SCBs aggregating `33,995.67 crore as compared to `23,759.34 crore to 21 SCBs during 2010-11. The credit limits included `3,171.70 crore for the Oilseeds Production Programme (OPP), ` 285.57 crore for National Pulse Development Programme (NPDP) and `1,106.47 Population crore for the SCBs Development reached a of Tribal (DTP). maximum
to farmers through the co-operative credit structure, a separate direct credit window facility was launched for well-functioning Central Co-operative Banks. In addition, NABARD sanctioned refinance to Regional Rural Banks and Public Sector Banks for financing Primary Agriculture Credit Societies (PACS) against promissory notes, subject to the Banks furnishing a declaration in writing setting out the purposes for which they have made loans and advances or any such reasons as may be required by NABARD. A credit limit of ` 79.47 crore was sanctioned to Public Sector Banks for financing PACS. 24. During 2011-12, NABARD sanctioned limits of
outstanding of `33,995.61 crore during 2011-12 with 100 per cent achievement level. 21. During 2011-12, ST (Weavers) credit limits
`13,925.66 crore to 81 RRBs under ST-SAO as against `9,799.69 crore sanctioned to 80 RRBs in 2010-11. The limit included `1,236.29 crore for Oilseeds Production Programme (OPP), ` 251.90 crore for Development of Tribal Population (DTP) and `27.91 crore for National Pulses Development Programme (NPDP). The maximum outstanding was `13,925.66 crore with 100 per cent achievement level under the limit sanctioned during 2011-12. Six RRBs in the North-Eastern Region were sanctioned credit limit of `104.94 crore, which was fully utilised by them. 25. RRBs were also provided additional refinance
aggregating ` 190.01 crore were sanctioned to three SCBs (Andhra Pradesh- ` 60.32 crore, Tamil Nadu` 122 crore & Puducherry` 7.69 crore) activities have for as production, Handloom procurement, Weavers marketing (HWG)
against ` 215.75 crore during 2010-11. So far, 4,624 Groups been formed in various States viz. Odisha (1,366), Andhra Pradesh (1,258), Assam (272), Bihar (82) Jharkhand (500), Madhya Pradesh (266), Uttar Pradesh (272), West Bengal (88) and in other States (520). Of these, 2,062 HWGs have been credit linked. 22. In order to enhance ground level credit for
of 10 per cent for 2011-12, only to enhance crop loans disbursed by them. Thus, RRBs were eligible for refinance upto 55 per cent of their crop loan disbursements in North-Eastern and Hilly Regions; upto 35 per cent in Eastern region and 30 per cent in the rest of the country.
crop loans by Co-operative Banks, it was decided to provide additional refinance of 10 per cent for the year 2011-12 only. Thus, SCBs were eligible for refinance upto 70 per cent of their crop loan disbursements in North-Eastern and Hilly Regions; 60
iii
26. Finance
In the Budget speech for 2011-12, the Minister announced that a Centrally
29.
NABARD continued to act as the nodal
agency for GoI package for restructuring of term loans of co-operative sugar mills. Out of `200.13 crore received from GoI towards interest subvention, ` 200.02 crore was disbursed to 76 co-operative sugar mills in Maharashtra and Odisha. NABARD also acted as the nodal agency for routing interest subvention to co-operative banks and RRB under Scheme for extending Financial Assistance to Sugar Undertakings 2007. Out of ` 383.59 crore received from GoI during the year 2011-12 towards interest subvention, ` 383.38 crore was released to 212 sugar mills operating in 11 States viz., Maharashtra, UP, AP , Tamil Nadu, Uttarakhand, Odisha, Madhya Pradesh, Gujarat, Goa, Punjab and Karnataka.
Sponsored Plan Scheme on Revival, Reform and Restructuring Package for Handloom Sector with a total outlay of ` 3,884 crore, be implemented by NABARD. The revival package includes waiver of overdue loans, capacity building, technology upgradation and introduction of Common Accounting System and Management Information System. So far, 19 States have given their consent to implement the package in their States out of which, tripartite agreement has been signed between GoI, NABARD and the Governments of Andhra Pradesh, Kerala, Uttarakhand, West Bengal and Karnataka. 27. The Ministry of Textiles (MoT), GoI vide its
notification dated 9 January 2012 issued operational guidelines for Institutional Credit component under the Integrated Handloom Development Scheme (IHDS) for the handloom sector in the country. NABARD has been designated as the implementing agency (@ for channelising per individual the Margin & Money Interest ` 4,200/weaver)
Investment Credit30. During the year 2011-12, the refinance disbursement for investment credit for farm and non-farm sector activities was ` 15,421.70 crore as against the budget of ` 14,995.00 crore. During 2011-12, Commercial Banks have availed of refinance amounting to ` 8,433.75 crore, SCARDBs and SCBs have availed of refinance amounting to ` 2,444.93 crore and ` 1,192.29 crore, respectively and RRBs have availed of refinance amounting to ` 3,086.19 crore. The spatial distribution of refinance disbursement across regions indicated that a major share had been accounted for, by the States in the southern region (48.20%), followed by northern (15.7%), central (12.10%), eastern (11.60%), western (10.80%), and north-eastern region (1.60%). During 2011-12, the major share of refinance has been accounted for, by NFS (23.18%) followed by SHG (19.92%), (10.03%). 31. With effect from 2 September 2011, refinance Farm Mechanisation (13.84%), Animal Husbandry (10.18%) and Plantation & Horticulture
Subsidy (@ 3 per cent per annum for 3 years) components under the Package. The first instalment of ` 7.57 crore has been released by the MoT, GoI to be passed on to the banks. 28. scheme The continuance of the interest subvention was announced in the Union Budget
2011-12, making interest subvention available at 2 per cent per annum to public sector banks, co-operative banks and RRBs for deploying their own funds for crop loan upto ` 3 lakh per farmer, provided the ultimate borrowers were given loans at 7 per cent interest rate per annum. Additional subvention of 3 per cent was announced for 2012-13 to those farmers who repaid crop loans promptly within one year of disbursement. Interest subvention was given to NABARD for providing concessional refinance to SCBs and RRBs at 4.5 per cent interest rates. The Interest subvention for 2011-12 was estimated at ` 3,000 crore.
to SCARDBs was extended as term loans as against the earlier practice of contribution to floatation of debentures. Under the new system, all SCARDBs are eligible for refinance of 90 per cent of the eligible bank loan disbursed.
iv
Rural infrastructure Development Fund32. The Corpus of the Fund has grown to `18,000 crore under Rural infrastructure Development Fund (RIDF) XVII (2011-12) from an allocated amount of `2,000 crore under RIDF I (1995-96), taking the cumulative allocation to `1,52,500 crore (which is inclusive of `18,500 crore under a separate window for funding rural roads under the Bharat Nirman Programme). The Union Budget for 2011-12, allocated an amount of `18,000 crore under RIDF XVII during 2011-12, out of which `2,000 crore has been exclusively dedicated towards creation of warehousing facilities in different States on a priority basis. 33. As on 31 March 2012, 18,162 projects
Kerala (95%), Haryana and Uttarakhand (93%), Tamil Nadu (92%) and Chhattisgarh (91%). 35. The The cumulative deposits received under RIDF total loan outstanding under RIDF as on
stood at `1,11,025.94 crore as on 31 March 2012. 31 March 2012, was `70,860.31 crore. 36. Consequent upon the change in bank rate
from 6 per cent to 9.5 per cent w.e.f. 13 February 2012, the rate of interest payable to NABARD by the State Governments has been fixed at the earlier bank rate viz., 6 per cent plus 0.5 per cent (i.e. 6.5 per cent) till 31 March 2012. Loan disbursements from RIDF to the State Governments on or after April 01, 2012 has been fixed at 1.5 per cent below the prevailing bank rate. 37. Among the new steps initiated in 2011-12 for Approvals (AA) from the State
involving a loan amount of `20701.12 crore were sanctioned under RIDF XVII. Of the total number of projects sanctioned, irrigation projects accounted for 27.50 per cent followed by rural road projects (24.20%), social sector projects (17.90%), rural bridges (12.90%) and agri related projects (9.70%). An amount of ` 1,493.82 crore was sanctioned for warehousing projects as at end of March 2012. Cumulatively, 4,62,229 projects were sanctioned since the inception of RIDF involving an amount of `1,42,470.65 crore as on 31 March 2012. Of the cumulative RIDF loans sanctioned as on 31 March 2012, 42 per cent went to agriculture and related sectors, including irrigation and power; 15 per cent to social sector projects like, health, education and rural drinking water supply; while the share of rural roads and bridges was 31 per cent and 12 per cent, respectively. 34. Taking into account phasing of the projects, had a total pool of projects of
quick grounding of RIDF projects, the receipt of Administrative Governments was made mandatory before submission of projects to NABARD for sanction; 20 per cent of RIDF was specifically allocated for social sector projects and steps initiated for on-line/web-based monitoring of RIDF projects. 38. NABARD set up the Rural Infrastructure
Promotion Fund (RIPF) with a corpus of ` 25 crore on 1 September 2011 for augmenting the skill sets and technical know-how of personnel engaged in the creation of rural infrastructure. The Fund also aims at creation of critical, low cost, last-mile rural infrastructure that would benefit the village community at large and form the basis for larger infrastructure projects under RIDF. The small investments under RIPF is expected to attract and make larger investments feasible under RIDF. As on 31 March 2012, 8 proposals amounting to `0.56 crore have been sanctioned under RIPF. 39. In the Union Budget 2011-12, Government of
under various tranches (RIDF I to XVII), State Governments `1,30,009 crore as on 31 March 2012. During the year, disbursements were made to the tune of `14,927 crore (inclusive of ` 759 crore sanctioned and released as refinance under Warehousing facilities to Banks). A state-wise analysis of ratio of disbursements to the approved phasing of sanctions reveals that Mizoram topped with 132 per cent, followed by Goa (106%), Meghalaya (100%), Manipur (96%), Maharashtra and
India (GoI) had made a dedicated allocation of `2,000 crore for financing warehousing under RIDF. As on 31 March 2012, total sanctions under the scheme, stood at `1,493.82 crore, to four State Governments viz., Bihar, Karnataka, Tamil Nadu and Puducherry. v
40.
NABARD
also
introduced
a
scheme
for
opportunities. To take advantage of these, building up institutions and arrangements based on principles of aggregation are essential. These would include co-operatives as well as producers organisations and its variants. The new business initiatives need to be viewed in the above context. 42. Financing Producers Organizations; creation of
providing refinance to banks, against loans extended by them to private entities and the agencies owned/ assisted by government, for creation of warehousing infrastructure. Refinance from NABARD was made available at an interest of 8 per cent for a period of 07 years (including a moratorium of 02 years). NABARD will also provide financial incentive to those borrowers, who repay their loans, along with interest, as per the repayment schedule prescribed by the financing bank. An aggregate amount of ` 759.07 crore was sanctioned and disbursed to banks. With this, the total sanctions against the allocation of ` 2,000 crore stood at ` 2,252.89 crore as on 31 March 2012.
new line of financial support for DCCBs; bringing co-operatives on a higher technology platform of Core Banking Solutions (CBS) to create a level playing field to compete with the other banks for business and growth; engaging with the Primary Agricultural Co-operative Societies (PACS) to convert them in to multi-service centers are all such initiatives which eventually have huge development potential and are inclusive in nature. The new business initiatives thus, are in tune with organisational strategy of business for development. 43. NABARD Infrastructure Development
New Business Initiatives41. As part has for of set funding the new business initiatives, NABARD support up NABARD of rural Infrastructure infrastructure
Development Assistance (NIDA) to provide credit projects. Ensuring investments in agriculture in the eastern states was another important initiative. The focus of the new initiatives was on excluded areas and the small operators who will have to compete in the markets, which are quite demanding in terms of quality and food safety. Participating in these markets poses challenges, but they also bring more
Assistance (NIDA), a new line of credit support for funding of rural infrastructure projects, funds State owned institutions/ corporations both on-budget as well as off-budget for creation of rural infrastructure outside the ambit of RIDF borrowing. The cumulative sanctions under NIDA during the year 2011-12 was ` 890.85 crore and disbursement of ` 422.90 crore.
Development and Promotional InitiativesFarm Sector44. During the year, 41 watershed projects were sanctioned under the Watershed Development Fund, taking the cumulative number of such projects to 620, covering an area of 5.29 lakh ha. in 15 States, with a total commitment (loan and grant component) of `239.99 crore. Sixty one projects graduated to Full Implementation Phase (FIP), taking the number of such projects to 316. NABARD anchors four types of watershed development programmes in the country namely, (i) Indo-German Watershed Development vi Programme (IGWDP), (ii) Participatory Watershed Development Development Programme Fund (WDF), under (iii) Prime Watershed Ministers
package for distressed districts in four States and (iv) Integrated Watershed Development Programme (IWDP) in Bihar, supported by the Planning Commission. 45. Tribal Development Fund programme, in its of tribal communities, covering
7th year of implementation, has enhanced livelihood opportunities traditional tribal livelihoods such as bee keeping,
sericulture, organic wadis and mixed wadis (perennial fruit crops + creeper vegetables + spices). During the year, financial assistance of `290.63 crore was sanctioned for 98 projects benefiting 72,419 tribal families in 16 States. The cumulative sanction as on 31 March 2012 was `1,208.23 crore, covering 3,22,912 families in 415 projects across 26 States/ UTs. During the year, a new Wadi model was introduced in Alirajpur, Madhya Pradesh that generated income for the farmers from the first year of implementation by combining the mandap system of vegetable cultivation along with cultivation of perennial fruit crops. 46. During 2011-12, 41 projects were sanctioned
(16.52%) and Northern (12.43%) regions, while NER accounted for 2.75 per cent. 279 Farmers Clubs functioned as Business Facilitators/Business Correspondents and 761 Farmers Clubs as Self Help Promoting Institutions. 49. The Umbrella Programme on Natural
Resource Management (UPNRM), which aims to boost rural livelihoods by supporting community-managed sustainable natural resource management projects, has supported 104 projects in 16 States with disbursements to the tune of `131.89 crore. 50. A concessional refinance support scheme was
launched by NABARD during the year to facilitate institutional credit flow for key investments in the Eastern Region that have a direct bearing on enhancing crop productivity. The scheme provides refinance at a concessional rate of 7.5 per cent per annum to seven Eastern states, viz., Assam, Bihar, Chhattisgarh, Jharkhand, Odisha, West Bengal and Uttar Pradesh. The key activities for concessional refinance support under the scheme, include (a) Water Resources Development (b) Land Development (c) Farm Equipment and (d) Seed Production units. The total lending target of the banks for the financial year 201112 was `3,912 crore. 51. include During the year, two new initiatives for the Pilot project for Augmenting Farm
under Farm Innovation and Promotion Fund (FIPF) in 14 States with financial assistance of ` 56.53 crore including the project on Augmenting Farm Productivity in Balasore District in Odisha with a grant support of ` 48.08 crore phased over a period of three years. The Fund also supported the pilot testing of the unique mobile-enabled Kisan Credit Project (mKCC) project in Villupuram district of Tamil Nadu. The project enabled farmers to transact on their loan accounts with Pallavan Grama Bank using their mobile phones and enter into mobile supported cashless transactions with agriculture input dealers. 47. The Farmers Technology Transfer Fund
(FTTF), with a corpus of `100 crore, supports adoption of appropriate technologies by farmers. During the year, 395 proposals were sanctioned under FTTF in 29 States with financial assistance of `20.59 crore as grant. The cumulative disbursement was `44.59 crore. 48. With the launching of 25,243 new Farmers
augmenting farm productivity were launched. These Productivity in Select Districts and the Pilot Project for Augmenting Farm Productivity in Balasore District, Odisha. The Pilot Project for Augmenting Farm Productivity in Select Districts is a comprehensive package for augmenting farm production and productivity by addressing all interlinked components of farming viz., agricultural inputs, technology, credit, post-harvest management, value addition and marketing in a holistic manner. One district each has been selected in 11 States for implementation, viz. , Bihar (Bhojpur), Chattisgarh (Bilaspur), Haryana (Sirsa), Jharkhand (Deoghar), Karnataka (Belgaum), Maharashtra (Yavatmal), Madhya Pradesh (Shahdol), Odisha (Balasore), Rajasthan (Bikaner), Uttar Pradesh vii
Clubs during the year, the number of clubs reached 1,01,951 as on 31 March 2012. NGOs promoted maximum number of clubs (15,870) followed by co-operative banks (4,359), commercial banks (2,104), RRBs (2,103) and SAUs/KVKs/other agencies (807) during the year 2011-12. Eastern region had the highest share (24.99%) of clubs followed by the Central (24.83%), Southern (18.48%,) Western
(Azamgarh) and West Bengal (Nadia). The Pilot Project at Balasore District in Odisha has been sanctioned with a total financial outlay of `3,211.86 crore, including a grant component of ` 48.08 crore to be supported under the Farm Innovation Promotion Fund (FIPF), for a period of three years i.e., from 2012-13 to 2014-15.
to support development, promotional and Information and Communication Technology (ICT) interventions leading to financial inclusion are in operation in NABARD. As on 31 March 2012, the cumulative sanctions under FIF and FITF were `114.62 crore and ` 343.48 crore, respectively and disbursements `36.46 crore and ` 184.16 crore, respectively. This year, RRBs were supported for implementation of CBS and card based ICT solutions using the Application Service Provider (ASP) model and for holding financial literacy awareness camps in villages. 56. A Centre of Excellence for Rural Financial
Rural Non farm Sector52. The Rural Innovation Fund, which facilitates innovative, risk-mitigating experiments with potential to promote livelihood opportunities in rural Farm, Non-Farm and micro-Finance sectors, supported 108 new innovative projects during the year. The cumulative projects supported under the Fund are 483 in number, as on 31 March 2011 of which, 150 have been completed and 67 are in advanced stages of implementation. 53. With the sanctioning of 9,852 REDPs/ SDPs
Institutions (CERFI) was set up during the year with the objective of embedding Aadhar numbers into the CBS platform of RRBs, for bringing about higher accountability and transparency in last- mile banking.
Micro Finance57. The SHG-Bank Linkage Programme was given a renewed thrust with the launch of SHG-2. The focus of SHG-2 would be on voluntary savings, cash credit as a preferred mode of lending, scope for multiple borrowings by SHG members in keeping with repaying capacity, avenues to meet higher credit requirements for livelihood creation, SHG Federations as nonfinancial intermediary, rating and audit of SHGs as part of risk mitigation system and strengthening monitoring mechanisms. 58. The GoI communicated its decision of only
with grant support of `13.09 crore during 2011-12, NABARD has so far supported 27,711 REDPs/SDPs with grant of `96.45 crore, covering around 6.93 lakh unemployed rural youth. During the year, NABARD initiated a vocational training programme for blue collar entry level workers like masons, welders, cooks, technicians and drivers on a pilot basis in collaboration with the PanIIT Alumni Reach for India (PARFI), an organization created by IIT alumni. It is a loan-based approach to vocational training. 800 students have been trained through this model with a 100 per cent placement rate. 54. During the year, 94,479 Swarojgar Credit
sanctioning Cash Credit Limits to SHGs from 17 November 2011, so as to address the issue of delayed/ limited /non-approval of repeat loans to SHGs, to ensure cost effectiveness to clients and to provide greater operational flexibility to SHG clients. 59. During 2011, loans amounting to `14,547.73
Cards (SCC) with credit limit of ` 495.81 crore were issued for facilitating hassle-free credit for investment and working capital requirements of small/micro entrepreneurs. The cumulative total of SCC as on 31 March 2012 was 13.06 lakh, involving a credit limit of `5,445.32 crore.
crore were disbursed to 11,96,134 SHGs. As on 31 March 2011, there were more than 74.62 lakh savingslinked Self Help Groups (SHG) and more than 47.87 lakh credit-linked SHGs covering 9.7 crore poor households under the micro-finance programme. viii
Financial Inclusion55. The Financial Inclusion Fund (FIF) and the Financial Inclusion Technology Fund (FITF), dedicated
60.
During 2011-12, `33.31 crore was released
by involving an anchor NGO in each of the selected backward districts of the country. The NGO will serve not only as an SHPI, but also as a banking/business facilitator. The scheme will be implemented in 109 selected backward/LWE districts of the country. 66. As stated in the Budget Speech of 2011-12, a
under Micro-Finance Development and Equity Fund (MFDEF); of which, `28.68 crore was grant support for promotional activities and `4.63 crore for CS/RFA to MFIs, as against `29.95 crore and `17.43 crore, respectively, in the previous year. 61. An amount of `36.68 crore was sanctioned as
Women SHGs Development Fund with a corpus of `500 crore was created to empower women by promoting their Self Help Groups. This Fund will also support the objectives of Aajeevika i.e. the National Rural Livelihood Mission. It will empower women SHGs to access bank credit.
grant for promotion of 1.94 lakh JLGs across the country till 31 March 2012. During the year, banks disbursed a loan of ` 946.81 crore to 1,29,646 JLGs upto 31 March 2012 taking the cumulative loan disbursed to `2,092.10 crore for 2,70,691 JLGs. A unique project was sanctioned by NABARD during the year, to the Bihar Kshetriya Gramin Bank, Munger for promotion of two JLGs comprising sex workers, one for taking up tailoring activity and the other for opening a shop selling bangles. 62. During the year, 1,914 MEDPs were
NABARD Consultancy Services67. During the year, NABCONS contracted 88 executed 125 assignments, including 6 assignments for a contract value of ` 26.87 crore. The company international visitors programmes. NABCONS earned `17.30 crore as professional fees on assignments executed, ` 0.43 crore as commission from mutual fund distribution and ` 2.62 crore as interest on investments, aggregating a total income of `20.35 crore.
conducted for 56,292 members on various locationspecific farm, non-farm and service sector activities. Cumulatively, 6,363 MEDPs had been conducted for 1,64,948 participants. 63. During 2011-12, NABARD Financial Services
Ltd., (NABFINS), disbursed loans to the extent of `213.58 crore to 6,915 SHGs through 67 Business Correspondents (BCs), taking the cumulative disbursement to `265.54 crore to 8,968 groups. Loans other than to SHGs were disbursed to the extent of `2.30 crore during the year, taking the cumulative of other loans disbursed to `5.25 crore. 64. The Centre for Micro-finance Research (CMR) undertook
Research and Development Activities68. research During the year, `17.67 crore was utilised projects/studies (` 0.70 crore), seminars from the R&D Fund for supporting activities like ( `0.85 crore), training/summer placement ( `15.57 crore), NABARD Chair Professor Scheme (`0.48 crore) and other activities (`0.07 crore). As on 31 March 2012, the cumulative disbursement stood at `153.86 crore. 69. During 2011-12, five research projects
brought out two issues of its half-yearly journal, The Micro-finance Reviewand its sub-centres research on 41 prioritised themes during the year. Grant assistance of `199.33 lakh was released by NABARD during 2011-12 to CMR, taking the cumulative assistance to `560.01 lakh. 65. A new scheme for Promotion of Women SHGs
involving a grant assistance of `0.49 crore were sanctioned. Further, seven projects/studies sanctioned earlier were completed during the year. 70. crore During the year, grant assistance of ` 1.14 was sanctioned to various universities,
in backward and Left Wing Extremism (LWE) affected districts of India was formulated in association with the GoI, as a viable and self-sustainable model for promotion and financing of Women Self Help Groups ix
research institutes and other agencies for organising 139 seminars, conferences, symposia and workshops covering subjects/areas related to agriculture and rural development including Green Revolution-II,
Agri-Marketing, Micro Finance, Financial Inclusion, Sustainable Livestock and Poultry Development, Plant Genetic Biotechnology, Resources Conservation Security of and Animal Climate Water
and initiate suitable policy interventions by agencies concerned. 71. carved NABARDs development initiatives have been out under the overarching objective of
Change, Food Security, Organic Farming, Economic Reforms and Agriculture, Advances in Aquaculture, Regional Imbalance Inclusive Growth, SHG and Women Entrepreneurship and Coffee Research, etc. The grant support extended to the organisers enabled them to document the proceedings and publish background papers, thus facilitating wider dissemination of the recommendations/action points
sustainable inclusive growth of Indias development policy. To make a perceptible difference on ground, addressing the concerns of small operators and excluded areas and deploying technology upon finding space for location/product specific viable delivery models, which can be up-scaled have been the principles which have guided various development initiatives.
Capacity Building of Client InstitutionsInstitutional Development72. During 2010-11, SCB as a group earned overall return of 6.9 per cent, while cost of funds worked out to 5.01 per cent, resulting in financial margin of 1.92 per cent (excluding miscellaneous income of 0.49 per cent). The average transaction cost and risk cost of SCB during the year worked out to 1.37 per cent and 0.39 per cent, respectively. SCB as a group earned a positive net margin of 0.71 per cent in 2010-11, compared to net margin of 1.06 per cent in 2009-10. 73. In the case of DCCB, the overall return on 75. RRBs were given a target of opening 2000 new branches by March 2012. In the current year, as on 31 March 2012, RRBs had opened 913 new branches, taking the cumulative number of branches of all RRBs to 16,914 spread over 635 districts in 26 States and one UT. It is now compulsory for all new branches to be equipped with CBS. CBS has been fully implemented in 80 RRBs. J & K GB has implemented CBS in 90 branches out of 184 branches. Kisan Kshetriya Gramin Bank (UP) has not been able to make any progress on CBS implementation in the bank, as it is linked to its merger with Aryavrat GB.
working funds was 7.62 per cent, while the cost of funds was 5.11 per cent, yielding a financial margin of 2.51 per cent (excluding miscellaneous income of 2.30 per cent). The average transaction cost and risk cost as percentage to working funds were 2.09 per cent and 1.37 per cent, respectively, during 2010-11. The DCCB as a group, earned a net margin of 1.41 per cent during 2010-11. 74. During 2011-12, financial assistance of `7.09
Supervision of Banks76. During 2011-12, statutory inspections of 319 banks (31 SCBs, 240 CCBs and 48 RRBs) and voluntary inspections of 15 SCARDBs have been conducted as on 31 March 2012 as scheduled. The inspections brought out supervisory concerns relating to these institutions, which were communicated to the banks concerned, Registrar of Co-operative Societies (RCS), State Governments (in respect of co-operative banks) and Sponsor Banks (in respect of RRBs) for corrective action. 77. Pursuant to the recommendations of the
crore under Co-operative Development Fund (CDF) was sanctioned and ` 5.34 crore disbursed (including disbursements against sanctions of previous years). As on 31 March 2012, cumulative sanctions and disbursements were `105.26 crore and ` 92.91 crore, respectively. The balance in the Fund as on 31 March 2012 stood at `125 crore. x
Committee on Financial Sector Assessment (CFSA) (Chairman: Dr. Rakesh Mohan, the then Deputy
Governor of RBI), the RBI had revised the licensing norms for co-operative banks during October 2009. The number of licensed SCBs and CCBs stood at 24 and 222, respectively, as on 31 March 2011. During the year, RBI issued licenses to 4 SCBs and 82 CCBs, thus increasing the number of licensed banks
to 332 (28 SCBs and 304 CCBs) as on 31 March 2012. The number of scheduled SCBs remained unchanged States at 16. The problems in attaining by the licensing eligibility by co-operative banks in some were reviewed periodically Government of India.
Organisation, Corporate Governance and Management78. The Board of Directors met seven times cadre. One programme each conducted by NBTC, ZTC and HO, Mumbai covering 31 ST/SC Group B staff. One pre-recruitment Training was conducted at IES, Bandra covering 84 SC/ST participants. 82. During the year, 20 staff members availed of during the year, while the Executive Committee and the Sanctioning Committee for loans under RIDF, met once and nine times, respectively. 79. The repositioning initiative of NABARD was
undertaken with a view to analyse existing financial products and services, types of existing development interventions both internally and through market survey and to design new products, services and networks. Further, the purpose was also to evaluate organisational structure, against repositioning of products and services and set up appropriate structure; system and processes re-engineering. 80. During the period ended 31 March 2012, 744
the facility of the Incentive Scheme for staff members to pursue professional studies. Various Courses being pursued by employees were CFA, CS and MBA from reputed institutions viz., C F Institute of USA and Institute of Company Secretaries of India, Sikkim Manipal University, etc. During the year, 177 officers completed the e-learning programme, Harvard Mentor 10 in collaboration with Harvard Business School, USA. 83. Total staff strength of the Bank as on 31
applications and 101 appeals were received and information provided. 20 hearings on appeals made to Central Information Commission were attended to. Workshops were conducted on Right to Information Act, 2005 through Video Conferencing for selected Regional Offices at HO. 81. During the year, 103 programmes were
March 2012 stood at 4552 of which 836 belong to Scheduled Castes (18.36 %) and 397 to Scheduled Tribes (8.72%). The staff strength of ex-servicemen and physically handicapped employees stood at 80 and 88, respectively, constituting 1.7 per cent and 1.9 per cent of the total staff strength. 84. Industrial relations in the Bank continued to
conducted by NBSC Lucknow covering 2,232 officers (2,049 from NABARD and 103 officials from RFIs) covering Programmes on Watershed Development, TDF, Microcredit, HRMS, Financial Inclusion, Appraisal and monitoring of Infrastructural projects etc. Further, 1,704 officers and 528 officers were trained in in-house and on-location programmes, respectively. During 2011-12, National Bank Training Centre (NBTC), Lucknow and Zonal Training Centre (ZTC), Hyderabad conducted 74 training programmes for 976 Group B and C staff. The College also conducted pre-promotional training programmes for Group B staff for promotion to higher grade in the officers xi
be harmonious during the year. Periodic discussions were held between the Management and the All India National Bank Officers Association and the All India NABARD Employees Association. Five meetings of the Grievances Redressal Committee and three meetings of the Appellate Committee were held during the year. Twenty one grievances and six appeals were received, of which 19 grievances and 6 appeals were processed. The Joint Consultative Committee (JCC) comprising representatives from Bank Management and National Bank Officers Association, met once
during the year to discuss HR issues. 85. Bank has taken steps in implementing IT
by
client
institutions
and
apprise
the
Top
Management of the status. During the year, ID conducted Inspection of 9 Regional Offices and 18 Head Office Departments. The concurrent audit of HO departments, continued to be outsourced to external auditors, while the Concurrent Audit of all ROs/Training Establishments were undertaken by the Concurrent Audit Cells (CAC) set up in the respective RO/TE. ID also inspected NABARD Subsidiaries, viz., Agri Business Finance Finance Ltd, Ltd, Hyderabad, Chennai, and Agri Development Financial NABARD NABCONS,
systems as per the IT roadmap. In continuation of the Banks efforts in this direction, in the financial year 2011-12, implementation of Human Resources Management System (HRMS) and Centralised Loan Accounting & Management System (CLMAS) was initiated after due system studies done in previous financial year. 86. During the year, as on 31 March 2012, the
Audit Committee of the Board (ACB) met four times, while the Risk Management Committee of the Board (RMCB) met thrice. The ACB reviewed the internal inspection/audit function in the institution - the system, its quality and effectiveness with focus on the follow-up of major areas of concern in housekeeping. The RMCB oversaw the functioning of Credit Risk Management, Asset and Liability Management, Operational Risk Management and other risks facing the bank and guided in devising the policy and strategy containing for integrated risk risk management of the for Bank. various exposures
Services,
Bangalore
Mumbai. The Inspection Reports and Flash Reports containing major areas of concern were placed before the MC and ACB for deliberation and guidance.
Visits of Parliamentary Committees87. During the year, nine Parliamentary Committees on Subordinate Legislation, Government Assurances, Agriculture and Official Language for the Central Government have visited NABARD offices at Chandigarh, Shimla, Jaipur, Delhi, Guwahati, Dimapur, Imphal, Kolkata, Port Blair, Chennai, Ranchi, Patna, Bhopal and Mumbai.
Inspection Department continued to monitor defaults
Financial Performance & Management of Resources88. The financial resources of NABARD increased March 2012. The amount of reserves and surplus increased to `16,408 crore on 31 March 2012 from `13,863 crore on 31 March 2011. 90. The total income of NABARD during the year to ` 1,82,075 crore, as on 31 March 2012, registering an increase of 14.60 per cent, over the previous financial year. During the year, total market borrowing of NABARD stood at ` 43,203 crore, constituting 23.73 per cent of the total resources of the Bank. 89. The paid up capital, as on 31 March 2012,
amounted to `10,979 crore as against `9,202 crore for the year 2010-11. The profit before tax and profit after tax stood at `2,252 crore and `1,635 crore, respectively, as on 31 March 2012, as compared to `1,824 crore and `1,279 crore, respectively, in the previous year. The average cost of borrowings (interest expenditure as a per cent of average borrowings) increased from 6.64 per cent per annum during 2010-11 to 6.96 per cent per annum during 2011-12.
stood at `3,000 crore against `2,000 crore on 31 March 2011, with the share of GoI being 99.33 per cent and that of RBI at 0.67 per cent. As per Union Budget 2011-12, Government of India infused `1,000 crore capital in NABARD, which was received on 31
xii
IRural Economic EnvironmentA. Economic Scenarioa. Gross Domestic ProductThe Indian economy continued to be one of the key drivers of global growth, even with its slower Gross Domestic Product (GDP) growth at 6.5 per cent in 2011-12, compared to a growth of 8.4 per cent achieved in two previous years (Table 1.1). The slowdown can be partly attributed to global factors viz., the slowdown in the world economy, exacerbation of the euro zone crisis, hardening of crude oil prices in the international market, as well as to domestic factors, such as the imperatives of dealing with inflation by tightening monetary policy and cutting back on the fiscal stimulus. The slowdown is mainly on account of the sluggishness in industrial sector, which registered a growth rate of 3.9 per cent in theTable 1.1: Economic Indicators Annual per cent change Particulars Overall GDP GDP from Agriculture & Allied Activities Foodgrain Production Industrial Production Inflation as measured by WPI Domestic Savings (as % of GDP) Capital Formation (as % of GDP) Fiscal Deficit (as % of GDP) Imports (% change) Exports (% change) Trade Balance (as % of GDP*) External Debt (as % of GDP*) 2009-10 8.4 1.0 (-)7.1 10.5 3.6 33.8 36.6 6.5 (-)5.0 (-)3.5 (-)2.8 18.1 2010-11 8.4 7.0 (QE) 6.8 7.8 9.4 32.3 35.1 4.8 28.2 40.5 (-)2.7 17.8 4.6 29.4 23.5 (-) 3.6 2011-12 6.5 2.8(RE)
financial year 2011-12 compared to 7.2 per cent in the corresponding period of the previous year. The growth in agriculture was 2.8 per cent, which is much lower compared to the high level of growth achieved during the previous year. With growth rate just short of double digits, service sector continues to be the mainstay of the economy holding Indias overall growth together. 1.2 the Increasing integration of Indian economy with world economy and greater integration of
agricultural sector with the overall economy has thrown up opportunities as well as challenges for agriculture, where concerns regarding food security and the subsidy regime continue to prevail. The sharp distinction between rural and urban is diminishing and a kind of ruralurban Some crux of of continuum this the is is emerging, in the while particularly with service sector occupying the lead in rural areas. areas. The captured is that, compositional shift in the consumption pattern in rural matter globalisation works through macro parameters, its impact is felt at the micro level and channels of its transmission need to be understood and accordingly responded to. 1.3 Sectoral analysis of growth rates has shown
the least inter-temporal variations. With the declining share of agriculture sector and consistent growth in the services sector, the variations in growth rate of GDP are lately being associated with the variations in the industry. The contributions of agriculture, industry and services to the GDP were 13.9, 27.0 and 59.1 per cent, respectively, during 2011-12 (Table 1.2). 1.4 An important feature of agricultural growth,
QE: Quick Estimates; RE: Revised Estimates; *: At current market prices Source: Economic Survey 2011-12; CMIE, April 2012; Central Statistical Organisation, GoI
unlike the overall economic growth pattern, is its volatility. The State of Indian Agriculture, Ministry of Agriculture 2011-12 reveals that the coefficient of variation (CV) of agricultural growth during 2000-01 1
Table 1.2: Sectoral Growth Rates of GDP (2004-05 prices) Sector Agriculture & Allied Industry# Services GDP at factor cost 2007-08 5.8 8.7 10.3 (16.4) (28.8) (54.8) 2008-09 (-)0.1 4.4 9.4 (15.7) (28.1) (56.2) 2009-10 1.0 8.4 10.5 (14.7) (28.1) (57.2) 2010-11(QE) 7.0 7.2 9.3 (14.5) (27.8) (57.7) 2011-12 (RE) 2.8 3.9 9.4 (13.9) (27.0) (59.1)
9.3 (100.0)
6.7 (100.0)
8.4 (100.0)
8.4 (100.0)
6.9 (100.0)
Figures in parentheses indicate percentage shares in GDP QE: Quick Estimates; RE: Revised Estimates #: Includes mining & quarrying, manufacturing, electricity, gas and water supply and construction Source: 1. Monthly Economic Report (March 2012), Ministry of Finance, GoI; 2. Economic Survey 2011-12
to 2010-11 was 1.6 compared to 1.1 during 1992-93 to 1999-2000. This is almost six times more than the CV observed in the overall GDP growth of the country, indicating that high and perhaps increasing volatility is a real concern. The volatility is likely to increase in the years to come in the wake of climate change, there by making it more challenging. Moreover, the Indian agriculture growth pattern has been highly varying across states, suggesting that uniform prescription may not work in propping agricultural growth as state level occurances measures up to the overall performance.
an overall growth of private final consumption expenditure that was in the range of 7.1 to 9.2 per cent during the period 2005-06 to 2010-11, the rates of growth of the consumption groups food, beverages, and tobacco and gross rent, fuel, and power have generally been lower. On the other hand, the growth rates of items and like furniture and and furnishing, transport communications,
miscellaneous goods and services have generally been higher. As a result, the composition of private final consumption expenditure in terms of shares underwent changes. 1.6 The Gross Domestic Savings (GDS), as a
b. Consumption, Savings and Investments1.5 The growth in real terms of consumption expenditure and gross fixed capital formation works out to 6.0 per cent and 5.6 per cent respectively for the year 2011-12. The growth in these indicators in 2010-11 was 8.1 per cent and 7.5 per cent respectively. The rate of growth of private final consumption expenditure in real terms has been fairly consistent and did not decline significantly even when the growth rate was relatively lower, partly due to the inherent nature of private consumption that does not fluctuate as much as other demand-side components and partly on account of inflationary tendencies, which tend to reduce savings (on account of reduction in real interest rates) rather than affecting the consumption level in the economy. However, this consistency masks large variations between the various commodity groups. As against 2
proportion to GDP at current market prices (savings rate) is estimated to have declined from 33.8 per cent during 2009-10 to 32.3 per cent during 2010-11. While the private sector savings has declined from 33.6 per cent to 30.6 per cent, public sector savings increased from 0.2 per cent to 1.7 per cent during 2009-10 and 2010-11, respectively. This decline is accounted for by a reduction in private savings, primarily household savings in financial assets, and somewhat by a reduction in corporate savings. Public savings, on the other hand, registered an increase, thanks to fiscal consolidation. The reduction in the financial savings rate of households could be partly attributable to inflationary tendencies in the economy during the period that resulted in higher growth of private final consumption expenditure than of personal disposable income and partly to a reduction in real interest rate. The Gross Capital Formation
(GCF), as a proportion to GDP, is estimated at 35.1 per cent with the contribution of public and private sectors at 8.8 and 24.9 per cent, respectively during 2010-11. Within the private sector, the investment rate for the corporate sector declined from 12.7 per cent in 2009-10 to 12.1 per cent in 2010-11 while that of the household sector increased from 12.4 per cent to 12.8 per cent. Reduction in corporate investment could be attributed to global factors, with the global economy exhibiting signs of slowing down in the second half of 2010 as well as to domestic factors, namely increased cost of borrowing following the upward revision of interest rates in order to control inflation. Fixed investment as a ratio of GDP peaked in 2007-08 and registered a decline since then, falling from 31.6 per cent in 2009-10 to 30.4 per cent in 2010-11. in September 2011 before coming down to 6.6 per cent in January 2012 (Chart 1.1).
i. Drivers of Inflation in Recent Years1.8 inflation The drivers and the measures to contain have been extensively analysed and
c. Inflation1.7 Headline year-on-year wholesale price index (WPI) inflation, after remaining persistently high over the past two years, has started to show signs of moderation towards the end of the year 2011-12. Financial year 2011-12 started with a headline inflation of 9.7 per cent, briefly touched double digits
commented upon in recent times. The analysis showed that the shift in the nature and causes of inflation in India is a natural fallout of the structural changes that the economy has undergone. Both domestic and global factors determined the inflationary trend. However, the inflationary pressure in India during the
Table 1.3: Drivers/Causes of Inflation in India Category Products covered Food Inflation Foodgrains, fruits & vegetables, proteins (milk, eggs, meat, fish) Immediate/ Short term 9 Spike in global food prices 9 Weak monsoon 9 Crop losses 9 Supply shock Core Inflation Manufacturing, coal 9 Excess demand 9 Production short fall Energy Prices Petroleum products, crude oil, aviation fuel etc. The list is illustrative. 9 Supply shock 9 Global trends 9 Growing demand 9 Capital stock deficiency 9 Resource constraint Medium Term 9 Demand side driversincreased wages due to MGNREGA 9 Wastages Long Term/ Structural 9 Pricing (MSP) 9 Changing consumption pattern 9 Lack of storage and other infrastructure 9 Infrastructural bottlenecks 9 Stabilising exchange rates to smoothen volatility 9 Need for finding alternative sources of energy Implications 9 Nutritional security 9 Productivity issues 9 Supply chain Management
3
year was caused due to the interplay of a number of immediate and some underlying long term factors (Table 1.3). 1.9 The analysis also showed that the nature of
commodities need to change in favour of the ones facing the supply shock. the Box 1.1. The measures adopted to contain inflation and food inflation are summarised in
inflation was different from the earlier instances of prolonged inflation, basically because of the kind of shifts it was pointing towards. Moreover, the persistent nature of food inflation posed challenges for policy makers as monetary policy cannot have a direct and immediate bearing on food prices. But in view of the prolonged inflationary spells in recent years, using the monetary policy weapon was thought to be the appropriate policy response in order to prevent and control the spillover of the supply shock in food prices into a generalised inflationary pressure in the economy. In order to keep inflation under check, relative prices across categories of
d. Trade1.10 Cumulative value of exports for the period April-March 2011-12 was ` 14,54,065 crore as against ` 11,42,921 crore over the same period last year, registering a growth of 27.22 per cent. Cumulative value of imports for the period April-March, 201112 was `23,42,216 crore as against `16,83,466 crore over the same period last year, registering a growth of 39.13 per cent. Agricultural exports increased from ` 1,13,117 crore during 2010-11 to `1,41,095 crore during 2011-12, registering a growth of 24.73 per cent. Increase in agricultural exports has been mainly
Box 1.1: Measures adopted to Contain Inflation and Food Inflation A. Fiscal and Administrative Measures per kg for Antyodaya Anna Yopjana (AAY)) and wheat ( a t `4.15 per kg for BPL and `2 per kg for AAY) since 2002.
Reduction of import duties (for rice, wheat, onion, pulses, edible oils). Permitting import of certain products (viz., skimmed milk powder and other dairy products, duty free white/ refined sugar).
Suspension of futures trading in rice, urad, and tur. Allocation of wheat and rice under the Open Market Sale Scheme (OMSS),bulk sale, for distribution to BPL families at BPL issue price and for above poverty line (APL) families. Extension of the Scheme for distribution of subsidised imported edible oils through state governments/UTs
Removal of levy obligation in respect of all imported raw sugar and white/refined sugar. Ban on export of edible oils and pulses (with certain exceptions), non-basmati rice, wheat, onion (for short period of time),milk powders, casein and casein products.
B. Monetary Measures As part of the monetary policy review stance, the RBI has taken suitable steps with 13 consecutive increases in policy rates and related measures to moderate demand to levels consistent with the capacity of the economy to maintain its growth without provoking price rise. As per the most recent announcement of the RBI on 24 January 2011, the cash reserve ratio (CRR) has been cut by 50 basis points (bps) from 6.0 per cent to 5.5 per cent and repo rate and reverse repo rate have remained unchanged at 8.5 per cent and 7.5 per cent respectively.
Permitting export of edible oils in branded consumer packs of up to 5 kg subject to a limit of 10,000 tonnes. No change in tariff rate values of edible oils. Exports of onion calibrated through the mechanism of minimum export prices (MEP).
Maintaining the central issue price (CIP) for rice ( a t `5.65 per kg for below poverty line (BPL) and `3
(Source: Economic Survey 2011-12)
4
Table 1.4: Trends in Exports and Imports ( ` 000 crore) Year Total Exports Share of agri allied products (%) 10.2 10.3 9.9 9.0 10.0 9.9 9.9 Total Share of food Imports & allied products(%) 660.4 840.5 1012.3 1374.4 1363.7 1683.5 1677.4 3.3 3.5 3.0 2.1 3.7 2.9 3.1
(60 to < 80 >80 Total SCBs* (No.) 2010 1 1 12 17 31 2011 3 1 9 18 31 2010 47 77 121 124 369 DCCBs* (No.) 2011 47 77 121 124 369 SCARDBs**@ (No.) 2010 10 4 4 1 19 2011 10 4 4 1 19 PCARDBs*@ (No.) 2010 337 205 113 42 697 2011 337 205 113 42 697
*: Data Provisional - The data for the year 2010-11 is repeated from previous year in respect of SCBs & DCCBs in Uttarakhand, Bihar, Assam, Manipur, Mizoram and Tripura. Data for one DCCB in MP not available. @: The LTCCS data for the year 2010-11 in respect of Haryana, Kerala, Odisha, Punjab, Tamil Nadu, Assam, Bihar, Puducherry and Tripura is repeated from the previous year. **: Manipur SCARDB is defunct.
recovery of PCARDBs had improved in Maharashtra, Karnataka, Rajasthan, while it showed decline in PCARDBs in Chhattisgarh, Madhya Pradesh states.
4.17
The frequency distribution of loan recovery of
banks in the co-operative structure is presented in Table 4.11 to Table 4.13.
Table 4.12: Frequency Distribution of States/UTs according to Level of Loan Recovery of SCBs and DCCBs (As on 30 June 2011) Recovery (%) 40 and 60 and 80%
Total*
370
Data Provisional - The data for the year 2010-11 is repeated from previous year in respect of SCBs & DCCBs in Uttarakhand, Bihar, Assam, Manipur, Mizoram and Tripura.
80
Table 4.13: Frequency Distribution of States/UTs according to Levels of Loan Recovery of SCARDBs and PCARDBs (As on 30 June 2011) Recovery < 40 % SCARDBs Chattisgarh, Madhya Pradesh, Bihar, Assam, J & K, Tamil Nadu and Maharashtra > 40 % and < 60% PCARDBs * Chhattisgarh (2), Haryana (15), Karnataka (59), Kerala (3), Madhya Pradesh (29), Maharashtra (29), Odisha (26), Punjab (8), Rajasthan (16), Tamil Nadu (170) West Bengal (11) (368) Chhattisgarh (7), Haryana (4), Karnataka (77), Kerala (15), Madhya Pradesh (7), Odisha (11), Punjab (24), Rajasthan (15), Tamil Nadu (8), West Bengal (9) (177)
Uttar Pradesh, Odisha, West Bengal, Pradesh, Gujarat Haryana, Himachal and Rajasthan
> 60% and < 80%
Tripura and Punjab
Chattishgarh
(3),
Himachal
Pradesh
(1),
Karnataka
(37),
Kerala
(20),
Madhya Pradesh (2), Odisha (5) Punjab (29), Rajasthan (4), Tamil Nadu (2), West Bengal (2) (105)
> 80%
Kerala and Puducherry
Karnataka (4) Kerala (8), Odisha (4), Punjab (28), Rajasthan (1), West Bengal (2) (47)
Total*
19*
697
Data in respect of Manipur SCARDB and Maharastra SCARDB not available ; Data in respect of SCARDB and PCARDB for the states in Bihar, West Bengal, Punjab, Kerala, Gujarat, and Maharashtra repeated from previous year
c. Supersession of Elected Boards4.18 NABARD, as a matter of policy, continues to emphasize the need for co-operative banks to be managed by duly elected Boards of Management (one of the covenants of the memorandum of understanding (MoU), executed by State Governments under the GoI revival package for STCCS). Despite this, the practice of superseding elected Boards continued in some States. As on 31 March 2011, duly elected Boards were superseded in 9 SCBs and 86
DCCBs in ST structure. Supersession was done in 7 SCARDBs also and in 284 PCARDBs in the LT structure (Table 4.14). 4.19 Co-operative credit institutions suffer from low
resource base, high dependence on higher financing agencies, imbalances, poor business diversification and recoveries, huge accumulated losses, lack of professionalism and skilled staff, weak MIS, poor internal checks and control systems, etc. leading to heavy accumulated losses.
Table 4.14: Elected Boards under Supersession (As on 31 March 2011) Particulars Total Institutions (No.) Boards under Supersession (No.) Boards under Supersession (%)*: The data for the year 2010-11 is provisional
SCBs* 31 9 29
DCCBs* 370 86 23
SCARDBs* 20 7 35
PCARDBs* 697 284 41
81
d. Development Action Plan (DAP)/ Memorandum of Understanding (MoU)4.20 Keeping in view the viability of the bank on sustainable basis, the process of preparing institution specific DAP and executing MoU began in 1994-95. It was implemented in four phases, 1994-95 to 1999-2000 (Phase I), 2000-01 to 2003-04 (Phase II), 2004-05 to 2006-07 (Phase III). The PACS were advised to prepare Viability Action Plans under the guidance of DCCBs and to enter into MoUs with the respective DCCBs in the third phase. The fourth phase of DAP/ MoU was for the period April 2007 to March 2012. As many as 21 SCBs and 10 SCARDBs and State Governments concerned had executed DAP/MoU with NABARD for fourth phase. The progress in implementation of DAPs is monitored and review is held during quarterly meetings of State Level Task Force (SLTF) at State level and District Level Monitoring and Review Committee (DLMRC) at district level. The banks have been advised by ROs to prepare DAP for 2012-13 based on the existing guidelines. The banks which seriously follow the targets under DAP have grown financially stronger. Further, implementing DAP in phases gives an opportunity to learn from past experience and refine their policies.
functional crore
efficiency.
During
2011-12,
financial against
assistance of `7.09 crore was sanctioned and `5.34 disbursed (including disbursements sanctions of previous years). As on 31 March 2012, cumulative sanctions and disbursements were ` 105.26 crore and `92.91 crore, respectively. The balance in the Fund as on 31 March 2012 stood at `125 crore.
f.
Organisation Development Initiatives (ODI)Organisation Development Initiatives (ODI),
4.22
being conducted by NABARD since 1994-95 is a re-engineering process which facilitates and aims at achieving change in the organisational structures. Keeping in view the changing environment for RRBs (Amalgamation) and co-operative banks (adoption of revival package for STCCS), the design, methodology and objective of ODIs would now be more focused towards enabling financial inclusion and sustainable viability. As RRBs and co-operative banks face different kind of problems and opportunities, separate approaches were worked out for these institutions. During the year, emphasis was laid on conducting ODIs in RRBs which are not compliant with section 42(6) of RBI Act, 1934 and the SCB and DCCBs not complying with section 11 of BR Act 1949 (AACS). With a view to assess the impact of ODI, the ROs were advised to evaluate the process for fine-tuning the ODI process. During 2011-12, 03 ODI viz. ODI (phase I) in Vizianagaram DCCB (Andhra Pradesh), Hazaribagh DCCB (Jharkhand) and Phase I - follow up visit of Cuttack DCCB (Odisha) have been conducted . ODI has been able to inculcate a sense of responsibility among the employees in achieving the targets set by the management. Further, ODI is a motivation to employees and helps in increasing their productivity and profits of the organisation, given that the functioning of other internal and external factors remain the same.
e. Co-operative Development Fund4.21 The Co-operative Development Fund (CDF) was constituted in 1993 under Section 45 of NABARD Act 1981, with an initial contribution of `10 crore. The fund is replenished every year through contributions from NABARDs surplus. Assistance from the Fund is available to co-operatives in the form of soft loans/ grants for resource mobilisation, human resource development, DCCBs etc., capacity which in building turn and operational to their streamlining, setting up of
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