The National Bank for Agriculture and Rural Development (NABARD) has decided to trim down its quantum of share of refinance of the grassroots level credit for 2015-16 for Odisha’s cooperative banks. The apex body of all the State Cooperative Banks, the National Federation of State Cooperative Banks (NAFSCOB), has taken the issue up with the Union Ministries of Finance and Agriculture and Cooperation and the Reserve Bank of India, sources said.
The NABARD in its policy circular for 2015-16 has notified to reduce the quantum of refinance from 55 per cent to 45 per cent. This 10-per cent reduction of refinance in a year would badly hit the Odisha State Cooperative Bank (OSCB), said OSCB management chief Bishnupada Sethi.
“This reduction will severely affect the performance of the cooperative banks in Odisha since they are providing 70 per cent of the total crop loans given by all commercial and nationalided banks in the State,” said Sethi. All the cooperative banks are largely dependent on NABARD refinance for the purpose, he added.
Out of the total crop loans of Rs11,918 crore disbursed in the State during 2014-15, the OSCB financed Rs8,344 crore, said a senior official in the Department of Finance (DoF), adding that the OSCB has all along been on the top for funding agriculture and allied activities. The Govt has set a target of Rs10,000 crore for the cooperative banks for which the NABARD would have provided refinance of Rs5,500 crore. But due to the recent change in policy, the refinanced amount would be reduced by Rs1,000 crore. This is the first time in the history of the NABARD that the quantum of refinance has been so reduced. The NAFSCOB has demanded that at least 70 per cent of the quantum of refinance be made by the NABARD.