Rural banking system gets 1.46 lakh crore boost

Mumbai: National Bank for Agriculture and Rural Development on Tuesday said it has infused Rs 1.46 lakh crore in the rural banking system during the current fiscal.

Nabard has been extending financial support to the banks operating in rural areas to help them deploy their resources effectively for meeting the credit needs of rural people, including farmers.

"As on February 28, 2020, Rs 87,069 crore has been extended to cooperative banks and regional rural banks in short-term refinance. In addition, long-term refinance of Rs 59,502 crore has also been provided to these banks as well as other financial institutions," National Bank for Agriculture and Rural Development (Nabard) said.

So far in the current fiscal, the development finance institution has extended Rs 66,397 crore in short-term credit and Rs 6,704 crore long-term credit to rural cooperative banks. Regional rural banks have availed Rs 14,141 crore in short-term credit and Rs 8,417 crore in long-term credit.

In addition, other banks, including small finance banks, have obtained long-term refinance of Rs 37,895 crore, the release said. It provides short-term refinance, which is essentially production credit, to banks to allow farmers meet their operational costs.

Long-term refinance is aimed at supporting sectors like dairy, poultry, fishery, farm mechanisation, irrigation, and non-farm sectors, among others.

The development is also directing its resources to increase institutional credit to rural sectors through non-banking financial institutions (NBFCs). It has also extended Rs 4,638 crore to NBFCs and MFIs so far in FY20.