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The operations of NABARD are governed by owned funds, funds from various
sources supplemented by market borrowings. Total Working funds of NABARD
increased from Rs.1,36,292 crore as on 31.03.2010 to Rs.1,58,872 crore as on
31.03.2011. The increase during the year was mainly contributed by increase in RIDF
deposits, Market borrowings and STCRC Fund.
The main sources of Funds have been grouped below -
1.
Sources of Funds
1.1
Own Funds
The authorised capital of NABARD is Rs.5,000 crore and the paid up capital is
presently Rs.2,000 crore (99% is subscribed by the GoI and 1% by the RBI). The
total capital, Reserves and Surplus aggregated to Rs.13862.72 crore (8.7% of
working funds) as on 31.3.2011. GoI has recently taken a decision to augment our
share capital by Rs.3000 crore in tranches first of which amounting to Rs.1000 crore
is likely to be subscribed during current financial year. Balances under NRC (LTO)
and NRC (Stabilization) Funds stood at Rs.16,045 crore as on 31.03.2011.
1.2
Deposits
NABARD accepts Deposits from tea, coffee and rubber companies based on
schemes announced by the Government of India in consultation with the respective
Commodity Boards. The deposits from them stood at Rs.228.29 crore as on
31.03.2011. The amount under "deposits" stood at Rs.277 crore as on 31.3.2010.
NABARD received deposits from commercial banks under Rural Infrastructure
Development Fund. The RIDF deposits were Rs.67877.63 crore as on 31.03.2011.
The interest rates on these deposits are inversely related to the extent of default in
achieving the 18% mandated target for lending to agriculture.
STCRC Fund: Short Term Cooperative Rural Credit (Refinance) Fund (STCRC) was
created in the year 2008-09 with a corpus of Rs.5,000 crore per year for 3 years to
support short term credit operations of NABARD. The balance under the fund as on
31.03.2011 was Rs.14,622 crore. ST credit facility is extended to Cooperative banks
out of this fund.
1.3
Borrowings
1.3.1 Bonds
NABARD raised funds from the market through Corporate Bonds. In the past
Government of India had permitted NABARD to raise resources through Capital
Gains Bonds (CGBs) [which was withdrawn since 1 April 2006] . Reserve Bank of
India had permitted NABARD to issue Priority Sector Bonds (PSBs) which aided
Banks not meeting the mandated 40% to priority Sector or 18% to agriculture to
invest in PSBs issued by NABARD which facility has been withdrawn with effect from
1 April 2006. RBI also authorised issue of SLR Bonds by NABARD from inception till
1998 [investment in these bonds were reckoned for SLR purposes]. Consequently,
the issue of Corporate Bonds has become the major source of raising resources.
Government of India announced permission to issue of Bhavishya Nirman Bonds
[which are Zero Coupon Bonds] upto Rs. 10000 crore in the Union Budget 2006-07.
Government of India further announced permission to issue of Rural Bonds [which
are Bonds qualifying for tax exemption under section 88 of the Income Tax Act] upto
Rs. 5000 crore in the Union Budget 2007-08. Total amount under "Bonds &
Debentures" stood at Rs. 26,788 crore as on 31.3.2011.
2.
Uses of Funds
2.1
2.1.3 Co-financing
NABARD also gives loans to corporates as part of co-financing with other banks
which stood at Rs.88 crore.
The project loans are made available to State Governments under RIDF for
supporting rural infrastructure creation which stood at Rs.66,078 crore as on
31.3.2011.
b.
Non-Project Loans
NABARD also provides loans to State Governments for contribution to the share
capital of co-operative credit institutions.
2.2
Investments
NABARD invests portfolio surplus in Money Market instruments (CBLO, Short Term
Deposits, Reverse Repo, Liquid Mutual Fund units) and Government Securities.
NABARD also invests in the equity of entities in the sphere of agriculture and rural
development. It has equity stake in AFC, ADFCs, MCX, NCDEX and SIDBI. During
the year NABARD increased equity in NCDEX
NABARD has equity in the subsidiaries viz. NABARD Financial Services Ltd
(NABFINS), Agri-Business Finance (Andhra Pradesh), Agri Development Finance
(Tamilnadu) and NABCONS. Equity of NABFINS was increased during the year.
3.
There are various Funds in the Balance Sheet of NABARD which are comprised of
Funds contributed by RBI, GoI, appropriated from profit or constituted by gifts, grants
and benefactions.
3.1
Research and Development Fund (as per NABARD Act) = Rs.50 crore
National Rural Credit (Long Term Operations) Fund (as per NABARD Act) =
Rs.14468 crore
National Rural Credit (Stabilisation) Fund (as per NABARD Act)= Rs.1577
crore
3.2
Special Reserve Created & Maintained u/s 36(1)(viii) of Income Tax Act, 1961
(created by NABARD) = Rs. 4445 crore
3.2.2 Funds Closed during the year and balance transferred to Reserve
Fund
3.3
Funds created with support from GoI, RBI, Banks and NABARD
Micro Finance Development and Equity Fund (created by GoI, RBI, Banks
and NABARD) = Rs.139.12 crore
3.4
Funds created as per agreement or out of reflows from bilateral
assistance
Interest Differential Fund - (Forex Risk) (created as per agreement with KfW)=
Rs.145 crore
KfW - Fund for Watershed Development (created from reflows of funds from
KfW)
KfW - NABARD V Fund for Adivasi Programme (created from reflows of funds
from KfW)
There are other funds which are Donor assisted project specific or Government
programme specific and get extinguished with the completion or termination of the
project. NABARD acts mainly as a pass through and monitoring agency [with or
without service charges].
NPA Non Performing Assets stood at Rs.69.15 crore for which provision of
Rs.32.90 was made during the year.
Capital adequacy CRAR as on 31.03.2011 works out to 21.78
4.
Income was received mainly from interest on loans and advances Rs.8169 crore
(88% of total income) and from investment operations Rs.943 crore.
Expenditure was also on interest and financial charges on borrowings Rs.6194
crore. Establishment and other expenses were Rs.1120 crore - increase mainly
because of Arrears Rs.277 crore and provision for Superannuation benefits Rs.216
crore. The average cost of borrowings for the year 2010-11 was Rs.6.64 which was
less than that of previous year (Rs.6.83).
Profit before tax was Rs.1824 crore and Rs.1279 crore after provision of tax which
was less than profit after tax of Rs.1558 crore for last year.