06/12/22

School of Business Management

C. S. J. M. University, Kanpur
Management of Funds and Policies, Practices of Development Banks
regarding loans, underwritting & security investment

Presented By:
Presented to:
Group 7
Prof. Sudanshu Pandiya
-Akansha Rajan
-Kartikay Mishra
-Saloni Maheshwari
 Development Bank
A development bank is defined as a financial institution concerned with
providing all types of financial assistance (medium as well as long term) to
business units, in the form of loans, underwriting, investment and guarantee
operations, and promotional activities — economic development in general,
and industrial development, in particular.
NABARD(NATIONAL BANK FOR AGRICULTURE
AND RURAL DEVELOPMENT)

INTRODUCTION-
•NABARD was established on 12 July 1982
• Headquarter-Mumbai
•NABARD is set as an apex development bank.
•It also has the mandate to support all other
allied economic activities promote integrated
and sustainable rural development and secure
prosperity of rural areas.
 NABARD
(National Banks for Agriculture and Rural Development)

VISION
• Development Bank of the Nation for Fostering Rural Prosperity

MISSION
• Promote sustainable and equitable agriculture and rural development
through participative financial and non-financial interventions, innovations,
technology and institutional development for securing prosperity.
 Management of Funds
Sources of Funds:
1. Own Funds
2. Deposits
3. Borrowings
3.1 Borrowing in the bond market
3.1.1 Bonds and Debentures
3.1.2 Bonds raised for GOIs schemes

3.2 Borrowing in the money market

Uses of Funds:

1. Shoring up GLC through refinance

2. Infracture Finance
3. Social sector investment
4. Investment of surplus funds
 WATERSHED
DEVELOPMENT
PROGRAMME

Tribal Development
Programme
 Farm Sector
 Producers Organisation Development Fund (PODF)
NABARD created “Producers Organization Development Fund” (PODF) from for supporting
producers’ companies on 01 April 2011, with an initial corpus of Rs. 50 crore.
The following would get benefit from it
• Any registered PO viz. Producers Company (as defined under Sec. 581 A Company’s Act, 1956)
• Producers Cooperatives
• Registered Farmer Federations
• MACS (Mutually Aided Cooperative Society), industrial cooperative societies, etc. set up by
producers are eligible for the Fund.
 Support under PODF is provided as under:
• Loan-linked grant support is available to the FPOs for promotion, capacity building & market
interventions.
• Grant assistance to eligible agencies for organizing/conducting workshops, meetings, round table
meetings, etc. is also available without linking to availing institutional loan.
 Watershed Development Programme

In 2000 The union finance minister announced the creation of Watershed

Development Fund (WDF) in NABARD with the objective of unification of different
watershed development programmes into a single national initiative through the
involvement of village-level institutions and Project Facilitating Agencies (PFAs).

In pursuance thereof, WDF has been created in NABARD with a contribution of Rs. 100
crore each by Ministry of Agriculture, Government of India (GoI) and NABARD.
 Tribal Development Programme

• As an integral component of NABARD’s Natural Resource Management

(NRM) policy of providing sustainable livelihoods, NABARD laid special
emphasis on providing support for the holistic development of tribal
communities with orchard establishment as the core element.
• In this direction, NABARD created a Tribal Development Fund (TDF) with
a corpus of Rs. 50 crore, out of its profits for 2003-04. The corpus was
augmented from time to time. All projects under TDF are implemented
by partnering with State Governments, The Government of India, NGOs,
and Corporates.
 OFF FARM SECTOR
• Marketing Initiatives
To enable the artisans not only to sell the products in marketing events, but to market
their products and benefit directly from the market feedback for better value
realization in future, financial assistance by way of grant is provided on selective
basis.
• Exhibition/Melas
NABARD supports and provides marketing platform to rural artisans and producers to
exhibit their traditional art crafts, produce and products through exhibitions and
melas which facilitate the artisans in not only utilizing their expertise as source of
livelihood but also help them in enhancing their income .
•Rural Haats/Rural Marts

To enable the artisans not only to sell the products in marketing events, but to market their
products and benefit directly from the market feedback for better value realization in future,
NABARD extends financial assistance by way of grant for setting up of Rural Haats and Rural
Marts.

•Rural Innovation Fund (RIF)

Rural Innovation Fund (RIF) is a fund designed to support innovative, risk friendly,
unconventional experiments in farm, off-farm and micro finance sectors that would have the
potential to promote livelihood opportunities and employment in rural areas.
Support available under RIF can be in the form of loan / grant/ incubation fund support, or a mix
of all the three components. The support is designed to be need based, cost effective and
dependent on the requirement of the project.
 RESEARCH AND DEVELOPMENT
R&D Fund

• This Fund aims for helping and acquiring new insights into the problems of
agricultural and rural development through in-depth studies and applied research
and trying out innovative approaches backed up by technical and economic
studies.
• The R&D Fund is utilised for formulating policies on matters of importance to
agricultural operations and rural development, including facilities for training,
dissemination of information and promotion of R&D by undertaking techno-
economic studies and other surveys in the fields of agriculture, rural banking and
rural development.
 MICROFINANCE SECTOR
•Micro Enterprise Development Programme (MEDPs)
MEDPs are on-location skill development training programmes that attempt to bridge the skill
deficits or facilitates optimization of production activities already pursued by the SHG members.
Grant is provided to eligible training institutions and SHPIs to provide skill development training in
farm/off-farm/service sector activities leading to the establishment of micro-enterprises on individual
basis or on group basis. Over the years around 3.47 Lakh SHG members have been covered through
12,531 MEDPs.
•Support for training and capacity building of clients for SHG-BL PROGRAMME
Giving due recognition to training and capacity building of various stakeholders such as bankers,
NGOs, Government officials, SHG (Self Help Group) members, and trainers, NABARD has trained
around 37.69 lakh participants as on 31 March 2017, in the process giving shape to a strong backup
team for implementation of the programme.
• Collaboration with NRLM

NABARD continues close coordination with all stakeholders in SHG BLP sector. Collaboration with
NRLM is being regularly maintained and enhanced for the support of SHG BLP. For this purpose
NABARD conduct National level seminars and workshops, mutual dialogues and capacity building of
stakeholders on SHG BLP.

• Conduct of Village Level Programmes (VLPs)

With a view to foster better understanding of mutual requirements between banks, SHGs & SHPIs and
to sort out issues like credit linkage & repayment etc. at ground level, Village Level Programmes
(VLPs) are being conducted with the support of banks and NRLM in 13 priority States. These VLPs
sponsored by NABARD are also helping in opening of SHG accounts, their credit linkage and regular
loan repayments.
 Underwriting of Securities
Underwriting of securities is one of the most important functions in the
financial world wherein an individual or an institution undertakes the risk
associated with a venture, an investment, or a loan in lieu of a premium. 

Development banks acquire securities of industrial units through either

direct subscribing or underwriting or both. The securities may also be acquired
through promotion work or by converting loans into equity shares or
preference shares. So development banks may build portfolios of industrial
stocks and bonds. These banks do not hold these securities on a permanent
basis. They are playing an important role in the promotion of industries in
developing and underdeveloped countries.
 CASE STUDIES
Doing more with less
Haryana
Initiative:

Dissemination of Direct Sowing of Rice (DSR) Technology

Beneficiaries:

Paddy farmers of Kaithal, Haryana

The Challenge:

The traditional method of transplanting rice resulted in over-exploitation of water

It was also labor intensive, leading to lower returns

The Challenge:

The traditional method of transplanting rice resulted in over-exploitation of water

It was also labor intensive, leading to lower returns

The Impact:

109 farmers participated in the pilot as against the target of 100

150 acres across 5 villages of Kaithal district covered under the project

Technology being replicated in 15 new villages covering 750 farmers owning over
3000 acres.

Better crop price discovery

Conclusion
 Acronymes
• NRC(LTO) Funds- National Rural Credit( Long Term Operations) Funds
• NRC(Stabilisation)- National Rural Credit( Stabilisation)
• STCRC Fund- Short Term Cooperative Rural Credit Fund
• LTRC Fund- Long Term Rural Credit Funds
• RIDF Deposite- Rural Infrastructure Development Fund
• LTIF- Long Term Irrigation fund
• MIF- Micro Irrigation Fund
• CBLO- Collateralised Borrowings and Learning Obligation
• NIDA- NABARD Infracture Development Assistance
• NFDB– National Fisheries Development Board
• MT & LT- Medium Term & Long Term Loans
• DCCBs- District Central Cooperative Banks
• PODF- Producers Organization Development Fund
• FPOs- Farmer Producer Organization Scheme
• MACS- Mutually Aided Cooperative Society
• WDF- Watershed Development Fund
• PFAs- Project Facilitating Agencies
• GoI- Government of India
• NRM- Natural Resource Management
• TDF- Tribal Development Fund
• RIF- Rural Innovation Fund
• MEDPs- Micro Enterprise Development Programme
• SHG-BLP- Self Help Group Bank Linkage Programme
• SHG- Self Help Group
• SHPIs- Self Help Promotional Institution
• VLPs- Conduct of Village Level Programmes
• VLPs- Village Level Programmes
 References
https://www.nabard.org/nabard-annual-report-2021-22.aspx
https://www.nabard.org/content1.aspx?id=684&catid=8&mid=8
https://www.nabard.org/casestudiesdetails.aspx?id=7&cid=509