NABARD's loans rise 25.2% to reach Rs 6L cr in FY21

The total loans and advances extended by NABARD during 2020-21 registered a growth of 25.2 per cent year-on-year to reach Rs 6 lakh crore, with half of it going into production and investment, the bank said in its annual report.

The report said NABARD earned Rs 34,671.2 crore income during 2020-21, or a 6.1 per cent increase over the preceding year. Its profit before tax in 2020-21 was Rs 6,081.4 crore, against Rs 5,234.3 crore in the year-ago period. The profit after tax was Rs 4,320 crore compared with Rs 3,859.2 crore in 2019-20.

The National Bank for Agriculture and Rural Development (NABARD) also said its balance sheet size reached Rs 6.57 lakh crore as on March 31, 2021, most of which is on account of non-idle (earning) assets that, in turn, helped create private and public investments at the ground level.

"We achieved a record year-on-year growth of 24 per cent in our total assets and similar impressive growth in loan portfolio," NABARD Chairman G R Chintala said in the annual report.

He noted that because of the government's Aatmanirbhar Bharat package and hardworking farmers, the agricultural sector recorded a growth of 3.6 per cent last year and is likely to repeat the performance in the current financial year also.

Agricultural credit outstanding grew at 12.3 per cent in 2020-21, the highest across all sectors.

"This gives us confidence to meet the target of Rs 16.5 lakh crore rural credit flow set by the Union Budget 2022, as the monsoon during current year is also expected to be normal," Chintala said.

Highlighting deployment of funds and year-on-year growth as on March 2021, the annual report said the total loans and advances from NABARD reached Rs 6 lakh crore compared to Rs 4.8 lakh crore as on March 31, 2020. The growth was 25.2 per cent despite the pandemic compared with 11.5 per cent in 2019-20.

"Encouragingly, half of this total went into production and investments and a third into infrastructure development. With the package unfolding over the coming years, the retail credit offtake in agriculture and rural sector is likely to remain buoyant," it said.

The report further said the quantum of short-term surplus deployed by NABARD in various financial instruments including deposits with banks stood at Rs 47,740 crore as on March 31, 2021, accounting for 7.3 per cent of the balance sheet.

Out of this, it said 94 per cent was deployed in government securities and other financial instruments and Rs 2,945 crore was kept in the form of short-term bank deposits to meet liquidity and contingency requirements, as on March 31, 2021.

NABARD said that during 2020-21, it formed about 6.8 lakh self-help groups (SHGs), ensured bank credit for nearly 4 lakh, and released Rs 170.2 crore against a sanction of Rs 418.20 crore for promoting over 8.7 lakh SHGs.

As per the report, the bank promoted 634 farmer producer organisations (FPOs) during the fiscal ending March 2021 against the target of 600. In 2019-20, the government had announced a scheme to develop 10,000 FPOs in five years. As one of the implementing agencies, NABARD targeted the promotion of about 4,000 FPOs within the scheme period.

A credit guarantee fund of Rs 1,000 crore with equal share from the central government and NABARD was set up under NABSanrakshan, a NABARD subsidiary, to incentivise banks to finance FPOs.