Agri-bank Nabard reported a 33 per cent increase in post-tax surplus for 2014-15 at Rs. 2,400 crore on Tuesday, driven by an increase in its core refinancing activities. The post-tax surplus of the National Bank for Agriculture and Rural Development in 2013-14 was Rs. 1,860 crore.
Even though the jump gives it greater room to borrow from the markets, Nabard Chairman H.K. Bhanwala said that sums from commercial banks not meeting priority sector lending (PSL) norms are falling continuously and therefore, it has made a representation to raise resources from tax-free bonds.
Contribution from PSL shortfall slipped from Rs. 1.60 trillion in FY14 to Rs. 1.07 trillion in FY15 and is estimated to slip further to Rs. 90,000 crore for FY16. “We need access to low cost funding resources,” he said, and stressed that the newly-floated draft guidelines on priority sector lending may squeeze Nabard’s funding line.
For FY16, it will borrow Rs. 50,000 crore from markets, which is Rs. 10,000 crore more than last fiscal, Mr. Bhanwala said, explaining that this is possible through the Rs. 700-crore jump in surplus and Rs. 300-crore equity infusion committed by the government. The chairman also said that generating long-term investments in agriculture will be the focus area for the lender, going beyond traditional short-term refinance which it has been doing.
In FY15, disbursements for short-term loans refinance grew 19.57 per cent to Rs. 1.21 trillion, while long-term refinance disbursements soared by 46 per cent to Rs. 31,424 crore, the chairman said, adding that the budget announcement of earmarking Rs. 15,000 crore for the Long-Term Rural Credit Fund will be of help.
