The National Bank for Agriculture and Rural Development (Nabard), has recently announced that it is planning to raise a huge amount of more than Rs 10,000 crore very soon, from the market in this financial year. The officials of the bank have informed that the amount is being raised for funding the cooperative and commercial banks. The officials said that the bank will raise an amount of Rs 3,000-4,000 crore through the retail bonds and will mop-up another amount of Rs 2,000 through issuance of the certificate of deposits and some short-term money market instruments.
According to one of the top officials of Nabard, "The balance will be raised through mix of sources like corporate bonds". The official said that the extent of dependence on market borrowings is going to be less for Nabard in this year, in comparison to that in fiscal 2008 (Rs 13,000 crore). He said that the dependence will be less because of the availability of Rs 5,000 crore from the National Rural Credit-short-term (NRC-ST) facility, that was announced in the 2008-09 budget. The official also said that they are expecting the interest rate for funds sourced from this corpus (NRC-ST) to be 6 per cent, that is much less than the market borrowings, which are made at an average of 8 per cent interest rate.
While talking about the banks plans further, the official said that the bank is also planning to bring down the cost of funds below 9 per cent from that of 9.15 per cent in the previous financial year. He said that the cost was 8.75 per cent in the financial year of 2006-07. The Chairman of Nabard, Mr. Umesh Chandra Sarangi was also talking about the banks plans and said, "The refinance division posted a net operational surplus of Rs 972 crore as against Rs 819 crore in 2006-07". He added that Nabard is also going to deploy this surplus for short-term finance and for funding various funds, that include those for the rural innovation and watershed development. Informing that the bank is also going to step up co-financing activity for the rural projects, Mr. Sarangi added, "We will scale up operations and plan to fund projects worth Rs 600 crore this year".
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| Posted : 4/11/2008 |
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