The National Bank for Agriculture and Rural Development (Nabard) will refinance crop loans worth Rs. 40,000 crore in the current fiscal, an over 11 per cent increase from the previous year, a top official said today.

The bank may need to borrow more than the amount of Rs. 8,000 crore it borrowed during 2009-10 to meet the excess refinancing target for the 2010-11 financial year.

“We have set a target of Rs. 40,000 crore for refinancing crop loans in the current fiscal,” Nabard Chairman U. C. Sarangi told PTI on the sidelines of a CII function here today.

Last fiscal, the agricultural bank had refinanced crop loans worth Rs. 36,000 crore.

“As the refinancing target is more this year, we may go for more borrowing than the last fiscal, which was Rs. 8,000 crore,” he said. He added, however, that no target has been set.

The bank also plans to issue Bhavishya Nirman Bonds, which are zero coupon bonds, this fiscal, depending on its borrowing needs and the market scenario.

Of the total crop loans refinanced, Rs. 13,000 crore has been earmarked for long-term crop loans made by all banks, while over Rs. 26,000 crore is for short-term loans made by cooperative and regional rural banks.

“Demand for credit is growing in the agriculture sector and credit has been the major problem for farmers... Capital formation in agriculture is must,” Mr. Sarangi noted.

Last fiscal, cooperative banks alone lent out Rs. 57,000 crore (Nabard’s contribution about Rs. 17,000 crore) for crop cultivation to around 2.3 crore farmers, 25 lakh farmers more than the previous year.

Nabard will also lend Rs. 18,000 crore to the states for rural infrastructure development this fiscal, slightly less than the Rs. 18,800 crore it lent for similar programmes last year.

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