NABARD enters into a co-financing agreement with WBSCB

KOLKATA: In a move which may pave the way for more investment loans for agriculture and rural development in West Bengal, the National Bank for Agriculture & Rural Development (NABARD) has entered into a co-financing agreement with West Bengal State Cooperative Bank.

This is the first time in NABARD s 27-years history that it has decided to work with a state cooperative bank and equally share the agri-loan as well as the risks associated with it.

The move is expected to enhance credit flow towards medium and long term projects in agriculture and allied sectors. Under such a scheme, the loan portfolio as well as the credit risks associated with it are being equally shared between the two partners. Just recently, NABARD had worked out similar arrangements with three regional rural banks in the state. It also has co-financing arrangements with a dozen mainstream commercial banks.

After signing the agrement here on Monday, NABARD chief general manager P Mohanaiah said: Co-financing agreements are aimed at promoting new and innovative projects involving sunrise technology, thrust areas, projects with large outlays and long gestation period.

WBSCB chairman Samir Ghosh said: Our reach has so far been confined to small sectors. This latest move will help us in lending to bigger projects too. Investment loans for agriculture and agro-processing, high tech agriculture and other rural projects will be considered by NABARD and WBSCB for co-financing.

Accordingly, projects in the areas like floriculture, organic farming, milk processing, ethanol production, infrastructure development and forestry will be benefited. Mr Mohanaiah said incidents of non-performing assets are far less as both NABARD and its partner monitor the loan account under co-financing scheme. NABARD also involve itself in carrying out due diligence for these loans.