Nabard, Kerala Regional Office, has sanctioned a credit limit of Rs 600 crore initially for the year 2012-13, to the Kerala State Cooperative Bank (KSCB), to enable financing of agriculture loans by the 13 District Cooperative Banks (DCBs).
Nabard had also written to the KSCB and all DCBs in the state to take measures for mobilising additional capital to comply with the licencing norms of the RBI on a sustainable basis.
The banks had been advised to improve their financial strength and continue to follow the eligibility norms in order to sustain credit flow from Nabard at a concessional rate of interest.
Nabard proposes to provide an aggregate limit of Rs 1,085 crore during 2012-13 to the cooperative banks, subject to their performance.
Nabard was unable to sanction the credit limit to the KSCB for the past few years in the normal course as the bank was not complying with the eligibility norms.
During the year 2011-12, as a special case, it had sanctioned a credit limit of Rs 500 crore, based on the guarantee issued by the Government of Kerala.
The State Government took the initiative and contributed to the extent of Rs 136 crore towards the share capital of the bank during 2011-12.