NABARD Current Affairs - 2020

RBI releases Framework for sale of Loan Exposure and Securitization of Standard Assets

The Reserve Bank of India recently released draft framework for “Sale of Loan Exposures” and “Securitization of Standard Assets”.

Highlights

The guidelines issued are applicable to Scheduled Commercial Banks. This includes All India Financial Institutions such as EXIM Bank, NABARD, Non-Banking Financial Companies. The guidelines have also included recommendations of Committee on Development of Housing Finance Securitization Market in India that was chaired by Dr Harsh Vardhan. Also, the guidelines included the recommendations made by the Task Force set up on the Development of Secondary Market for Corporate Loans. Both the Committee and the Task Force were set up by the Reserve Bank of India.

Key Features of the Guidelines

  • The Guidelines has proposed Two Capital Measurement approach. This includes Securitisation External Ratings based approach and Securitisation Standardised Approach.
  • Simple Transparent Comparable Securitisation has been prescribed to define preferential capital treatment.
  • The new guidelines allowed Securitisation of exposures that are purchased from other lenders
  • The Stressed Assets under the new guidelines shall be sold only through novation and assignment.

Per Drop More Crop: Rs 4,000 crore allocated

The Government of India has allocated Rs 4,000 crores under Per Drop More Crop component of Pradhan Mantri Krishi Sinchayee Yojana for the year 2020-21.

Highlights

The Government of India has allocated the funds to implement the Per Drop More Crop component and the state governments are to identify the beneficiaries. Along with this, the GoI has also informed about the creation of Micro Irrigation Fund Corpus of Rs 5,000 crores along with NABARD (National Bank for Agriculture and Rural Development) to implement the special innovative projects.

Micro Irrigation Fund Corpus

The Micro Irrigation Funds are to be used for resource mobilization and expand micro irrigation. So far, the micro irrigation funds have been released to the states of Tamil Nadu and Andhra Pradesh. Rs 478.79 crores have been released for Tamil Nadu and Rs 616.14 crores have been released for Andhra Pradesh.

Per Drop More Crop

The Per Drop More Crop of Pradhan Mantri Krishi Sinchayee Yojana focuses on water use efficiency through sprinkler and drip irrigation. It also aims at reducing fertilizer use, labour expenses and input costs.