National Bank for Agriculture and Rural Development (NABARD) plans to raise about Rs 400 billion from markets through bonds in the current FY19 (2018-2019).
The nodal agency for refinancing rural infrastructure and farming sector has increased its market borrowings while reducing share of Rural Infrastructure Development Funds over the years.
Harsh Bhanwala, chairman, Nabard said the financial institution has raised about Rs 330 billion through bonds in 2017-18, up from Rs 250 billion in 2016-17. In FY19, market borrowing will be Rs 70-80 billion more than what it raised in 2017-18.
With the benefit of easing interest rates, the weighted average cost of funds (for money raised from market), declined to 7.07 per cent in FY18 from 7.35 per cent in FY17. However, the cost of borrowing may rise in FY19 due to rising yields on bonds in the market.
The outstanding bonds and borrowings stood at Rs 1.18 trillion at end of March 2018, up from Rs 854.65 billion at the end of March 2017.
The lender would look at increasing borrowing from overseas markets as the costs for hedging foreign exchange risk stablise. Nabard would look at the feasibility of tapping Masala bonds, which would need Reserve Bank of India’s nod, Bhanwala said.
Meanwhile, its loans and advances disbursed in 2017-18 rose by 15 per cent to Rs 3.54 trillion. Of this, long term refinance grew by 17 per cent to Rs 1.22 trillion. The loans under RIDF showed nine per cent growth to Rs 1.10 trillion, he said.
Lending under Long Term Irrigation Fund grew by 125 per cent to Rs 204.4 billion in Fy18, up from Rs 90.8 billion in Fy17.
The surplus generated from operations grew to Rs 29.51 billion in 2017-18 from Rs 26.46 billion in 2016-17.