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The National Bank for Agriculture and Rural Development (Nabard) will begin raising funds for the ₹20,000 crore dedicated long-term irrigation fund announced in this year’s budget, in a month from now, its Chairman Harsh Kumar Bhanwala has said.
Elaborating on the plans for the fund mop up, Bhanwala said that Nabard will raise the funds in several tranches under two types of bonds. One type of bond will be in which the Centre will take the liability for repayment, and the other in which Nabard will bear the obligation to repay the bonds.
Of the targeted funds mop up of close to ₹20,000 crore, the water resources ministry will bring in ₹1,500 crore (budgetary allocation), the bonds for which Centre will take the repayment obligation will amount to about ₹6,300 crore, and the balance amount of about ₹12,000-13,000 crore will be directly raised by Nabard under its own books, Bhanwala told BusinessLine here.
First set The total fund mop up — which will happen throughout this fiscal – could even exceed ₹20,000 crore. The first set of bonds will be issued within a month and about ₹3,000 crore will be raised.
Bhanwala also made it clear that all the bonds issued will be on private placement basis and no public issue is being planned for this purpose.
Nabard bonds will have tenure of 15 years and coupon on such bonds is likely to be about 8.2 per cent, he added.
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