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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

NABARD issues Operational Guidelines for Schematic Lending under Long-Term Refinance to Scheduled Commercial Banks (Public Sector/Private Sector) & Foreign Banks

14-Aug-2026 | Ref. No. NB. DOR/LT Policy/PPS-9/49633 -49667/2o26-27 Circular No. 186/DOR-5o/2o26

NABARD issues a circular on the Operational Guidelines for Schematic Lending under Long-Term Refinance to Scheduled Commercial Banks (Public Sector/Private Sector) & Foreign Banks. Key Highlights: 1. Eligibility Criteria- The banks must be- a. complying with minimum CRAR norm of 11.5% (as per Basel III). b. Their net NPAs not exceeding 6% of net loans and advances outstanding. The Bank will reckon the NPA position as a whole. c. Net profit in the immediately preceding financial year and should be in profit for at least 3 years out of the last 4 years. 2. NABARD will decide the interest rates on refinance based on tenor, prevailing market rate, risk perception, etc. and is subject to revision from time to time. A prescribed credit risk premium will be charged over and above the rate of interest on refinance based upon internal risk rating. 3. The rate of pre-payment facilitation charges will be 2.5o% p.a. (plus applicable taxes) and will be chargeable for each instalment due separately for the entire period from the date of pre-payment to the date on which the instalment is actually due for payment, with a minimum period of 06 months. 4. NABARD will conduct verification to ensure that the terms and conditions of refinance are adhered to.

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