National Bank for Agriculture and Rural Development Act,1981
Act No : 61
Section :
Conversion loan for production credit.
22. Conversion loan for production credit.- Where the National Bank is satisfied that owing to drought, famine or other natural calamities, military operations or enemy action, any State co- operative bank, regional rural bank or any such financial institution or any financial institution falling under any such class of financial institutions, as may be approved by the Reserve Bank in this behalf, requires assistance under this section, it may provide to such bank or institution such financial assistance as it may deem fit by way of making loans and advances repayable on the expiry of fixed periods not exceeding seven years and on such terms and conditions as may be specified in this behalf by the National Bank: Provided that loans and advances may be made under this section only for the purpose of enabling the borrowing bank or institution,-- (i) to pay any dues to the National Bank for credit extended for financing agricultural operations or the marketing of crops under clause (i) of sub-section (1) of section 21, or (ii) to make to central co-operative banks or primary rural credit societies, loans or advances repayable on the expiry of fixed periods not beings less than eighteen months and not exceeding seven years, by way of reimbursement of loans and advances made by such co-operative bank or 327 societies for agriculture or agricultural operations or for reimbursement of such loans or advances which have been converted into loans or advances repayable on expiry of fixed periods not being less than eighteen months and not exceeding seven years from the date of conversion: Provided further that no loan or advance shall be made under this section to a State co-operative bank unless such loan or advance is fully guaranteed as to the repayment of the principal and payment of interest, by the State Government.
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