National Bank for Agriculture and Rural Development (NABARD)

More than 75 per cent people of India depends on agriculture. Rural infrastructure investments help in raising the socio-economic status of the rural people through increased income levels and quality of life.

NABARD being an apex institution for providing credit facilities and capacity building to the Indian rural economy, it has a great opportunity for poverty reduction and socio-economic empowerment of rural India.

BACKGROUND

National Bank for Agriculture and Rural Development (NABARD) was established on 12 July 1982 by an Act of the Parliament.

NABARD, as a Development Bank, is mandated for providing and regulating credit and other facilities for the promotion and development of agriculture, small scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing the prosperity of rural areas, and for matters connected therewith or incidental thereto.

OWNERSHIP

NABARD is wholly owned by the Government of India.

Note: -

In 2019, RBI Sold its stake in NABARD to the government of India. Thus Now NABARD is fully owned by GOI.

ORGANISATIONAL SETUP

NABARD, with its Head office at Mumbai

FUNCTIONS AT A GLANCE

The major functions of NABARD include promotion and development, refinancing, financing, planning, monitoring and supervision.

a)     Credit-related:

·         Refinance to Rural Financial Institutions for investment credit (long term loan) and production and marketing credit (short term loan) purposes for farm and off-farm activities in rural areas.

·         Loans to State Governments for developing rural infrastructure and strengthening of the Cooperative Credit Structure

·         Loans for warehousing infrastructure to State Governments, State/ Central government Owned/ assisted entities, Cooperatives, Federation of cooperatives, Farmers’ Producers Organizations,(FPOs), Federations of Farmers’ Collectives, Primary Agricultural Credit Societies (PACS) / Cooperative Marketing Societies (CMS) or similar institutions, Corporates/ Companies, Individual entrepreneurs, etc.,  

·         Direct lending to Cooperatives and Producers’ Organization, support to State owned institutions /corporations under NABARD Infrastructure Development Assistance and direct lending to individuals, partnership firms, corporates, NGOs, MFIs, Farmers’ collectives etc. under Umbrella Programme for Natural Resource Management (UPNRM)

·         Pass through agency of select Government of India Capital Investment Subsidy Schemes. 

b)     Non-credit related:

•Credit Planning and Monitoring, Coordination with various agencies and institutions.

•Assist in policy formulation of GoI, RBI and State Governments on matters related to agricultural credit and rural development

•Institutional development and capacity building of Cooperatives and Regional Rural Banks (RRBs) to strengthen the rural credit delivery system. Statutory inspection of Regional Rural Banks (RRBs), State Cooperative Banks and District Central Cooperative Banks (DCCBs), voluntary inspection of State Cooperative Agriculture and Rural Development Banks (SCARDBs) and their off-site surveillance

•Promotional and developmental initiatives in the areas of the farm, off-farm, microfinance, financial inclusion, Convergence with Govt sponsored programmes.

•Supporting the financial inclusion efforts of Regional Rural Banks and Cooperative Banks

•Thrust on the promotion of livelihood opportunities and Micro Enterprises  

•Capacity Building of Personnel and Board Members of Credit Cooperatives and Staff of Rural Financial Institutions.

•Support to research and development, rural innovations, etc.  

Developmental Contribution

·        Kisan Credit Card Scheme for Farmers: The Kisan Credit Card (KCC) scheme was designed by NABARD in association with the RBI in August 1998 for providing crop loans.

·        RuPayKisan Cards (RKCs): NABARD has been at the forefront of the technology revolution by helping rural financial institutions in providing RuPayKisan Cards (RKCs) to all their farmer clients.

·        Tribal Development: The Tribal Development Programme

·        Umbrella Programme on Natural Resource Management (UPNRM):

The UPNRM started in 2007, works at enhancing investments in rural areas, creating business opportunities and enabling rural communities to sustainably utilise their natural resources.

·        Microfinance Sector:

·        NABARD had launched the Self Help Group-Bank Linkage Programme (SHG-BLP) in 1992. Over 23 lakh SHGs were credit-linked during 2017-18 financial year.

·        Skill Development: Promoting an entrepreneurial culture among the rural youth and encouraging them to start enterprises in the rural off-farm sector has been NABARD’s strategy for over three decades.

·        Marketing Initiatives: For providing marketing opportunities to rural artisans and producers, NABARD has traditionally facilitated their participation in exhibitions across the country.