Table of Contents

 Introduction
 What is NABARD?
 Background
 Role
 Objective of NABARD
 Duties
 Functions of NABARD
 Other categorial functions of NABARD
 NABARD Schemes
 Achievements of NABARD
 Conclusion
 References
Introduction

India is a country where the contribution of the agriculture sector to

the economy is much higher than the world’s average. 60% of the
population depends on the agricultural products but still, the
condition of farmers and rural area people, who indulge in small
production or starts their petty work, is still lacking behind. To raise
their living, rural people either require credit or the right direction to
do a particular thing but they are lacking in both ways.

Government of India in order to resolve the problems faced by the

rural area peoples Established NABARD, to give credit assurance to
these people for the agricultural loan, social innovation, and other
works.

What is NABARD?
NABARD stands for the “National Bank for Agriculture and Rural
Development”. One of the institutions owned by the government,
which only aims to provides developmental credit in rural areas and
rely on the mission to “promote sustainable and equitable
agriculture and rural prosperity with effective credit support related
to institution development, innovative initiative, and
service”. NABARD is an apex financial development institution in
India. NABARD headquarter is located at Mumbai and it possesses
336 district offices, having six training centres and a special cell at
Srinagar in India.
The main work of NABARD is concerned with the planning and
operation, in the field of credit giving to the agriculture sector and
with economic activity goes in rural areas. Also, it performs the
work for developing financial inclusion policy. The head of the
Nabard regional office is the Chief General Manager. And the other
executives in the head office are :Executive Directors

 Directors
 And Chairperson

Background

After India got independence, in order to improve rural section credit,

the Government of India and the Reserve Bank of India set up a
committee. The committee was called the All India Rural Credit Survey
Committee and it was headed by Mr Gorewalla. With the increasing role
of RBI, it was difficult to concentrate on agricultural finance.

In 1981 a committee was set up to review arrangements for institutional

Credit for Agriculture and Rural Development under the chairmanship
of Mr. Sivaraman. NABARD was formed on the recommendation of the
B. Sivaraman Committee and it was established on 12 July 1982 to
regulate National Bank for Agriculture and Rural Development Act 1981.
The existing organization was displaced by other institutions like:

The Agricultural Credit Department and Rural Planning and Credit Cell
of Reserve Bank of India

The Agricultural Refinance and Development Corporation

The authorized capital collection of NABARD was 500 crore and later it
was increased by the bill introduced in Parliament which is six times
more than today’s collection i.e. 30,000 crores. Government-owned
100% paid-up capital share in NABARD, which is 6,700 crore.
International recognition of NABARD is with World Bank related
organizations and with Global Development Agencies.

Role
 1. It is the most superior institution that has the power to
handle all the matters concerning policy, planning, and
operation in giving credit for agriculture and other economic
activities that take place in rural areas.
2. It is based on the pattern on refinancing agency for those
institutions that provide production and investment credit for
promoting the numerous developmental programs and
initiatives for rural development. These institutions are as
follows :
1. Regional rural banks (RRBs),
2. Commercial banks (CBs)
3. Other financial institutions approved by RBI.
4. State co-operative agriculture and rural development
banks (SCARDBs),
5. State co-operative banks (SCBs)
3. It is improving by enlarging its capacity of the credit giving
system in India which includes, supervision, formulation of
rehabilitation schemes, restructuring of credit institutions,
and training of employees.
4. It correlates the rural credit financing planning of all sorts of
institutions that indulge in developmental work at the field
level while maintaining communication with the State
Government, and Central Government and also with RBI and
other national level institutions that are concerned with
policy formulation and credit giving system
5. It also circulates and prepares rural credit plans, annually as
required, for all districts in the country.
6. It also helps to promote research and training program in
rural banking, and in the field of agriculture and rural
development.
In addition to this NABARD also undertake some natural resource
management program like tribal development and watershed
development program

Objective of NABARD

Approximately 50% of the rural credit is paid out by the Co-operative

Banks and Regional Banks of those areas. NABARD is responsible for
mandating and supervising the functions of Co-operative banks and
RRBs. NABARD works mainly in the direction of providing a strong and
 efficient base for the rural credit delivery system and enables it to take
care of the expanding and diverse credit needs of agriculture and rural
development.

Thus, the objects of NABARD can be brought under three major heads:

1. Credit Function
2. Development
3. Function Promotional Function

Duties
NABARD works towards uplifting the rural and agricultural sectors
and prepares grounds for rural and social innovations. It plays an
important role in framing development initiatives for our country’s
rural sector industry, cottage industry, and small-scale industries. It
re-invests the profits earned through developmental spending
towards research activities to frame better development initiatives
for rural and agricultural fields.

This has helped NABARD to gain trust among rural communities. For
rural and agricultural development, NABARD has entered into the
partnership with many National and International organizations and
has over 4000 partner organizations which assist it to plan and
execute rural and social innovation. Some of the initiatives of
NABARD include:

 SHG Bank Linkage program, an initiative to improve the living

standard of tree-based tribal communities,
 Forming farmer clubs to educate and motivate farmers to
incorporate crop productivity initiatives, programs for soil
and water conservation,
NABARD has been consistently maintaining its position of the
highest taxpayer, and figures among the top 50 taxpayers to the
exchequer. Together with its associated economies, NABARD carries
out and supports integrated development for the rural sector.

Functions of NABARD
 NABARD provides refinancing services to Central Co-operative
banks, Regional rural banks, and Land Development banks.
Commercial banks, State co-operative banks.
 It provides refinancing to agriculture, small scale industries,
and other village and cottage industries by way of lending
money to commercial banks.
 It promotes small scale, cottage industries and rural
industries, including tiny and petty sectors by providing credit
loans to commercial and co-operative banks.
 Special assistance is given by the bank for the development of
the small scale, cottage and village industries under service
area methodology.
 bills and checks of co-operative banks and commercial are discounted
to enable them to finance for agricultural inputs.
 The bank also gives credit financing in the research and development of
agricultural and rural industries.
 bank formulates the policy of the Central Government and the RBI
concerning agricultural credit.
 provides finance for promoting non-farming activities and employment
in non-farming sectors with the purpose of reducing the rate of rural
unemployment.
 It empowers the co-operative structure in the States by providing credit
loans to the State co-operative banks and also to Land Development
Banks.
 also promotes some irrigation projects by credit through State
Government’s sponsored irrigation projects.
 bank also regulated the inspection work of Co-operative banks and
Regional rural banks.
 bank has opened branches regional offices at all District headquarters
through which bank co-ordinates the District development programs
along with the district employees.
 bank additionally helps in the yearly credit plan of the business banks
and co-ordinates the exercises of business and co-usable banks at the
area level.
 normal catastrophes, for example, dry spells, crop disappointment, and
floods, the bank helps by renegotiating business and agreeable banks so
the ranchers tide over their troublesome period.
Other categorial functions of NABARD
Credit Functions
 Surrounding approach and rules for rustic money related
establishments.
 Giving credit offices to issuing associations
 Observing the progression of ground-level rustic credit.
 Arrangement of credit designs every year for all regions to
recognize proof of credit potential.
Improvement Functions
 Help banks and Regional Rural Banks to get ready
advancement activities plans for themselves.
 Help Regional Rural Banks and the support banks to go into
MoUs with State governments and agreeable banks to
improve the undertakings of the Regional Rural Banks.
 Screen execution of the advancement activity plans of banks.
 Give monetary help to the preparation organizations of
agreeable banks, business banks, and Regional Rural Banks.
 Give budgetary help to agreeable banks for structure improved
administration data framework, computerization of activities
and advancement of HR.
Supervisory Functions
 Attempts examination of Regional Rural Banks (RRBs) and
Cooperative Banks (other than urban/essential helpful
banks) under the arrangements of Banking Regulation Act,
1949.
 Attempts examination of State Cooperative Agriculture and
Rural Development Banks (SCARDBs) and summit non-credit
helpful social orders on an intentional premise.
 Gives proposals to Reserve Bank of India on the issue of
licenses to Cooperative Banks, opening of new branches by
State Cooperative Banks and Regional Rural Banks (RRBs).
 Embraces portfolio investigations other than off-site
reconnaissance of Cooperative Banks and Regional Rural
Banks (RRBs).
NABARD Schemes
Features of NABARD scheme
There are numerous features of the NABARD scheme some of these
are as follows:
 1. Providingf refinancing
2. HelpBuilding infrastructure in rural areas
3. Preparing credit plans annually at the district level
4. Guiding the banking sector in completing their credit targets
5. Regulates regional rural banks (RRBs) and cooperative banks
6. Initiates new projects for rural development work
7. Work on the principles of the Government’s development schemes
8. Giveport to training handicraft artisans

Following are the major schemes under NABARD

 Refinance– Short Term Loans

 Long Term Loans
 Rural Infrastructure Development Fund (RIDF)
 Long-Term Irrigation Fund (LTIF)
 NABARD Infrastructure Development Assistance (NIDA)
 Warehouse Infrastructure Fund
 Food Processing Fund
 Direct Lending to Cooperative Banks
 Credit Facility to Marketing Federations (CFF)
 Credit to Producer Organizations & PACS

Achievements of NABARD
After the establishment of NABARD, there has been a remarkable increase in
the rural finance and development of cottage industry and small scale industry
as well. By way of providing short-term credit, nearly Rs. 4,000 crores have
been given during the ’90s as compared to Rs. 1,200 crores during the ‘80s.

With the help of medium-term finance, nearly Rs. 400 crores have been
distributed and they have been optimized mainly by States affected by natural
disasters. In ways of a long-term loan, more than Rs. 240 crores have been
sanctioned for promotion to the share capital of co-operative institutions.

NABARD has also played a meticulous role in stabling storage facilities for
agricultural products in the country. It has also played a scientific role in the
export of agricultural commodities which include vegetables and fruits. It has
played a supplementary role in maintaining the Green Revolution in the
country.
Blue revolution and white revolution in the form of increased fisheries
production and milk have also been contributed by the efforts of NABARD.
India ranked the top most country in the world in the production of dairy
milk.

Conclusion
More or less, NABARD for satisfying its job as a facilitator of provincial
thriving and is endowed with the renegotiating of credit establishments in
country territories, invigorating institutional improvement and assessment
and investigation of client banks. NABARD presented a novel direct loaning
office under the ‘Umbrella Program for Natural Resource Management’ in
2007-2008.

Reference
1. Course material
2. I pleaders
3. Banking . Rekha Surya rao