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National Bank for Agriculture & Rural Development (NABARD)



Rajesh Goyal 

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Headquarters      : Mumbai, Maharashtra, India

Established          :  12 July 1982

Website                  :



The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the Chairmanship of Shri B. Sivaraman, conceived and recommended the establishment of the National Bank for Agriculture and Rural Development (NABARD).

It was established on 12 July 1982 by a special act by the parliament, as an apex Development Bank.   It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC).   


Shareholding in NABARD / Ownership of NABARD As on 31st March 2014

Initially, RBI held 72.5 per cent of equity in NABARD amounting to   Rs 1450 crore. The remaining shareholding of Rs 550 crore was with the Government of India. The Union Cabinet in May 2008 approved the Reserve Bank's proposal to transfer its share holding in NABARD to the Government of India.   Accordingly, the Government of India issued a notification on September 16, 2010 prescribing the proportion of subscription/ownership of Government of India and Reserve Bank in NABARD as 99 per cent and 1 per cent respectively.  In terms of RBI circular dated 14th October, 2010,  RBI had divested its stake amounting to Rs 1430 crore (Rupees one thousand four hundred and thirty crore) in National Bank for Agriculture and Rural Development (NABARD) on October 13, 2010. With this, the Reserve Bank's holding in NABARD came down to one per cent of shareholding in NABARD.   In September, 2013, GoI gave an amount of Rs.700 crore  towards Share Capital.   Consequent to this the shareholding of Government of India and RBI in the Paid up capital of NABARD as on 31 March 2014 was at 99.57 : 0.43



NABARD was established in terms of the Preamble to the Act, "for providing credit for the promotion 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 IRDP and securing prosperity of rural areas and for matters connected therewith in incidental thereto".  The main objectives of the NABARD as stated in the statement of objectives while placing the bill before the Lok Sabha were categorized as under : The National Bank will be an apex organisation in respect of all matters relating to policy, planning operational aspects in the field of credit for promotion of Agriculture, Small Scale Industries, Cottage and Village Industries, Handicrafts and other rural crafts and other allied economic activities in rural areas. The Bank will serve as a refinancing institution for institutional credit such as long-term, short-term for the promotion of activities in the rural areas.The Bank will also provide direct lending to any institution as may approved by the Central Government.The Bank will have organic links with the Reserve Bank and maintain a close link with in.

Thus, we can say NABARD was given  a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.   It also has the mandate to support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas.   NABARD  is the apex refinancing agency for institutions providing agricultural finance so that credit reaches rural areas for development activities. 


Major Functions of  NABARD also include :

·         Coordinator in the operations of rural credit institutions

·         Extends assistance to the government, the Reserve Bank of India and other organizations in matters relating to rural development

·         Offers training and research facilities for banks, cooperatives and organizations working in the field of rural development

·         Helps the state governments in reaching their targets of providing assistance to eligible institutions in agriculture and rural development

·         Acts as regulator for cooperative banks and RRBs.  On-site inspection of cooperative banks and Regional Rural Banks (RRBs) and iff-site surveillance over health of cooperatives and RRBs.


Thus, we can say NABARD is an apex institution accredited with all matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas. It is an apex refinancing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.  It takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc. It co-ordinates the rural financing activities of all the institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India and other national level institutions concerned with policy formulation. It prepares, on annual basis, rural credit plans for all districts in the country; these plans form the base for annual credit plans of all rural financial institutions. It undertakes monitoring and evaluation of projects refinanced by it. It promotes research in the fields of rural banking, agriculture and rural development.



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Achievements of NABARD :

NABARD has been instrumental in grounding rural,social innovations and social enterprises in the rural hinterlands. This endeavour is perhaps unparalleled in the country, it has in the process partnered with about 4000 partner organisations in grounding many of the interventions be it, SHG-Bank Linkage programme, tree-based tribal communities’ livelihoods initiative, watershed approach in soil and water conservation, increasing crop productivity initiatives through lead crop initiative or dissemination of information flow to agrarian communities through Farmer clubs.Despite all this, it pays huge taxes too, to the exchequer – figuring in the top 50 tax payers consistently. NABARD virtually ploughs back all the profits for development spending, in their unending search for solutions and answers. Thus the organisation had developed a huge amount of trust capital in its 3 decades of work with rural communities. 



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