Role of NABARD in India

NABARD is an abbreviation that stands for National Bank for Agriculture and Rural Development. It is a supreme regulatory body for the entire regulation of regional rural banks and supreme cooperative banks in India that was founded on 12 July 1982, headquartered in Mumbai. Role of NABARD is under the jurisdiction of the Ministry of Finance, who is also referred to as an owner of this Bank.

Its predecessors were Agricultural Refinance and Development Corporation. The role of NABARD is entrusted with "subjects regarding policy, planning, and operations in the area of credit for agriculture and different economic activities in rural regions in India". NABARD is active in developing & enforcing Financial Inclusion.

On this page, we will understand milestones in NABARD activities and along with NABARD functions, roles, and achievements. We will also understand the milestones in NABARD activities along with the latest facts and information.

NABARD - Background of Establishment

NABARD was set up at the recommendations of B. Sivaramman Committee (by Act 61, 1981 of Parliament) on 12 July 1982 to enforce the National Bank for Agriculture and Rural Development Act 1981. It reinstated the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of (RBI) Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). It is one of the premier organizations imparting Rs.14080 crore (100% proportion). The legal share capital is Rs.30,000 crore.

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NABARD’s international partners include World Bank-affiliated and global development organizations working in the fields of agriculture and rural development.  These firms assist NABARD by advising and giving monetary aid for the upliftment of the people in the rural regions and optimizing the agricultural process.

NABARD Functions, Roles, and Achievements - All About It

NABARD has been instrumental in grounding rural, social innovations and social corporations in the rural hinterlands. As of May, 2020, NABARD functions at 32 Regional Offices in India. 

It has in the method partnered with approximately 4000 partner organisations in grounding a few of the interventions be it, SHG-Bank Linkage programme, tree-based tribal communities’ livelihoods initiative, watershed method in soil and water conservation, increasing crop productivity initiatives via lead crop initiative or dissemination of information flow to agrarian communities via Farmer clubs. Despite all this, it pays massive taxes too, to the exchequer – figuring in the pinnacle 50 taxpayers consistently. 

NABARD certainly pays back all the profits for development expenses, in their unending look for solutions and answers. As a result, the organization has put forward a large number of trust funds in three decades of work with rural communities.

1. NABARD is the most significant institution in the country after the development of the cottage industry, small scale industry and village industry, and different rural industries.

2. In addition, NABARD reaches out to partner countries and helps and contributes in the development.

The Role of NABARD - The National Rural and Agricultural Bank 

NABARD discharge its responsibility by undertaking the subsequent roles:

Serves as an apex financing company for the establishments offering investment and production credit for promoting the numerous developmental activities in rural areas.

Takes measures towards organization constructing for enhancing absorptive capacity of the credit transport system, along with monitoring, formulation of rehabilitation schemes, restructuring of credit establishments, training of personnel, etc.

Co-ordinates the agricultural financing activities of all institutions engaged in developmental work at the field level and continues liaison with Government of India, state governments, Reserve Bank of India (RBI) and other national level institutions engaged with policy formulation.

Undertakes tracking and assessment of projects were refinanced by NABARD.

• NABARD refinances the monetary institutions which finance the rural sector.

• Also, it partakes in the development of institutions which assist the rural economy.

• Additionally, NABARD constantly keeps a check on its client institutes.

• It controls the institutions that offer financial help to the rural economy.

• It offers training facilities to the institutions operating in the discipline of rural upliftment.

• It regulates and observes the cooperative banks and the RRBs, in the course of the whole of India.

NABARD has its HO at Mumbai, India and regional workplaces in all states and one unique cell at Srinagar J&K. The Regional Office (RO) is led by a Chief General Manager (CGMs) as Officer In-charge, and the Head office has numerous pinnacle executives viz the Directors, Deputy Managing Directors(DMD), and the Chairperson. The Board of Directors (BoD) are appointed by the Government of India in accordance with NABARD Act. It has 336 District Offices (DOs) in the country that are staffed by District Development Managers (DDMs). It additionally has 6 training establishments.

NABARD is likewise recognized for its 'SHG Bank Linkage Programme' which encourages India's banks to lend to self-help groups (SHGs). Largely due to the fact SHGs are composed especially of poor women, this has evolved into a crucial Indian tool for microfinance. By March 2006, 22 lakh SHGs representing 3.3 crore members needed to be linked to credit via this program.

NABARD additionally has a portfolio of Natural Resource Management Programmes related to various fields like Watershed Development, Tribal Development and Farm Innovation via dedicated funds set up for the purpose.

NABARD Functions, Roles and Achievements - Milestones Faced By NABARD

NABARD's role in rural development in India is astounding.  It is set up as an apex Development Bank by the GoI with a mandate for accelerating credit flow for encouraging and development of agriculture, cottage and village industries. The credit float to agriculture activities sanctioned by NABARD reached Rs 1,57,480 crore in 2005–2006. The overall GDP is anticipated to grow at 8.4 per cent. The Indian economic system as a whole is poised for better growth in the coming years. Role of NABARD in overall development of India in widespread and rural & agricultural in precise is highly pivotal.

Through the help of the Swiss Agency for Development and Cooperation or SADC, (which is an officio-level agency in the federal administration of Switzerland, and a portion of the Federal Department of Foreign Affairs), NABARD bank established the Rural Innovation Fund. Rural Infrastructure Development Fund (RIDF) is another noted scheme for the bank for rural improvement. 

Under the RIDF scheme Rs. 51,283 crore were approved for 2,44,651 projects covering irrigation, rural roads and bridges, health and education, soil conservation, water schemes etc. Rural Innovation Fund is a fund designed to help innovative, risk friendly, unconventional experiments in these sectors that would have the ability to promote livelihood opportunities and employment in rural areas. 

The help is extended to the following:

Individuals, 

NGOs, 

Cooperatives, 

Self Help Group, and 

Panchayati Raj Institutions; these institutions have the expertise and willingness to put into effect innovative ideas for enhancing the quality of life in rural areas. Through a member base of 25 crore 600000 cooperatives are working in dia a t grass root level in almost every sector of economy. There is a link between SHGs and other types of institutions and cooperatives.

The motive of RIDF is to enhance innovation in the rural and agricultural sector via feasible means. Effectiveness of this system relies upon many factors, however, the kind of organization to which the help is extended is crucial one in generating, executing ideas in an optimum industrial way. A cooperative is a formal organization run by its members for socio-economic purposes, while a self-help group is informal. NGOs are more social, while PRIs are more political. Does the legal status of an institute impact the effectiveness of the program? How & to what an extent? cooperative type of organisation is better (financial efficiency & effectiveness) in functioning (agriculture & rural sector) compared to NGO, SHG, and PRI’s.

During 2007-08, NABARD launched a new loan policy under a proposed plan to execute a natural resources facility under 'Umbrella Programme for Natural Resource Management,’ i.e., UPNRM).  Under this facility, financial help for natural resource management sports can be supplied as a loan at an affordable rate of interest. Already 35 projects were sanctioned concerning loan amounts of worth Rs 1000 crore.  The sanctioned tasks encompass honey collection through tribals in Maharashtra, tussar value chain through a women's producer company ('MASUTA'), eco-tourism in Karnataka, etc. 

Milestones in NABARD Activities 

Some of the milestones in NABARD's activities are as follows:

Business Operations

1. Production Credit: 

NABARD sanctioned distributing of 66,418 crore short term loans to Cooperative Banks and Regional Rural Banks (RRBs) at some point of 2012-13, towards which, the most outstanding was 65,176 crore.

2. Investment Credit: 

Investment Credit for capital evolution in the following:

agriculture sectors,

allied sectors, 

non-farm sector actions and services sector to commercial banks, 

RRBs and co-operative banks reached a magnitude of 17,674.29 crore as on March 31 2013 registering an boom of 14.6 per cent, over the previous 12 months.

3. Rural Infrastructure Development Fund (or RIDF)

Via the Rural Infrastructure Development Fund, 16,292.26 crore was dispersed during 2012-13. As on March 31, 2013, a cumulative amount of 1,62,083 crore has been sanctioned for 5.08 lakh initiatives, covering the following: 

irrigation, 

rural roads and bridges, 

health and education, 

soil conservation, 

drinking water schemes, 

flood protection, and 

forest management, etc.

NABARD - Facts And Information - New Business Initiatives

Below are the new business initiatives that NABARD is going to start soon:

1. NABARD Infrastructure Development Assistance (or NIDA):

NABARD has set up NIDA, a new line of credit support for funding of rural infrastructure initiatives. The approvals under NIDA during the period 2012-13 was 2,818.46 crore and allocation was 859.70 crore.

2. Direct refinance help to CCBs for short term multipurpose credit:

Direct refinance help to CCBs was conceived as an additional line of finance for CCBs in the light of suggestions of the “Task Force on Resurrection of Short Term Rural Cooperative Credit Structure, which encourages the latter to raise financial resources apart from StCBs. During 2012-13, refinance help accumulating 3,385 crore was approved to 42 CCBs and disbursement stood at 2,363.45 crore.

Now it can be concluded that the Agricultural & rural development is totally dependent on the efficiency of the NABARD, which is doing its job as per the necessities of the economy.