Scribd Logo
Upload

Welcome to Scribd!

  • 208 views

    National Bank For Agriculture and Rural Development (Nabard)

    Uploaded by

    HASHMI SUTARIYA
    NABARD provides credit and refinancing support to rural banks and cooperatives. It also undertakes development and regulatory functions like training, research, and inspection of rural banks. Some key initiatives by NABARD include self-help groups, watershed development projects, and Kisan Credit Cards. However, NABARD faces limitations like gaps between sanctioned and disbursed credit amounts and resource constraints.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    National Bank For Agriculture and Rural Development (Nabard)

    Uploaded by

    HASHMI SUTARIYA
    208 views21 pages
    NABARD provides credit and refinancing support to rural banks and cooperatives. It also undertakes development and regulatory functions like training, research, and inspection of rural banks. Some key initiatives by NABARD include self-help groups, watershed development projects, and Kisan Credit Cards. However, NABARD faces limitations like gaps between sanctioned and disbursed credit amounts and resource constraints.

    Original Title

    5. NABARD

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    NABARD provides credit and refinancing support to rural banks and cooperatives. It also undertakes development and regulatory functions like training, research, and inspection of rural banks. Some key initiatives by NABARD include self-help groups, watershed development projects, and Kisan Credit Cards. However, NABARD faces limitations like gaps between sanctioned and disbursed credit amounts and resource constraints.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    208 views21 pages

    National Bank For Agriculture and Rural Development (Nabard)

    Uploaded by

    HASHMI SUTARIYA
    NABARD provides credit and refinancing support to rural banks and cooperatives. It also undertakes development and regulatory functions like training, research, and inspection of rural banks. Some key initiatives by NABARD include self-help groups, watershed development projects, and Kisan Credit Cards. However, NABARD faces limitations like gaps between sanctioned and disbursed credit amounts and resource constraints.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 21

    NATIONAL BANK FOR

    AGRICULTURE AND RURAL


    DEVELOPMENT
    Weightage: 15%
    (NABARD)
    National Bank for Agriculture and
    Rural Development (NABARD)

    TOPICS TO BE COVERED:
    1. NABARD – introduction
    2. Functions
    3. Performance
    4. Limitations
    QUESTIONS ASKED IN UNIVERSITY
    EXAM

    1. SHORT NOTE ON KISAN CREDIT CARD


    2. EVALUATE ROLE OF NABARD IN RURAL
    DEVELOPMENT IN INDIA
    3. SHORT NOTE ON NABARD
    4. WHICH ARE THE MAIN FUNCTIONS OF
    NABARD
    INTRODUCTION
    • Development Banks are unique Financial
    Institutions which perform a special task of
    promoting the development of the country.
    • The concept of development banks originated
    during the post Second World War period
    when many countries of Europe set up
    development banks to foster industrial growth.
    • Many under developed countries in Asia, Africa
    & Latin America have also established
    development banks to accelerate the process
    of industrialization and economic development.
    DEVELOPMENT BANKING IN INDIA
    • In India the need of development bank was felt
    after independence.
    • Banking sector and capital markets of the country
    were not strong and incapable to fulfill the
    requirements of rapid industrialization.
    • Special financial institutions called development
    banks were set up.
    • At present we have 4 development banks (IFCI, IDBI,
    EXIM, TFCI); 3 refinance institutions (NABARD,
    SIDBI, NHD); 2 investment institutions (LIC, GIC)
    and 3 specialized financial institutions (IDFC, IVFC,
    ICICI)
    NABARD
    • NABARD was established under an Act of Parliament as
    the apex institution for the promotion of agriculture,
    small scale industries, cottage and village industries
    and other allied economic activities in rural areas.
    • In 1979, RBI had constituted a committee for reviewing
    arrangements for Financing Institutional Credit for
    Agriculture and Rural Development under the
    chairmanship of Shri Sivraman.
    • The committee recommended the establishment of
    NABARD in its report in March, 1981
    • Finally NABARD was set up and it started it’s working
    from 15 July, 1982 with it’s head quarter in Mumbai.
    th

    • It took over development & refinancing functions of the


    Agriculture Refinance & Development Corporation and
    Agricultural Credit department of RBI.
    CAPITAL OF NABARD
    • It had initial authorized capital of Rs. 500
    crores and a share capital of Rs. 100
    crores.
    • The paid up capital was contributed
    equally by the Government of India and the
    RBI
    • It can collect funds from CG, SGs,
    International Agencies and by raising
    funds from the market through bonds and
    debentures.
    MANAGEMENT OF NABARD
    • Management is by the Board consisting of the
    following:-
    1. A Chairman (who is a deputy governor of RBI)
    2. 3 nominated members of RBI
    3. 3 nominated members of Central Government
    4. 3 members (2 with experience & expertise in Co-
    operative Banking & 1 in Commercial banking
    5. 2 nominees of the state governments
    6. 2 experts in rural economics and rural
    development
    7. A managing director
    OBJECTIVES OF NABARD
    • The main objectives of NABARD are as below:
    1. To play the role of apex institution in respect
    of all matters relating to policy, planning and
    operational aspects relating to promotion of
    credit for agriculture, small scale industries,
    cottage industries, handicrafts and other
    allied activities in rural areas.
    2. To serve as refinancing institution by
    providing long and short term credit for
    promotion of activities in rural areas.
    FUNCTIONS OF NABARD
    • It performs a dual role of apex institution
    for agricultural finance as well as a
    refinance institutions.
    • There are 3 types of functions performed
    by NABARD:
    1. CREDIT FUNCTIONS
    2. DEVELOPMENT FUNCTIONS
    3. REGULATORY FUNCTIONS
    Credit Functions
    NABARD provides all kind of productive and
    investment credit to agriculture, small scale
    industries, cottage and village industries,
    handicrafts and other allied economic activities.
    It also provides refinance for short, medium &
    long term to eligible institutions like – State Co-
    operative banks, Regional Rural Banks, State
    Land Development Banks, Commercial Banks &
    other institutions approved by RBI
    It should be specially mentioned that the interest
    rates prescribed by NABARD are reasonable
    and lower.
    Development Functions
    • NABARD co ordinates the operations of rural
    credit agencies, develops expertise to deal
    with agricultural & rural problems.
    • NABARD assists Government, RBI & other
    institutions in development of rural areas.
    • NABARD provides facilities for training and
    research
    • NABARD also assists various state
    governments to help them contribute capital
    in eligible institutions.
    Regulatory functions
    • The Banking Regulation Act, 1949
    empowers NABARD to undertake
    inspection of RRBs and Co-operative Banks.
    • These branches needs recommendation
    from NABARD for opening up of its bank
    branches in rural areas.
    • NABARD is also an apex institution in the
    field of providing agricultural finance and
    regulates the flow of financial credit in
    agricultural sector.
    INNOVATIONS INTRODUCED BY
    NABARD IN RECENT YEARS
    • Promotion of Self Help Groups
    • Farmers’ Clubs
    • Rural Infrastructure Development Fund
    • Watershed Development
    • Kisan Credit Card
    • District Rural Industries Project
    • Cluster Development Programme
    • Rural Innovation Fund
    KISAN CREDIT CARD
    • KCC was introduced in 1998-99 to facilitate
    timely and adequate availability of short term
    loans to farmers.
    • These cards are issued to farmers by public
    sector banks, RRBs and District Co-Operative
    Banks
    • The main objective of KCC is to provide
    adequate and timely support from banking
    system to the farmers for financial
    requirement at the time of cultivation in a cost
    effective manner.
    Characteristics of KCC
    • Farmers eligible for production credit of Rs. 5000/- or
    more are eligible for the issue of KCC
    • Eligible farmers are provided with a KCC or KCC cum
    pass book
    • Cash credit facility is also available within a limit
    • There is no restrictions on number of transactions
    • Farming requirements as well as other requirements
    for the whole year round are considered while
    determining the limit
    • This limit is fixed on the basis of operational land
    holding, cropping pattern and scale of finance.
    discretion
     Card is valid for 3 years subject to annual review
     Withdrawals should be repaid within a year
     Re-scheduling of the loans is allowed in certain
    cases
     Limits can also be enhanced for good
    performance
     Rate of Interest etc are fixed by RBI
     Operations from issuing branch or designated
    branch
     Withdrawals through cheques or slips along with
    KCC
     Insurance cover under National Agricultural
    Insurance Scheme of GIC
    This scheme is being implemented through
    cooperatives, scheduled CBs & RRBs to provide
    Revised KCC Scheme
    • A working group under the chairmanship of Shri T. M.
    Bhasin who gave the following recommendation for
    revising the KCC Scheme in 2012 May:
    1. Issue of smart cards with E-Chip replacing old ones
    2. Finance covered: crop loan, post harvest expenses,
    consumption requirements, working capital &
    investment credit
    3. Increase the ambit of KCC to include along with
    farmers tenant-farmers, lessees & share croppers
    4. Interest incentive for early payment
    5. Loan against warehouse receipt
    6. Implement system of bio-metrics smart cards
    7. National Payments Corporation of India will
    design the KCC
    All of these recommendations were accepted by
    GOI & RBI
    NABARD has further enlarged the scope of KCC
    scheme to cover long term loans for agriculture and
    allied activities as well as a part from short term
    and medium term loans.
    Loans to agriculture related activities is also
    permissible under this scheme.
    Banks will now have to ensure that the credit is
    routed only through KCC
    LIMITATIONS OF NABARD
    1. There is a wide gap between the amount
    sanctioned by NABARD and its actual
    disbursement
    2. Low budgetary allocations by state
    government in Rural Infrastructure
    Development Fund
    3. Delays due to formalities
    4. Resources crunch in NABARD
    5. Lack of healthy credit delivery at the field
    level.
    6. Refinance function has attained more
    THE–END

    You might also like