NABARD

When
It was established on the recommenda on of the B. Sivaraman Commi ee on 12 July

1982
Under the Sixth Five Year Plan
NABARD as an apex development financial institution in India.
It is a statutory body established in 1982 under Parliamentary act-National Bank for
Agriculture and Rural Development Act, 1981
NABARD’s role is basically a continuation of the RBI role in the sphere of
Agriculture and Rural Development.
RBI Regulates these three Ins tutes
( ACD ) Agriculture Credit Department (short term refinance to coopera ves.)
( RPCC ) Rural Planning and Credit Cell
( ARDC ) Agriculture Refinance and Development Corpora on (before it was ARC
___________renamed in 1975 as ARDC)
Currently 99.6% of its stake is held by GOI and remaining 0.4% by RBI.
Unique and Special Kind of Bank for the Development of Rural India
Ini al Capital of NABARD was RS. 100 CRORES Contribu on Ra o was 50:50 by GOI and
RBI
The NABARD (Amendment) Bill, 2017 passed in 2018: Amendment in Act enabled
Union Government to increase the authorized capital of NABARD from Rs. 5,000
crore to Rs. 30,000 crore.
Why GOI is interested to develope Rural India

Because 70 to 80% Indian are engaged in Agricultural ac vi es
And contribu ng about approximately 20.19% in GDP
But USA in the Same area With less Input more output
Role and Func ons of NABARD
I. Credit Func ons: NABARD provides financial help to farmers, rural entrepreneurs. and
others in the rural sector through credit schemes like RIDE FSPF, and MDF.
2. Development Func ons: NABARD develops rural infrastructure and offers technical
services to promote sustainable agriculture prac ces.
3. Supervisory Func ons: NABARD supervises and regulates the func ons Of coopera ve
banks and RRBs in India.
4. Promo ng Financial Inclusion: NABARD promotes financial inclusion by providing access
to banking services, credit, and financial products in rural areas through ini a ves like
NRFIP and e-Shak .
5. Policy and Planning: NABARD advises the government on policy ma ers related to
agriculture. rural infrastructure. and rural finance.
FUNCTIONS
• Credit Support:
— At its business, NABARD provides credit support that suits every ac vity in rural
India.
— It refinances commercial, co-opera ves and regional banks for lending to our farm
ac vi es (minor irriga on, animal husbandry, farm mechaniza on, forestry,
fisheries, land development, hor culture, planta on, and medical crop)
& non-farm ac vi es (rural industries, ar sans, handicra s, handlooms, rural
housing, rural tourism and so on).
— Refinance is provided by NABARD for both long-term investment credit as well as
short-term produc on credit for crop rearing and working capital for non-financial
ac vi es.
How NABARD Contributes to the Development of Rural Economy?
The NABARD has touched almost every aspect of rural economy in terms of Financial,
Developmental and Supervision functions
Financial Contribution
 Refinance - Short Term Loans: Crop loans are extended to farmers for crop
production by financial institutions, which support in ensuring food security in
the country.
 Long Term Loans: NABARD's long-term refinance provides credit to financial
institutions for a wide gamut of activities encompassing farm and non-farm
activities with tenors of 18 months to more than 5 years.
 Rural Infrastructure Development Fund (RIDF): It was set up with NABARD in
1995-96 by the RBI out of the shortfall in lending to priority sector by
scheduled commercial banks for supporting rural infrastructure projects.
 Long-Term Irrigation Fund (LTIF): The LTIF in NABARD was setup with an initial
corpus of Rs 20,000 crore for funding 99 irrigation projects during 2016-17
following announcement in the Union Budget.
 Pradhan Mantri Awaas Yojana - Grameen (PMAY-G).
 NABARD Infrastructure Development Assistance (NIDA): NIDA has
been designed to complement RIDF.
 Warehouse Infrastructure Fund (WIF): Union government created WIF in the
year 2013- 14 with NABARD with a corpus of Rs 5,000 crore for providing loans
to meet the requirements for scientific warehousing
infrastructure for agricultural commodities in the country.
 Food Processing Fund
 Direct Lending to Cooperative Banks
 Credit Facility to Marketing Federations (CFF):
 Producer Organizations Development Fund (PODF) for POs & PACS:
o NABARD set up Producer Organizations Development Fund (PODF)

with an initial corpus of Rs 50 crore to support and finance Producer
Organizations (POs) and Primary Agriculture Credit
Societies (PACS) to operate as Multi Service Centres.
 Producer Organisation (PO): it is a legal entity formed by

primary producers, viz. farmers, milk producers,
fishermen, weavers, rural artisans, craftsmen. A PO can
be a producer company, a cooperative society or any
other legal form which provides for sharing of
profits/benefits among the members.
 Primary Agricultural Credit Society (PACS) is a basic unit
and smallest co-operative credit institution in India. It
works on the grassroots level (gram panchayat and village
level). It provides credit to farmers in the form of term
loans and recovers the amount after harvesting of crop
from the cultivator.
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 technology
revolution by helping rural financial institutions in providing RuPayKisan Cards
(RKCs) to all their farmer clients.
 Tribal Development: the Tribal Development Programme
 Climate Resilient Agriculture
 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.
 EShakti: In a bid to digitise SHGs, project EShakti was launched on 15 March
2015.
 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.
Incubation Centres
 To commercialise innovations and to shape agricultural entrepreneurship in

the country, NABARD extended support to Chaudhary Charan Singh Haryana
Agricultural University, Hisar and Tamil Nadu Agricultural University, Madurai
for establishing Agri Incubation Centres with a total financial commitment
of Rs 23.99 crore.

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When

It was established on the recommenda on of the B. Sivaraman Commi ee on 12 July

Why GOI is interested to develope Rural India

o NABARD set up Producer Organizations Development Fund (PODF)

 Producer Organisation (PO): it is a legal entity formed by

 To commercialise innovations and to shape agricultural entrepreneurship in

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