NABARD

1. National Bank for Agriculture and Rural Development
NABARD was established on the recommendations of Shiva Raman Committee, by an act of
Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural
Development Act 1981. 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). It is one of the premier agencies to provide credit in rural
areas.
Associated with NABARD
International associates of NABARD ranges from World Bank-affiliated organizations to
global developmental agencies working in the field of agriculture and rural development.
These organizations help NABARD by advising and giving monetary aid for the upliftment of
the people in the rural areas and optimizing the agricultural process. NABARD was established
on the recommendations of Shivaraman Committee.
Role
NABARD is the apex institution in the country which looks after the development of the
cottage industry, small industry and village industry, and other rural industries. NABARD also
reaches out to allied economies and supports and promotes integrated development and to help
the NABARD to discharge its duty, it has been given certain roles as follows:
1. Serves as an apex financing agency for the institutions providing investment and
production credit for promoting the various developmental activities in rural areas
2. 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.
3. Co-ordinates the rural financing activities of all institutions engaged in developmental
work at the field level and maintains liaison with Government of India, State
Governments, Reserve Bank of India (RBI) and other national level institutions
concerned with policy formulation
4. Undertakes monitoring and evaluation of projects refinanced by it.
5. NABARD refinances the financial institutions which finances the rural sector.
6. The institutions which help the rural economy, NABARD helps develop.
7. NABARD also keeps a check on its client institutes.
8. It regulates the institution which provides financial help to the rural economy.
9. It provides training facilities to the institutions working the field of rural upliftment.

2. 10. It regulates the cooperative banks and the RRB’s, and manages talent acquisition
through IBPS CWE.
NABARD's refinance is available to State Co-operative Agriculture and Rural Development
Banks (SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs),
Commercial Banks (CBs) and other financial institutions approved by RBI. While the ultimate
beneficiaries of investment credit can be individuals, partnership concerns, companies, State-
owned corporations or co-operative societies, production credit is generally given to
individuals. NABARD has its head office at Mumbai, India.
NABARD operates throughout the country through its 28 Regional Offices and one Sub-office,
located in the capitals of all the states/union territories. Each Regional Office [RO] has a Chief
General Manager [CGMs] as its head, and the Head office has several Top executives like the
Executive Directors [ED], Managing Directors[MD], and the Chairperson. It has 336 District
Offices across the country, one Sub-office at Port Blair and one special cell at Srinagar. It also
has 6 training establishments.
NABARD is also known for its 'SHG Bank Linkage Programme' which encourages India's
banks to lend to self-help groups (SHGs). Because SHGs are composed mainly of poor
women, this has evolved into an important Indian tool for microfinance. As of March 2006 2.2
million SHGs representing 33 million members had to been linked to credit through this
programme.
NABARD also has a portfolio of Natural Resource Management Programmes involving
diverse fields like Watershed Development, Tribal Development and Farm Innovation through
dedicated funds set up for the purpose.
Organisation Setup

3. Objectives of NABARD
NABARD has been set up in the form of an apex institution for meeting the growing and
diverse credit needs of the agricultural and rural sector. The bank is a specialized institution in
the field of agricultural credit and is able to tackle the problems arising from Integrated Rural
Development. It is believed that the institution will also include the financing of agriculture
and allied activities, which would also include marketing, processing, storage and rural
enterprises. For this, the bank will combine in itself the developmental and financial role.
As the apex institution it is concerned with policy, planning and operations in the field of
agricultural credit and other economic activities in rural areas. The main objectives which
guide the functioning of NABARD are:

4. 1. to provide refinance to eligible institutions, namely, SLDBs (State Land Development
Banks), SCBs (State Cooperative Banks), and RRBs (Regional Rural Banks) for supporting
production and investment credit for developmental activities in rural areas,
2. to improve the absorptive capacity of the credit delivery system through institution building
by monitoring, formulation of rehabilitation schemes, restructuring of credit institutions,
training of personnel, etc.,
3. to coordinate the activities of different agencies engaged in developmental work at the field
level and to keep liaison with government of India, state governments and Reserve Bank of
India and other national level institutions connected with policy formulation,
4. To undertake monitoring and evaluation of projects refinanced by it.
The major objectives which guide refinance support for different activities through the eligible
institutions by NABARD are:
1. To support national policies for increasing agricultural production and rural employment
through efficient use of national resources;
2. Reduction of regional imbalances;
3. Equitable distribution of growth, ensuring credit support to the weaker sections of the
society through special programmes like the Integrated Rural Development Programme;
4. Increasing the credit absorptive capacity of the credit delivery system by improving the
health of the agencies involved in credit dispensation; and
5. Improving quality of lending through proper control of technical and financial parameters
and propagation of the repayment ethics.
Functions of NABARD
The main functions of NABARD are explained under
(1) Production and marketing credit,
(2) Conversion of loan for production credit,
(3) Rescheduling of loans of artisans, small industries

5. (4) Investment credit medium term,
(5) Other investment credit,
(6) Purchase and sale of shares,
(7) Loans to state governments for share capital contribution,
(8) Security for credit,
(9) Direct loans and
(10) Issues of guarantees.

6. (4) Investment credit medium term,
(5) Other investment credit,
(6) Purchase and sale of shares,
(7) Loans to state governments for share capital contribution,
(8) Security for credit,
(9) Direct loans and
(10) Issues of guarantees.