National Rural Bank

NABARD (National Bank for Agriculture and Rural Development) is an Indian national financial organisation with a total balance sheet of more than US$ 40 billion. Its mission is to promote healthy food security and sustainable development by providing technical and financial assistance to creative, sustainable, national rural development and egalitarian agriculture and rural prosperity.

In the areas of agriculture, preservation of natural resources, fisheries, sustainable livelihood advancement, renewable energy, and micro finance, it has formed partnerships with other state building, financial institutions, and non-governmental organisations to implement new thinking through loans, guarantees, blended finance, and other structures.

Changing climate preparedness and response measures account for over a third of its total expenditures. There are a lot of National Bank for Agriculture and Rural Development locations.

History

In 1979, at the request of the Indian government, the Reserve Bank of India (RBI) constituted a Committee to Review the Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), which was headed by Shri B. Sivaraman, an old member of the Planning Commission. 

The Committee’s report (1979) underlined the need for such a modern management device to give credit-related concerns in rural development undivided attention, powerful direction, and clear focus. The National Bank for Agriculture and Rural Development (NABARD) was established in 1982 as a statutory agency under the National Bank for Agriculture and Rural Development Act, 1981. 

Its initial paid-up equity was Rs. 100 crore, split 50:50 between the Indian government and the Reserve Bank of India. When it comes to National Bank for Agriculture and Rural Development locations, its head office is situated in Mumbai, India, and regional offices in all the states of India.

Functions

• Through various goal-oriented departments that may be grouped broadly under three heads: financial, developmental, and supervision, National Bank for Agriculture and Rural Development(NABARD’s) programmes strive to establish an enlightened yet monetarily inclusive rural India
• It aids in the refinancing of rural infrastructure projects
• It develops district-level credit plans to guide and motivate the banking industry toward these goals
• It regulates financial institutions and rural banks (RRBs), assisting them in developing good banking practises and integrating them with the CBS platform (Core Banking Solution)
• It is engaged in creating and implementing development projects for the Union government
• It gives craftsmen with training and assistance in building an advertising platform for marketing their goods
• Leading worldwide organisations and World Bank-affiliated entities are among NABARD’s foreign partners

NABARD and RBI (National Bank for Agriculture and Rural Development)

• The Reserve Bank of India is the country’s central bank, with sole authority to oversee and supervise the banking industry, including NABARD, as established by the Banking Regulation Act of 1949
• RBI and NABARD collaborate on a number of developmental and regulatory projects
• The RBI appoints three directors to the NABARD Board of Directors
• NABARD makes recommendations to the Reserve Bank of India on cooperative bank licensing, state cooperative bank branch openings, and regional rural bank branch openings (RRBs)
• NABARD took over the operations of three RBI institutes: the Agricultural Credit Department (ACD), the Rural Planning and Credit Cell (RPCC), and the Agricultural Refinance and Development Corporation (ARDC)
• ACD: The RBI helped cooperatives with short-term refinancing through its ACD programme
• RPCC: Since 1979, it has dealt with Regional Rural Banks (RRBs)
• Agricultural Refinance Corporation (ARC): In 1963, the RBI established the Agricultural Refinance Corporation (ARC) as a refinancing organisation to provide medium and long-term agricultural loans to satisfy investment credit needs for agricultural development
• Agriculture Refinance and Development Corporation (ARDC) was renamed as ARC in the year of 1975 to focus on factors of loan off-take, development, and promotion of the agricultural sector

In 2018, the NABARD (Amendment) Bill 2017 was passed

The Union Government was able to enhance NABARD’s permitted capital from Rs. 5,000 crore to Rs. 30,000 crore by amending the Act. NABARD is allowed to have a capital of Rs 100 crore under the 1981 Act. The central government, in collaboration with the Reserve Bank of India, can augment this capital to Rs 5,000 crore (RBI). The bill authorises the government to raise this capital to Rs 30,000 crore.

Conclusion

Agriculture supports more than 75% of India’s population. Investments in rural infrastructure help to improve the socioeconomic standing of rural residents by increasing their income and improving their quality of life. NABARD, as the apex institution for issuing credit and building capacity to the Indian rural economy, has a significant opportunity to reduce poverty and empower rural India. Producer Organizations Development Fund (POF) was established by NABARD with a Rs 50 crore initial corpus to assist and sustain Producer Organizations (POs) & Primary Agriculture Credit Societies (PACS) to function as Multi Service Centres. The Executive board might appoint an Administrative Committee composed of a specified number of directors (known as Executive Directors).