The Role of NABARD in Business

On the recommendation of theB. Sivaraman Committee, NABARD was established on July 12, 1982. The National Bank for Agriculture and Rural Development Act of 1981 was established and put into effect. The founding capital of NABARD was Rs. 100 crores.

It’s an apex development community that provides credit flow services to small-scale manufacturing, agriculture, cottage industries, and other small-scale rural businesses. NABARD’s headquarters are in Mumbai, Maharashtra, and the organisation has branches all throughout India.

Functions of NABARD

• Through various goal-oriented departments that may be grouped broadly under three heads: financial, developmental, and supervision, NABARD’s programmes strive to establish an empowered and financially 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 cooperative banks and regional rural banks (RRBs), assisting them in developing good banking practices and integrating them with the CBS platform (Core Banking Solution).
• CBS is a branch networking system that allows customers to access their accounts and banking services from any Bank branch on the CBS network, regardless of where they keep their accounts. The customer is no longer a Branch’s customer.
• It is involved in developing and implementing development projects for the Union government.
• It gives handcraft craftsmen with training and assistance in building a marketing platform for selling their products.
• NABARD works with a number of foreign organisations, including leading global organisations and World Bank-affiliated institutions, to create new ground in the sectors of rural development and agriculture.
• These international partners serve as important consultants, offering advice and financial support to ensure the upliftment of rural peoples as well as the optimization of various agricultural processes.

NABARD & RBI

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 Chairman

With effect from May 27, 2020, Dr. G.R. Chintala is the Chairman of the National Bank for Agriculture and Rural Development (NABARD). He was previously the Managing Director of NABFINS, a NABARD subsidiary based in Bengaluru.

History Of NABARD

The role of institutional lending in supporting the rural economy has been recognised by the government since its inception.In 1979, at the request of the Indian government, the Reserve Bank of India (RBI) established a Committee to Review the Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), which was chaired by Shri B. Sivaraman, a former member of the Planning Commission.

The Committee’s report (1979) underlined the need for a new organisational device to give credit-related concerns in rural development undivided attention, powerful direction, and clear focus.

Prior to the foundation of NABARD, RBI was the apex body for providing loans to the Indian rural sector.

It resulted in NABARD being India’s apex development funding institution.

In the field of agriculture and rural development, the NABARD’s role is essentially the same as the RBI’s.

Role Of NABARD

1. It is an apex institution with the authority to deal with all topics relating to policy, planning, and operations in the provision of loans for agricultural and other rural economic activities.
2. It is a refinancing agency for banks that provide investment and production finance in order to promote a variety of rural development projects.
3. It is enhancing the absorptive ability of India’s credit delivery system, including monitoring, rehabilitation scheme creation, credit institution restructuring, and personnel training.
4. It coordinates the rural credit financing activities of all types of organisations engaged in development work on the ground, while maintaining communication with the Government of India, state governments, the Reserve Bank of India, and other national level policy-making institutions.
5. It creates annual rural credit programmes for all of the country’s districts.
6. It also encourages research in the fields of rural banking, agriculture, and rural development.

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 providing loans and capacity building to the Indian rural economy, has a significant opportunity to reduce poverty and empower rural India.