Profile
Settings
Refer your friends
Sign out
National bank for Agriculture and Rural development i.e.NABARD is a financial institution for the development of rural areas and it was established on 12th July 1982. Its headquarters is in Mumbai. The RBI constituted a committee called CRAFICARD to look into institutional credits to boost the rural economy. This committee reviews the arrangements for “institutional credit” for the “agriculture and development” of rural areas. This committee was formed on 30th March 1979 under Chairman B Shivaraman. He was a former member of the Planning Commission of the Government of India.
Various roles of NABARD
The main role of NABARD is the development of agriculture in rural areas. It provides credit to the agriculture sectors through different-different cooperative, regional banks, and commercial banks. NABARD (The National bank for Agriculture and Rural Development) was established in 1982. It is known as the apex bank for agriculture and rural credit. RBI is called apex bank because it is the banker of the bank. Similarly, NABARD is also called apex bank because it is also a banker of the bank for the agriculture sector.
It also provides finance through cooperative and commercial banks and regional rural banks. By providing credit to agriculture, small-scale industries, village industries, and cottage, handicrafts NABARD promotes integrated rural development. and it is also promoting other allied economic activities in rural areas.
It inspects district and state cooperative banks and regional rural banks. Reducing regional imbalance in the availability of finance is also a very important role or function of the National bank for Agriculture and Rural development “Nabard”. Another function or role of NABARD is to introduce innovations in the form of new schemes.
As a refinance institution, NABARD provides refinance to state cooperative banks, regional rural banks, and other rural financial Institutions. It also provides long-term loans to any Institutions approved by the central government, for agricultural finance.
Microfinance
The microfinance scheme was introduced in 1992 as a project under which a formal banking system reaches the micro-entrepreneurs including farmers. The scheme has been implemented through a “self-help group” which is also known as SHG and a bank linkage program. Marginal farmers, landless labourers, and artisans and craftsmen are the beneficiary. Persons engaged in small businesses like hawking and vending in the rural areas are also the beneficiaries.
The SHG bank linkage program is implemented by regional rural banks, commercial banks” and cooperative banks. The program has enabled about a hundred million poor families to gain access to microfinance in the banking system. The program however is not very successful due to problems associated with the recovery of loans.
Nabard also introduces the scheme for bulk lending support to NGOs. It is for on-lending to rural micro and household enterprises engineers receive finance under this scheme.
Wadi project or tribal development program in Gujarat
Nabard has supported an innovative tribal development program for a project in the Valsad district of Gujarat since 1995. This project is also known as the Wadi project. This program has multipronged objectives which include
- Elevation of poverty,
- Restoration of forest lands,
- Checking seasonal migrations,
- Community hygiene and
- Inculcating self-help among tribals.
More than 4500 families have developed about 1500 hectares of marginal land. This program has demonstrated that tribals can remain in their territory and do what they are best at- forest horticulture, and develop their lot on a sustainable basis. This is also the role of NABARD.
FIIS (Farm Income Insurance Scheme)
Nabard provides income protection to farmers through this scheme. This scheme was introduced in 2003-2004. It provides income protection to the people in rural areas. This scheme is also beneficial for farmers as it protects farmers’ income by ensuring minimum guaranteed income.
Conclusion
National bank for rural development or NABARD was set up in July 1982. It is the broad-based organisation at the apex level to support and guide rural credit. It also provides loans to state governments, non-governmental organisations known as NGOs and Panchayati Raj institutions for the development of rural infrastructure.
It also supports credit innovations of NGOs and often non-formal agencies. Extension of formal banking services to the unreached rural poor by the Self-Help groups (SHGs) supported by NABARD. It also promotes participatory watershed development and inspections of regional rural banks and cooperative banks. It supports technology transfer through the farmers club. NABARD also promotes the development of rural non-formal sectors.
