National Bank for Agriculture and Rural Development (NABARD)

Introduction

• The National Bank for Agriculture and Rural Development (NABARD) is an apex financial institution which is primarily responsible for rural and agricultural financing.
• The origin of the National Bank for Agriculture and Rural Development (NABARD) can be traced back to the B. Sivaraman Committee which was created by the Reserve Bank of India (RBI) to review the Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD).
• B. Sivaraman Committee outlined the need for a new organizational device for providing undivided attention to credit related issues linked with rural development. 
• Its recommendation was formation of a unique development financial institution which would address these aspirations and creation of National Bank for Agriculture and Rural Development (NABARD) was approved by the Parliament through Act 61 of 1981.
• NABARD came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC).
• NABARD today is fully owned by the Government of India.

Functions of NABARD

• NABARD supervises the Regional Rural Banks (RRBs) and Cooperative Banks along with developing their banking practices and integrating them to the Core Banking Solution (CBS) platform.
• NABARD provides the necessary financial support to build rural infrastructure.
• It provides short, medium, and long-term credit to state cooperative banks, RRBs to support agriculture and allied activities.
• It also maintains a Research And Development Fund known as Rural Infrastructure Development Fund (RIDF)  to promote research in agriculture and rural development.
• It also provides various refinancing facilities.

Important Notes

• The Reserve Bank of India divested its entire stake in the National Bank for Agriculture and Rural Development (NABARD) and National Housing Bank (NHB). With this divestment, the Government of India holds a 100% stake in both of these financial institutions.
• The important subsidiaries of NABARD are:

1. NABKISAN Finance Limited (NABKISAN)
2. NABSAMRUDDHI Finance Limited (NSFL)
3. NABFINS Limited (NABFINS)
4. NABFOUNDATION
5. NABCONS (NABARD Consultancy Services)
6. NABVENTURES Limited
7. NABSanrakshan Trustee Company Private Limited