NABARD development Day – July 12

Context:

• National Bank for Agriculture and Rural Development (NABARD) is an Apex Development Financial Institution in India.
• The Bank has been entrusted with “matters concerning Policy Planning and Operations in the field of credit for Agriculture and other Economic activities in rural areas in India”.
• NABARD is active in developing Financial Inclusion policy.

Background:

• NABARD was established on the recommendations of B. Sivaramman Committee, (by Act 61, 1981 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 providing developmental credit in rural areas.
•  NABARD is India’s specialised bank for Agriculture and Rural Development in India.

Role:

1. NABARD is the most important institution in the country which looks after the development of the cottage industry, small scale industry and village industry, and other rural industries.
2. NABARD also reaches out to allied economies and supports and promotes integrated development.
3. NABARD discharge its duty by undertaking the following roles :
4. Serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas
5. 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.
6. 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
7. Undertakes monitoring and evaluation of projects refinanced by it.
8. NABARD refinances the financial institutions which finances the rural sector.
9. NABARD partakes in development of institutions which help the rural economy.
10. NABARD also keeps a check on its client institutes.
11. It regulates the institutions which provide financial help to the rural economy.
12. It provides training facilities to the institutions working in the field of rural upliftment.
13. It regulates and supervise the cooperative banks and the RRB’s, throughout entire India.

NABARD has its head office at Mumbai, India.

Conclusion:

• NABARD is also known for its ‘SHG Bank Linkage Programme’ which encourages India’s banks to lend to self-help groups (SHGs). Largely because SHGs are composed mainly of poor women, this has evolved into an important Indian tool for microfinance.
•  By March 2006, 22 lakh SHGs representing 3.3 crore members had to be 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.