NABARD Full Form: The National Bank for Agriculture and Rural Development (NABARD) is India’s top regulatory agency for regional rural banks and apex cooperative banks.
It is governed by the Government of India’s Ministry of Finance.
Matters relating policy, planning, and operations in the field of credit for agricultural and other economic activities in rural areas of India” have been committed to the bank. NABARD is actively involved in the development and implementation of Financial Inclusion.
What is NABARD and NABARD Full Form?
On 12 July 1982, NABARD was founded to implement the National Bank for Agriculture and Rural Development Act 1981, based on the recommendations of the B. Sivaram man Committee (by Act 61, 1981 of Parliament).
It took the position from the Reserve Bank of India’s Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC), as well as the Agricultural Refinance and Development Corporation (ARDC).
It is one of the most prestigious agencies, with a budget of Rs.14080 crore (100 per cent share). There is an Rs.30,000 crore approved share capital.
World Bank-affiliated organizations and global development agencies working in agricultural and rural development are among NABARD’s international associates.
These organizations assist NABARD by providing advice and financial assistance for the upliftment of people in rural areas and the optimization of agricultural processes.
NABARD has played
NABARD has played a key role in establishing rural, social innovations, and social enterprises in rural areas. NABARD has 32 Regional Offices around the country as of May 2020.
Many of the interventions, such as the SHG-Bank Linkage programme, tree-based tribal communities’ livelihoods initiative, watershed approach in soil and water conservation, increasing crop productivity initiatives through lead crop initiative, or dissemination of information flow to agrarian communities through Farmer clubs, have been grounded through collaboration with over 4000 partner organizations.
Despite this, it pays high taxes to the government, consistently ranking among the top 50 taxpayers. In their never-ending hunt for ideas and answers, NABARD virtually returns all revenues to development investment.
In nearly three decades of working with rural communities, the organization had built up a significant amount of trust capital.
1. NABARD is the country’s most important institution, responsible for the development of cottages, small-scale, and village industries, as well as other rural businesses.
2. NABARD also supports and encourages integrated growth across allied economies.
3. NABARD fulfils its responsibilities by doing the following tasks:
- Acts as an apex financing agency for institutions that provide investment and production loans in order to promote diverse rural development initiatives.
- Takes actions to improve the credit delivery system’s absorptive ability, such as monitoring, formulating rehabilitation plans, reorganizing credit institutions, and training employees, among other things.
- Coordinates the rural financing activities of all institutions involved in development work on the ground and maintains communication with the Government of India, state governments, the Reserve Bank of India (RBI), and other national-level policy-making organizations.
- Conducts monitoring and evaluation of projects that it has refinanced.
- 5. The National Bank for Agriculture and Rural Development (NABARD) refinances the financial institutions that fund the rural economy.
- NABARD participates in the creation of institutions that benefit the rural economy.
- NABARD also monitors its customer institutions.
- It regulates the financial institutions that assist the rural economy.
- It offers training to organizations that engage in the field of rural development.
- It controls and supervises cooperative banks and regional rural banks across India.
NABARD is headquartered in Mumbai
NABARD is headquartered in Mumbai, India has regional offices across the country and a special cell in Srinagar, J&K.
The Regional Office[RO] is led by a Chief General Manager [CGMs] as Officer Incharge, while the Head Office is staffed by Directors, Deputy Managing Directors[DMD], and the Chairperson.
The Government of India appoints the Board of Directors in accordance with the NABARD Act. It operates 336 District Offices across the country, with District Development Managers in charge (DDMs). It also features six training facilities.
NABARD is well recognized for its “SHG Bank Linkage Program,” which encourages Indian banks to lend to self-help organizations (SHGs). SHGs have grown in importance in India as a microfinance tool, owing to the fact that they are primarily made up of underprivileged women. Through this scheme, 22 lakh SHGs representing 3.3 crore members have to be linked to credit by March 2006.
Through specialized funds set up for the purpose, NABARD also maintains a portfolio of Natural Resource Management Programs involving varied sectors such as Watershed Development, Tribal Development, and Farm Innovation.
Regulation of Banks
State cooperative banks (StCBs), district cooperative central banks (DCCBs), and regional rural banks (RRBs) are all supervised by NABARD, which also conducts statutory inspections.
State cooperative agriculture and rural development banks (SCARDBs), state cooperative banks (SCBs), regional rural banks (RRBs), commercial banks (CBS), and other financial institutions authorized by RBI are recipients of NABARD’s refinance fund from the World Bank and Asian Development Bank.
Individuals, partnership concerns, firms, state-owned corporations, and cooperative societies can all benefit from investment credit, but production credit is typically allocated to individuals.
Innovating in the countryside
NABARD’s contribution to India’s rural development is enormous. The Government of India established the National Bank For Agricultural & Rural Development (NABARD) as an apex Development Bank to ease loan flow to promote and develop agriculture, cottage and village industries.
In 2005–2006, NABARD sanctioned Rs 1,57,480 crore in loans for agricultural activities. The entire GDP is expected to expand at an annual rate of 8.4%.
In the future years, the Indian economy as a whole is expected to grow faster. NABARD plays a critical role in India’s overall development, particularly in rural and agricultural development.
NABARD established the Rural Innovation Fund with the help of the Swiss Agency for Development and Cooperation. Another well-known rural development scheme for the bank is the Rural Infrastructure Development Fund (RIDF).
A total of Rs 51,283 crore has been allocated to 2,44,651 projects under the RIDF scheme, including irrigation, rural roads and bridges, health and education, soil conservation, and water schemes.
The Rural Innovation Fund was established to assist innovative, risk-free, unconventional trials in these industries that have the potential to increase livelihood and job prospects in rural areas.
Individuals, NGOs, cooperatives, self-help groups, and Panchayati Raj institutions with the expertise and commitment to execute innovative ideas to improve the quality of life in rural regions are eligible for assistance.
600000 cooperatives in India work at the grassroots level in practically every area of the economy, with a member base of 25 crores. There are connections between SHGs and other types of institutes and cooperatives.
The goal of the RIDF is to foster
The goal of the RIDF is to foster rural and agricultural innovation through practical measures. The effectiveness of the programme is determined by a variety of elements, but the sort of organization to which assistance is provided is critical in terms of producing and executing ideas in a commercially viable manner.
Cooperative is a member-driven formal socioeconomic organization, whereas an SHG is an informal one. The social colour of NGOs is more prominent, but the political colour of PRI is more prominent.
Does an institute’s legal status have an impact on the program’s effectiveness? How so, and to what extent? When compared to NGOs, SHG, and PRIs, cooperative organizations perform better (in terms of financial efficiency and effectiveness) in the agricultural and rural sectors.
In 2007–08, NABARD launched a new direct financing facility under the umbrella of the “Umbrella Program for Natural Resource Management” (UPNRM).
Financial assistance for natural resource management initiatives might be granted as a loan with a reasonable interest rate under this instrument. Already, 35 projects with a total loan sum of Rs 1000 crore have been approved.
Honey gathering by tribals in Maharashtra, tussar value chain by a women’s producer company (‘MASUTA’), eco-tourism in Karnataka, and other approved projects.