About NABARD
- NABARD (National Bank for Agriculture and Rural Development) is an apex development financial institution established on 12 July 1982 under the NABARD Act, 1981 by an Act of Parliament.
- Its mandate is to promote and develop agriculture and rural areas through credit, institutional development and related initiatives.
- NABARD is wholly owned by the Government of India and has its head office in Mumbai. The agriculture-credit functions of the Reserve Bank of India (RBI) and refinance functions of the former Agricultural Refinance and Development Corporation (ARDC) were transferred to it on formation.
Credit and Development Role
- Refinance: Provides refinance support to Rural Financial Institutions, mainly Cooperative Banks and Regional Rural Banks (RRBs), to strengthen the flow of agricultural and rural credit.
- Rural Infrastructure Development Fund (RIDF): Provides loans to State Governments for creating rural infrastructure.
- Financial Inclusion: Supports initiatives such as the Self-Help Group (SHG)-Bank Linkage Programme and Joint Liability Groups (JLGs) for marginal and tenant farmers.
- Direct Finance: Provides assistance for rural infrastructure, warehousing and other eligible rural-sector projects through instruments such as NABARD Infrastructure Development Assistance (NIDA).
Supervision and Institutional Development
- Supervision: Supervises Rural Financial Institutions, particularly Regional Rural Banks (RRBs) and Cooperative Banks, to strengthen rural credit delivery.
- Institution Building: Works with governments, financial institutions and other stakeholders to improve rural credit systems, institutional capacity and development practices.
- Policy Support: Provides inputs to the Government of India, Reserve Bank of India (RBI) and State Governments on agriculture credit, rural development and institutional development.
- Research and Training: Undertakes studies, surveys, training and information dissemination relating to agriculture, rural banking and rural development.
Key Institutional Features
- Legal Basis: Established under the NABARD Act, 1981, which provides for its establishment, functions and governance.
- Ownership: Wholly owned by the Government of India.
- Head Office: Located at Mumbai, with offices and development personnel operating across India.
- Core Objective: Promotes sustainable and equitable agriculture and rural prosperity through financial and non-financial interventions, institutional development and innovation.
Conclusion
NABARD is the apex development financial institution focused on strengthening agriculture, rural credit and rural infrastructure. Its role combines refinance, development, financial inclusion and supervision of key rural financial institutions.
Through programmes such as RIDF and the SHG-Bank Linkage Programme, NABARD links institutional finance with rural development and wider financial inclusion.
| This concept has been elaborately discussed in the following article – NABARD: National Bank for Agriculture and Rural Development |