Table of Contents:-
- Introduction to NABARD – National Bank For Agriculture And Rural Development
- Organisation and Structure of NABARD
- Objectives of NABARD
- Roles of NABARD
Introduction to NABARD – National Bank For Agriculture And Rural Development
In light of the recommendations of the Committee to Review Developmental Credit for Agriculture and Rural Development (CRAFICARD), the Government of India (GOI) established the National Bank for Agriculture and Rural Development (NABARD) on July 12, 1982. NABARD was created to serve as an agency to promote integrated rural development and to provide various forms of production and investment credit for agriculture and rural development.
NABARD is established as an apex development bank with a mandate to facilitate credit flow for the promotion and development of small-scale industries, handicrafts, agriculture, cottage and village industries, and other natural crafts. It also has the mandate to support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure the prosperity of rural areas. In fulfilling its role as a facilitator for rural prosperity, NABARD is authorised with:
1) Bringing about or promoting institutional development.
2) Evaluating, monitoring and inspecting the client banks.
3) Providing refinance to lending institutions in rural areas.
Responsibilities of NABARD – National Bank For Agriculture And Rural Development
Besides this pivotal role, NABARD also has certain responsibilities:
1) Acts as a regulator for cooperative banks and RRBs.
2) Acts as a coordinator in the operations of rural credit institutions.
3) Helps the state governments in reaching their targets of assisting eligible institutions in agriculture and rural development.
5) Extends assistance to the government, the Reserve Bank of India and other organisations in matters relating to rural development.
Organisation and Structure of NABARD – National Bank For Agriculture And Rural Development
NABARD functions through its head office in Mumbai and operates all over the country through its 28 regional offices and 1 sub-office, located in the capitals of all the states/union territories. It has 376 districts nationwide and one special cell situated in Srinagar. It also has six training, establishments in different parts of the country for capacity building and enhancement of the skills of its manpower and also of other organisations such as NGOs, banks, etc., who are equal partners in rural development.
The NABARD started with a capital of 100 crore which is in equal proportion held by the GOI and the Reserve Bank. The NABARD has replaced the Agricultural Refinance Development Corporation (ARDC) by assuming control of its entire assets and liabilities.
The bank is also authorised to accept deposits for over a year from the Central, State and local governments, scheduled commercial banks, etc. It can also borrow, seeking the approval of the Central Government, foreign currency from any bank or institution in India or abroad.
Objectives of NABARD – National Bank For Agriculture And Rural Development
The main objectives of NABARD, as stated in the statement of objectives presented before the Lok Sabha while introducing the bill, were categorized as follows:
1) The Bank will have organic links with the Reserve Bank and maintain a close link within.
2) The Bank will also provide direct lending to any institution as approved by the Central Government.
3) The Bank will serve as a refinancing institution for institutional credit such as long-term, for the promotion of activities in the rural areas.
4) The National Bank will be an apex organisation in respect of all matters relating to policy, planning operational aspects in the field of credit for the promotion of Agriculture, Small Scale Industries, Cottage and Village Industries, Handicrafts and other rural crafts as well as other allied economic activities in rural areas.
Roles of NABARD – National Bank For Agriculture And Rural Development
The roles of NABARD are as follows:
1) In the Development of the Rural Sector
The role of NABARD in the development of the rural sector in the country is as follows:
i) National-level institutions concerned with policy formulation,
ii) Undertakes monitoring and evaluation of projects refinanced by it, and
iii) Promotes research in the fields of rural banking, agriculture and rural development.
iv) Serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas;
v) 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,
vi) Coordinates the rural financing activities of all institutions engaged in developmental work at the field level and maintains liaison with the Government of India, State Governments, Reserve Bank of India – RBI and others.
The NABARD operates throughout the country through its 28 Regional Offices and one sub-office each located in the capitals of all the states and union territories.
2) In the Development of the Financial Sector
The role of NABARD in the development of the financial sector in the country is as follows:
i) Quality of Service
To improve the quality of service as well as keep in tune with the emerging developments in Information Technology, NABARD has launched an Action Plan on information technology, and its implementation has been vigorously pursued. NABARD has a complement of experienced and qualified staff in the following areas:
a) Agriculture Economics,
b) General Banking.
c) Information Technology.
d) Agriculture and related services such as irrigation, plantation and horticulture, and land development. agriculture engineering, biotechnology, fisheries, forestry, etc.
ii) Customers of the Bank
The customers of NABARD are cooperative banks, state land development banks, scheduled commercial banks, urban cooperative banks and such financial institutions as may be approved by RBI. Furthermore, NABARD also engages with voluntary agencies/NGOs, in addition to various state governments. NABARD has recently introduced capital gains bonds and these bonds are subscribed by the public.
iii) Grievance Redressal
NABARD has its internal redressal machinery, for example, the Central Vigilance Cell which has been established as per the directions of the Central Vigilance Commission of GOL. A strong internal audit and inspection mechanism is in place, in addition to the statutory audit conducted by professional auditors and inspections carried out by the RBI.
A notice board is displayed for the public at large in all NABARD office premises, indicating the names of the Chief Vigilance Officer/Vigilance Officer to be contacted by the public in case of need. Regarding client banks (SCBs, SCARDBs, RRBs, CCBs, and commercial banks), complaints against their staff, when submitted to NABARD, are addressed effectively. It is ensured that no complaint is left unattended at various levels.
iv) Performance Standards
NABARD has always maintained high standards of performance and made efforts to bring about similar performance standards for its client banks/institutions. To supervise its operations and performance, NABARD has its internal inspection department which periodically undertakes inspections of its all head office departments and regional offices.
v) Access to Information
NABARD has its website and its address is www.nabard.org The website highlights all major areas of its functioning and broadly indicates all matters relating to the organization, role and functions, operations, rural economy, international associates, addresses of its offices, etc. The general public, if necessary, may approach the Head Office (HO), Regional Offices (ROs), or District Development Managers (DDMs) of NABARD regarding matters related to credit for agriculture and rural development. The addresses are provided on the above-mentioned website.
vi) Important Initiatives by NABARD
These are the following initiatives:
b) Development Initiatives,
c) Institutional Strengthening Initiatives,
d) Research and Development Initiatives,
e) Micro-Finance Innovations and Strategies,
f) Institution of Purpose-Specific Funds in NABARD.