National Bank for Agriculture and Rural Development (NABARD) is an apex development bank in
India having headquarters based in Mumbai (Maharashtra) and
other branches are all over the country. The Committee to Review Arrangements
for Institutional Credit for Agriculture and Rural Development (CRAFICARD), set
up by the Reserve Bank of India (RBI) under the Chairmanship of Shri B.
Sivaraman, conceived and recommended the establishment of the National Bank for
Agriculture and Rural Development (NABARD). It was established on 12 July 1982
by a special act by the parliament and its main focus was to uplift rural India
by increasing the credit flow for elevation of agriculture & rural non farm
sector and completed its 25 years on 12 July 2007. It has been
accredited with "matters concerning policy, planning and operations in the
field of credit for agriculture and other economic activities in rural areas in
India". RBI sold its stake in NABARD to the Government of India, which now
holds 99% stake. NABARD is
active in developing financial
inclusion policy and is a member of the Alliance for Financial
Inclusion.
History
NABARD was established on the recommendations of Shivaraman
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 to provide credit in rural areas. Nabard is India's
specialised bank.
Associated with NABARD
International associates of NABARD ranges from World
Bank-affiliated organizations to global developmental agencies working in the
field of agriculture and rural development. These organizations help NABARD by
advising and giving monetary aid for the upliftment of the people in the rural
areas and optimizing the agricultural process.
Role
NABARD is the apex institution in the country which looks after
the development of the cottage industry, small industry and village industry,
and other rural industries. NABARD also reaches out to allied economies and
supports and promotes integrated development. And to help NABARD discharge its
duty, it has been given certain roles as follows:
1.
Serves as an apex financing agency
for the institutions providing investment and production credit for promoting
the various developmental activities in rural areas
2.
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.
3.
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
4.
Undertakes monitoring and evaluation
of projects refinanced by it.
5.
NABARD refinances the financial
institutions which finances the rural sector.
6.
The institutions which help the rural
economy, NABARD helps develop.
7.
NABARD also keeps a check on its
client institutes.
8.
It regulates the institution which
provides financial help to the rural economy.
9.
It provides training facilities to
the institutions working the field of rural upliftment.
10.
It regulates the cooperative banks
and the RRB’s, and manages talent acquisition through IBPS CWE.
NABARD's refinance is available to State Co-operative
Agriculture and Rural Development Banks (SCARDBs), State Co-operative Banks
(SCBs), Regional Rural Banks (RRBs), Commercial Banks (CBs) and other financial
institutions approved by RBI. While the ultimate beneficiaries of investment
credit can be individuals, partnership concerns, companies, State-owned
corporations or co-operative societies, production credit is generally given to
individuals. NABARD has its head office at Mumbai, India.
NABARD operates throughout the country through its 28 Regional
Offices and one Sub-office, located in the capitals of all the states/union
territories. Each Regional Office[RO] has a Chief General Manager [CGMs] as its
head, and the Head office has several Top executives like the Executive
Directors[ED], Managing Directors[MD], and the Chairperson.It has 336 District
Offices across the country, one Sub-office at [[Port Blair]] and one special
cell at Srinagar. It also has 6
training establishments.
NABARD is also known for its 'SHG Bank Linkage Programme' which
encourages India's banks to lend to [[self-help group (finance)|self-help
groups]] (SHGs). Because SHGs are composed mainly of poor women, this has
evolved into an important Indian tool for microfinance.
As of March 2006 22 lakh SHGs representing 3.3 crore members had to been 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.
Rural innovation
NABARD role in rural development in India is phenomenal.
National Bank For Agriculture & Rural Development (NABARD) is set up as an
apex Development Bank by the Government of India with a mandate for
facilitating credit flow for promotion and development of agriculture, cottage
and village industries. The credit flow to agriculture activities sanctioned by
NABARD reached Rs 1,57,480 crore in 2005-2006. The overall GDP is estimated to
grow at 8.4 per cent. The Indian economy as a whole is poised for higher growth
in the coming years. Role of NABARD in overall development of India in general
and rural & agricultural in specific is highly pivotal.
Through assistance of Swiss Agency for Development and
Cooperation, NABARD set up the Rural Infrastructure Development Fund. Under the
RIDF scheme Rs. 51,283 crore have been sanctioned for 2,44,651 projects
covering irrigation, rural roads and bridges, health and education, soil
conservation, water schemes etc. Rural Innovation Fund is a fund designed to
support innovative, risk friendly, unconventional experiments in these sectors
that would have the potential to promote livelihood opportunities and
employment in rural areas. The
assistance is extended to Individuals, NGOs, Cooperatives, Self Help Group, and
Panchayati Raj Institutions who have the expertise and willingness to implement
innovative ideas for improving the quality of life in rural areas. Through
member base of 25 crore, 600000 cooperatives are working in India at grass root
level in almost every sector of economy. There are linkages between SHG and
other type institutes with that of cooperatives.
The purpose of RIDF is to promote innovation in rural & agricultural
sector through viable means. Effectiveness of the program depends upon many
factors, but the type of organization to which the assistance is extended is
crucial one in generating, executing ideas in optimum commercial way.
Cooperative is member driven formal organization for socio-economic purpose,
while SHG is informal one. NGO have more of social color while that of PRI is
political one. Does the legal status of an institute influences effectiveness
of the program? How & to what an extent? Cooperative type of organization
is better (Financial efficiency & effectiveness) in functioning
(agriculture & rural sector) compared to NGO, SHG &
PRIs.
Recently in 2007-08, NABARD has started a new direct lending
facility under 'Umbrella Programme for Natural Resource Management' (UPNRM).
Under this facility financial support for natural resource management
activities can be provided as a loan at reasonable rate of interest. Already 35
projects have been sanctioned involving loan amount of about Rs 1000 crore. The
sanctioned projects include honey collection by tribals in Maharashtra, tussar
value chain by a women producer company ('MASUTA'), eco-tourism in Karnataka etc.
Microfinance and NABARD
Thus the Reserve Bank of INDIA and NABARD has laid out certain
guidelines in 06-07 for the commercial banks, Regional Rural Banks and
Cooperative Banks to provide the data to RBI and es data regarding loans given
by banks to the microfinance institutions.
NABARD a 100 % CSR company
NABARD has been instrumental in grounding rural,social
innovations and social enterprises in the rural hinterlands. This endeavour is
perhaps unparalleled in the country, it has in the process partnered with about
4000 partner organisations in grounding many of the interventions be it, 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.Despite all this, it pays huge
taxes too, to the exchequer – figuring in the top 50 tax payers consistently.
NABARD virtually ploughs back all the profits for development spending, in
their unending search for solutions and answers. Thus the organisation had
developed a huge amount of trust capital in its 3 decades of work with rural
communities.