The National Bank of Agriculture and Rural Development (NABARD) was established on July 12, 1982, by an act of Parliament as a non-bank financial institution. It plays a crucial role in boosting the livelihood of tribal communities and supporting agriculture, cotton industries, rural handicrafts, village industries, and other related economic activities in rural areas. The main aim is to drive comprehensive rural development and ensure these areas thrive. NABARD collaborates with the government on various loan schemes, passing on subsidies to financing banks for applicants to access loans and benefits.
For the farming sector, NABARD offers a number of schemes like the “Dairy Entrepreneurship Development Scheme.” This scheme provides support for entrepreneurs in the dairy business to set up small dairy farms and invest in new technologies and infrastructure improvements.
Specific objectives of this scheme include:
– Modernizing farms to enhance milk production
– Financing purchases of new technology for commercial-scale milk production
– Promoting self-employment and infrastructure development in the informal sector
– Encouraging the rearing of heifer calves and conservation of good breeding stock
Additionally, NABARD offers other government loan schemes, including the Agri-clinic and Agribusiness Centres Scheme, New Agricultural Marketing Infrastructure, and the National Livestock Mission.
In recent developments, NABARD has introduced a special refinance facility of Rs. 800 crore for the fiscal year 2021 to support the Water, Sanitation, and Hygiene (WASH) program. This scheme provides concessional refinance to eligible financial institutions, including commercial banks, regional rural banks, cooperative banks, and microfinance institutions with a loan repayment period of up to 36 months.
NABARD plays several key roles, such as:
– Acting as a coordinator for rural credit institutions
– Supporting the government and Reserve Bank of India in rural development matters
– Offering training and research facilities for banks and cooperatives
– Serving as a regulator for Cooperative Banks and Regional Rural Banks (RRBs)
– Assisting with projects funded by the World Bank and International Funds for Agricultural Development (IFAD)
Its functions include:
Credit Functions:
– Setting policies for rural financial institutions
– Offering credit facilities to lending organizations
– Monitoring the flow of rural credit
Financial Functions:
– Providing various loan options to banks and institutions involved in agriculture and rural development
– Directly financing infrastructure such as warehouses and food processing units
Development Functions:
– Assisting banks in preparing and implementing development plans
– Offering financial support to bank training institutes
– Supporting the growth of farm and non-farm sectors
Supervisory Actions:
– Inspecting banks and cooperative societies to ensure compliance
Interest rates for NABARD schemes in 2020 included long-term refinance assistance from 8.50% and short-term from 4.50%, with similar rates for cooperative and regional rural banks.
Partner Institutions include state governments, various banks, corporations, non-banking finance companies, farmers’ organizations, and development-oriented partners like farmers’ clubs, self-help groups, and NGOs.
