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National Bank for Agriculture and Rural Development

National Bank for Agriculture and Rural Development
Logo of NABARD
Logo of NABARD
Headquarters in Mumbai
Headquarters in Mumbai
Headquarters Mumbai, Maharashtra, India
Established 12 July 1982[1]
Chairman Dr. Harsh Kumar Bhanwala[2]
Currency INR (Rupees)
Reserves Rs.81,220 crore (2007)
NABARD is the apex development bank in India

National Bank for Agriculture and Rural Development (NABARD) is an apex development bank in India having headquarters based in Mumbai (Maharashtra)[3] 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.[4] 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.[5] NABARD is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.[6]


  • History 1
  • Associated with NABARD 2
  • Role 3
  • Rural innovation 4
  • Microfinance and NABARD 5
  • NABARD a 100 % CSR company 6
  • References 7
  • External links 8


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. [7]


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.[8]

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 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 (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.[9]

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.[10] 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. Vrajlal Sapovadia noted schemes for the bank for rural development. [11] 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.[12] 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.[13]

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[14] etc.[15]

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.[16]

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.[17]


  1. ^ "25 YEARS OF DEDICATION TO RURAL PROSPERITY". Retrieved 2010-09-01. 
  2. ^ "Apex Development Bank with a mandate for facilitating credit flow". Retrieved 2010-09-01. 
  3. ^ "Nabard Rural Innovation Fund | Agriculture and Industry Survey". Retrieved 2010-09-01. 
  4. ^ "25 YEARS OF DEDICATION TO RURAL PROSPERITY". Retrieved 11 September 2011. 
  5. ^ "RBI sells Nabard stake to govt". 15 October 2010. Retrieved 28 December 2011. 
  6. ^ Bringing smart policies to life. AFI Global. Retrieved on 2013-12-06.
  7. ^ "NABARD". Retrieved 11 September 2011. 
  8. ^ "ROLE OF NABARD". Retrieved 10/12/2011. 
  9. ^ EDA and APMAS Self-Help Groups in India: A Study of the Lights and Shades, CARE, CRS, USAID and GTZ, 2006, p. 11
  10. ^ "Nabard can help change face of rural India". The Hindu Business Line. 28 June 2010. Retrieved 2010-09-01. 
  11. ^
  12. ^ "NABARD – SDC rural innovation fund". India Retrieved 2010-09-01. 
  13. ^ "SSRN-Evaluating Effectiveness Among Cooperatives vis-a-vis Other Social Institutes - A Case Study of Nabard's Rural Innovation Fund & Other Schemes by Vrajlal Sapovadia". Retrieved 2010-09-01. 
  14. ^ "india lags in using Nabard rural infra fund". 12 April 2010. Retrieved 2010-09-01. 
  15. ^ "National Bank for Agriculture and Rural Development". Retrieved 2010-09-01. 
  16. ^ "status of microfinance in INDIA .about microfinance one detail serve has been done by2009-2010". 
  17. ^ "NABARD is a institution and is in the business of development". 

External links

  • Official website
  • List of NABARD Schemes and Grants for 2012
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