What are the key activities of NABARD?

What are the key activities of NABARD?


National Bank of Agriculture and Rural Development (NABARD) was initially promoted by Reserve Bank of India in 1982 under National Bank of Agriculture and Rural Development Act 1981. By its establishment NABARD substituted Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). Currently, Government of India is holding entire share capital (100% share) of face value worth Rs.30000 Crore in NABARD.

NABARD serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities including development of the cottage industries, handloom industries, MSMEs and other rural industries in rural areas. While the production credit is generally given to individuals, NABARD encourages commercial banks to lend self-help groups (SHGs) under ‘SHG Bank Linkage Program’.

The partnership firms, corporates, state owned enterprises, co-operative societies are receivers of NABARD’s production credit in rural areas. NABARD offers refinance to state co-operative agriculture and rural development banks (SCARDBs), State co-operative banks (SCBs), Regional Rural Banks (RRBs), Land Development Bank, Commercial Banks, and other financial institutions approved by RBI for their lending to farm sector and non-farm sector in rural areas. NABARD’s farm sector refinance covers wide range of agriculture and allied activities viz. Minor Irrigation, Land Development, Dry Land Farming, Watershed Development, Farm Mechanisation, Plantation & Horticulture, Poultry, Dairy, Fisheries, Bio-gas, Agri-clinic, cold Storage and so on.

While refinance available on farm sector credits, refinance facility is also extended on lending to the non-farm sectors like Small Road and Water Transport Operators, Small & Micro Enterprises, Rural Housing, etc. NABARD also extends financial support for training and research institutes of co-operative banks, RRBs and commercial banks working in the field of rural developments.

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