Nabard

Brief description of Nabard

1. National Bank for Agriculture and Rural Development NABARD BY ALOK SINGH(KANPUR)

2. Genesis Reserve Bank of India (RBI), constituted a committee to review the arrangements for institutional credit for agriculture and rural development on 30 March 1979. Purpose was to review the arrangements for institutional credit for agriculture and rural development. 

3. The Committee felt the need for a new organisational device for providing undivided attention and focus to the credit problems arising out of integrated rural development. It recommended the formation of National Bank for Agriculture and Rural Development( NABARD ).

4. The Parliament, through Act,61 of 1981, approved the setting up of NABARD . The bank came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC)

5. Functions of NABARD Financial Development Supervisory

6. I Financial Function of NABARD Refinance Direct Finance

7. Refinance NABARD refinancing is a way for banks to get funding in respect of term loan for both Farm Sector and Non - Farm Sector activities for a period of 3-15 years and is released to only eligible institutions viz. SCARDBs, SCBs, Regional Rural Banks or Scheduled commercial banks or any other financial institution , approved by Reserve Bank of India (RBI) as defined under Section 25 of NABARD Act.

8. Refinance Department of Refinance provides refinance in respect of term loan for both Farm Sector and Non - Farm Sector activities. Short term loans available for a period of 12 months Long term loans are available for a period of 3-15 years. It is released to only eligible institutions

9. Institutions Eligible for Refinance State Co-operative Agriculture & Rural Development Banks (SCARDBs) Regional Rural Banks (RRBs) State Co-operative Banks (SCBs) Commercial Banks (CBs) State Agricultural Development Finance Companies (ADFCs) Scheduled Primary Urban Co-operative Banks (PUCBs) North East Development Finance Corporation (NEDFC) Non-Banking Financial Companies (NBFCs)

10. Activities covered by NABARD Refinance Minor Irrigation, Land Development, Dry Land Farming, Watershed Development, Farm Mechanisation , Plantation & Horticulture, Poultry / Dairy / Other Animal Husbandry Activities, Fisheries, Bio-gas, Forestry, Storage/Market Yard, Non - Farm Sector (Small & Micro Enterprises), Self Help Groups, Financing in Agri Export Zones etc

11. NABARD Direct Finances Loans for Food Processing Parks and Units NABARD had been granted Rs . 2000 crore as a special fund by RBI for providing credit to Food Parks, also known as agro-processing units. The fund is referred to as the Food Processing Fund – 2014-15.

12. The fund is provided either directly or through other financing agencies via consortium arrangements . The purpose of this fund is to aid in the development of the food processing sector in the country, create job opportunities and reduce wastage of agricultural produce.

13. Loans for Warehouses, Cold Storage and Cold Chain Infrastructure NABARD was allocated Rs . 5000 crore in 2014-15 to aid in building an infrastructure for the storage of agricultural commodities. The fund was labelled as the Warehouse Infrastructure Fund of 2014-15. The fund gives loans to private and public sectors for construction of cold storages, silos, warehouses and other cold chain infrastructure

14. Developmental Function

15. The rural financial system in the country calls for a strong and efficient credit delivery system, capable of taking care of the expanding and diverse credit needs of agriculture and rural development. More than 50% of the rural credit is disbursed by the Co-operative Banks and Regional Rural Banks . NABARD is responsible for regulating and supervising the functions of Co-operative banks and RRBs .

16. In this direction NABARD has been taking various initiatives in association with Government of India and RBI to improve the health of Co-operative banks and Regional Rural Banks.

17. Following are the developmental functions Help cooperative banks and Regional Rural Banks to prepare development actions plans for themselves. Help Regional Rural Banks and the sponsor banks to enter into MoUs with state governments and cooperative banks to improve the affairs of the Regional Rural Banks. Monitor implementation of development action plans of banks.

18. Provide financial support for the training institutes of cooperative banks, commercial banks and Regional Rural Banks. Provide financial assistance to cooperative banks for building improved management information system, computerisation of operations and development of human resources.

19. Supervisory Functions Undertakes inspection of Regional Rural Banks (RRBs) and Cooperative Banks under the provisions of Banking Regulation Act, 1949 . Undertakes inspection of State Cooperative Agriculture and Rural Development Banks (SCARDBs ).

20. Provides recommendations to Reserve Bank of India on issue of licenses to Cooperative Banks, opening of new branches by State Cooperative Banks and Regional Rural Banks (RRBs).

21. II Developmental Function Farm Sector Non-Farm Sector Financial Inclusion Micro Credit Innovations Research and Development Core Banking Solutions to Cooperative Banks Climate change Institutional Development

22. Farm Sector Farm Sector Development Department (FSDD ) C onservation and management of natural resources A ccelerating ground level credit flow by Rural Financial Institutions I ncremental agricultural production and productivity G enerating rural employment and raising the standard of living of rural poor through credit and grant.

23. Projects Support to Farmers' Training and Rural Development Centres Grant support  is provided to Farmers' Training and Rural Development Centres set up by major Commercial Banks / other agencies

24. Support for Capacity Building for Adoption of Technology (CAT ) Under Capacity Building for Adoption of Technology (CAT), during 2013-14, 392 exposure visits were arranged in collaboration with select research institutes to build the capacity of around 11736 farmers for adopting new / innovative methods of farming .

25. Areas covered were: P recision farming High-tech agriculture B anana tissue culture F odder development O rganic farming D rum seeding S ustainable agriculture practices, cattle management, vegetable seed multiplication

26. Village Development Programme Holistic Development of villages. VDPs are implemented by partnering with NGOs or other agencies. Activities such as- Comprehensive soil testing and recommended crop specific package of practices.  Integrated Nutrient Management (INM) / Integrated Pest Management (IPM), Organic Farming, use of certified seeds, Nursery Development etc

27. I mproved seed replacement, use of low cost compost/ vermi compost led to reduction in cost of cultivation from 10 to 20 %. Pilot Project on Augmenting Productivity of Lead Crops

28. Pilot Project on System of Rice Intensification - a combination of simple agronomic and management practices to improve productivity . Average increase in grain productivity reported at 30 % In condition of poor rainfall , this method did comparatively well. Cost of cultivation was observed to be reduced while income level of small and marginal farmers have increased.

29. Rural Non-Farm Sector Development Promotion of Rural Non-Farm Sector to reduce over dependence on agriculture of our rural population and to provide alternate livelihood options . H elps in reducing large-scale migration of small and marginal farmers and agricultural labourers to urban areas in search of livelihood opportunities on account of unemployment/disguised employment in the agriculture sector.

30. Priority Area The focus has been on greater credit flow for small, cottage and village industries, handloom, handicrafts and other rural crafts and service sector rural areas . Building an entrepreneurial culture and necessary skills among the rural youth and women. Developing markets for the rural non-farm sector .

31. Marketing Initiative To enable the artisans to sell the products in marketing events. To market their artistry to the consumers and benefit directly from the market feedback for better value realization in future. Financial assistance by way of grant is provided on selective basis.

32. Example - The Bank co-sponsored SARAS- Mahalaxmi Fair at Mumbai wherein 100 artisans from 27 States participated in the 11 day long exhibition-cum-sale event.

33. Participation in marketing events/exhibitions provided them necessary exposure to interact directly with the consumers. Interface with management students, professional designers and representatives of promotional agencies like KVIC/KVIB, etc., at such events enabled the artisans to fine tune their product range to suit consumer preferences .

34. Example – Confederation of Indian Industry (CII) was sanctioned Rs.9 lakh for experimenting with marketing of handloom and handicraft products from the north-eastern States through organised retail outlets in Metro Cities.

35. Women Empowerment Assistance to Rural Women for Non-Farm Development (ARWIND) scheme was introduced in 1993 for meeting promotional and other credit needs of women entrepreneurs supported by NGOs , co-operatives and other registered institutions.

36. The scheme of Marketing of Non-Farm Products of Rural Women (MAHIMA) aimed at supporting agencies engaged in marketing products manufactured by rural women was introduced in 1997.

37. SUDHA A SHG Bank linkage Program ‘Help the women to help themselves’.

38. A Self-Help Group (SHG) is a village-based financial intermediary usually composed of 10-20 local women . Members make small regular savings contributions over a few months until there is enough capital in the group to begin lending. Funds may then be lent back to the members or to others in the village for any purpose

39. In India, many SHGs are ‘linked’ to banks for the delivery of micro-credit.