The National Bank for Agriculture and Rural Development (NABARD) closed its business in the 2020-21 fiscal year with a remarkable growth rate of 23.5%, reaching Rs. 6.57 lakh crore.
NABARD’s Business Activities in the Fiscal Year 2020-21
In response to the Aatmanirbhar Bharat Abhiyan initiative, NABARD supported cooperative banks, Regional Rural Banks (RRBs), and NBFC-MFIs (Non-Banking Financial Company: Micro Finance Institution) through a Special Liquidity Facility (SLF). This strategy aimed to bolster the resources of Cooperative banks and RRBs, enabling them to provide credit facilities to farmers more readily.
NABARD marked Rs. 2.23 lakh crore in total refinance disbursements throughout the fiscal year, strengthening agricultural and rural development efforts amidst the ongoing pandemic. Concurrently, it rolled out a refinance facility worth Rs. 500 crore to buttress the Government of India’s Water, Sanitisation and Hygiene (WASH) programme.
About NABARD
NABARD is a statutory body established under the ‘National Bank for Agriculture and Rural Development Act, 1981’, with its inception on 12th July 1982. The entity was formed by transferring the agricultural credit functions of the Reserve Bank of India (RBI) and the refinance functions of the erstwhile Agricultural Refinance and Development Corporation (ARDC). NABARD operates as a development bank with its primary focus on the nation’s rural sector, acting as the apex institution responsible for providing finance for agriculture and rural development.
The bank liaises with RBI, which provides three directors to NABARD’s Board of Directors. NABARD contributes recommendations to RBI concerning the issuance of licenses to Cooperative Banks, as well as the opening of new branches by State Cooperative Banks and RRBs. NABARD is headquartered in Mumbai.
Major Functions of NABARD
NABARD plays a crucial role in providing refinance support for the construction of rural infrastructure. As a refinancing agency, it lends to other institutions that directly disburse loans to end customers. It extends short-term, medium-term, and long-term refinance to Cooperative banks and RRBs to augment their resources, thereby ensuring adequate credit supply for supporting farmers and rural artisans’ investment activities.
NABARD oversees Cooperative Banks and Regional Rural Banks (RRBs), assisting their development of sound banking practices and incorporation into the CBS (Core Banking Solution) platform. The CBS platform facilitates banks to offer client-centered services on a 24×7 basis from a single location.
In addition, NABARD takes part in designing Union government’s development schemes and overseeing their implementation, such as the National Livestock Mission, Interest Subvention Scheme, New Agricultural Marketing Infrastructure, and more.
NABARD’s International Partnerships
NABARD has established partnerships with various leading international organizations and World Bank-affiliated institutions, which are innovating in the fields of rural development and agriculture. These global partners provide vital consulting services and financial assistance geared towards uplifting rural communities and optimizing various agricultural processes.
