NABARD is an apex institution, accredited with all mattersconcerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India.The Committee to Review Arrangements for Institutional Credit for Agricultureand Rural Development (CRAFICARD), set up by the Reserve Bank of India(RBI) under the Chairmanship of Shri B. Sivaraman, conceived andrecommended the establishment of the National Bank for Agriculture and RuralDevelopment (NABARD). The Indian Parliament through the Act 61 of 1981,approved the setting up of NABARD. The Bank which came into existence on 12July, 1982, was dedicated to the service of the Nation by the Hon’ble PrimeMinister, Smt Indira Gandhi on 5
NABARD is established as a development Bank, in terms of the Preamble of the Act, "for providing and regulating Credit and other facilities for thepromotion and development of agriculture, small scale industries, cottageand village industries, handicrafts and other rural crafts and other alliedeconomic activities in rural areas with a view to promoting integrated ruraldevelopment and securing prosperity of rural areas and for mattersconnected therewith or incidental thereto."
NABARD took over the functions of the erstwhile Agricultural Credit Department(ACD) and Rural Planning and Credit Cell (RPCC) of RBI and AgriculturalRefinance and Development Corporation (ARDC). Its subscribed and paid-upCapital was Rs.100 crore which was enhanced to Rs. 500 crore, contributed bythe Government Of India (GOI) and RBI in equal proportions. Currently it is Rs.2000 crore, contibuted by GoI (Rs.550 crore) and RBI (Rs.1450 crore).NABARD: (i) serves as an apex financing agency for the institutions providinginvestment and production credit for promoting the various developmentalactivities in rural areas; (ii) takes measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring,formulation of rehabilitation schemes, restructuring of credit institutions, trainingof personnel, etc. ; (iii) co-ordinates the rural financing activities of all institutionsengaged in developmental work at the field level and maintains liaison withGovernment of India, State Governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy formulation; and (iv) undertakesmonitoring and evaluation of projects refinanced by it.NABARD’s refinance is available to State Co-operative Agriculture and RuralDevelopment Banks (SCARDBs), State Co-operative Banks (SCBs), RegionalRural Banks (RRBs), Commercial Banks (CBs) and other financial institutionsapproved by RBI. While the ultimate beneficiaries of investment credit can be