NABARD

The National Bank for Agriculture and Rural Development (NABARD), a development bank, came
into existence on July 12, 1982, under an act of parliament with an initial capital of Rs. 100 crore. It is
an apex institution set up for providing and regulating credit and other facilities for the promotion and
development of agriculture, small-scale industries, cottage and village industries, handicrafts and
other rural crafts, and other allied economic activities in rural areas with a view to promoting
integrated rural development and securing prosperity of rural areas and for matters connected
therewith or incidental thereto.

NABARD took over the functions of the erstwhile Agricultural Credit Department (ACD) and Rural
Planning and Credit Cell (RPCC) of the RBI and Agricultural Refinance and Development
Corporation
(ARDC). Its subscribed and paid-up capital was Rs. 100 crore which was enhanced to Rs. 500 crore,
contributed by the Government of India (GOI) and the RBI in equal proportions. The capital has now
been enhanced to Rs. 2,000 crore—Rs 550 crore subscribed by Government of India and Rs. 1,450
crore by the RBI.

The management of NABARD vests in a board of directors, representatives from the RBI, the
Government of India, state governments and directors nominated by the Government of India.

Functions of NABARD

• It serves as an apex refinancing agency for the institutions providing investment and
production credit for promoting the various developmental activities in rural areas.

• It takes measures towards institution building for improving absorptive capacity of the
credit delivery system, including monitoring, formulation of rehabilitation schemes,
restructuring of credit institutions, and training of personnel.

• It coordinates and supervises the rural financing activities of all institutions engaged in
developmental work at the field level and maintains liaison with the Government of India,
state governments, RBI, and other national level institutions concerned with policy
formulation.

• It undertakes monitoring and evaluation of projects refinanced by it.

• It promotes research in the fields of rural banking, agriculture, and rural development.

• It prepares annual rural credit plans for all districts in the country which form the base for
annual credit plans of all rural financial institutions.

In a nutshell, the functions of NABARD are to facilitate credit flow for agriculture and rural
development, promote and support policies, practices and innovations conducive to rural
development, strengthen rural credit delivery system through institutional development and
supervise rural financial institutions such as cooperative banks and regional rural banks.

NABARD operates throughout the country through its 28 regional offices and one sub office;
located in the capital of all the states/union territories and one sub-office at Port Blair. It has
330 district offices across the country and one special cell at Srinagar. It has also set up five
training centres.