The National Bank of Agriculture and Rural Development (NABARD) was initially promoted by the Reserve Bank of India in 1982 under the National Bank of Agriculture and Rural Development Act 1981. By its establishment, NABARD substituted the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India, and the Agricultural Refinance and Development Corporation (ARDC). Currently, the Government of India is holding the 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 various developmental activities including the 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 to self-help groups (SHGs) under the ‘SHG Bank Linkage Program’.
The partnership firms, corporates, state-owned enterprises, and cooperative societies are receivers of NABARD’s production credit in rural areas. NABARD offers to refinance to state co-operative agriculture and rural development banks (SCARDBs), State co-operative banks (SCBs), Regional Rural Banks (RRBs), Land Development Banks, Commercial Banks, and other financial institutions approved by RBI for their lending to the farm sector and non-farm sector in rural areas. NABARD’s farm sector refinance covers a 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 is 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 cooperative banks, RRBs, and commercial banks working in the field of rural development.
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| Role of IDBI | Role of NABARD | National Housing Bank (NHB) |
| EXIM Bank | SIDBI | NaBFID |
