NABARD

NABARD

PRESENTED BY:-SANJAY YADV

INTRODUCTION

NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts. It also has the mandate to support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas.

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In discharging its role as a facilitator for rural prosperity NABARD is entrusted with:

• Providing refinance to lending institutions in rural areas

• Bringing about or promoting institutional development and

• Evaluating, monitoring and inspecting the client banks

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Besides this pivotal role NABARD also:

• Acts as a coordinator in the operations of rural credit institutions

• Acts as regulator for cooperative banks and RRBs• Offers training and research facilities for banks, cooperatives

and organizations working in the field of rural development • Extends assistance to the government, the Reserve Bank of

India and other organizations in matters relating to rural development

GENESIS AND HISTORICAL BACKGROUND•   The Committee to Review Arrangements for

Institutional Credit for Agriculture and Rural Development (CRAFICARD) set up by the RBI under the Chairmanship of Shri B Sivaraman in its report submitted to Governor, Reserve Bank of India on November 28, 1979 recommended the establishment of NABARD.

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• The Parliament through the Act 61 of 81, approved its setting up.  The Committee after reviewing the arrangements came to the conclusion that a new arrangement would be necessary at the national level for achieving the desired focus and thrust towards integration of credit activities in the context of the strategy for Integrated Rural Development.

• It was set up with an initial capital of Rs 100 crore, which was enhanced to Rs 2,000 crore, fully subscribed by the Government of India and the RBI.

MISSION

Promoting sustainable and equitable agriculture and rural development through effective credit support, related services, institution building and other innovative initiatives.  

In pursuing this mission, NABARD focuses its activities on:  • Credit functions: involving preparation of potential-linked

credit plans annually for all districts of the country for identification of credit potential, monitoring the flow of ground level rural credit, issuing policy and operational guidelines to rural financing institutions and providing credit facilities to eligible institutions under various programmes  

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• Development functions: concerning reinforcement of the credit functions and making credit more productive  

• Supervisory functions: ensuring the proper functioning of cooperative banks and regional rural banks

OBJECTIVESThe main objectives of the NABARD as stated in the statement of objectives

while placing the bill before the Lok Sabha were categorized as under :  • The National Bank will be an apex organization in respect of all matters

relating to policy, planning operational aspects in the field of credit for promotion of Agriculture, Small Scale Industries, Cottage and Village Industries, Handicrafts and other rural crafts and other allied economic activities in rural areas.  

• The Bank will serve as a refinancing institution for institutional credit such as long-term, short-term for the promotion of activities in the rural areas.

• The Bank will also provide direct lending to any institution as may approved by the Central Government.  

• The Bank will have organic links with the Reserve Bank and maintain a close link with in.

MAJOR ACTIVITIES

• Preparing of Potential Linked Credit Plans for identification of exploitable potentials under agriculture and other activities available for development through bank credit.

• Refinancing banks for extending loans for investment and production purpose in rural areas.

• Providing loans to State Government/Non Government Organizations (NGOs)/Panchayati Raj Institutions (PRIs) for developing rural infrastructure.

• Supporting credit innovations of Non Government Organizations (NGOs) and other non-formal agencies.

• Extending formal banking services to the unreached rural poor by evolving a supplementary credit delivery strategy in a cost effective manner by promoting Self Help Groups (SHGs)

ORGANIZATION STRUCTURE

SUBSIDIARIES OF NABARD

NABCONS • NABARD Consultancy Services (Nabcons) is a wholly owned

subsidiary promoted by National Bank for Agriculture and Rural Development (NABARD) and is engaged in providing consultancy in all spheres of agriculture, rural development and allied areas. Nabcons leverages on the core competence of the NABARD in the areas of agricultural and rural development, especially multidisciplinary projects, banking, institutional development, infrastructure, training, etc., internalized for more than two decades.

• The Company is registered under the Company's Act, 1956, with an authorized capital of Rs 250 million (US $5.75 million) and paid up capital of Rs 50 million (US $1.15 million).

NABFINS NABARD Financial Services Limited

• Is a subsidiary of National Bank for Agriculture and Rural Development (NABARD) with equity participation from NABARD, Government of Karnataka, Canara Bank, Union Bank of India, Dhanalakshmi Bank and Federal Bank

• It is a non-deposit taking NBFC registered with the  Reserve Bank of India and  shall operate throughout India.  The main objectives of the Company are to provide financial services in  two broad areas of agriculture and microfinance.

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• NABFINS provides credit and other facilities  for  promotion, expansion, commercialization and modernization of agriculture and allied activities.

• NABFINS shall engage in the business of providing micro finance services (with or without thrift) and other facilities to needy and disadvantageous sections of the society for securing their prosperity in both rural and urban areas.

DEPARTMENTS• Repositioning Department• Accounts Department• Central Vigilance Cell• Corporate Communications Department• Corporate Planning Department• Department for Cooperative Revival and Reforms (DCRR)• Department of Economic Analysis & Research• Department of Information Technology• Department of Supervision• Development Policy Department-Farm Sector• Development Policy Department-Non-Farm Sector• Finance Department • Financial Inclusion Department • General Administration Department

Protocol & Security Section

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• Human Resource Management Department• Inspection Department• Institutional Development Department• Investment Credit Department• Law Department• Micro Credit Innovation Department• Premises Department• Production Credit Department• Rajbhasha Prabhag• Secretary's Department• State Projects Department • Technical Services Department

ROLE AND FUNCTIONS• NABARD is an apex institution accredited with all matters

concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas.    

• It is 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, training of personnel, etc.  

• It co-ordinates the rural financing activities of all the institutions engaged in developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India and other national level institutions concerned with policy formulation.  

• It prepares, on annual basis, rural credit plans for all districts in the country; these plans form the base for annual credit plans of all rural financial institutions  

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

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

CREDIT FUNCTIONSNABARD's credit functions cover planning, dispensation and

monitoring of credit.  

This activity involves:

• Framing policy and guidelines for rural financial institutions   •  Providing credit facilities to issuing organizations     • Preparation of potential-linked credit plans annually for all

districts for identification of credit potential     • Monitoring the flow of ground level rural credit    

FARM SECTOR SCHEMES • Village Adoption/Village development Plan• Bamboo Farming• Bio Fuels• Crop Insurance• Agriculture Commodities• SGSY• Farm Mechanization• Land Purchase• Scheme for AgriClinic/ Agri-Business Centers (ACABCs)• Capacity Building for Adoption of Technology (CAT)• Contract Farming• Farmer's Club

NON-FARM SECTOR SCHEMES

• Rural Non Farm Sector (RNFS) holds the key to faster economic development of the country.

• It has potential and promise for generating employment and increased income in the rural areas. Hence, NABARD has identified financing, development and promotion of RNFS as one of its thrust areas.

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• NABARD has evolved several refinance and promotional schemes over the years and has been making constant efforts to liberalize, broad base and refine/ rationalize the schemes in response to the field level needs.

• The focus has been on greater credit flow and provision of linkages for small, cottage and village industries, handicrafts and other rural crafts and service sector in the decentralized sector in the rural areas.

RURAL HOUSING

• With a view to supplementing the efforts of Government of India, State Governments, National Housing Bank and Banking Sector in augmenting the resources for the Rural Housing segment, NABARD has included Rural Housing as an eligible activity for extension of refinance (investment credit) to the eligible banks w.e.f. 01 April 2001.

The broad terms and conditions for the refinance scheme are as under

Area of Operation • Refinance will be provided to all eligible Banks for finance extended by them to

housing projects in the 'rural' areas only. • As per NABARD Act, Rural area means the area comprised in any village and

includes the area comprised in any town, the population of which does not exceed 50000 or such other figure as the RBI may specify from time to time.

  Eligible Borrowers   • Individuals• Co-operative Housing Societies • Public Bodies • Housing Boards/ Housing Development Authorities/ Improvement Trusts• Local Bodies • Voluntary agencies and NGOs • Housing Finance Companies registered, with NHB

DEVELOPMENT AND PROMOTIONAL FUNCTIONSIn order to reinforce the credit functions and to make credit more productive,

NABARD has been undertaking a number of developmental and promotional activities such as:-

• Help cooperative banks and Regional Rural Banks to prepare development actions plans for themselves

• Enter into MoU with state governments and cooperative banks specifying their respective obligations to improve the affairs of the banks in a stipulated timeframe

• Help Regional Rural Banks and the sponsor banks to enter into MoUs specifying their respective obligations to improve the affairs of the Regional Rural Banks in a stipulated timeframe

• Monitor implementation of development action plans of banks and fulfillment of obligations under MoUs

• Provide financial assistance to cooperatives and Regional Rural Banks for establishment of technical, monitoring and evaluations cells

• Provide Organization Development Intervention (ODI) through reputed training institutes like Bankers Institute of Rural Development (BIRD), Lucknow www.birdindia.org.in, National Bank Staff College, Lucknow www.nbsc.in and College of Agriculture Banking, Pune, etc.

• Provide financial support for the training institutes of cooperative banks

• Provide training for senior and middle level executives of commercial banks, Regional Rural Banks and cooperative banks

• Create awareness among the borrowers on ethics of repayment through Vikas Volunteer Vahini and Farmer’s clubs.

• Provide financial assistance to cooperative banks for building improved management information system, computerisation of operations and development of human resources

SUPERVISORY FUNCTIONS

• NABARD has been sharing with the Reserve Bank of India certain supervisory functions in respect of cooperative banks and Regional Rural BanksAs part of these functions, it

• Undertakes inspection of Regional Rural Banks (RRBs) and Cooperative Banks (other than urban/primary cooperative banks) under the provisions of Banking Regulation Act, 1949.

•  Undertakes inspection of State Cooperative Agriculture and Rural Development Banks (SCARDBs) and apex non-credit cooperative societies on a voluntary basis.

CONTD..• Undertakes portfolio inspections, systems study,

besides off-site surveillance of Cooperative Banks and Regional Rural Banks (RRBs)

• 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)

• Administering Credit Monitoring Arrangements (CMA) in SCBs and CCBs.

CORE FUNCTIONS

•  NABARD has been entrusted with the statutory responsibility of

conducting inspections of State Cooperative Banks (SCBs), District

Central Cooperative Banks (DCCBs) and Regional Rural Banks

(RRBs) under the provisions of Section 35(6) of the Banking

Regulation Act (BR Act), 1949.

• In addition, NABARD has also been conducting periodic inspections

of state level cooperative institutions such as State Cooperative

Agriculture and Rural Development Banks (SCARDBs), Apex Weavers

Societies, Marketing Federations, etc., on a voluntary basis.

LIST OF “NABARD” SCHEMES

MICRO FINANCE• Assistance to Self Help Promoting Institutions (SHPIs) for

promotion and linkage of SHGs• Micro Enterprise Development Programme (MEDP)• Scheme for Financing of matured SHGs for Farm and

Investment Activities• Scheme for providing technological support to NGOs• Scheme for supporting Activity Based Groups• Incentive for promotion of  Joint Liability Groups (JLGs) of

SF/ MF/ Tenant Farmers/ Oral Lessees and Share Croppers under Farm Sector

FINANCIAL INCLUSION• Support under Financial Inclusion Fund (FIF)• Support under Financial Inclusion Technology Fund

(FITF)• Farmers’ Club as Business Facilitators (BFs)• Establishing Web enabled Financial Services Cell at

RUDSETI• Support for certificate course for Business Correspondents

(BCs) and Business Facilitators  conducted by Indian Institute of Banking and Finance (IIBF)

• Authorized Functionaries of well-run SHGs as BC/ BF

NON FARM SECTOR• Rural Entrepreneurship Development Programmes

• Skill Development Programme/Skill Upgradation

• Scheme for strengthening of Rural Haats – Financing through Panchayat Raj

Institutions (PRIs)

• Setting up of Marketing outlets (Rural Marts)

• NABARD’s support for setting up of clusters

• Credit linked capital subsidy scheme (CLCSS) for technological upgradation of Medium

and Small Enterprises – GoI scheme

• Solar Home Lighting System.

PROMOTIONAL FUNDS

• Farm Innovation Promotion Fund (FIPF)• Rural Innovation fund (RIF)• Farmers’ Technology Transfer Fund (FTTF) –

Farmers’ Clubs• Umbrella Programme for Natural Resource

Management• Tribal development Fund• Technology Transfer & Pilot Projects under FTTF• Watershed Development Fund

PRODUCTION CREDIT SUPPORT

• Refinance Schemes of NABARD – ST (SAO) Policy• Scheme for Extending Financial Assistance to Sugar

Undertakings (SEFASU), 2007• Interest Subvention Scheme

RURAL INFRASTRUCTURE DEVELOPMENT• Rural Infrastructure Development Fund (RIDF)• NABARD Infrastructure Development Assistance

(NIDA)

GOI SCHEMES IMPLEMENTED BY NABARD

• Capital Investment Subsidy Scheme for Commercial Production Units of Organic inputs under National Project on Organic Farming

• Poultry Venture Capital Fund• Scheme for Integrated Development of Small Ruminants

and Rabbits• Dairy Entrepreneurship Development Scheme• Establishment of Agri Clinics and Agri Business Centres

(ACABCs)• Scheme on Pig Development

CONTD..• Central Sector Scheme on Salvaging and Rearing of

Male Buffalo Calves• Centrally Sponsored Scheme for Establishing Mother

Units of Rural• Backyard Poultry• Centrally Sponsored Scheme on Utilisation of Fallen

Animals• Gramin Bhandaran Yojana / Rural Godown Scheme• Scheme for Strengthening of Agricultural Marketing

Infrastructure, Grading and Standardisation

THANK YOU….