NABARD Registers 24% Growth

• 08 Apr 2021

Why in News

National Bank for Agriculture and Rural Development (NABARD) closed its business at Rs. 6.57 lakh crore in FY 2020-21, recording a growth rate of 23.5%.

Key Points

• NABARD’s Business in 2020-21:
  
  • Under Aatmanirbhar Bharat Abhiyan, NABARD released amounts to cooperative banks,Regional Rural Banks (RRBs) and to NBFC-MFIs (Non-Banking Financial Company: Micro Finance Institution) through a Special Liquidity Facility (SLF).
    
    • The SLF was with a view to augment the resources of the Cooperative banks and RRBs to enable them to extend credit to farmers.
  • NABARD registered a total refinance disbursement of Rs. 2.23 lakh crore to support agriculture and rural development activities during the pandemic.
  • A refinance facility of Rs. 500 crore was introduced to support the Government of India’s Water, Sanitisation and Hygiene (WASH) programme.
• About NABARD:
  
  • Formation:
    
    • NABARD came into existence on 12^th July 1982 by transferring the agricultural credit functions of the Reserve Bank of India (RBI) and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC).
    • It is a statutory body established under ‘National Bank for Agriculture and Rural Development Act, 1981’.
  • Role:
    
    • It is a development bank focussing primarily on the rural sector of the country.
    • It is the apex banking institution to provide finance for Agriculture and rural development.
  • Cooperation with the RBI:
    
    • RBI provides 3 directors to NABARD’s Board of Directors.
    • NABARD provides recommendations to RBI on issue of licenses to Cooperative Banks, opening of new branches by State Cooperative Banks and RRBs.
  • Headquarters: Mumbai
• Major Functions of NABARD:
  
  • It provides refinance support for building rural infrastructure.
    
    • Refinancing institutions are important institutions who give loans to other institutions who ultimately give loans to the end customers.
    • NABARD provides short-term, medium-term and long-term refinance to Cooperative banks and RRBs to supplement their resources for providing adequate credit for supporting investment activities of farmers and rural artisans.
  • It supervises Cooperative Banks and Regional Rural Banks (RRBs) and helps them develop sound banking practices and integrate them to the CBS (Core Banking Solution) platform.
    
    • CBS can be defined as a solution that enables banks to offer a multitude of customer-centric services on a 24x7 basis from a single location.
  • It is involved in designing Union government’s development schemes and their implementation.
    
    • Examples: National Livestock Mission, Interest subvention Scheme, New Agricultural Marketing Infrastructure, etc.
  • NABARD has various international partnerships including leading global organizations and World Bank-affiliated institutions that are breaking new ground in the fields of rural development as well as agriculture.
    
    • These international partners play a key consultant role in providing advisory services as well as financial assistance designed to ensure uplifting of rural peoples as well as optimization of various agricultural processes.

Source: TH