National Bank for Agriculture & Rural Development 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. The company 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.
NABARD provides credit (mainly refinance) to various primary lending institutions (PLIs) viz. state co-operative banks (StCBs), state co-operative agriculture and rural development banks (SCARDBs) also known as land development banks (LDBs), regional rural banks (RRBs), commercial banks (CBs), etc. in respect of the loans extended to agriculture, small-scale and allied activities.
NABARD provides short-term refinance to StCBs and RRBs in the form of a general line of credit (similar to a cash credit account) that can be drawn at any time during the twelve month period. In the medium and long-term, NABARD provides refinance to the PLIs in respect of loans given for minor irrigation, farm mechanization, land development, soil conservation, dairy & poultry farming, plantation/horticulture, forestry, fishery, storage and other agri-related services.
In addition, under rural infrastructure development fund (RIDF) scheme, NABARD directly assists state governments for promoting rural infrastructure projects. Also, there is a provision to finance PLIs/ SHGs/ NGOs under RIDF but the extent of this lending is marginal.
NABARD has their Head Office located at Mumbai. They have 30 Regional Offices located in the states, a Cell at Srinagar, Training Establishments at Bolpur, Hyderabad, Mangalore and Lucknow and 395 District Development Managers functioning at district level.
National Bank for Agriculture and Rural Development was incorporated on July 12, 1982. The agriculture credit functions of the Reserve Bank of India (RBI) and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC) were transferred to NABARD on their formation.
Initially, in the year 1979, RBI, at the instance of Government of India appointed a Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD). . The CRAFICARD reviewed the need of integrating short-term, medium-term and long-term agriculture credit structure. The CRAFICARD recommended the established of National Bank for Agriculture and Rural Development. National Bank for Agriculture and Rural Development Act, 1981 was passed by the Indian Parliament and NABARD was established on July 12, 1982.
NABARD was set up by Government of India as a development bank with a mandate 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.
Over the year, NABARD's functions can be classified into 4 major categories viz. Credit Planning, Financial Services, Promotion and Development, and Supervision. They effectively brought in a number of innovations in the rural credit domains, such as Formation and Linkage of Self Help Groups, Farmers Clubs, Rural Infrastructure Development Fund, Watershed Development, Kisan Credit Card, District Rural Industries Project, Cluster Development Programme and Rural Innovation Fund.
During the year 2005-06, NABARD opened 18 new DDM Offices in 10 states, taking the total number to 376. In addition, 93 districts are tagged with neighboring DDM offices. During the year 2006-07, they opened 15 DDM offices and 88 districts are tagged to these DDM offices. Also, NABARD supported 230 marketing events/exhibitions across the country involving grant assistance of Rs.51.07 lakh.
During the year 2007-08, NABARD opened one District Development Manager's (DDM) office, taking the total number of offices to 392 covering 484 districts including 92 tagged districts. They introduced the Village Development Programme (VDP) across the country to develop identified villages in a holistic and integrated manner. NABARD in association with APRACA brought out the 'Country Book' for India and provided editorial assistance in consultation with Nabcons for preparation of country books for 12 other APRACA Asian members.
During the year 2008-09, NABARD sanctioned 38 watershed projects taking the cumulative number to 454, spread over 94 districts in 14 States. They sanctioned 14 projects involving grant assistance of Rs.1.81 crore in six States from the Farm Innovation and Promotion Fund (FIPF). They conducted 37 investment and 5 scheme specific studies under farm sector, rural housing and cold storage projects in association with banks and nodal departments of State Governments to identify factors adversely affecting schemes and ensuring prompt corrective measures.
The Farmers Technology Transfer Fund (FTTF) was operationalised from April 1, 2008 with a corpus of Rs.25 crore with the aim of promoting technology transfer for enhancing production and productivity in agriculture and farm related activities. NABARD sanctioned 12 proposals involving a grant assistance of Rs.233 lakh in 6 states for activities like oil-production, turmeric processing, information and commodity trading center, technology transfer for seed production, establishment of Outreach Center for North and Middle Andamans districts, etc.
During the year 2009-10, NABARD sanctioned 59 watershed projects taking the cumulative number to 513, spread over 94 districts in 14 States. They supported 263 marketing events/ exhibitions, with grant assistance of Rs.146.13 lakh. They conducted 1530 Micro-Enterprise Development Programmes (MEDPs) for 38,313 SHG members on location-specific farm, non-farm and service sector activities. Also, NABARD Consultancy Services, Nabcons opened a liaison office in Nairobi, Kenya to garner potential rural development consultancies in the African continent.
During the year, NABARD sanctioned 8 new co-finance projects with total financial outlay (TFO) of Rs.62.13 crore taking the cumulative number of projects sanctioned to 48 with cumulative TFO of Rs 807.52 crore. They sanctioned 60 projects under cold storages/onion godowns with TFO of Rs.129.81 crore, bank loan of Rs.77.77 crore and subsidy of Rs.30.28 crore. Also, they completed an all-India study of Kisan Credit Card (KCC) scheme in 14 states and a study of rural godown scheme in Gujarat.
In March 2011, National Bank of Agriculture and Rural Development has planned to set up two pasteurization milk plants in the state Himachal Pradesh through Self Help Groups to strengthen the rural economy. The plant would be set up at Parola in Hamirpur district and in Sirmour or Solan district. In addition, NABARD is financing to set up Veterinary clinics by the self help groups in the state and has made a provision of Rs 120 crore to develop small poly houses.