NABARD

NABARD
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. In
discharging its role as a
facilitator for rural prosperity
NABARD is entrusted with
1.Providing refinance to lending
institutions in rural areas
2.Bringing about or promoting
institutional development and
3.Evaluating, monitoring and
inspecting the client banks
Besides this pivotal role, NABARD
also:
•Acts as a coordinator in the
operations of rural credit
institutions
•Extends assistance to the
government, the Reserve Bank of
India and other organizations in
matters relating to rural
development
•Offers training and research
facilities for banks, cooperatives
and organizations working in
the field of rural development
•Helps the state governments in
reaching their targets of
providing assistance to eligible
institutions in agriculture and
rural development
Acts as regulator for cooperative
banks and RRBs
NABARD's functions can be
classified into 4 major categories
viz. Credit Planning, Financial
Services, Promotion and
Development, and Supervision.
Under Credit Planning NABARD
prepares Potential Linked Credit
Plan (PLP) annually for each
district of the country by
assessing potential available in
agriculture and rural sector. This
serves as a guide for banks and
Government agencies to prepare
their own investment and credit
plans in the district and state.
Under its Financial services, it
refinances commercial, co-
operative and regional rural
banks for lending to on farm and
non-farm activities. This includes
farm activities like minor
irrigation, animal husbandry,
farm mechanization, forestry,
fisheries, land development,
horticulture, plantation and
medicinal crops and non-farm
like rural industries, artisans,
handicrafts, handlooms, rural
housing, rural tourism and agro
processing. Refinance is
provided by NABARD for both
long term investment credit as
well as short term production
credit for crop loans and
working capital for non-farm
activities. A nationwide network
of 28 regional offices at the state
capitals, a sub-office at Port Blair
and 391 district development
offices are at hand to cater to
this awesome task.
Self Help Groups (SHGs):
One of the major success stories
of NABARD, the SHG Bank linkage
programme started as a pilot
project in 1992 with 500 SHGs.
SHGs comprise homogeneous
groups of poor people who have
voluntarily come together mainly
with the idea of overcoming
their common problems of low
social and economic status. SHGs
enable the poor, especially the
women from the poor
households, to collectively
identify, prioritize and tackle the
problems they face in their socio
economic environment. By
pooling their meager resources
and using them for lending
among themselves, they develop
the habit of thrift and the skill of
credit appraisal, before getting
mature enough to access a loan
from banks, which is called credit
linkage. Starting with small loans
for consumption they soon
graduate to bigger loans for
setting up of income generating
micro-enterprises. Today,
NABARD's SHG Bank Linkage
Programme boasts of over 26
lakh SHGs and 3.9 crore
households influencing the lives
of over 16 crore poor population.
During the year 2006-07 alone,
as many as 458591 groups were
credit linked.
Rural Infrastructure Development
Fund (RIDF):
Deficient Rural infrastructure
hinders both social and
economic development.
Economists have explicitly
emphasized on the direct
correlation between the index of
infrastructure development and
rural development. NABARD's
support to State Governments
through RIDF since 1995-96 has
brought about a sea change in
the shape of upgraded
infrastructure in rural areas.
Rural roads and bridges under
RIDF have improved market
access to farmers; check dams
and irrigation structures have
augmented their water
resources. Even drinking water
projects and health centres have
been supported under the Fund.
NABARD so far has sanctioned Rs.
61539 crore for 2,44,025
projects under the Fund. A
cumulative position of sector-
wise sanctions as on 31 st March
2007 : Irrigation: Rs. 20637
crore, Rural connectivity: Rs.
26935 crore for rural road
network and bridges, Power: Rs.
1434 crore Social Sector: Rs.
6988 crore Others: Rs. 5547
crore. A separate window has
been created for rural
connectivity with villages of
population less than 500, with a
corpus of Rs. 4,000 crore to
support the Bharat Nirman
project.