National Bank for Agriculture and Rural Development

NABARD

Headquarters:Mumbai, Maharashtra,

India

Established:12 July 1982

ChairmanDr. Harsh Kumar BhanwalaCurrency (Rupees)ReservesRs.81,220 crore (2007)Websitewww.nabard.orgNABARD is the apex development bank in India

NABARD is an apex development bank in india.

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, conceived and recommended the estb. Of NABARD.

Estb. In 12 july 1982 by special act by the parliament & focussing to uplift rural india by increasing the credit flow for elevation of agriculture and rural non-farm sector.

Completed its 25 years on 12 july 2007. It has been accredited with “matters concerning

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

RBI sold its stake in NABARD to Govt. of india , which now holds 99% stake.

NABARD is active in developing financial inclusion policy and is a member of the alliance for financial institution.

It replaced agriculture credit dept.(ACD) and Rural planning & credit cell(RPCC) of RBI and agriculture refinance & development corporation(ARDC).

It is one of the priemer agency to provide credit in rural areas.NABARD is India’s specialised bank.

Associated with NABARD

International associates of NABARD ranges from world bank affliated organisations to global developmental agencies working in the field of agriculture and rural development.

These organisations help NABARD by advising and giving monetary aid for the upliftment of the people in rural areas and optimising the agricultural process.

Role: NABARD is an apex institution in the country . It looks after the development of cottages

industry, small industry & village industry , and other rural industries.

NABARD also reaches out to allied economies & support & promotes integrated development.

It has been given a certain rules as follows :1. Serves as an apex financing agency for the

institutions providing investment and production credit for promoting the various developmental activites in rural areas.

2.Takes measures towards institution building for the institution building for improving absorptive capacity of the credit delivery system,including monitoring, training of personnel etc.

3.co-ordinates the rural financing activites of all institutions engaged in developmental work at the field level and maintains liason with govt. of india , State govt. , RBI and other national level institutionsconcerned with policy formulation.

4.Undertakes monitoring and evaluation of projects financed by it .

5.NABARD refinances the financial institutions which finances the rural sector.

6.The instituions which help the rural economy ,NABARD helps develop.

7.NABARD also checks on its client institutes.8.It regulates the institution which provide

financial help to rural economy.9.It provides training facilities to the institutions

working on the field of rural upliftment10.It regulates the cooperative banks and the

RRB’s and manages talent acquisition through IBPS CWE.

NABARD’S refinance is available to state co-operative agriculture and rural development bank(SCARDBs),state co-operative banks(SCBs),

Regional rural banks(RRBs),commercial banks and other financial institution approved by RBI.

NABARD has 28 regional offices and one sub office,located in the capitals of all the staes/union territories .

Each regional office has chief general manager as its head and head office has several top executives.

It has 336 district offices across the country ,one sub-office at port blair and one special cell at srinagar.

It has also 6 training establishments. NABARD is known for ‘SHG bank linkage

programme’ which encourages India’s banks to lend to self-help groups(SHG) composed mainly of poor womens.

RURAL INNOVATIONSRIF & RIDF

NABARD role in rural development in India is phenomenal.

The credit flow to agriculture activities sanctioned by NABARD reached Rs1,57,480crore in 2005-2006.

Role of NABARD in overall development of India in general and rural & agriculture in specific is highly pivotal.

RURAL INNOVATION FUNDRIF

FUND designed to suport innovative,risk friendly,unconventional experiments in these sectors that would have the potential to promote livelihood opportunities & employment in rural areas.

The assistance is extende to individuals,NGOs,cooperatives,SHGs,Panchayati Raj Institutions who have the expertise & willingness to implement innovative ideas for improving the quality of life in rural areas.

600000 cooperatives are working in India at grass root level in almost every sector of economy.

Guiding principles of RIF: The activities must have rural poor in focus

& must be innovative , experimental & demonstrative in nature leading to replicability & commercial viability.

The activities funded may involve development of new products, processes , prototypes, technology , patenting & extension support.

Appropriate action research and studies contributing to better understanding of rural development issues , policy & process implementation may be undertaken.

Type of projects that can be supported under RIF:

All innovations & activities in the farm , rural non-farm & microfinance sectors can have access to RIF.

Activities which are in keeping with the guidelines principles of RIF &specifically those which provide technology , skill upgradation , sustainable employment , infrastructure development , improved flow & access of credit to rural entrepreneurs.

Preffered sectors Dry land/rain fed farming Innovative rain water harvesting for rural

dwelling Rural enrgy from biomass/agricultural

wastes Techniques for increasing the value of crop

residues & non-crop biomass.

Eligibility Individuals , NGOs , community based

organizations , SHG ,farmers club , panchayati raj institutions & corporates who have expertise & willingness to implement innovative ideas for improving the quality of rural areas may apply.

Financial Support Support available under RIF can be in form

of loan/grant/incubation fund support or a mix of all three components.

The support would be need based , cost effective & dependent on the requirements of the project.

RURAL INFRASTRUCTURE DEVELOPMENT FUND(RIDF)

Through assistance of Swiss agency for development and co-operation ,NABARD set up the rural infrastructure development fund.

Vrajlal Sapovadia noted schemes for the bank for rural development.

Under RIDF scheme Rs 51,283 crore have been snactioned for 2,44,651 projects covering irrigation , rural roads & bridges , health & education , soil conservation , water schemes etc.

Criteria for selection of projects : Should be of high priority to state

government Should be completed in 3-5 years Economic rate of return(ERR) should be

more than 15%. Benefit cost(BC) ratio should be more than 1

at 15% discounting factor. Borrowing institutions State govt. , Panchayat raj institutions ,non-

governmental organizations ,SHG etc.

Nodal department for RIDF The finance department of state govt. acts as

nodal department for operationalising RIDF. The project proposals are routed through finance

department only & proposals from other departments directly are not received.

Eligible activities The eligible activities covered under the RIDF can

be broadly classified into the following sector –• Agricultural sector projects(RIDF loan 95% of

TFO)1. Minor irrigation projects/micro irrigation2. Soil conservation3. Flood protection4. Watershed development

5. Drainage6. Forest development 7. Market yard/ godown8. Cold storage9. Plantation and horticulture10. Fishing harbour / jetties11. Riverine fisheries12. Animal husbandry13. Village knowledge centres etc

Social sector projects ( RIDF loan 85% of TFO)1. Drinking water2. Infrastructure for rural education institutions3. “pay & use” toilets in rural areas4. Construction of anganwadi centres etc

Rural connectivity projects( RIDF LOAN 80% of TFO)

1. Rural roads 2. Rural bridges Phasing ( period of implementation)• Phasing is normally 2-3 years for smaller

projects in diversified sectors.• Max 5 years of phasing for projects related

with major & medium irrigation & other stand alone projects involving RIDF loan of Rs 50 crore & ↑.

• Max phasing period of 3 years for all other projects .

Expenditure incurred on or after 1 April of the corresponding year would be eligible for reimbursement under the respective tranche.

RIDF loans are released to the state govt. By regional offices of NABARD. The state govt. will be reqd. to pay interest as

decided by RBI, on loans disbursed under various tranches.

Each drawal by state govt. would be treated as a separate loan and would be repayable in 7 years inclusive of a grace period of 2 years.

Interest will be payable during grace period. The state govt. shall utilise the loan amount

solely & exclusively for the purpose for which it is sanctioned by NABARD.

The state govt. shall execute and complete the projects for which the loans are granted within such time as stipulated in sanctioned letter.

The state govt. shall make suitable budgetary provisions for timely payment of interests & repayment of loan installments.

The state govt. shall remove any legal or other procedural hurdles in the smooth implementation of the projects.

The project implementing authority shall undertake desk / field monitoring and quality control tests as per the internal instructions / manual of implementing department.

NABARD-RECENT DEVELOPMENTS

REFINANCE TO BANKS RIDF to state govt. Special scheme for warehouse projects NABARD infrastructure development

assistance (NIDA) Direct lending to cooperative banks Direct lending to procedures organisation Subsidy schemes & revival packages SHG-bank linkage programme Joint liability groups

Farmers club Watershed developments Tribal developments Promotional development Institutional development-regional rural

banks(RRB) Institution development- short & long term

cooperatives Core banking solutions (CBS) for

cooperatives

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