NABARD- National Bank for Agriculture and Rural Development

NABARD- National Bank for Agriculture and Rural Development


  • In the sprawling landscape of financial institutions in India, one entity stands out for its unique role in fostering rural development and agricultural growth – the National Bank for Agriculture and Rural Development (NABARD). Since its inception in 1982, NABARD has been instrumental in transforming the rural economy through its multifaceted initiatives and interventions. This article delves into the core functions, contributions, and significance of NABARD in the socio-economic fabric of India.

What is NABARD?

  • NABARD, established on July 12, 1982, under the NABARD Act 1981, is an apex development bank in India. It was set up with the primary objective of promoting sustainable and equitable agriculture and rural development. Governed by the Reserve Bank of India (RBI) Act 1934, NABARD operates with a unique mandate to serve as a catalyst for rural prosperity by facilitating credit flow and fostering institutional development in rural areas.

Important Facts about NABARD:

  1. NABARD operates as an apex institution for all matters related to policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas.
  2. It acts as a refinancing agency for financial institutions engaged in financing agriculture and rural development.
  3. NABARD is owned by the Government of India, the RBI, and the Government of states where it operates.
  4. The bank has a wide network of regional offices across India, ensuring decentralized and effective implementation of its schemes and programs.

Functions of NABARD:

NABARD's functions can be broadly categorized into the following:

  • Credit Functions: NABARD extends credit to various financial institutions for agriculture and rural development. It provides refinance facilities for crop loans, term loans, and working capital requirements of cooperative banks, regional rural banks (RRBs), and other financial institutions.
  • Development Functions: NABARD undertakes various developmental initiatives to strengthen rural infrastructure, promote agriculture, allied activities, and rural entrepreneurship. It supports watershed development, rural connectivity, and sustainable agricultural practices through its funding and technical assistance.
  • Supervisory Functions: NABARD regulates and supervises cooperative banks and RRBs to ensure sound banking practices and compliance with regulatory norms. It conducts inspections and audits to assess the financial health and performance of these institutions.
  • Promotional Functions: NABARD promotes capacity building, innovation, and entrepreneurship in rural areas through training programs, research, and development initiatives. It facilitates the adoption of modern technology and best practices to enhance productivity and income levels in agriculture and allied sectors.

What is the CBS(Core Banking Solution) Platform?

  • CBS stands for Core Banking Solution, a centralized banking platform that enables banks to provide integrated and real-time banking services to customers across multiple branches. NABARD has played a pivotal role in promoting CBS(Core Banking Solution) adoption among cooperative banks and RRBs to improve operational efficiency, customer service, and financial inclusion in rural areas. By implementing CBS(Core Banking Solution), these banks can offer a wide range of banking services, including deposits, withdrawals, fund transfers, and loan processing, seamlessly across their branch network.

Important Contributions of NABARD:

  • Credit Accessibility: NABARD has facilitated increased access to credit for farmers and rural entrepreneurs by providing refinancing support to financial institutions. This has led to enhanced agricultural productivity, income generation, and rural employment opportunities.
  • Rural Infrastructure Development: NABARD's funding support for rural infrastructure projects such as irrigation, roads, and warehousing has bolstered agricultural productivity and market connectivity in remote rural areas. It has contributed to improving the quality of life and reducing migration from rural to urban areas.
  • Financial Inclusion: Through initiatives like the SHG-Bank Linkage Program and Kisan Credit Card scheme, NABARD has promoted financial inclusion by extending banking services to unbanked and underserved sections of the rural population. This has empowered women, small farmers, and artisans to access formal credit and savings facilities, thereby enhancing their economic resilience and social empowerment.
  • Sustainable Agriculture: NABARD has been at the forefront of promoting sustainable agricultural practices and natural resource management through initiatives like watershed development, organic farming, and climate-resilient agriculture. By promoting eco-friendly practices and technologies, NABARD aims to ensure long-term food security and environmental sustainability.


  • In conclusion, NABARD remains a cornerstone of India's rural development architecture, playing a pivotal role in driving inclusive growth, poverty alleviation, and sustainable development in rural areas. With its innovative approach, strategic interventions, and collaborative partnerships, NABARD continues to be a beacon of hope for millions of farmers and rural households across the country.

Important FAQs:

What is NABARD and its function?

  • NABARD operates as a Development Bank entrusted with the responsibility of providing and overseeing credit for the advancement of agriculture, small-scale industries, cottage and village industries, handicrafts, and other related economic activities in rural regions, aiming to foster prosperity in these areas.

When was NABARD established in India?

  • NABARD was established on July 12, 1982, consolidating the agricultural credit functions of the RBI and the refinance functions of the then Agricultural Refinance and Development Corporation (ARDC). Its inauguration was marked by the late Prime Minister Smt. Indira Gandhi on November 5, 1982.

Is NABARD owned by RBI?

  • Before February 26, 2019, both NABARD and NHB were subsidiaries of the RBI. However, they are now wholly-owned by the central government.

Who started NABARD?

  • This institution was established under the capable chairmanship of Shri B. Sivaraman, former Member of the Planning Commission, on March 30, 1979.

How can I avail of credit facilities from NABARD?

  • Individuals and institutions can avail credit facilities from NABARD through registered financial institutions like cooperative banks, RRBs, and commercial banks that are eligible for refinance support from NABARD.

What are the eligibility criteria for NABARD's development schemes?

  • The eligibility criteria vary depending on the specific scheme or program. Generally, beneficiaries are required to be residents of rural areas and fulfill certain criteria related to landholding, income levels, and project viability.

How can I participate in NABARD's training and capacity building programs?

  • NABARD conducts training programs, workshops, and seminars for various stakeholders involved in rural development. Interested individuals and organizations can contact their nearest NABARD office or visit the official website for information on upcoming events and registration details.

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