National Bank for Agriculture and Rural Development (NABARD) is a development bank which focuses primarily on the rural sector of the country. It has been entrusted with matters related to policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas in India. It is under the jurisdiction of the Union Ministry of Finance, Government of India. NABARD is active in developing and implementing financial inclusion.

Overview of NABARD

Established12 July 1982
TypeRegulatory Body
HeadquartersMumbai, India
OwnerMinistry of Finance, Government of India
Purpose• Agriculture Development.
• Rural Development.
• Credit Planning.
• Refinance.
• Supervision of Regional Rural Banks.
• Supervision of Apex Cooperative Banks.

Background – NABARD

On 30 March 1979, at the insistence of the Indian Government, the Reserve Bank of India (RBI) constituted a “Committee to Review the Arrangements For Institutional Credit for Agriculture and Rural Development (CRAFICARD)“, under the chairmanship of Shri B. Sivaraman (the former member of Planning Commission), to look into the critical aspects of institutional credit in boosting rural economy.

The B. Sivaraman Committee submitted its interim report on 28 November 1979, which outlined the need for a new organisational device for providing undivided attention and pointed focus to credit-related issues linked with rural development.

The Committee recommended the formation of a unique development financial institution, which would address the credit-related matters related to rural growth. The Government approved the establishment of the National Bank for Agriculture and Rural Development (NABARD) through Act 61 of 1981 of Parliament.


On the recommendations of the B. Sivaraman Committee, NABARD was founded on 12 July 1982 as a statutory body under the Parliamentary Act, National Bank for Agriculture and Rural Development Act of 1981. It was set up with an initial capital of INR 100 crore.

NABARD came into existence by merging: the Agriculture Credit Department, the Rural Planning & Credit Cell (RPCC) of RBI, and the Agricultural Refinance & Development Corporation (ARDC). The agricultural credit functions of the RBI and refinance functions of the then Agricultural Refinance & Development Corporation (ARDC) were transferred to NABARD.

The Government of India wholly owns the NABARD. It is an apex regulatory body for the overall regulation of Regional Rural Banks and apex cooperative banks in India.

NABARD has its head office in Mumbai, India and regional offices in all States. It has one special cell in Srinagar, Jammu & Kashmir. The Head office has several top executives, including the Directors, Deputy Managing Directors (DMD), and the Chairperson. The Regional Office is headed by a Chief General Manager (CGM) as Officer In-charge.

Vision – NABARD

Development bank of the nation for fostering rural prosperity

Mission – NABARD

Promote sustainable and equitable agriculture and rural development through participative financial and non-financial interventions, innovations, technology and institutional development for securing prosperity.

Governance – NABARD

Board of Directors

The Board of Directors governs the NABARD’s affairs. The Government of India appointed the Board of Directors in accordance with NABARD Act.

The Board of Directors consists of the Chairman, Managing Director, Deputy Managing Directors, and Directors comprising experts in relevant fields, such as rural economics, rural development, cottage and village industries, cooperative banks, regional rural banks, along with Representatives from the Reserve Bank of India, Central Government, and State Governments.

The Central Government appoints the Chairman and other Directors in consultation with the Reserve Bank of India (RBI).

Executive Committees

The Board of Directors may constitute an Executive Committee consisting of prescribed numbers of directors (called Executive Directors)

The Executive Committee shall discharge such functions as may be prescribed or delegated to it by the Board.

Functions of NABARD

NABARD initiatives aim at building empowered and financially inclusive rural India through specific goal-oriented departments, which can be categorised broadly into three heads:

  • Financial,
  • Developmental,
  • Supervision.

Financial Functions

  • NABARD serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
  • NABARD provides Refinance support for building the rural infrastructure. It refinances the financial institutions which finance the rural sector.
  • It provides financial assistance to the farm sector through refinancing for a variety of agriculture & allied activities such as minor irrigation, plantation and horticulture, land development, and animal husbandry.
  • It undertakes monitoring and evaluation of projects refinanced by it.
  • NABARD’s refinance fund from World Bank and Asian Development Bank to State Co-operative Agriculture and Rural Development Banks (SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs), Commercial banks, and other financial institutions, approved by RBI.
  • The international associates of NABARD include World Bank-affiliated organisations and global development agencies working in the field of Agriculture and Rural Development. These organisations help NABARD by advising and providing financial assistance for the upliftment of people in the rural areas and optimising the agricultural process.
  • The ultimate beneficiaries of the investment credit can be individuals, companies, partnership concerns, State-owned corporations, or cooperative societies, while the production credit is given generally to individuals.

Developmental Functions

  • NABARD is an apex development bank in the country, which looks after the development of the cottage industry, small-scale industry, village industry and other rural industries.
  • It prepares district-level credit plans to guide and motivate the banking industry in achieving the required targets.
  • It takes measures towards institution building to improve the absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc.
  • It partakes in the development of institutions which finances the rural sector.
  • It regulates the institutions which provide financial support to the rural economy.
  • It coordinates the rural financing activities of all institutions engaged in developmental work at the field level, maintaining liaison with Central government, State governments, RBI, and other national-level institutions concerned with policy formulation.
  • It is involved in designing the Central government’s development schemes and their implementation.
  • It also reaches out to allied economies and supports & promotes integrated development.
  • It gives training to handicraft artisans and provides them with a marketing platform for selling the articles.
  • NABARD has a Research and Development Fund ((RDF), which aims at acquiring new insights into issues of agricultural and rural development through in-depth studies and applied research and trying out innovative approaches backed up by technical and economic analyses.

Supervisory Functions

NABARD supervises the State Cooperative Banks (StCBs), District Central Cooperative Banks (DCCBs) and Regional Rural Banks (RRBs). It also conducts statutory inspections of these banks. It helps them develop sound banking practices and integrate them into CBS (Core Banking Solution) platform.

In addition, NABARD has also been conducting periodic inspections of state-level cooperative institutions, such as State Cooperative Agriculture and Rural Development Banks (SCARDBs), Apex Weavers Societies, Marketing Federations, etc., on a voluntary basis.


Before the formation of NABARD, the Reserve Bank of India (RBI) was the apex body to support the Indian rural economy with credit facilities.

In 1963, RBI set up the Agriculture Refinance Corporation (ARC) to work as a refinancing agency to provide medium-term and long-term agricultural credit to support investment credit needs for agriculture development. In 1975, ARC was renamed Agriculture Refinance and Development Corporation (ARDC) to provide focused attention to credit off-take, development and promotion of the agricultural sector.

Since 1979, The Rural Planning and Credit Cell (RPCC) of the RBI dealing with the Regional Rural Banks (RRBs). Until the formation of NABARD in 1982, the Agriculture Credit Department (ACD) of the RBI provided short-term refinance to cooperatives.

In 1982, NABARD took over the functions of the erstwhile Agriculture Credit Department (ACD) and Rural Planning & Credit Cell (RPCC) of the RBI and the Agriculture Refinance and Development Corporation (ARDC).

The Reserve Bank of India (RBI) is the central bank of India with the sole right to regulate the banking industry and supervise the various banks/financial institutions, including NABARD, defined under the Banking Regulation Act of 1949.

RBI and NABARD perform several developmental and regulatory works in cooperation.

NABARD provides recommendations to RBI on the issue of licenses to Cooperative banks and the opening of new branches by State Cooperative Banks and Regional Rural Banks (RRBs).

Government Schemes with NABARD Partnership

The Indian government encourages farmers to take up projects in select areas by subsidising a portion of the total project cost. These projects aim at enhancing capital investment, sustained income flow and employment areas of national importance. NABARD has been a proud channel partner of the Government in some of these schemes, which are as follows:

  • Farm Sector:
    • Dairy Entrepreneurship Development Scheme (DEBS).
    • Agri Clinics and Agri-Business Centres Scheme (ACABC).
    • National Livestock Mission – Entrepreneurship Development & Employment Generation (NLM-EDEG).
    • GSS – Ensuring End-use of Subsidy Released.
    • Interest Subvention Scheme.
    • New Agriculture Marketing Infrastructure (AMI) – sub-scheme of Integrated Scheme for Agriculture Marketing (ISAM).
    • Commercial Production units of Organic Inputs – National Project on Organic Farming (NPOF)
    • Formulation of Special Long Term Refinance Schemes.
  • Off-Farm Sector:
    • Credit Link Capital Subsidy Scheme.
    • NRLM/NULM (Deendayal Antyodaya Yojana).
    • Weavers Package.

Important Contributions of NABARD

  • Kisan Credit Card Scheme for farmers: The Kisan Credi Card (KCC) scheme was designed by NABARD in association with the Reserve Bank of India (RBI) in August 1998 to provide crop loans.
  • RuPay Kisan Cards: To bring a technological change in the rural financial sector, NABARD helps the rural financial institutions by providing the Rupay Kisan Cards (RKCs) to all their farmer clients.
  • Rural Infrastructure Development Fund (RIDF): RIDF was set up with NABARD in 1995-96 by the Reserve Bank of India (RBI) out of the shortfall in lending to the priority sector by scheduled commercial banks for supporting rural infrastructure projects.
  • NABARD Infrastructure Development Assistance (NIDA): NABARD Infrastructure Development Assistance (NIDA) offers flexible long-term loans to well-managed public sector entities for financing rural infrastructure. Projects for agriculture infrastructure, renewable energy, rural connectivity, power transmission, drinking water & sanitation, and other social & commercial infrastructure are financed under NIDA.
  • Rural Innovation Fund (RIF): Through the assistance of the Swiss Agency for Development and Cooperation, NABARD set up the Rural Innovation Fund. RIF is a fund designed to support innovative, risk-friendly, unconventional experiments in the sectors that would have the potential to promote livelihood opportunities and employment in rural areas.
  • EShakti: To digitalise Self-Help Groups (SHGs), the project EShakti was launched on 15 March 2015. The project has enabled the Bankers to provide online credit to SHGs based on an inbuilt grading system in the portal. It has resulted in an increase in credit linkage with the banks. SMS alerts received by SHG members on their banking transactions in the local language (10 languages) boosted the confidence and empowerment among the women.
  • SHG-based Livelihood Interventions: For stimulating the micro-entrepreneurship movement, NABARD has launched two skill-building and capacity-building programmes viz, Micro-Enterprise Development Programme (MEDP) and Livelihood & Enterprise Development Programme (LEDP).

Also Read:- Contributions of NABARD.


  1. What is Core Banking Solution (CBS)?

    Core Banking Solution is the networking of Branches that enables customers to operate their accounts and avail of banking services from any branch of the Bank on the CBS network, regardless of where the person maintains his account. The customer is no more customer of a Branch but becomes the bank’s customer.

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