National Bank for Agriculture and Rural Development is an apex development financial institution in India that focuses on providing financial and technical assistance to the agricultural and rural sectors. Established on July 12, 1982, NABARD's primary objective is to promote sustainable and equitable agricultural and rural development in the country.
In this post, we will discuss the objectives, functions and importance of NABARD.
Objectives of NABARD
The main objectives of National Bank for Agriculture and Rural Development has been provided below:
- Promotion of Agriculture and Rural Development: NABARD aims to accelerate agricultural production and rural development by providing financial support, promoting institutional development, and implementing various development schemes.
- Facilitating Credit for Agriculture: It plays a crucial role in channeling credit to the agriculture sector. It refinances commercial banks, regional rural banks, and other financial institutions to provide loans for agricultural and rural development activities.
- Institutional Development: It focuses on strengthening and developing rural financial institutions to improve their efficiency and outreach. It provides assistance for capacity building, training, and technology adoption to enhance the functioning of cooperative banks, regional rural banks, and microfinance institutions.
- Promoting Rural Infrastructure Development: Nabard Bank supports the development of rural infrastructure by providing financial assistance for irrigation projects, rural roads, rural markets, and other agricultural infrastructure facilities. It aims to improve connectivity and access to markets for farmers and rural communities.
- Promoting Sustainable Agriculture: It encourages the adoption of sustainable agricultural practices and technologies to enhance productivity, conserve natural resources, and promote climate resilience. It supports projects related to organic farming, watershed management, renewable energy, and agricultural research and development.
- Rural Innovation: National Bank for Agriculture and Rural Development promotes innovation and entrepreneurship in rural areas. It provides funding and support for rural startups, agri-businesses, and rural artisans to encourage economic diversification and employment generation.
- Financial Inclusion: It actively works towards promoting financial inclusion in rural areas. It supports initiatives to provide banking services, credit, and insurance products to underserved sections of the rural population, including small farmers, rural women, and marginalized communities
Functions of Nabard Bank
Given below are the several roles and functions of NABARD:
- Credit Functions: NABARD is the primary provider of credit facilities in rural areas. It offers, controls, and monitors credit flow in rural areas of the country.
- Development Activities: The major objective of the National Bank for Agriculture and Rural Development is to focus on creating sustainable agriculture and promoting rural development. It also provides development functions which includes assisting rural banks in creating action plans for developmental activities.
- Financial transactions: NABARD has a number of customer banks and institutions that help and support rural development projects. Through financial functions, NABARD provides loans to various banks and financial institutions, such as handicraft enterprises, food parks, processing units, artisans, and others.
Importance of Nabard Bank
The establishment of NABARD has provided a significant boost to rural funding. NABARD's developmental and supervisory functions helped in the establishment of efficient banking and commercial practices among the rural population.
Some of the highlights of NABARD's role over the years are listed below:
- Creating credit programs at the district level and encouraging the rural banking industry to implement them.
- NABARD's SHG linkage initiatives have grown to be among the most talked-about microfinance projects in the world.
- Farmers in any part of the country can profit from the NABARD-issued Kisan Credit Card.
- Providing local artisans with essential training in the development and promotion of indigenous handicrafts.
- Providing the rural sector with the required short- and long-term refinancing solutions.
- Making improvements to rural infrastructure.
- Supervising the Regional Rural Banks (RRBs) and Co-operative Banks.