Abstract:
NABARD or National Bank For Agriculture and Rural Development was set up by Indian Government with the objective of providing financial and institutional support to the rural agricultural sector of the economy. NABARD not only monitors and regulates rural credit flow but also carries out some important supervisory and development functions for the overall development of regional rural banks and state cooperative banks.
National Bank For Agriculture and Rural Development was established by Government of India in order to facilitate credit flow in the rural agricultural sector of India. This National Bank For Agriculture and Rural Development or NABARD not only promotes the development of agriculture in the rural areas but also supports other economic activities of rural India to achieve integrated and sustainable rural development.
NABARD is funded by Government of India and Reserve Bank of India. At present, it has a capital base of 2000 crore rupees and runs 28 regional offices and 391 district offices. All the regional offices of NABAED are situated in state capitals of India.
NABARD carry out many functions which are extremely important for the growth of rural economy of India. In order to understand the role of NABARD in promoting rural development we need to know the following Functions of NABARD:
Credit Functions of NABARD
NABARD constitutes policy guidelines for the financial institutions of rural India. It offers credit facilities to the institutions which provide loans to the farmers. NABARD not only prepares annual credit plans for all states of India, but also monitors overall rural credit flow.
Supervisory Functions of NABARD
NABARD conducts inspection of Regional Rural Banks and Cooperative Banks of India in order to ensure that the interests of depositors are well protected and the rural banks are abiding by the relevant rules and regulations. It not only inspects the portfolios, but also does system study of the regional banks and cooperative banks. NABARD gives suggestions and recommendations to Reserve Bank of India regarding opening of new branches of Regional Rural Banks and State Cooperative Banks.
Development Functions of NABARD
NABARD helps the State Cooperative Banks and Regional Rural Banks to create development plans. Not only in designing action plans, but NABARD helps the rural banks in implementing the development plans as well. This National Bank For Agriculture and Rural Development also offers financial supports to the rural banks for carrying out training sessions for the bank executives and for establishment of evaluation cells.