Report on NABARD

7/28/2019 Report on NABARD

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Report on

Submitted to: Submitted by:

prof. Sumit Gulati Jitendra Tiwari

Sec-A


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TABLE OF CONTENT

1. Introduction2. Mission3. Objective4. Organization Structure5. Roles & Function


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1. Introduction

NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for

promotion and development of agriculture, small-scale industries, cottage and village industries,

handicrafts and other rural crafts. It also has the mandate to support all other allied economic activities

in rural areas, promote integrated and sustainable rural development and secure prosperity of rural

areas. In discharging its role as a facilitator for rural prosperity NABARD is entrusted with

1. Providing refinance to lending institutions in rural areas

2. Bringing about or promoting institutional development and

3. Evaluating, monitoring and inspecting the client banks

Besides this pivotal role, NABARD also:

Acts as a coordinator in the operations of rural credit institutions

Extends assistance to the government, the Reserve Bank of India and other organizations in matters

relating to rural development

Offers training and research facilities for banks, cooperatives and organizations working in the field of

rural development


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Helps the state governments in reaching their targets of providing assistance to eligible institutions in

agriculture and rural development

Acts as regulator for cooperative banks and RRBs

Some of the milestones in NABARD's activities are:

Business Operations:

Production Credit: Production Credit (or Crop Loans) to Cooperative Banks and Regional Rural Banks

(RRBs) stood at 48,981 crore during 2011-12, registering a growth of 45 per cent over the previous year.

Investment Credit : Investment Credit for capital formation in agriculture & allied sectors, non-farm

sector activities and services sector to commercial banks, RRBs and co-operative banks reached a level

of 15,421 crore as on 31 March 2012 registering an increase of 14 per cent, over the previous year.

Rural Infrastructure Development Fund (RIDF): Through the Rural Infrastructure Development Fund

(RIDF) 14927 crore was disbursed during 2011-12. A cumulative amount of 142470.65 crore has been

sanctioned for 462229 projects as on 31 March 2012 covering irrigation, rural roads and bridges, healthand education, soil conservation, drinking water schemes, flood protection, forest management etc.

New Business Initiatives:

NABARD Infrastructure Development Assistance (NIDA): NABARD has set up NIDA, a new line of credit

support for funding of rural infrastructure projects. The cumulative sanctions under NIDA during the

year 2011-12 was 890.85 crore and disbursement was 422.90 crore.

Producers Organisations Development Fund (PODF): In order to support and finance Producers

Organiosations, NABARD set up PODF. During the year, 13 projects were sanctioned to Producers


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Organisations and 70 projects to PACS, with an assistance of `32.29 crore and 7.75 crore, respectively.

The cumulative sanction under the fund was 40.04 crore.

Direct Lending to CCBs: Under Direct lending to CCBs, 937.74 crore was disbursed during the year

2011-12.

PACS as Multi Service Centres : A total of 2,335 PACS have been developed as Multi-service Centres

through various interventions from NABARD.

Core Banking Solutions (CBS) : Through Core Banking Solution (CBS), Co-operatives are being brought

to a higher technology platform so as to compete with other banks for business and growth.

Development Initiatives:

Watershed Development Fund (WDF): During 2011-12, NABARD provided assistance of 239.99 crore

for watershed development covering an area of 5.29 lakh ha, as against 152 crore during 2010-11. The

cumulative support stood at 598 crore in respect of 620 projects as on 31 March 2012.

Farm Innovation and Promotion Fund (FIPF): During 2011-12, 41 projects were sanctioned under FIPF

in 14 States with financial assistance of 56.53 crore under the Fund. The Fund also supported the pilot

testing of the unique mobile-enabled Kisan Credit Project (m-KCC) project.

Farmers Technology Transfer Fund (FTTF): During the year 2011-12, 395 proposals were sanctioned in

29 States with grant assistance of 20.59 crore. The cumulative disbursement as at the end of March

2012 was 44.59 crore.

Farmers Clubs: With the launching of 25,243new Farmers Clubs during the year, the number of clubs

reached 1,01,951 as on 31 March 2012.


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Umbrella Programme on Natural Resource Management (UPNRM): UPNRM aims to boost rural

livelihoods by supporting community-managed sustainable natural resource management projects and

supported 104 projects in 16 States with disbursements to the tune of 131.89 crore.

Tribal Development Fund (TDF): During the year 2011-12, financial assistance of 290.63 crore was

sanctioned for 98 projects benefiting 72,419 tribal families in 16 States. The cumulative sanction as on

31 March 2012 was 1,208.23 crore, covering 3.23 lakh families in 415 projects across 26 States/UTs.

Financial Inclusion Fund (FIF) and the Financial Inclusion Technology Fund (FITF) : As on 31 March

2012, the cumulative sanctions under FIF and FITF were 114.62 crore and 343.48 crore, respectively and

disbursements were 36.46 crore and 184.16 crore, respectively.

SHG-Bank Linkage Programme: As on 31 March 2011, there were more than 74.62 lakh savings linked

Self Help Groups (SHG) and more than 47.87 lakh credit-linked SHGs covering 9.7 crore poor households

under the micro-finance programme. The SHG - Bank Linkage Programme was given a renewed thrust

with the launch of SHG-2.


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2. Mission

Promoting sustainable and equitable agriculture and rural development through effective credit

support, related services, institution building and other innovative initiatives.

In pursuing this mission, NABARD focuses its activities on:

Credit functions, involving preparation of potential-linked credit plans annually for alldistricts of the country for identification of credit potential, monitoring the flow of

ground level rural credit, issuing policy and operational guidelines to rural financing

institutions and providing credit facilities to eligible institutions under various

programmes.

Development functions, concerning reinforcement of the credit functions and makingcredit more productive

Supervisory functions, ensuring the proper functioning of cooperative banks andregional rural banks


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3. Objectives

NABARD was established in terms of the Preamble to the Act, "for providing credit for the

promotion of agriculture, small scale industries, cottage and village industries, handicrafts and

other rural crafts and other allied economic activities in rural areas with a view to promoting

IRDP and securing prosperity of rural areas and for matters connected therewith in incidental

thereto".

The main objectives of the NABARD as stated in the statement of objectives while placing the

bill before the Lok Sabha were categorized as under :

1. The National Bank will be an apex organisation in respect of all matters relating to policy,

planning operational aspects in the field of credit for promotion of Agriculture, Small Scale

Industries, Cottage and Village Industries, Handicrafts and other rural crafts and other allied

economic activities in rural areas.

2. The Bank will serve as a refinancing institution for institutional credit such as long-term,

short-term for the promotion of activities in the rural areas.

3. The Bank will also provide direct lending to any institution as may approved by the Central

Government.

4. The Bank will have organic links with the Reserve Bank and maintain a close link with in.

Major Activities

Preparing of Potential Linked Credit Plans for identification of exploitable potentials under

agriculture and other activities available for development through bank credit.

Refinancing banks for extending loans for investment and production purpose in rural areas.


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Providing loans to State Government/Non Government Organizations (NGOs)/Panchayati Raj

Institutions (PRIs) for developing rural infrastructure.

Supporting credit innovations of Non Government Organizations (NGOs) and other non-formal agencies.

Extending formal banking services to the unreached rural poor by evolving a supplementary

credit delivery strategy in a cost effective manner by promoting Self Help Groups (SHGs)

Promoting participatory watershed development for enhancing productivity and profitability

of rainfed agriculture in a sustainable manner.


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4. Organization Structure


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5. Functions and Role

Functions

NABARD is an apex institution accredited with all matters concerning policy, planning and

operations in the field of credit for agriculture and other economic activities in rural areas.

It is an apex refinancing agency for the institutions providing investment and production

credit for promoting the various developmental activities in rural areas

It takes measures towards institution building for improving absorptive capacity of the credit

delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of

credit institutions, training of personnel, etc.

It co-ordinates the rural financing activities of all the institutions engaged in developmental

work at the field level and maintains liaison with Government of India, State Governments,

Reserve Bank of India and other national level institutions concerned with policy formulation.

It prepares, on annual basis, rural credit plans for all districts in the country; these plans form

the base for annual credit plans of all rural financial institutions

It undertakes monitoring and evaluation of projects refinanced by it.

It promotes research in the fields of rural banking, agriculture and rural development


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NABARD and its Role in Training

National Bank Staff College, Lucknow

National Bank Training Centre, Lucknow

Zonal Training Centre, Hyderabad

Bankers Institute of Rural Development (BIRD), Mangalore

Bankers Institute of Rural Development (BIRD), Bolpur

Bankers Institute of Rural Development (BIRD), Lucknow

The provisions of the Act as stated below very clearly indicate the nature and scope of the

developmental mandate of the Bank and its role in training and capacity building with the underlying

belief that the process of development cannot be accomplished by credit/refinance alone.

Section 38 of the NABARD Act provides that the Bank shall:

maintain expert staff to study all problems relating to agriculture and rural development and be

available for consultation to the Central Government, the Reserve Bank, the State Governments and the

other institutions engaged in the field of rural development.


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provide facilities for training, for dissemination of information and the promotion ofresearch including

the undertaking of studies, researches, techno-economic and other surveys in the field of rural banking,

agriculture and rural development.

provide technical, legal, financial, marketing and administrative assistance to any person engaged in

agriculture and rural development activities;

may provide consultancy services in the field of agriculture and rural development and other related

matters in or outside India, on such terms and against such remuneration, as may be agreed upon;

In this context, the role of training in NABARD and the role played by it for capacity building in client

institutions, partner agencies and other developmental agencies is important.

For maintaining 'Expert Staff', the bank needs to provide continuous exposure to its officers and staff for

upscaling their knowledge and skills in core areas. However, in the initial years the Bank had recruited

expert staff from various technical disciplines and created a separate cadre of officers. These officers

were involved in formulating, appraising, monitoring and evaluating different agricultural projects

implemented by different credit agencies.

These officers, irrespective of their academic background, were imparted similar type of training as all

other officers. Their placements and the regular job rotations helped in grooming them to take up

assorted assignments, get involved in a variety of roles and functions including credit, developmental,

promotional, supervisory and necessary support and information for decision making. The Bank also had

access to their specialised skills which were utilised whenever needed.

In pursuance of the Bank's mandate as stated in the Act, the Bank provides training facilities for the RFIs

and agencies involved in rural development through BIRD and the two RTCs. With a view to broadbase

the training and capacity building efforts, the Bank encourages the RFIs to set up their own training

systems and provides these training institutes the necessary support to conduct meaningful and quality

training. Options and avenues for strengthening the training interventions at the client level are

continuously examined so that the human resources in these institutions are developed to take on the

challenges, reckon with the competition, improve customer service, expand outreach, develop suitable

products and thereby contribute to rural development.


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As NABARD primarily functions through other agencies, the needs of the client institutions largely

determine the knowledge and skill requirements of NABARD officers.

NABARD endeavours to blend the experiences of client bank training with the training for NABARD

officers so as to make training meaningful and relevant to their roles. Efforts are also made to blend the

study findings with the outcome from training to periodically measure the overall impact of the

investments made in the training efforts

Role

NABARD is the apex institution in the country which looks after the development of the cottageindustry, small industry and village industry, and other rural industries. NABARD also reachesout to allied economies and supports and promotes integrated development. And to help

NABARD discharge its duty, it has been given certain roles as follows:

1. Serves as an apex financing agency for the institutions providing investment and productioncredit for promoting the various developmental activities in rural areas

2. Takes measures towards institution building for improving absorptive capacity of the creditdelivery system, including monitoring, formulation of rehabilitation schemes, restructuring of

credit institutions, training of personnel, etc.

3. Co-ordinates the rural financing activities of all institutions engaged in developmental work atthe field level and maintains liaison with Government of India, State Governments, ReserveBank of India (RBI) and other national level institutions concerned with policy formulation

4. Undertakes monitoring and evaluation of projects refinanced by it.5. NABARD refinances the financial institutions which finances the rural sector.6. The institutions which help the rural economy, NABARD helps develop.7. NABARD also keeps a check on its client institutes.8. It regulates the institution which provides financial help to the rural economy.9. It provides training facilities to the institutions working the field of rural upliftment10. It regulates the cooperative banks and the RRBs.

NABARD's refinance is available to State Co-operative Agriculture and Rural Development

Banks (SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs),Commercial Banks (CBs) and other financial institutions approved by RBI. While the ultimate

beneficiaries of investment credit can be individuals, partnership concerns, companies, State-

owned corporations or co-operative societies, production credit is generally given to individuals.NABARD has its head office at Mumbai, India.

NABARD operates throughout the country through its 28 Regional Offices and one Sub-office,located in the capitals of all the states/union territories. Each Regional Office[RO] has a Chief
http://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Government_of_India


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General Manager [CGMs] as its head, and the Head office has several Top executives like the

Executive Directors[ED], Managing Directors[MD], and the Chairperson.It has 336 District

Offices across the country, one Sub-office at Port Blairand one special cell at Srinagar. It also

has 6 training establishments.

NABARD is also known for its 'SHG Bank Linkage Programme' which encourages India's banksto lend to self-help groups (SHGs). Because SHGs are composed mainly of poor women, this has

evolved into an important Indian tool formicrofinance. As of March 2006 2.2 million SHGs

representing 33 million members had to been linked to credit through this programme.

NABARD also has a portfolio of Natural Resource Management Programmes involving diverse

fields like Watershed Development, Tribal Development and Farm Innovation through dedicatedfunds set up for the purpose.
http://en.wikipedia.org/wiki/Port_Blairhttp://en.wikipedia.org/wiki/Srinagarhttp://en.wikipedia.org/wiki/Self-help_group_(finance)http://en.wikipedia.org/wiki/Microfinancehttp://en.wikipedia.org/wiki/Microfinancehttp://en.wikipedia.org/wiki/Self-help_group_(finance)http://en.wikipedia.org/wiki/Srinagarhttp://en.wikipedia.org/wiki/Port_Blair

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Report on NABARD