The National Bank for Agriculture and Rural Development (NABARD) is an apex development financial institution in India, established for promoting sustainable and equitable agriculture and rural development. It serves as the principal regulator and supervisor of cooperative banks and Regional Rural Banks (RRBs), and provides refinance, institutional credit, and developmental assistance to support rural livelihoods across the country.
Key facts
| Type | Statutory body / Development financial institution |
|---|---|
| Established | 12 July 1982 |
| Founding statute | National Bank for Agriculture and Rural Development Act, 1981 |
| Headquarters | Mumbai, Maharashtra, India |
| Sector | Agriculture, rural development, cooperative and rural banking |
| Owner | Government of India |
| Parent ministry | Ministry of Finance, Government of India |
| Role | Apex refinance institution; regulator of cooperative banks and RRBs (alongside the RBI) |
Background
NABARD was set up on the recommendations of the Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), commonly called the Sivaraman Committee, constituted by the Reserve Bank of India in 1979. The committee recommended the creation of a single apex agency to coordinate rural credit and developmental functions, leading to the enactment of the NABARD Act, 1981.
On its formation, NABARD took over the functions previously performed by the Agricultural Credit Department (ACD) and the Rural Planning and Credit Cell (RPCC) of the Reserve Bank of India, as well as the work of the Agricultural Refinance and Development Corporation (ARDC). This consolidated the functions of agricultural credit policy, refinance, and rural development under a single institution.
Functions
NABARD operates through three broad mandates:
- Credit functions: Providing refinance to commercial banks, cooperative banks, RRBs, and other eligible financial institutions for investment and production credit in agriculture and allied activities, rural non-farm sector, and rural infrastructure.
- Development functions: Promoting and supporting institutions and initiatives such as Self-Help Groups (SHGs), Joint Liability Groups (JLGs), Farmer Producer Organisations (FPOs), watershed development, tribal development (Wadi programme), and rural innovation.
- Supervisory functions: Conducting statutory inspections of State Cooperative Banks, District Central Cooperative Banks, and Regional Rural Banks, and overseeing their performance, governance, and compliance.
Major programmes and instruments
- Rural Infrastructure Development Fund (RIDF): Established in 1995–96, RIDF channels funds from scheduled commercial banks (in respect of shortfall in priority sector lending) to state governments for completion of rural infrastructure projects in irrigation, rural roads, bridges, and social infrastructure.
- SHG–Bank Linkage Programme: Launched in 1992 as a pilot, it has grown into one of the largest microfinance initiatives in the world, linking women-led self-help groups with the formal banking system.
- Kisan Credit Card (KCC) scheme: Designed in 1998 in association with the Reserve Bank of India to provide timely and adequate credit to farmers.
- Long Term Irrigation Fund (LTIF), Pradhan Mantri Awaas Yojana – Gramin (PMAY-G) funding window, Micro Irrigation Fund, Dairy Processing and Infrastructure Development Fund, and other dedicated funds operated on behalf of the Government of India.
- NABARD Consultancy Services (NABCONS): A wholly owned subsidiary providing consultancy in agriculture, rural development, and allied areas.
Subsidiaries and associated entities
- NABARD Financial Services Limited (NABFINS)
- NABARD Consultancy Services (NABCONS)
- NABKISAN Finance Limited
- NABSAMRUDDHI Finance Limited
- NABVENTURES Limited
- NABFOUNDATION
Organisation
NABARD is headed by a Chairman appointed by the Government of India, supported by a Managing Director, Deputy Managing Directors, and a Board of Directors with representation from the Government of India, the Reserve Bank of India, state governments, and experts in rural economy and cooperative banking. The bank operates through regional offices in every state and union territory, training establishments, and district development offices to coordinate with state governments and field-level institutions.
Key training and research institutions associated with NABARD include the Bankers Institute of Rural Development (BIRD) at Lucknow, with centres at Mangaluru and Kolkata.
Timeline
- 1979: CRAFICARD (Sivaraman Committee) constituted by the RBI.
- 1981: Parliament enacts the NABARD Act.
- 1982: NABARD established on 12 July; takes over functions from ACD, RPCC, and ARDC.
- 1992: SHG–Bank Linkage Programme launched as a pilot.
- 1995–96: Rural Infrastructure Development Fund (RIDF) created.
- 1998: Kisan Credit Card scheme rolled out.
- 2017–18: Government of India fully acquires the residual shareholding of the Reserve Bank of India in NABARD, making it a wholly Government-owned institution.
Significance
NABARD plays a central role in the architecture of rural finance in India. By refinancing cooperative banks and RRBs, it strengthens the lower tiers of the rural banking system that serve smallholder farmers, artisans, and rural entrepreneurs. Its development initiatives—particularly the SHG–Bank Linkage Programme and FPO promotion—have been influential in shaping financial inclusion and women's economic empowerment in rural India. Through RIDF and similar funds, NABARD has supported the creation of rural infrastructure across irrigation, connectivity, education, and health.
Related topics
- Reserve Bank of India
- Regional Rural Banks
- Cooperative banking in India
- Self-Help Group
- Kisan Credit Card
- Farmer Producer Organisation
- Priority sector lending
- Ministry of Finance (India)
- Agriculture in India
- Rural development in India
References
- National Bank for Agriculture and Rural Development Act, 1981.
- Official website of NABARD.
- Reserve Bank of India publications on rural and cooperative credit.
- Wikidata entry: Q3519950.