Introduction

National Bank for Agriculture and Rural Development (NABARD) is an All India Development Financial Institution (DFI) and the apex supervisory body for Regional Rural Banks (RRBs), State Cooperative Banks (SCBs), and District Central Cooperative Banks (DCCBs) in India. It was established under the NABARD Act, 1981 passed by the Parliament of India and came into existence on 12 July 1982 by taking over the agricultural credit functions of the Reserve Bank of India (RBI) and refinance functions of the Agricultural Refinance and Development Corporation (ARDC). NABARD is fully owned by the Government of India and functions under the Department of Financial Services (DFS), Ministry of Finance.

History of NABARD

The idea of NABARD emerged after the RBI formed the Committee to Review the Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD) on 30 March 1979 under the chairmanship of Shri B. Sivaraman. The committee recommended the establishment of a separate institution focused on rural credit and development, which led to the passing of Act 61 of 1981 by Parliament. NABARD was dedicated to the nation by former Prime Minister Indira Gandhi on 5 November 1982. It started with an initial capital of Rs. 100 crore, while its paid-up capital stood at Rs. 14,080 crore as on 31 March 2020, and the authorized share capital is Rs. 30,000 crore.

International Partners of NABARD

NABARD works closely with several international organizations for rural and agricultural development. World Bank and its affiliated agencies provide advisory and financial support for agricultural and rural development projects. United Nations Development Programme (UNDP) signed a Memorandum of Understanding (MoU) with NABARD to promote data-driven innovations in agriculture, technology transfer, open-source data sharing, and better agrarian policies for small farmers. KfW collaborates with NABARD on projects such as the KfW-NABARD Adivasi Development Programme, Indo-German Watershed Development Programme, and Natural Resource Management Programme. Women’s World Banking also partnered with NABARD to promote the Jan Dhan Plus Programme through Regional Rural Banks with the aim of increasing financial inclusion and empowering women account holders.

Role and Functions of NABARD

NABARD plays a major role in rural development, social innovation, agricultural growth, and financial inclusion in India. It operates through 31 regional offices and has partnered with around 4000 organizations for implementing rural development programmes. Its major initiatives include the SHG-Bank Linkage Programme, watershed development, tribal livelihood programmes, soil and water conservation, crop productivity enhancement, and farmer clubs. NABARD also contributes significantly to the national treasury through taxes and reinvests most of its profits into rural development.

Its functions can broadly be divided into refinancing, banking supervision, and development activities. As a refinancing institution, NABARD provides investment and production credit support to institutions involved in rural development and coordinates with the Government of India, State Governments, RBI, and other institutions. It also refinances loans from the World Bank and Asian Development Bank to State Cooperative Agriculture and Rural Development Banks (SCARDBs), State Cooperative Banks (SCBs), Regional Rural Banks (RRBs), Commercial Banks, and other RBI-approved financial institutions. Beneficiaries include individuals, companies, partnership firms, state-owned corporations, and cooperative societies.

As a supervisory institution, NABARD supervises State Cooperative Banks, District Central Cooperative Banks, and Regional Rural Banks by conducting statutory inspections, monitoring projects, restructuring credit institutions, formulating rehabilitation schemes, and training personnel. NABARD is widely known for its Self Help Group (SHG)-Bank Linkage Programme, which encourages banks to lend to SHGs mainly consisting of poor rural women. By March 2006, around 22 lakh SHGs representing 3.3 crore members had been linked to banks under this programme, making it one of India’s most important microfinance initiatives. NABARD also runs Natural Resource Management Programmes related to watershed development, tribal development, farm innovation, and soil and water conservation through dedicated funds.

Regional Offices and Administration

The head office of NABARD is located in Mumbai, and it has regional offices in all states along with a special cell in Srinagar, Jammu and Kashmir. The regional offices are headed by Chief General Managers (CGMs), while the head office is managed by Directors, Deputy Managing Directors (DMDs), and the Chairperson. NABARD also has 336 district offices staffed by District Development Managers (DDMs) and six training establishments.

Subsidiaries of NABARD

NABARD has established several subsidiaries to work in specialized sectors. NABKISAN provides credit support for agriculture, allied activities, and rural non-farm enterprises and has supported 550 Farmer Producer Organizations (FPOs) with assistance exceeding Rs. 225 crore. NABSAMRUDDHI provides credit for microfinance, MSMEs, housing, education, transport, and non-farm activities, and launched the ‘Climate Ready WASH’ campaign in 2024 for women Joint Liability Group borrowers. NABFINS provides doorstep microfinance services mainly to low-income women households through SHGs and JLGs. NABFOUNDATION works as a non-profit entity implementing development projects with NGOs, agri-universities, government departments, and CSR organizations. It signed an MoU with Dalmia Bharat Foundation to develop a skill mapping programme for unemployed youth in North Eastern states. NABCONS functions as the consultancy wing of NABARD and provides consultancy services in agriculture and rural development, including support for Kerala’s Digital Crop Survey Programme. NABVENTURES manages a fund with a target corpus of INR 500 crore for investments in agri-tech, agri-biotech, food, rural fintech, and rural startups, while NABSanrakshan focuses on credit guarantee and sustainable rural development activities.

Rural Innovation and Development Initiatives

NABARD has played an important role in rural innovation and infrastructure development. With support from the Swiss Agency for Development and Cooperation, NABARD established the Rural Innovation Fund to support innovative and unconventional rural development projects that generate livelihood and employment opportunities. The Rural Infrastructure Development Fund (RIDF) finances projects related to irrigation, rural roads, bridges, health, education, soil conservation, and water supply. Under RIDF, Rs. 51,283 crore was sanctioned for 2,44,651 projects. NABARD also started the Umbrella Programme for Natural Resource Management (UPNRM) in 2007–08 to provide direct lending support for natural resource management activities at reasonable interest rates.

NABARD Examinations

NABARD conducts various competitive examinations for recruitment into Group ‘A’ and Group ‘B’ services. These include the NABARD Grade A Examination for Assistant Managers, NABARD Grade B Examination for Managers, and the Development Assistant Examination for recruitment of Development Assistants.