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Role of NABARD
The roots of India are essentially to be seen in its rural sector. Initially considered an agrarian economy, India has the second largest farm output in the world. Nearly 70% of India’s population resides in the rural areas, and sustains itself on farming or other small scale industrial setup.
Thus, to facilitate the monetary flow into the integration and promotion active rural development, the Government of India, setup NABARD(National Bank for Agriculture and Rural Development).
It was set up on the recommendations of the Siva Raman Committee on July 12, 1982 as an act of parliament which became one of the specialized finance organizations to fund the rural areas replacing the earlier, Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, Agricultural Refinance and Development Corporation (ARDC) & Agricultural Credit Department (ACD).
With its head office in Mumbai, NABARD has an extensive network of 28 regional offices and a sub office in the capitals of different states and union territories.
It is affiliated with the World Bank associated organizations and other global development agencies working on the rural development and agriculture creating a network of advisory and monetary aid to empower people in rural areas and to achieve optimized results in agriculture.
NABARD’s roles are clearly defined; it promotes institution building which facilitates effective credit distribution, personnel training, monitoring funds and rehabilitation training.
It coordinates with the central Government, State Governments, RBI and other institutions. NABARD lays out the policy formation. An annual record of credit plans for all the districts are laid out; projects undertaken are monitored and evaluated.
It functions as a regulatory authority and guide of cooperative banks and regional banks. It also facilitates research projects in fields of rural banking and agriculture development.
Applauded for its phenomenal role in rural developments, NABARD has to be credited for the growths of GDP and increasing credit flow to agriculture since its inception.
With assistance of Swiss Agency for Development and Cooperation, NABARD has managed to get millions of rupees sanctioned to promote over 2 lakh projects promoting rural Innovation that includes education, irrigation, water schemes, roads and bridges etc.
This assistance is extended to the Individuals, Panchayats, NGO’s, cooperatives and others who have the knowledge, expertise who would implement new ideas that improve quality of life in rural areas. With a strong member base of 250 million, NABARD has brought together 600000 cooperatives to work at the grass root level covering almost all sectors of economy.
Over the recent years, NABARD has initiated direct lending facilities under the “Umbrella Programme for Natural Resource Management” (UPNRM) which extends monetary support for Natural Resource Management with loans on low interests.
It has already sanctioned 35 projects like honey collection by tribals in Maharashtra, eco tourism in Karnataka etc.
An effective microfinance program has to be achieved by NABARD with a rigorous process of status evaluation, qualitative and quantitative performance checks.
Thus, the Reserve Bank of India and NABARD have laid out guidelines in 06-07 for Commercial Banks, Regional Banks, Cooperative Banks to keep both the organizations updated on their progress of microfinance program , loans forwarded to microfinance institutions, loans to and savings of self help groups with the banks.
NABARD is an exemplary initiative to promote equitable distribution of resources to remote sectors of societies which help build a structure of social justice and growth.
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