The National Bank for Agriculture and Rural Development (NABARD) is one of India’s most important development financial institutions. Since its establishment in 1982, NABARD has played a significant role in strengthening agriculture, rural infrastructure, cooperative banking, and rural entrepreneurship across the country. It acts as the apex institution for financing and promoting rural development while supporting farmers, self-help groups, rural artisans, and small businesses. Through its financial assistance, developmental initiatives, and supervisory functions, NABARD continues to contribute towards building a stronger and more inclusive rural economy in India.
What is NABARD?
NABARD stands for National Bank for Agriculture and Rural Development. It is a statutory development bank established on 12 July 1982 under the National Bank for Agriculture and Rural Development Act, 1981. The institution was created to provide focused attention to agriculture and rural development by offering financial support, policy guidance, and developmental assistance. NABARD serves as the apex body for rural financing and works closely with cooperative banks, Regional Rural Banks (RRBs), government agencies, and other rural development institutions.
| Particulars | Details |
|---|---|
| Full Form | National Bank for Agriculture and Rural Development |
| Established | 12 July 1982 |
| Headquarters | Mumbai, Maharashtra |
| Ownership | Government of India |
| Nature | Apex Development Financial Institution |
| Vision | Rural Development |
| Mission | Sustainable and Equitable Agriculture and Rural Development |
| Governing Act | NABARD Act, 1981 |
| Main Focus | Agriculture, Rural Development, Financial Inclusion |
NABARD Full Form in Hindi
NABARD (नाबार्ड) का मतलब “राष्ट्रीय कृषि और ग्रामीण विकास बैंक” है। नाबार्ड, 1982 में स्थापित, एक विशेष वित्तीय संस्थान है जो कृषि और संबद्ध गतिविधियों का समर्थन करने के लिए ऋण और अन्य सुविधाएं प्रदान करके ग्रामीण विकास को बढ़ावा देने के प्राथमिक उद्देश्य से संचालित होता है।
Attempt Free Quiz on NABARD and its functions
Test your knowledge of NABARD and its role in agricultural and rural development by attempting this free quiz. The quiz covers important topics such as the structure, functions, objectives, schemes, and contributions of NABARD, helping you assess your understanding and improve your exam preparation.
1. NABARD stands for:
2. Where is the headquarter of NABARD located?
3. Under which Parliamentary Act was NABARD established?
4. In which year was NABARD established?
5. What was the initial paid-up capital of NABARD?
6. Who chaired the CRAFICARD committee constituted by RBI in 1979?
7. The initial paid-up capital of NABARD was contributed equally by:
8. CRAFICARD stands for:
9. Before the formation of NABARD, which was the apex body to support the Indian rural economy with credit facility?
10. Which of the following RBI departments was transferred to NABARD?
11. In which year was the Agricultural Refinance Corporation (ARC) renamed as Agriculture Refinance and Development Corporation (ARDC)?
12. The NABARD (Amendment) Bill, 2017 increased NABARD’s authorized capital from Rs. 5,000 crore to:
13. As per the NABARD (Amendment) Bill, 2017, what is the minimum shareholding the Central Government alone must hold in NABARD?
14. The Rural Infrastructure Development Fund (RIDF) was set up with NABARD in:
15. The Kisan Credit Card (KCC) scheme was designed by NABARD in association with RBI in:
16. In which year was the Self Help Group-Bank Linkage Programme (SHG-BLP) launched by NABARD?
17. Project EShakti was launched by NABARD to:
18. When was project EShakti launched by NABARD?
19. The Warehouse Infrastructure Fund (WIF) was created with NABARD in the year:
20. The Warehouse Infrastructure Fund (WIF) was set up with a corpus of:
21. How many directors does RBI provide to NABARD’s Board of Directors?
22. The Producer Organizations Development Fund (PODF) was set up with an initial corpus of:
23. The Long-Term Irrigation Fund (LTIF) was announced in which Union Budget year?
24. The initial corpus of the Long-Term Irrigation Fund (LTIF) in NABARD was:
25. NABARD supervises which of the following types of banks?
26. What does CBS stand for in the banking context?
27. NABARD’s role is basically a continuation of the role of which institution in the sphere of Agriculture and Rural Development?
28. Which of the following is a broad category of NABARD’s functions?
29. The Agricultural Refinance Corporation (ARC) was set up by RBI in which year?
30. How many SHGs were credit-linked during the 2017–18 financial year under SHG-BLP?
31. What is the paid-up capital of NABARD as on 31 March 2018?
32. NABARD provides recommendations to RBI on issue of licenses to which type of banks?
33. The Umbrella Programme on Natural Resource Management (UPNRM) was started in which year?
34. What percentage of NABARD’s resources comes from market borrowings?
35. Under the NABARD Amendment Bill 2017, the RBI’s share capital in NABARD valued at Rs. 20 crore was transferred to:
36. Which fund was set up by NABARD to support rural infrastructure projects arising from shortfall in priority sector lending by scheduled commercial banks?
37. Under the 1981 Act, NABARD was responsible for providing credit to industries having investment of up to how much in machinery and plant?
38. As per NABARD Amendment Bill 2017, what is the investment limit in the manufacturing sector for MSMEs eligible for NABARD assistance?
39. The northeast region receives approximately what percentage of NABARD’s credit funds?
40. What does PACS stand for?
41. NABARD’s long-term refinance provides credit for tenors of:
42. Which of the following is NOT a function of the Rural Planning and Credit Cell (RPCC) of RBI that was transferred to NABARD?
43. A Producer Organisation (PO) can be formed by which of the following primary producers?
44. Which institution regulates NABARD under the Banking Regulation Act of 1949?
45. NABARD prepares which type of plans to guide the banking industry?
46. NABARD extended support to Chaudhary Charan Singh Haryana Agricultural University for establishing:
47. Which card scheme was developed to provide RuPay-based banking access to farmer clients of rural financial institutions?
48. NABARD Infrastructure Development Assistance (NIDA) has been designed to complement which fund?
49. The LONGTERM Irrigation Fund (LTIF) was created to fund how many irrigation projects?
50. As per the NABARD Amendment Bill 2017, investment limit up to how much in the services sector qualifies MSMEs for NABARD assistance?
Quiz Summary
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Why was NABARD established?
Before NABARD was formed, the Reserve Bank of India (RBI) handled most agricultural credit-related functions. However, the growing importance of agriculture and rural development created a need for a dedicated institution that could focus entirely on rural financing and development.
In 1979, the Committee to Review the Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), chaired by B. Sivaraman, recommended the creation of a specialized institution. Based on these recommendations, NABARD was established in 1982.
- Dedicated institution for agriculture and rural development financing.
- Better coordination among rural financial institutions.
- Increased flow of institutional credit to farmers.
- Support for rural infrastructure development.
- Promotion of sustainable agricultural growth.
- Reduction of dependence on informal money lenders.
What is the Structure of NABARD?
NABARD functions under a well-defined governance framework led by a Board of Directors appointed by the Government of India in consultation with the RBI. The Board oversees policy decisions, administration, and strategic planning of the institution.
| Position | Details |
| Chairperson | Head of NABARD |
| Managing Director | Responsible for executive management |
| RBI Directors | 3 Directors nominated by RBI |
| Central Government Representatives | 3 Officials |
| State Government Representatives | 4 Officials |
| Experts | Specialists in rural economics, agriculture, banking, rural development, and small-scale industries |
| Shareholder Representatives | Elected members from eligible shareholders |
Executive Committee
The Board may establish Executive Committees to manage specific responsibilities and ensure efficient implementation of policies and programs.
What are the main functions of NABARD?
NABARD’s activities are broadly divided into three major categories: Financial Functions, Developmental Functions, and Supervisory Functions. These functions help strengthen rural institutions and improve the living standards of rural communities.
- Financial Functions
- Developmental Functions
- Supervisory Functions
What are the financial functions of NABARD?
The financial role of NABARD focuses on providing refinance support and funding to banks and institutions involved in agriculture and rural development. These financial services ensure that credit reaches farmers, rural entrepreneurs, and development projects.
- Refinance Support
- Provides short-term crop loan refinance.
- Offers medium-term and long-term refinance assistance.
- Supports farm and non-farm rural activities.
- Rural Infrastructure Development Fund (RIDF)
- Established in 1995-96.
- Finances roads, bridges, irrigation systems, and rural infrastructure projects.
- Long-Term Irrigation Fund (LTIF)
- Supports large irrigation projects.
- Helps improve water availability for agriculture.
- Warehouse Infrastructure Fund (WIF)
- Promotes scientific storage facilities.
- Reduces post-harvest losses of agricultural produce.
- NABARD Infrastructure Development Assistance (NIDA)
- Complements RIDF projects.
- Provides funding for large-scale infrastructure development.
- Direct Lending Support
- Extends loans to cooperative banks and rural institutions.
- Facilitates credit support to marketing federations.
- Producer Organizations Development Fund (PODF)
- Supports Farmer Producer Organizations (FPOs).
- Strengthens Primary Agricultural Credit Societies (PACS).
What are the developmental functions of NABARD?
Apart from providing finance, NABARD actively works towards capacity building, innovation, skill development, and rural empowerment. Its developmental activities aim to create sustainable growth opportunities in rural areas.
- Kisan Credit Card (KCC) Scheme
- Developed jointly by NABARD and RBI.
- Provides easy access to crop loans for farmers.
- Self Help Group-Bank Linkage Programme (SHG-BLP)
- Launched in 1992.
- Connects self-help groups with formal banking institutions.
- EShakti Project
- Digitizes Self Help Groups.
- Improves transparency and record keeping.
- Tribal Development Programme
- Supports tribal communities through sustainable livelihood initiatives.
- Promotes integrated farming systems.
- Climate Resilient Agriculture
- Encourages sustainable farming methods.
- Helps farmers adapt to climate change.
- Skill Development Programs
- Promotes entrepreneurship among rural youth.
- Encourages self-employment opportunities.
- Marketing Support
- Organizes exhibitions and fairs.
- Provides market access for rural artisans and producers.
- Agricultural Incubation Centres
- Supports innovation and agri-startups.
- Encourages commercialization of agricultural technologies.
What are the supervisory functions of NABARD?
NABARD acts as a supervisory authority for certain rural financial institutions. It ensures that these institutions operate efficiently and follow sound banking practices.
- Important Supervisory Functions
- Supervises Cooperative Banks.
- Monitors Regional Rural Banks (RRBs).
- Conducts inspections and audits.
- Recommends licensing of cooperative banks to RBI.
- Assists banks in adopting Core Banking Solutions (CBS).
- Promotes financial discipline and transparency.
- Benefits of Supervision
- Improved banking services.
- Better financial management.
- Enhanced customer confidence.
- Stronger rural banking network.
How does NABARD contribute to Rural Development?
NABARD serves as a catalyst for rural transformation by funding development projects and creating opportunities for economic growth. Its initiatives directly impact farmers, rural businesses, and village communities.
| Area | Contribution |
| Agriculture | Credit support, technology adoption, irrigation funding |
| Rural Infrastructure | Roads, bridges, warehouses, irrigation projects |
| Employment | Promotion of rural enterprises and self-employment |
| Financial Inclusion | Banking access for underserved populations |
| Women Empowerment | Support through Self Help Groups |
| Tribal Welfare | Development programs for tribal communities |
| Entrepreneurship | Skill development and startup support |
| Sustainability | Promotion of climate-resilient agriculture |
What is the relationship between NABARD and RBI?
Although NABARD operates independently, it maintains close coordination with the Reserve Bank of India. NABARD was originally created by transferring several agricultural credit-related functions from RBI.
| NABARD | RBI |
| Focuses on agriculture and rural development | Central bank of India |
| Provides refinance to rural institutions | Regulates entire banking system |
| Supervises cooperative banks and RRBs | Supervises all banking institutions |
| Promotes rural development schemes | Formulates monetary policy |
| Development-oriented institution | Regulatory institution |
What changes were introduced through the NABARD Amendment Act, 2017?
The NABARD Amendment Act, 2017 brought significant changes to the institution’s capital structure and operational scope.
- Authorized capital increased from ₹5,000 crore to ₹30,000 crore.
- Central Government became the majority shareholder.
- RBI’s shareholding was transferred to the Government of India.
- NABARD’s support expanded to Micro, Small and Medium Enterprises (MSMEs).
- Greater flexibility in funding development projects.
What are the major Government-NABARD partnership programs?
NABARD works closely with the Government of India to implement several rural development initiatives.
- Dairy Entrepreneurship Development Scheme
- Agricultural Marketing Infrastructure Scheme
- Organic Input Production Units
- Agriclinic and Agribusiness Centres Scheme
- Pradhan Mantri Awaas Yojana-Gramin (PMAY-G)
- Watershed Development Projects
- Tribal Development Programs
What challenges does NABARD face?
Despite its achievements, NABARD faces several operational and developmental challenges in fulfilling its objectives.
- Climate Change
- Unpredictable weather affects agricultural productivity.
- Increased need for climate-resilient farming solutions.
- High Cost of Funding
- Dependence on market borrowings increases financing costs.
- Regional Imbalance
- Northeastern states receive comparatively lower credit support.
- Financial Inclusion Gaps
- Many rural communities still lack access to formal banking.
- Technology Adoption
- Slow adoption of modern agricultural technologies by farmers.
- Market Connectivity Issues
- Farmers often face difficulties in accessing profitable markets.
- Risk Management
- Agricultural activities remain vulnerable to natural and economic risks.
Why is NABARD important for India’s Economy?
NABARD acts as the backbone of rural financing and development in India. It not only provides financial assistance but also supports institutional growth, infrastructure development, and sustainable agriculture. By promoting financial inclusion and empowering rural communities, NABARD contributes significantly to poverty reduction, employment generation, and economic growth.
- Supports agricultural growth.
- Strengthens rural infrastructure.
- Promotes financial inclusion.
- Encourages entrepreneurship.
- Generates employment opportunities.
- Enhances rural livelihoods.
- Supports sustainable development.
- Improves access to institutional credit.
FAQs
NABARD stands for National Bank for Agriculture and Rural Development.
NABARD was established on 12 July 1982 under the NABARD Act, 1981.
The headquarters of NABARD is located in Mumbai, Maharashtra.
NABARD performs financial, developmental, and supervisory functions for rural and agricultural sectors.
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