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National
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Bank for
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and Rural
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Development
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Matang Barot 03
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Rajvi Dedhia 11
Shantanu kurup 28
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3. National Bank for Agriculture and
Rural Development
National Bank for Agriculture and Rural Development
Logo of NABARD Headquarters in Mumbai
Headquarters Mumbai, Maharashtra, India
Established 12 July 1982
Managing Director Dr K G Karmakar
Currency
Reserves 81,220crore (US$ 18.11 billion) (2007)
Website www.nabard.org
NABARD is the apex development bank in India

4. Contents
Acknowledgement
Introduction
History
Rural Innovation
References

5. Acknowledgement
My deepest thanks to Sanjay Rode sir for guiding us through
this project and for supporting us through out. Sirs
suggestions and recommendations have been invaluable for
this project. Then I would like to thank my teacher, for
guiding me and my friends throughout this project. We had
some difficulties in doing this task, but she taught us
patiently until we knew what to do.
Last but not least, my friends who were doing this project
with me and sharing our ideas. They were helpful that when
we combined and discussed together, we had this task done.
I would also like to thank the college and Mumbai
University for providing me with the opportunity to do this
project.

6. Introduction
National Bank for Agriculture and Rural Development
(NABARD) is an apex development bank in India based in
Mumbai, Maharashtra. It has been accredited with “matters
concerning policy, planning and operations in the field of
credit for agriculture and other economic activities in rural
areas in India”.
NABARD or National Bank for agriculture and Rural
Development is the apex institution accredited with all
matters concerning policy, planning, and operations in the
fields of credit for agriculture and other economic activities in
the rural areas in India.
NABARD is committed to rural prosperity by promoting
sustainable and equitable agriculture and rural development
through effective credit support, related services,
institutional building and other innovative initiatives.
NABARD is set up by the Government of India as a
development bank with the mandate of facilitating credit
flow for promotion and development of agriculture and
integrated rural development. The mandate also covers
supporting all other allied economic activities in rural areas,
promoting sustainable rural development and ushering in
prosperity in the rural areas.
With a capital base of Rs 2,000crore provided by the
Government of India and Reserve Bank of India, it operates
through its head office at Mumbai, 28 regional offices
situated in state capitals and 391 district offices at districts.
NABARD is set up as an apex Development Bank with a
mandate for facilitating credit flow for promotion and

7. 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
• 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
• 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
• Helps the state governments in reaching their targets of
providing assistance to eligible institutions in agriculture
and rural development

8. • Acts as regulator for cooperative banks and RRBs
Some of the milestones in NABARD's activities are:
• Refinance disbursement under ST-Agri & Others and MT-
Conversion/ Liquidity support aggregated Rs.19452 crore
during 2009-10.
• Refinance disbursement under Investment Credit to
commercial banks, state cooperative banks, state
cooperative agriculture and rural development banks,
RRBs and other eligible financial institutions during 2009-
10 aggregated Rs.12009.08 crore.
• Through the Rural Infrastructure Development Fund (RIDF)
Rs.12387.54 crores were disbursed during 2009-10. With
this, a cumulative amount of Rs.86939.74 crore has been
disbursed as on 31 March 2010 covering irrigation, rural
roads and bridges, health and education, soil conservation,
drinking water schemes, flood protection, forest
management and the Bharat Nirman Project (BNP).
• Under Watershed Development Fund with a corpus of
Rs.1102 crore as on 31 March 2008, 513 projects in 14
states have benefited.
• Farmers now enjoy hassle free access to credit and
security through 906.40 lakh Kisan Credit Cards that have
been issued through a vast rural banking network.
• Under the Farmers' Club Programme, a total of 54805
clubs covering 104648 villages in 587 districts have been
formed, helping farmers get access to credit, technology
and extension services.

9. 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

10. 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 all districts 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 making credit more productive
Supervisory functions, ensuring the proper functioning of
cooperative banks and regional rural banks

11. History
NABARD was established on the recommendations of
Shivaraman Committee, by an act of Parliament on 12 July
1982 to implement the National Bank for Agriculture and
Rural Development Act 1981. It replaced the Agricultural
Credit Department (ACD) and Rural Planning and Credit Cell
(RPCC) of Reserve Bank of India, and Agricultural Refinance
and Development Corporation (ARDC). It is one of the
premiere agencies to provide credit in rural areas.

12. 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 organization 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 be approved by the Central Government.
4. The Bank will have organic links with the Reserve Bank and
maintain a close link with in.

13. Role
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 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 Blair and one special cell at Srinagar. It also has 6
training establishments.
NABARD is also known for its 'SHG Bank Linkage Programmed
which encourages India's banks to lend to self-help groups
(SHGs). Because SHGs are composed mainly of poor women,
this has evolved into an important Indian tool for
microfinance. As of March 2006 2.2 million SHGs
representing 33 million members had to been linked to credit
through this programmed.
NABARD also has a portfolio of Natural Resource
Management Programmes involving diverse fields like

14. Watershed Development, Tribal Development and Farm
Innovation through dedicated funds set up for the purpose.

15. 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.
• 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.
• On-site inspection of cooperative banks and Regional Rural
Banks (RRBs) and iff-site surveillance over health of
cooperatives andRRBs.

16. Rural Innovation
NABARD's role in rural development in India is phenomenal.
National Bank for Agriculture & Rural Development
(NABARD) is set up as an apex Development Bank by the
Government of India with a mandate for facilitating credit
flow for promotion and development of agriculture, cottage
and village industries. The credit flow to agriculture activities
sanctioned by NABARD reached Rs 1,574,800 million in 2005-
2006. The overall GDP is estimated to grow at 8.4 per cent.
The Indian economy as a whole is poised for higher growth in
the coming years. Role of NABARD in overall development of
India in general and rural & agricultural in specific is highly
pivotal.
Through assistance of Swiss Agency for Development and
Cooperation, NABARD set up the Rural Infrastructure
Development Fund. Under the RIDF scheme Rs. 512830
million have been sanctioned for 2,44,651 projects covering
irrigation, rural roads and bridges, health and education, soil
conservation, water schemes etc. Rural Innovation Fund is a
fund designed to support innovative, risk friendly,
unconventional experiments in these sectors that would have
the potential to promote livelihood opportunities and
employment in rural areas. The assistance is extended to
Individuals, NGOs, Cooperatives, Self Help Group, and
Panchayati Raj Institutions who have the expertise and
willingness to implement innovative ideas for improving the
quality of life in rural areas. Through member base of 250
million, 600000 cooperatives are working in India at grass
root level in almost every sector of economy. There are
linkages between SHG and other type institutes with that of
cooperatives.

17. The purpose of RIDF is to promote innovation in rural &
agricultural sector through viable means. Effectiveness of the
program depends upon many factors, but the type of
organization to which the assistance is extended is crucial
one in generating, executing ideas in optimum commercial
way. Cooperative is member driven formal organization for
socio-economic purpose, while SHG is informal one. NGO
have more of social color while that of PRI is political one.
Recently in 2007-08, NABARD has started a new direct
lending facility under 'Umbrella Programme for Natural
Resource Management' (UPNRM). Under this facility financial
support for natural resource management activities can be
provided as a loan at reasonable rate of interest. Already 35
projects have been sanctioned involving loan amount of
about Rs 1000 million. The sanctioned projects include honey
collection by tribals in Maharashtra, tussar value chain by a
women producer company ('MASUTA'), eco-tourism in
Karnataka etc.

18. NABARD and its Role in Training
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.
•Provide facilities for training, for dissemination of
information and the promotion of research 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

19. agencies and other developmental agencies are important.
For maintaining 'Expert Staff', the bank needs to provide
continuous exposure to its officers and staff for up scaling
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 specialized skills which were utilized 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 broad base 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,

20. improve customer service, expand outreach, develop suitable
products and thereby contribute to rural development.
As NABARD primarily functions through other agencies, the
needs of the client institutions largely determine the
knowledge and skill requirements of NABARD officers.
NABARD endeavors 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.

21. NABARD today
25 YEARS OF DEDICATION TO RURAL PROSPERITY
Initiates measures toward 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.
NABARD completed 25 years of its eventful and trailblazing
existence on 12 July 2007. Established in 1982, by an Act of
Parliament, NABARD's mandate was to provide focused and
undivided attention to the development of rural India by
facilitating credit flow for promotion of agriculture and rural
non farm sector. Emphasizing this in no uncertain terms, its
mission statement underscores NABARD's goal to "promote
sustainable and equitable agriculture and rural prosperity
through effective credit support, related services, institution
development and other innovative initiatives".
NABARD's functions can be classified into 4 major categories
viz. Credit Planning, Financial Services, Promotion and
Development, and Supervision. Under Credit Planning
NABARD prepares Potential Linked Credit Plan (PLP) annually
for each district of the country by assessing potential
available in agriculture and rural sector. This serves as a
guide for banks and Government agencies to prepare their
own investment and credit plans in the district and state.
Under its Financial services, it refinances commercial, co-
operative and regional rural banks for lending to on farm and
non-farm activities. This includes farm activities like minor
irrigation, animal husbandry, farm mechanization, forestry,

22. fisheries, land development, horticulture, plantation and
medicinal crops and non-farm like rural industries, artisans,
handicrafts, handlooms, rural housing, rural tourism and agro
processing. Refinance is provided by NABARD for both long
term investment credit as well as short term production
credit for crop loans and working capital for non-farm
activities. A nationwide network of 28 regional offices at the
state capitals, a sub-office at Port Blair and 391 district
development offices are at hand to cater to this awesome
task.
Clearly NABARD's benevolent hand has been silently at work
in supporting rural resurgence in various ways and its stakes
are quite enormous. A glance at the figures will give a fair
idea. It has channelized a whopping Rs. 1, 21,000 crore under
its investment credit programme and RIDF since inception,
which includes Rs. 8795 crore disbursed during 2006-07.
Under production credit the Bank sanctioned limits of Rs.
12570 crore during 2006-07.
NABARD has effectively brought in a number of innovations
in the rural credit domains. To quote a few: Formation and
Linkage of Self Help Groups, Farmers Clubs, Rural
Infrastructure Development Fund, Watershed Development,
Kisan Credit Card, District Rural Industries Project, Cluster
Development Programme and Rural Innovation Fund.
Coordinates the rural financing activities of all the
institutions engaged in developmental work at the field
level and maintains liaison with the government of India ,
State governments, the Reserve Bank of India and other
national level institutions concerned with policy

23. formulation
Self Help Groups (SHGs) Farmers Clubs
Rural Infrastructure Development Fund (RIDF)Watershed
Development
Tribal Development and WADI approach
Women and Development
District Rural Industries Project (DRIP)
Rural Entrepreneurship Development Programme (REDP)
Rural Marketing
Revival of Short-Term Rural Co-operative Structure (STCCS)
Rural Innovation Fund
NABARD Consultancy Services (NABCONS)
Co-Financing
Prepares, on annual basis, rural credit plans for all the
districts in the country. These plans form the base for
annual credit plans of all rural financial institutions
Self Help Groups (SHGs):
One of the major success stories of NABARD, the SHG Bank
linkage programme started as a pilot project in 1992 with 500
SHGs. SHGs comprise homogeneous groups of poor people
who have voluntarily come together mainly with the idea of
overcoming their common problems of low social and
economic status. SHGs enable the poor, especially the
women from the poor households, to collectively identify,
prioritize and tackle the problems they face in their socio
economic environment. By pooling their meager resources
and using them for lending among themselves, they develop
the habit of thrift and the skill of credit appraisal, before
getting mature enough to access a loan from banks, which is

24. called credit linkage. Starting with small loans for
consumption they soon graduate to bigger loans for setting
up of income generating micro-enterprises. Today, NABARD's
SHG Bank Linkage Programme boasts of over 26 lakh SHGs
and 3.9 crore households influencing the lives of over 16
crore poor population. During the year 2006-07 alone, as
many as 458591 groups were credit linked.
Farmers Clubs A popular intervention among both farmers
and Bankers, the farmers Club concept was envisaged as an
experiment in social engineering, a forum to bring the rural
banker and the borrower closer and to propagate the
principles of development through credit. Farmers Club is an
informal group of 15-20 farmers, one per village, which acts
as a medium for accessing and disseminating awareness of
modern methods of farming and technological advancements
in agriculture in its area. Financial support is provided by
NABARD for opening and maintenance of Clubs as well as for
organizing training programmes in the respective villages.
With corporate and food chains looking for supply chain
linkages of farm produce, Farmers Clubs may have an
important role to play in joint production and marketing of
farm produce. As on 31 March 2007, there were Farmers
Clubs in 534 districts covering 48763 villages.
Rural Infrastructure Development Fund (RIDF):
Deficient Rural infrastructure hinders both social and
economic development. Economists have explicitly
emphasized on the direct correlation between the index of
infrastructure development and rural development.
NABARD's support to State Governments through RIDF since

25. 1995-96 has brought about a sea change in the shape of
upgraded infrastructure in rural areas. Rural roads and
bridges under RIDF have improved market access to farmers;
check dams and irrigation structures have augmented their
water resources. Even drinking water projects and health
centres have been supported under the Fund. NABARD so far
has sanctioned Rs. 61539 crore for 2, 44,025 projects under
the Fund. A cumulative position of sector-wise sanctions as
on 31 st March 2007 : Irrigation: Rs. 20637 crore, Rural
connectivity: Rs. 26935 crore for rural road network and
bridges, Power: Rs. 1434 crore Social Sector: Rs. 6988 crore
Others: Rs. 5547 crore. A separate window has been created
for rural connectivity with villages of population less than
500, with a corpus of Rs. 4,000 crore to support the Bharat
Nirman project.
Watershed Development:
In a comprehensive effort to enhance productivity of dryland
through conserving soil, rainwater and irrigation, NABARD
embarked on perfecting its experiments in creating a
sustainable cost effective solution to the water harvesting
techniques in rural areas. Building on its experience with the
KFW funded watershed development programme in
Maharashtra , NABARD established a Watershed
Development Fund with an initial corpus of Rs. 200 crore in
1999-2000 which now stands at Rs. 602.76 crore. The
programme is now being replicated in 124 districts of 14
States.
Tribal Development and WADI approach :
With over 8% of the population comprising tribal’s largely
dependent on forests, livestock and agriculture, NABARD
found a holistic approach by addressing production,

26. processing and marketing of the produce with WADI as the
core of the programme. WADI (small orchard) was found to
be an effective tool for arresting migration of tribal’s from
their native habitat. The WADI model evolved out of
concerted efforts made in association with Bhartiya Agro
Industries Foundation (BAIF). The project also envisages
other development interventions like environment, gender
and health. Having completed 10 years in Gujarat and 5 years
in Maharashtra, the programme has touched 275111 families
in 410 villages.
Women and Development
Women constitute one third of the labour force. In order to
give focus to women in various development activities and
increase their access to Bank credit, schemes like Assistance
to Rural women in Non-farm Development (ARWIND),
Assistance for Marketing of Non- Farm Products of Rural
Women (MAHIMA), Development of Women through Area
Programme (DEWTA) have been designed to provide
exclusive support to women in rural areas.
District Rural Industries Project (DRIP):
NABARD launched DRIP, an integrated area-based credit
intensification programme, in collaboration with
Government, banks and other development agencies with
district specific focus. It was introduced in 1993-94 with the
objective of creating sustainable employment opportunities
in 106 districts all over the country.
Rural Entrepreneurship Development Programme (REDP):
In order to generate employment in rural areas, it was felt
necessary to develop the entrepreneurial skills of the rural
youth. REDP is a promotional programme supported by
NABARD to motivate and train educated unemployed rural

27. youth, to set up their own enterprises. So far, 2.32 lakh
persons have been trained under the programme under 7792
REDPs.
Rural Marketing:
A number of marketing interventions have been made for
marketing of rural non-farm products since marketing is a key
factor in the sustainability of any such endeavour. With the
financial support of NABARD under its promotional
programmes like Rural Haats, Rural Marts, participation in
fairs, exhibitions and marketing meals, rural artisans and
entrepreneurs can get a larger market for their produce and
showcase their talent to urban and upcountry markets.
Revival of Short-Term Rural Co-operative Structure (STCCS)
NABARD is the implementing agency for the Revival package
for the STCCS which mean the State Coop. Banks, District
Coop. Banks and the Primary Agricultural Coop. Societies.
(PACS). The revival package has been approved by the Govt.
of India based on the recommendations of the Vaidyanathan
Committee. NABARD has had dialogues with State Govts. and
so far 10 states have executed MOU with GoI and NABARD.
Apart from being on the national, state and district level
implementing committees, NABARD has designed guidelines
and training manuals for the special audit of PACS under the
Package.
Rural Innovation Fund:
In association with Swiss Agency for Development and
Cooperation (SDC), NABARD has constituted the “NABARD
SDC Rural Innovation Fund (RIF)” to support innovative
projects in Farm, Non-Farm and Micro-Finance Sectors
leading to creation of livelihood opportunities for the poor.

28. Government and Non-Government Institutions, corporate
bodies, financial institutions and individuals can avail funding
support for activities involved in development of new
products, processes, prototypes, technology etc. which have
the poor in their focus.
NABARD Consultancy Services (NABCONS) NABCONS is a
wholly owned subsidiary of NABARD, which has established
itself as a dependable and professional consultancy services
provider in agriculture and allied activities. As on 31 March
2007 , it has cumulatively contracted 487 national and
international assignments involving consultancy fee of
Rs.25.49 crores.
Co-Financing It has been the experience that Banks are wary
of taking credit risk of financing high tech/large scale/ export
oriented agricultural projects or those involving sunrise
technologies. To instill confidence in banks and ensure credit
flow to such projects, NABARD has entered into agreements
for co-financing with 14 commercial banks. During 2006-07,
seven projects were sanctioned with bank loan of Rs. 145.03
crore and NABARD's share of Rs. 72.42 crore. Floriculture,
organic farming, milk processing, ethanol production and
agro processing are among the projects sanctioned so far.

29. References
Wikipedia.com
Nabard.org