Full Form of NABARD

The full form of NABARD is National Bank for Agriculture and Rural Development. It has been the top development financial institution in India majorly involved in planning policies and operations in the field of agriculture and other economic services in the rural parts of India.

It was set up on 12 July 1982 on the recommendations of the B. Sivaraman committee, marking the implementation of the National Bank for Agriculture and Rural Development Act 1981. NABARD primarily replaces many old acts like the Agriculture Credit Act, Rural Planning and Credit Cell of RBI, and Agriculture Refinance and Development Corporation.

The full form of NABARD has its initials relating to the national financing options available for agriculture and rural development sectors. It is one of rural India’s most important sources of credit providers. The initial corpus with which NABARD set was ₹100 crores.

NABARD primarily replaces many old acts like the Agriculture Credit Act, Rural Planning and Credit Cell of RBI, and Agriculture Refinance and Development Corporation. It is one of rural India's most important sources of credit providers. The initial corpus with which NABARD set was ₹100 crores.

The authorized paid-up capital is more than ₹30,000 crores at present. The government of India holds 100% of the share capital. NABARD has its headquartered in Mumbai. It has been the key to providing rural and innovative social services and credit services in the rural parts of India.

The supreme body has the authority and power to plan and deal with matters related to framing policies related to the rural credit for agriculture and other economic activities.

NABARD acts as the refinancing house for other agencies providing rural development credit. It has an active role in preparing credit plans for rural India every year, basically for all the districts in the nation. NABARD also plays a key role in promoting a research-based scenario in rural banking, rural development, and agriculture.

NABARD has been instrumental in shaping modern India and solving rural problems from the grassroots level. It has been shaping the problems faced by the rural population and helped them earn a livelihood and betterment the rural economy. NABARD has connected the rural and national economies and created a synergy. NABARD currently works with nearly 4,000 partner companies leading innovators and major players in various rural projects.

One can relate the history of the National Bank for Agricultural and Rural Development to the year 1981, the B.Sivaraman Committee's moment. The 61st Act of the Parliament of India in 1981 set the committee to scrutinize and serve suggestions for providing better services and elevating the mass of India's rural population, which was almost 80% of the overall population during those days.

NABARD came into action on 12th July 1982. The newly formed NABARD replaced the roles of a couple of other departments or acts like Agriculture Credit Department (ACD) and the RPCC (Rural Planning and Credit Cell), and ARDC (Agricultural Refinance and Development Corporation). After the successful implementation of NABARD, ARDC, RPCC, and ACD were stopped and replaced.

They formed NABARD with an initial capital of ₹100 crores, then it grew multiple folds with subsequent passage of time. NABARD's total paid-up capital stood at ₹10,580 crores as of 31 March 2018, with the Government of India holding 100% of the total capital.

During later stages, RBI sold most of its stake in NABARD to the Government of India, and thus Government of India now has overall control over NABARD. NABARD has several international partnerships, which also include the World Bank. They offer effective advisory services and financial assistance to help the betterment of the rural population.

NABARD is an entity that takes care of the financial needs of the rural development initiatives and agricultural requirements in India. Besides what the full form of NABARD states, there are other roles as well that this entity performs.  

Let us have a look at them below:

Supports cottage industry

The cottage industry in India, once the prime source of revenue generation for the masses, has been in bad shape lately and needs financial restructuring. Most of the cottages and SMEs in India are situated in rural areas. NABARD has played a crucial role in reorganizing the cottage industry. As a result, rural areas of India have again become a key contributor to India's growth.

Establishes synergy

They treated the national economy differently from the rural one and were considered different entities. NABARD brought a synergy between the two by reaching out to various industries and sectors like fertilizer manufacturers, pesticide developers, and farm equipment producers within the two economies and linking each other for synergetic growth. It led to a mutual benefit cycle that helped the rural and national economies.

Acts as an Apex

NABARD serves as the apex body to provide services that involve financing and credit to the rural regions for carrying out various development activities. Moreover, NABARD also provides credits to other third-party companies involved in lending support to rural industries all over the country.

Supports new initiatives

NABARD is also a key body to support new agencies and institutions specifically targeting Indian villages and their inhabitants. These agencies specifically target end scrutiny, rehabilitation unit creation, credit institution restructuring, training new hires, etc.

An Intermediary

NABARD also acts as an intermediary to various rural financing agencies that operate at the bottom-most level. It also acts as a bridge between RBI, the Indian Government, state-level bodies, and also other institutions that are operating at a national level.

Conducts inspection

It also acts as an evaluation body of all the related projects and monitors them closely, considering refinancing if needed.

Other roles

NABARD also takes part in developing other organizations that take part in the development of the rural economy.

NABARD plays a crucial role in developing and supporting co-operative banks' functioning in regulating and training their staff.

NABARD set to serve the below-mentioned functions:

• It acts as the leading financing agency for providing credits to agencies or firms focused on promoting various development activities in rural areas.
• NABARD pays special attention to projects built under the Integrated Rural Development Programme (IRDP).
• It arranges to refinance for IRDP accounts to give the highest share of contribution towards eradicating poverty.
• NABARD provides instructions for the promotion of group activities under its programs and provides 100% refinance support.
• It helps to connect the Self-Help Group (SHG) and the needy population of the rural areas.
• It also provides a helping hand to "Vikas Vahini" volunteer programs that offer credit and development activities to poor farmers.
• NABARD also monitors and controls the cooperative banks and RRBs to support rural financing and needy farmers.
• NABARAD also suggests RBI licenses be provided to RRBs and co-operative banks.

#1 - NABARD Infrastructure Development Assistance (NIDA)

It is a new line of credit support for rural funding targeted to projects related to rural infrastructure.

#2 - Direct Refinance Assistance to CCBs

NABARD, on a short-term basis, provides direct refinance assistance to CBBs for use on a multilateral basis.

This article has been a guide to what is the Full form of NABARD. We explain National Bank for Agriculture & Rural Development, its history, roles, functions & plans. You may refer to the following articles to learn more about finance: -

• SBI - Full Form
• MOU Full Form
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• Credit Facility