• NABARD is an apex development bank in India.
  • The Reserve Bank of India (RBI) holds the majority stake in it.
  • Headquarters: Mumbai, Maharashtra.
  • Established: 1982 on the recommendations of Shivaraman Committee to implement the National Bank for Agriculture and Rural Development Act, 1981.
  • It has been entrusted with matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India.
  • It is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.
  • Mandate:
    • Facilitate credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.
    • Support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas.
Recent Amendments:
  • Amendments in Act to increase authorized capital of NABARD from Rs. 5,000 crore to Rs. 30,000 crore and further increase it beyond Rs. 30,000 crore in consultation with RBI, as deemed necessary from time to time.
  • It also includes certain other amendments including changes in long title and certain sections to bring Handlooms and Medium Enterprises in NABARD’s mandate.
  • Transfer of 0.4% equity of RBI in NABARD amounting to Rs. 20 crores, to the Union Government.
Why these amendments?
  • Increase in authorized capital will enable NABARD to respond to the its commitments undertaken, in respect of Long Term Irrigation Fund (LIF) and Government’s decision regarding on-lending to cooperative banks.
  • It will enable NABARD to augment its business and enhance its activities, thus facilitating promotion of integrated rural development and securing prosperity of rural areas by generating of more employment.
  • The transfer of entire shareholding of RBI held in NABARD to the Union Government will remove the conflict in RBI’s role as banking regulator and shareholder in NABARD

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