Why this matters now
NABARD is tested for: Sivaraman Committee 1979 recommendation; established 12 July 1982 by NABARD Act 1981; merger of ARDC + ACD of RBI; RIDF (Rural Infrastructure Development Fund) 1995; refinance for cooperative banks + RRBs; SHG-Bank Linkage Programme; Long Term Irrigation Fund (LTIF) 2016; Bharat Nidhi/PMAY-G support; recent Govt of India 100% ownership (RBI’s 0.4% stake transferred 2018).
History
- 1979: Sivaraman Committee (B. Sivaraman, member Planning Commission) recommended single national-level institution for rural credit.
- NABARD Act 1981: passed Parliament Dec 1981.
- 12 July 1982: NABARD established by merger of:
- Agricultural Refinance and Development Corporation (ARDC, est. 1963)
- Agricultural Credit Department (ACD) of RBI
- Rural Planning and Credit Cell of RBI
- 1992: SHG-Bank Linkage Programme pilot.
- 1995: Rural Infrastructure Development Fund (RIDF) instituted.
- 1999: Kisan Credit Card scheme co-designed with NABARD.
- 2016: Long Term Irrigation Fund (LTIF) Rs 40,000 cr.
- 2018: RBI transferred its 0.4% stake to Govt of India — 100% Govt-owned.
- 2022: Rural Infrastructure Assistance to State Governments Programme.
Functions
- Refinance to cooperative banks (StCBs, DCCBs), Regional Rural Banks (RRBs), commercial banks (for priority sector), state govts for rural credit. NABARD does NOT directly lend to individuals.
- Direct lending through Rural Infrastructure Development Fund (RIDF) to State govts + State PSEs for rural infra projects (irrigation, roads, bridges, schools, hospitals, water supply). Funded by commercial banks’ shortfall in priority sector lending.
- Supervision of cooperative banks + RRBs (alongside RBI).
- Promotional + developmental: SHG-Bank Linkage Programme (75 lakh+ SHGs, 9 crore women); Farmer Producer Organisations (FPOs); Producer Companies; tribal development.
- Long-term lending via LTIF; warehouse infra; food processing.
- Rural credit assessment + reports: Status of Microfinance, All-India Rural Credit Survey.
Recent
NABARD’s balance sheet (FY24): Rs 8.18 lakh crore assets; profit Rs 7,253 cr. Schemes:
- RIDF XXIX (2023-24): Rs 38,000 cr allocation; ~7.65 lakh projects sanctioned cumulatively.
- LTIF: 99 major + medium irrigation projects.
- NABARD Climate Action Plan 2030.
- Atal Beemit Vyakti Kalyan Yojana.
- Co-implementer of 10,000 FPOs scheme.
- SHG-Bank Linkage: 144 lakh SHG-Bank linkage (one of world’s largest micro-finance programmes).
UPSC angle
Know NABARD — National Bank for Agriculture and Rural Development; NABARD ACT 1981, established 12 JULY 1982; SIVARAMAN COMMITTEE 1979 (B. Sivaraman Planning Commission) recommended; merger of AGRICULTURAL REFINANCE & DEVELOPMENT CORPORATION (ARDC 1963) + AGRICULTURAL CREDIT DEPARTMENT (ACD) of RBI + Rural Planning & Credit Cell; HQ MUMBAI Bandra-Kurla; 100% GOVT-OWNED (RBI 0.4% transferred 2018); CHAIRMAN SHAJI K.V. since 6 September 2023; FUNCTIONS: (1) REFINANCE to cooperative banks (StCBs/DCCBs) + RRBs + commercial banks priority sector + state govts (NOT direct lend individuals); (2) DIRECT via RIDF RURAL INFRASTRUCTURE DEVELOPMENT FUND 1995 to State govts+PSEs (irrigation/roads/bridges/schools/hospitals/water), funded by commercial banks priority-sector shortfall; (3) SUPERVISION cooperative banks+RRBs with RBI; (4) PROMOTIONAL: SHG-Bank Linkage Programme 1992 (144 lakh SHGs 9 cr women, world’s largest micro-finance) + FPOs + Producer Companies + tribal; (5) LONG-TERM via LTIF Long Term Irrigation Fund 2016 Rs 40000 cr; (6) Status of Microfinance + AIRCS; FY24 balance sheet Rs 8.18 LAKH CR + profit Rs 7253 cr; RIDF XXIX 2023-24 Rs 38000 cr; co-implementer 10000 FPOs scheme; NABARD Climate Action Plan 2030.
Frequently asked questions
When was NABARD established?
On 12 July 1982 under the NABARD Act 1981, on recommendation of the Sivaraman Committee 1979. Created by merging ARDC, RBI’s Agricultural Credit Department, and the Rural Planning & Credit Cell.
Does NABARD lend directly to farmers?
No — NABARD is a refinancing institution. It refinances cooperative banks, RRBs, commercial banks (for priority sector), and state govts. Direct end-borrowers go through these intermediaries.
What is RIDF?
Rural Infrastructure Development Fund (1995) — NABARD-administered fund for rural infrastructure (irrigation, roads, bridges, etc.). Funded by commercial banks’ shortfall in priority sector lending targets.
Who owns NABARD?
100% Government of India since 2018, when RBI transferred its 0.4% remaining stake.