The full form of NABARD is National Bank for Agriculture and Rural Development. It is a regulating body in India, headquartered in Mumbai, that regulates economic activities in the rural areas of India. It was established in 1982 to promote sustainable development. Its main objective is to improve the livelihood of people in rural areas through various initiatives. The question related to NABARD and its functions is generally asked in the banking examinations. Also, it conducts its recruitment for NABARD Grade A and Grade B positions. Therefore, it becomes an important topic to be covered for the government exam aspirants. Continue reading till the last and know all the details regarding the National Bank for Agriculture and Rural Development.
NABARD Overview
The table below provides an overview of the National Bank of Agricultural and Rural Development.
| Particulars | Details |
|---|---|
| Full Form | National Bank for Agriculture and Rural Development |
| Established | 12 July 1982 |
| Headquarters | Mumbai, Maharashtra |
| Regulated By | Ministry of Finance, Government of India |
| Ownership | 100% owned by Government of India (after RBI transferred its stake in 2018) |
| Objective | Promote sustainable and equitable agriculture and rural development |
| Main Functions | – Refinance for agriculture and rural development – Developmental and supervisory role – Financial inclusion and rural credit monitoring |
| Key Areas of Operation | – Agriculture finance – Rural infrastructure – Microfinance – SHGs – Cooperative Banks and RRBs |
| Refinancing Role | Provides refinance support to Cooperative Banks, RRBs, Commercial Banks |
| Development Role | Capacity building, training, institution development |
| Supervisory Role | Inspects and supervises Cooperative Banks and Regional Rural Banks |
| Flagship Funds Managed | – RIDF (Rural Infrastructure Development Fund) – Long-Term Irrigation Fund – Micro Irrigation Fund |
| Chairman (as of 2024) | Shaji K.V. |
| Tagline | “Development Bank of the Nation for Fostering Rural Prosperity” |
About NABARD – Establishment
The National Bank for Agriculture and Rural Development is wholly owned by the Government of India. It operates under the Department of Financial Services (DFS) within the Ministry of Finance. It was established on the recommendations of the B. Shivaraman Committee. This committee was formed to review the arrangements of institutional credit for agriculture and rural development. This committee’s report led to the creation of NABARD. It was established by an act of Parliament in 1981 and became operational on July 12, 1982. The headquarters of NABARD is in Mumbai and is called the apex development bank of India. It was established under the sixth five-year plan with the passing of an Act of Parliament. The current Chairman of NABARD is Mr. Shaji K V, who assumed charge on 7th December 2022. The tagline of NABARD is “Development Bank of the Nation for Fostering Rural Prosperity”. B. Sivaraman is called the “Father of NABARD” for his pivotal role in the establishment of NABARD. The first Female Chairman of NABARD is Ranjana Kumar. It works in collaboration with the Reserve Bank of India (RBI) on various developmental and regulatory projects. Now let’s know about the history and functions of NABARD.
History of NABARD – Timeline
The complete history of NABARD starts with its pre-establishment phase and continues till the present. It represents its major contributions, mergers, and key roles in uplifting the economic situation the rural India. Let’s have a look at the timeline of the NABARD from 1982 to present times.
| Period | Development |
|---|---|
| Pre-1982 | Agricultural credit and rural development functions were performed by RBI and its departments like ARDC (Agricultural Refinance and Development Corporation). |
| 1979 | The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD) was set up under the chairmanship of B. Sivaraman. |
| 1981 | Based on CRAFICARD’s recommendations, the National Bank for Agriculture and Rural Development Act, 1981 was enacted by the Parliament. |
| 12 July 1982 | NABARD was established as an apex development bank by transferring the functions of ARDC and the rural credit departments of the RBI. It started operations with an initial capital of ₹100 crore. |
| 1982–1990s | NABARD started refinancing rural credit, promoted Self-Help Groups (SHGs), and supported rural infrastructure development. |
| 1995 | Rural Infrastructure Development Fund (RIDF) was established with NABARD’s management to support rural infrastructure projects. |
| 2000s | NABARD became actively involved in microfinance, SHG–Bank Linkage Programme (world’s largest), and financial inclusion efforts. |
| 2007 | Started supporting climate change-related initiatives and sustainable agriculture through funds and international partnerships. |
| 2018 | The RBI transferred its 0.4% stake to the Government of India, making NABARD fully government-owned. |
| 2020s–present | NABARD continues to play a pivotal role in financing rural infrastructure, digitizing rural banks, and supporting agritech and sustainable development initiatives. |
Origin Entities that Merged into NABARD
- ARDC (Agricultural Refinance and Development Corporation)
- Agricultural Credit Department (ACD) of RBI
- Rural Planning and Credit Cell (RPCC) of RBI
Key Contributions Over the Years
- SHGs (Self-Help Groups)-Bank Linkage Programme.
- Rural Infrastructure Development through RIDF.
- Refinance support to RRBs and Cooperative Banks.
- Supervision and regulation of rural financial institutions.
- Promoting rural innovations, digital banking, and climate resilience.
Functions of NABARD
The functions of NABARD include various financial and non-financial functions. The non-financial functions include Developmental, Supervisory, Planning, and Sustainable Development functions. A complete list of these functions is provided below.
Financial Functions
- Refinancing: Provides refinance support to:
- Regional Rural Banks (RRBs)
- Cooperative Banks
- Commercial Banks
- NBFCs and other financial institutions engaged in agriculture and rural development
- Direct Lending:
- Provides long-term loans directly to State Governments and other eligible institutions for infrastructure and rural development.
- Fund Management: Manages various funds such as:
- Rural Infrastructure Development Fund (RIDF)
- Long-Term Irrigation Fund (LTIF)
- Micro Irrigation Fund
- NABARD Infrastructure Development Assistance (NIDA)
Developmental Functions
- Institutional Development:
- Helps in the development and strengthening of rural financial institutions like RRBs and Cooperative Banks.
- Training & Capacity Building:
- Conducts training and provides support for improving the capabilities of personnel in rural credit institutions.
- Promotion of SHGs & Microfinance:
- Implements and supports the Self-Help Group (SHG)-Bank Linkage Programme to boost microfinance in rural areas.
- Innovation & Technology Support:
- Promotes agritech, digital banking, and financial inclusion initiatives in rural India.
Supervisory Functions
- Inspection of Banks:
- Conducts inspections of RRBs and Cooperative Banks as per the Banking Regulation Act, 1949.
- Monitoring and Evaluation:
- Monitors financial institutions for performance and ensures proper utilization of funds.
- Regulatory Role:
- Offers guidance and policy input to improve the operational efficiency of rural banks.
Planning & Policy Formulation
- Credit Planning:
- Assists state governments in preparing district-level credit plans.
- Policy Advice:
- Advises the central and state governments on rural credit and development policies.
- Research and Development:
- Funds and conducts research on rural development issues.
Promoting Sustainable & Inclusive Development
- Climate and Sustainable Agriculture:
- Supports projects related to climate change adaptation and sustainable agricultural practices.
- Tribal and Backward Area Development:
- Implements special development programmes for vulnerable and remote rural regions.
- Watershed Development and Natural Resource Management:
- Supports holistic rural development through natural resource-based initiatives.
Summary
National Bank for Agriculture and Rural Development (NABARD) is an apex institution for rural credit management. It regulates Regional Rural Banks (RRBs), Cooperative Banks, Commercial Banks, NBFCs (Non-Banking Financial Institutions), and other institutions that operate in the rural areas. It was established under the chairmanship of the B. Sivaraman committee and continued operation on 12th July 1982. Its main objective is to promote sustainable and equitable agriculture and rural development. It manages various funds like the Micro irrigation fund, RIDF, LTIF, and NIDA. It regulates RRBs and Cooperative Banks and promotes Self-Help Groups. Its functions include microfinancing, supervising, evaluation, research, and development for rural area development. In this way, NABARD plays a key role in the overall development of the economy of a nation.
Banking Exams Free Mock Test
| IBPS RRB PO Free Mock Test | IBPS PO Free Mock Test |
| SBI PO Free Mock Test | IBPS SO Free Mock Test |
| IBPS RRB Clerk Free Mock Test | IBPS Clerk Free Mock Test |
If you want to prepare for NABARD Grade A, check our blogs:
Join our exclusive Telegram group, where our experts are ready to answer all your queries, guide you in banking exam preparation, and give personalised tips to boost your success. Get access to real-time solutions, expert advice, and valuable resources to improve your study journey.
FAQs
The NABARD was established by the NABARD act of Parliament in 1981 on the B. Sivaraman Committee recommendation and became fully functional on 12th July 1982.
The current chairman of NABARD (as of 2024) is Shaji K V.
The non-financial roles of NABARD include regulating and managing RRBs and Cooperative Banks. It also includes research and development roles, supervisory roles, planning and policy formation for tribal and other backward area.
The NABARD is under the Ministry of Finance. Specifically under Department of Financial Services (DFS)
- Sign Up on Practicemock for Updated Current Affairs, Topic Tests and Mini Mocks
- Sign Up Here to Download Free Study Material
Free Mock Tests for the Upcoming Exams
- IBPS PO Free Mock Test
- RBI Grade B Free Mock Test
- IBPS SO Free Mock Test
- NABARD Grade A Free Mock Test
- SSC CGL Free Mock Test
- IBPS Clerk Free Mock Test
- IBPS RRB PO Free Mock Test
- IBPS RRB Clerk Free Mock Test
- RRB NTPC Free Mock Test
- SSC MTS Free Mock Test
- SSC Strenographer Free Mock Test
- GATE Mechanical Free Mock Test
- GATE Civil Free Mock Test
- RRB ALP Free Mock Test
- SSC CPO Free Mock Test
- AFCAT Free Mock Test
- SEBI Grade A Free Mock Test
- IFSCA Grade A Free Mock Test
- RRB JE Free Mock Test
- Free Banking Live Test
- Free SSC Live Test