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Financial Institutions and Services
Notes
Recently, NABARD appointed global management consultancy firm Boston Consulting
Group (BCG) to prepare a report to restructure and diversify its operations to leverage its
expertise in refinancing. The development bank is also seeking to implement a core
banking solution.
Source: http://www.thehindubusinessline.in
Task Find out what is the thrust area of NABARD activities in the changed focus
of the new government and discuss it in detail.
6.2 Functions of NABARD
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.
Its mission includes 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:
1. 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.
2. Development functions, concerning reinforcement of the credit functions and making
credit more productive.
3. Supervisory functions, ensuring the proper functioning of cooperative banks and regional
rural banks.
Under all these categories, NABARD performs the following activities:
1. 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.
2. 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.
3. 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.
4. It undertakes monitoring and evaluation of projects refinanced by it.
5. It promotes research in the fields of rural banking, agriculture and rural development.
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
78 LOVELY PROFESSIONAL UNIVERSITY
