NABARD Registers 24% Growth

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  NABARD Registers 24% Growth

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1. The story: The National Bank for Agriculture and Rural Development (NABARD) closed its business at Rs. 6.57 lakh crore in FY 2020-21, recording a growth rate of 23.5%.
2. Points to note: Under Aatmanirbhar Bharat Abhiyan, NABARD released amounts to cooperative banks,Regional Rural Banks (RRBs) and to NBFC-MFIs (Non-Banking Financial Company: Micro Finance Institution) through a Special Liquidity Facility (SLF). The SLF was with a view to augment the resources of the Cooperative banks and RRBs to enable them to extend credit to farmers. The NABARD registered a total refinance disbursement of Rs. 2.23 lakh crore to support agriculture and rural development activities during the pandemic. A refinance facility of Rs. 500 crore was introduced to support the Government of India’s Water, Sanitisation and Hygiene (WASH) programme.
3. NABARD: It came into existence on 12th July 1982 by transferring the agricultural credit functions of the Reserve Bank of India (RBI) and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC). It is a statutory body established under ‘National Bank for Agriculture and Rural Development Act, 1981’. It is a development bank focussing primarily on the rural sector of the country, and the apex banking institution to provide finance for Agriculture and rural development.
4. Cooperation with the RBI: The RBI provides 3 directors to NABARD’s Board of Directors. NABARD provides recommendations to RBI on issue of licenses to Cooperative Banks, opening of new branches by State Cooperative Banks and RRBs. Headquarters is at Mumbai. 
5. Major functions: It provides refinance support for building rural infrastructure. Refinancing institutions are important institutions who give loans to other institutions who ultimately give loans to the end customers. NABARD provides short-term, medium-term and long-term refinance to Cooperative banks and RRBs to supplement their resources for providing adequate credit for supporting investment activities of farmers and rural artisans. It supervises Cooperative Banks and Regional Rural Banks (RRBs) and helps them develop sound banking practices and integrate them to the CBS (Core Banking Solution) platform. CBS can be defined as a solution that enables banks to offer a multitude of customer-centric services on a 24x7 basis from a single location. It is involved in designing Union government’s development schemes and their implementation. Examples: National Livestock Mission, Interest subvention Scheme, New Agricultural Marketing Infrastructure, etc. NABARD has various international partnerships including leading global organizations and World Bank-affiliated institutions that are breaking new ground in the fields of rural development as well as agriculture. These international partners play a key consultant role in providing advisory services as well as financial assistance designed to ensure uplifting of rural peoples as well as optimization of various agricultural processes.

Read more on - Polity | Economy | Schemes | S&T | Environment

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