Must know concept for NABARD : Functions of NABARD

By Ajay Tripathi|Updated : April 3rd, 2018

Dear Aspirants, 

Today we will discuss the functions of NABARD. The topic will be further continued on Friday and soon a PDF will be posted covering the whole topic.

Functions of NABARD:

  • NABARD aims at building an empowered and financially inclusive rural India through specific goal-oriented departments which can be categorized broadly into three heads: Financial, Developmental and Supervision. 
  • Over the years NABARD initiatives have touched millions of rural lives across the country.
  • The SHG Bank Linkage Project launched by NABARD in 1992 has blossomed into the world’s largest microfinance project.
  • Kisan Credit Card has become the source of comfort for crores of farmers.

Financial Functions

  1. Loans for Food Parks and Food Processing Units in Designated Food Parks
    • Development of food processing industry in the country is accorded top priority by the Government of India as it is one of the most critical links in the agri value chain.
    • In 2014, a Special Fund of Rs. 2,000 crore was provided to NABARD for providing direct term loans at affordable rates of interest to Designated Food Parks (DFPs) and food processing units in the DFPs. 
  1. Loans to Warehouses, Cold Storage and Cold Chain Infrastructure
    • 5,000 cr to NABARD in the 2014-15 budget for supporting the creation of infrastructure for storage of agricultural commodities.
    • Reserve Bank of India (RBI) issued guidelines for the creation of Warehouse Infrastructure Fund (WIF 2014 -15) in NABARD.
  1. Credit Facilities to Marketing Federations
    • Marketing federations and cooperatives are playing a very important role in agribusiness and value/supply chain management of the various agricultural commodities. Major activities undertaken by these institutions are:
      • Procurement of agricultural commodities including milk.
      • Aggregation, storage and value addition in few select commodities like milk etc.
      • Marketing
    • A large number of farmers, producers’ organizations and primary societies depend upon these institutions for marketing of their produce and for value-added services like input supply, value addition and storage facilities.
    • The marketing operations by these federations and cooperatives require seasonal and timely short-term credit facility to support their day-to-day operations. 
  1. Rural Infrastructure Development Fund
    • The government of India created the RIDF in NABARD in 1995-96, with an initial corpus of Rs. 2,000 crore.
    • At present, there are 36 eligible activities under RIDF as approved by GoI. (Annexure I). The eligible activities are classified into three broad categories i.e. 
      • Agriculture and related sector
      • Social sector 
      • Rural connectivity
  1. Direct Refinance Assistance to Co-operative Banks 
    • Vaidyanathan Committee recommendations enabled District Central Co-operative Banks (DCCBs) to borrow funds directly from any financial institution regulated/approved by RBI.
    • NABARD developed a progressive product titled ‘Short Term Multipurpose Credit Product’ (STMPCP) to provide financial assistance to Co-operative Banks (StCBs/DCCBs). The primary objective here was to expand their lendable resources and enable their diversification into a variety of business operations. 
  1. Long-Term Irrigation Fund
    • A Long-Term Irrigation Fund (LTIF) with an initial corpus of `20,000 crore for funding and fast-tracking the implementation of incomplete major and medium irrigation projects. 
  1. Financing and supporting Producer Organisations
    • NABARD has set up “Producers Organization Development Fund” (PODF) in 2011 with an initial corpus of Rs. 50 crore.
    • The Fund supports formation and financing producer organizations by adopting a flexible approach to meet the needs of producers.

If you have missed the introduction or basic details of NABARD, then click the link below:-

Basics of NABARD.Click now to Read!


Attempt Free Mock Test for NABARD Grade A Exam Here!

You can read more about the Important Terms of NABARD Exam 2018 here!

All the best for your exam

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Posted by:

Ajay TripathiAjay TripathiMember since Jan 2018
Content Manager (RBI Grade B)
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Abhigna B

Abhigna BApr 3, 2018

@Priyanshu Maheshwari gdmrng mam...plz provide previous year cutoff marks n qstn papers of Nabard..thnq ma.
Sushobhan Mukherjee
@Priyanshu Maheshwari ma'am please provide previous years' solved question paper on ARD and ESI
Utpal Kumar Kumar
Notes nahi h ek bhi please send chsl syllabus
How to crack NABARD Exam ???

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