What is the primary function of NABARD?

NABARD provides financial support and credit for the development of rural areas and agriculture, ensuring the growth of these sectors.

How does NABARD support rural industries?

NABARD offers loans and financial assistance to rural industries, including handicrafts, food processing units, and cooperative societies.

What role does NABARD play in credit regulation?

NABARD regulates, monitors, and facilitates credit activities in rural areas to ensure proper distribution and usage of funds.

How does NABARD assist Self-Help Groups (SHGs)?

NABARD supports SHGs through its SHG bank linkage programme, providing them access to credit and financial services.

What are NABARD’s supervisory functions?

NABARD oversees and monitors the progress of development projects, ensuring that financial institutions involved meet the required standards.

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Know Everything About NABARD, It’s Functions And More In India!

Alankar Mishra

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Updated: 02-06-2025 at 12:31 PM

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Agriculture and rural areas in India have required special attention and assistance from the beginning due to backwardness, under-development, lack of opportunities and unfair policies of the British. Special laws were enacted to extend development and opportunities to these areas.

Currently, the rural areas are thriving and much more developed than before with almost all amenities. The agricultural sector is also one of the primary contributors to the Indian GDP, which reflects the positive effects of multiple government schemes. This credit is also owed to NABARD. Let us know more about NABARD!

What Is NABARD?

The National Bank for Agriculture and Rural Development (NABARD) is the primary body for regulating rural banking, finance and agricultural finance in India. It was created as a banking body for agriculture and rural areas in 1981 through the National Bank for Agriculture and Rural Development Act, 1981. The operations of NABARD began in 1982.

NABARD has been entrusted with multiple responsibilities such as formulation of policies, engaging in banking activities and many more. It is also one of the major supporters of cottage industries, MSMEs in rural areas, and cooperative societies.

What Is The Role Of NABARD?

NABARD plays a major role as a financier and banker in rural and agricultural areas. It serves multiple purposes and has helped a lot in achieving growth in both rural areas and agriculture. The role of NABARD can be summarised as follows:

NABARD funds development projects, fosters investment and facilitates credit for development.
NABARD monitors, evaluates and supervises the developmental projects after financing.
NABARD provides training facilities for institutions working for rural upliftment and also keeps them in check.
NABARD holds multiple National Resource Management Programmes.
NABARD helps Self-Help Groups or SHGs through its SHG bank linkage programme.

What Are The Functions Of NABARD?

NABARD performs multiple functions as a banking and financing institution. Let us have a glance at them!

Credit Functions

NABARD, as the main bank for rural banking performs credit functions and provides, regulates and monitors the credit activities in rural areas. As a part of NABARD’s credit functions, it facilitates and supervises credit.

Financial Functions

NABARD takes the help of multiple organisations and institutions to develop rural areas and assist agriculture. For these purposes, NABARD provides loans to institutions such as handicraft industries, food parks, processing units, cooperative societies, etc.

Supervisory Functions

NABARD performs supervisory functions by overseeing the work of all development projects and activities ongoing in rural areas. It keeps a check on the financial aspect of a development project by monitoring the role of all banks and financial institutions engaged.

Development Functions

NABARD undertakes many development projects on its own. It funds and finances many projects in collaboration with other institutions and organisations as a part of its developmental functions.

Conclusion

NABARD plays a very important role in the development of rural areas and agriculture. With the introduction of NABARD, the growth process in these areas and sectors has been fast-paced. It is a major financier as well as a regulator of the financial activities in rural areas.

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