NABARD

4.1 Importance of NABARD

1. Farmers Club Programmes

Background

and

genesis of Farmers Club Programme Agriculture is the backbone of the Indian Economy as nearly 60
of the population of the

country

depends

on

agriculture and it contributes 18% to the GDP. For transfer of agriculture technology to the farmers field, orienting them to establish better relationship with banks, and enjoy the benefits of collective bargaining power both for procuring inputs and output management, the Farmers Club Programme is an appropriate and most suitable strategy initiated by NABARD in late 1982

NABARDs support to Farmers Club Programme

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NABARDs policy support for Farmers Club Programme lays stress on linking technologies with farmers club members and also facilitating market access through the following mechanism

Capacity building of members of Farmers Clubs including leadership training.

Linkage with technology/markets Self Help Groups (SHGs)/Joint Liability Groups (JLGs) formation

Functions of the Farmers Clubs are as follows :

Coordinate with banks to ensure credit flow among its members and forge better bank borrower relationship,

Organise minimum one meeting per month and depending upon the need, there would be 2-3 meetings per month. Non-members can also be invited to attend the meetings,

Interface with subject matter specialists in the various fields of agriculture and allied activities etc., For guest lectures, even experienced farmers who are non members from the village/ neighbouring villages could be invited,

Liaison with Corporate input suppliers to purchase bulk inputs on behalf of members, Organise/facilitate joint activities like value addition, processing, collective purchase of inputs and farm produce marketing, etc.; for the benefit of members. They can also sponsor / organise SHGs,

Undertake socio-economic developmental activities like community works, education, health, environment and natural resource management etc. Market rural produce and products.

Institutional structure of Farmers Club Programme

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Who can form Farmers' Clubs
All Institutional Agencies (Commercial Banks, Cooperative Banks and Regional Rural Banks) and all grass root level organisations (NGOs, PRIs, State Agricultural Universities, KVKs, ATMA, Post Offices etc.) are eligible to form Farmers Clubs

Set up
Farmers Club is an informal forum in the villages. It can be promoted in a village/ cluster of villages, generally in the Operational Area of a Bank. While Farmers Club should have minimum of 10 members, no upper limit on the membership is envisaged..

Functions of the Office bearers:

The main functions of the office bearers would be to convene meetings, to arrange meetings with experts, maintenance of Books of Accounts, coordination with Bank, Line Departments of the State Governments, maintaining proper liaison with all concerned.

. 2 Area Development Programme Cluster Development Programme (CDP) The cluster development programme of NABARD is a comprehensive strategy aimed at holistic development of the cluster through planned interventions to achieve the main objective of raising the income level and thereby living standards of the artisans through various interventions.

3 Marketing and Technology Support Skill Upgradation & Design Development for Handloom Weavers (SUDHA) To assist weaver members of Primary Weavers' Cooperative Societies (PWCS) or

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Vas/NGOs and other promotional agencies involved in the development of handloom weavers through skill upgradation, design development/product mix, quality improvement, marketing etc. Rural Haat Realising the fact that marketing has a crucial role in development of rural non-farm sector and rural haats being an integral part of a rural market system. The scheme was introduced in 1999 for DRIP and DDM districts and from 14 December 2005 onwards, it has been extended to all districts by providing grant assistance to create marketing opportunities for rural farm and non farm products. Rural Mart NABARD has launched a pilot scheme for setting up of Marketing Outlets "Rural Marts" at district level and sub district level. The scheme was introduced with effect from 19 September 2005 on pilot basis in 9 states and extended to all the states during 2006-07 to facilitate marketing linkages for the artisan-handicraft and agro based products through setting up of a retail outlet and cover the risk involved in the initial stages of setting up the rural retail outlet Marketing Initiatives (Exhibition, Melas..etc.) To enable the artisans not only to sell the products in marketing events, but to market their artistry to the consumers and benefit directly from the market feedback for better value realization in future.

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4 Support to Women

Women Development Cell (WDCs) To facilitate the banks to plan and ensure increased credit flow to women, on a sustainable basis. Strengthening credit delivery to women and to provide credit plus services to them. Assistance for Marketing of Non-Farm Products of Rural Women (MAHIMA) Introduced in 1997, the scheme envisaged an exclusive package of assistance to take care of the marketing needs of agencies dealing with products produced by rural women. The scheme has both grant and loan by way of refinance to cover components such as marketing services, advertising, processing, transportation, packaging, labeling etc. The scheme covers all the activities from initial market survey/feasibility/ product study to branding, packaging, preparation of catalogues, sales outlets, mobile vans and other promotional activities. Scheme for Assistance to Rural Women in Non-Farm Development
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(ARWIND) To encourage group loaning to rural women, foster group enterprises, mother units/ancillarisation with full back-up support in the form of foreward and backward linkages from the NGOs. Development of Women Through Area (DEWTA) Employment creation by enhancing entrepreneurship among women and income generation through sustainbale livelihoods for women .Facilitating setting up of microenterprises by women and its development and access to basic services.

5 Entrepreneur and Skill Development

Rural

Entrepreneurship

Development

Programme

(REDP),

Skill

Development /Upgradation Initiatives (SDI) Introduced on an experimental basis in the early nineties, as a means to support capacity building of rural unemployed persons to enable them to set up their own enterprises, is firmly entrenched as a successful model for employment generation in rural areas. RUDSETI / RUDSETI Type of Institutions / RSETIs Promoting an entrepreneurial culture among the rural youths and encouraging them to start enterprises in the rural non-farm sector through Institutional support.

Environmental Promotional Assistance (EPA)

NABARD
Environmental Promotional Assistance (EPA) Scheme was introduced on 30 June 1998 to support research institutions, in ensuring clean and green environment. The promotional support in the form of grant assistance to research institutions and other similar institutions including universities for providing simple and cleaner ecotechnologies such as use/reuse, recycling, resource recovery, waste minimisation, treatment of effluents and waste etc. to maintain clean and green environment Development without Distraction.

Sustainable livelihood support for tribal families

NABARD has been closely associated with tribal development through concessional rates of refinance, general line of credit for tribal development agencies such as Girijan Cooperative Corporation, and sustainable livelihoods through orchard based farming systems. As an integral component of NABARDs Natural Resource Management policy of providing sustainable livelihoods, NABARD laid special emphasis on providing support for holistic development of tribal communities with orchard cultivation as the core element. The implementation of comprehensive Adivasi Development

Programmes(ADP) in Gujarat since 1995 and in Maharashtra since 2000 had provided several insights for NABARD in framing strategies for holistic development of tribal regions.

6 ANIMAL HUSBANDRY

Dairying is an important source of subsidiary income to small/marginal farmers and agricultural labourers.
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The manure from animals provides a good source of organic matter for improving soil fertility and crop yields. Dairy also provides employment throughout the year. The main beneficiaries of dairy programmes are small/marginal farmers and landless labourers..

Package of Common Management Practices Recommended for Dairy .Some of the major norms and recommended practices are as follows : I. Housing: . Construct shed on dry, properly raised ground. Avoid water-logging, marshy and heavy rainfall areas. The walls should be plastered to make them damp proof. II. Selection of Animal : Immediately after release of the loan purchase the stock from a reliable breeder or from nearest livestock market. .Vaccinate the newly purchased animal against disease. Cull the old animals after 6-7 lactations. III. Feeding of Milch Animals Feed the animals with best feeds and fodders. (Feeding schedule is given in Anneuxre VIII). Give adequate green fodder in the ration To estimate the daily feed requirement remember that the animals consume about 2.5 to 3.0 percent of their body weight on dry matter basis. IV. Milking of Animals . Milk the animals two to three times a day. Milk at fixed times. Milking should be done with full hands, quickly and completely followed by
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stripping. V. Protection against Diseases Be on the alert for signs of illness such as reduced feed intake, fever, abnormal discharge or unusual behaviour. Consult the nearest veterinary aid centre for help if illness is suspected. Protect the animals against common diseases .

4.2 FUNCTIONS OF NABARD

FINANACIAL FUNCTIONS

I CREDIT FUNCTIONS NABARD's credit functions cover

planning, dispensation and monitoring of credit.

This activity involves: Short Term (ST) Credit

Modern agriculture, as distinguished from traditional cultivation, involves substantial investment of recurring nature for using high yielding varieties of seeds, fertilizers, insecticides and costly agricultural implements. In such a situation, arrangements for credit should go much beyond the simple provision of credit and must be linked operationally with productivity and other services. Production and productivity,
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marketing and raising the level of surplus and savings must, therefore, be the major functions of credit. The benefit of modern technology, the advantages of institutional credit, infrastructural arrangements etc., should accrue to all classes of farmers. Besides, on the supply side, there must be an arrangement for assessing the requirements of funds on the basis of actual cost and raising the resources therefore . It was in this context, the crop loan system or the production oriented system of lending was evolved and concerived as the most appropriate mechanism for mass disbursement of production credit. Production Credit Department (PCD) deals with short term refinance facilities, for various types of production, marketing and procurement activities, being provided to client institutions, as detailed below: Seasonal Agricultural Operations (SAO) To ensure timely availability of credit to farmers for seasonal agricultural operations, NABARD provides refinance at concessional rate of interest to State Cooperative Banks (SCBs) and Regional Rural Banks (RRBs). The maximum period of loan is upto 18 months. Government Of India provides interest subvention to banks to ensure availability of crop loans up to a maximum of Rs.3 lakh at 7% interest. NABARD, as nodal agency, coordinates the interest subvention scheme for Cooperative Banks and RRBs. In 2009-10, interest subvention to banks was 2% with an additional subvention of 1% to farmers for prompt repayment. For 2010-11, interest subvention to banks is 1.5% and additional 2% subvention for prompt repayment by farmers. Short Term (ST) Others Refinance support is extended for various activities, other than SAO, to : Cooperative Banks for financing Agriculture, allied and marketing activities,
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Marketing of crops, Pisciculture, Industrial cooperative societies (other than weavers), Labour contract and forest labour cooperative societies including collection of minor forest produce, Rural artisans including weaver members of functional societies, Procurement of agricultural inputs (fertilisers, seeds, etc.).

Regional Rural Banks for financing : Marketing of crops, Picsiculture, Production and marketing of activities of artisans (including handloom weavers) and village/cottage/tiny sector industries,

Persons belonging to weaker sections of the society engaged in trade/business/service activities including distribution of inputs for agriculture and allied activities

Medium Term Credit

Medium Term (Conversion) Loan Substantial crop loss on account of natural calamities, affecting the farmers ability to repay their production credit dues to banks, whenever declared by State Governments, refinance by way of medium term conversion loan is granted to State Cooperative Banks and Regional Rural Banks to enable them to convert the short term loans of farmers into medium term loans. This facilitates the

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farmers to become eligible for fresh crop loans. The repayment period of such converted loan

Refinance support is available under ST (Weavers) as under : 1. Working Capital requirement of Primary/Apex/Regional Weavers Coop Society - through State Coop Banks/DCCBs 2. Working Capital requirement of Primary Weavers Coop Society through Scheduled Commercial Bank 3. Working Capital requirement of State Handloom Development Corporation through Scheduled Commercial Banks & State Cooperative Banks 4. Working Capital and Marketing requirement of Individual Weavers, Handloom Weavers Groups, Master Weavers, Mutually aided Coop Societies, Societies outside Coop fold and Producer Group Companies through Scheduled Commercial Banks & RRBs

Long Term Loans

Investment credit leads to capital formation through asset creation. It induces technological upgradation resulting in increased production, productivity and incremental income to farmers and entrepreneurs. This is a long-term refinance facility. The credit is normally provided for a period of 3 to 15 years. It is intended to

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create income generating assets in the following sectors: 1. Agriculture and allied activities 2. Artisans, small scale industries, Non-Farm Sector (Small and Micro Enterprises), handicrafts, handlooms, powerlooms, etc. 3. Activities of voluntary agencies and self help groups working among the rural poor

Eligible Institutions 1. State Co-operative Agriculture & Rural Development Banks (SCARDBs) 2. 3. 4. 5. 6. 7. 8. Regional Rural Banks (RRBs) State Co-operative Banks (SCBs) Commercial Banks (CBs) State Agricultural Development Finance Companies (ADFCs) Scheduled Primary Urban Co-operative Banks (PUCBs) North East Development Finance Corporation (NEDFC) Non-Banking Financial Companies (NBFCs)

Farm Sector : Agriculture and allied activities such as minor irrigation, farm mechanisation, land development, soil conservation, dairy, sheep/goat rearing, poultry, piggery, plantation/horticulture, forestry, fishery, storage and market yards, bio-gas and other alternate sources of energy, sericulture, apiculture, animals and animal driven carts, agro-processing, agro-service centres, etc. Non-Farm Sector :

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Artisans, Small & Micro Enterprises, handicrafts, handlooms powerlooms, etc .The loan period is upto a maximum of 15 years

II DEVELOPMENTAL FUNCTIONS

NABARD took over the functions of erstwhile Agriculture Credit Department. Rural Planning and Credit Department. Rural Planning and Credit Cell of Reserve Bank of India and Agriculture Refinance and Development Corporation. The main functions of NABARD pertain lo policy development, coordination, research, training, etc., relating to rural credit. It provides refinance lo cooperatives, regional rural banks, etc. Moreover it makes loans and advances to stale governments for a period not exceeding more than 20 years to enable (hem lo subscribe directly or indirectly lo share the capital of cooperative credit societies. Following are the developmental functions:

1 Farm sector Climate Change Adaptation (CCA) Introduction:

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Climate change has become real and tangible, affecting peoples lives worldwide. It is a major challenge for agriculture, food security and rural livelihoods In this direction NABARD has sanctioned a pilot project on Climate Change Adaptation (CCA) in Akole and Sangamner Taluka, Ahmednagar district, Maharashtra State. The CCA project seeks to develop the knowledge, strategies, approaches, measures and processes that enable vulnerable communities to cope with Climate Change and adapt to the impending impacts. The overall objective/ goal of the Project is to enhance the capacities of rural communities to adapt to climate change effects.. Project The outcomes envisaged from the project are as under

Communities sustainably manage enhanced ecosystems in the project area. Increased productivity of natural and other resources that contribute to improved quality of life of the target group especially the poor

Local institutions are in place for effective governance mechanisms to sustainably manage regenerated ecosystems.

Increased awareness and understanding of Climate Change issues amongst children, the wider public, opinion and policy makers.

Project Area The project area consists of 25 villages in Akole and Sangamner Taluka of Ahmednagar district. Ahmednagar district that lies in the direct rain- shadow of the Western Ghats is the largest district of Maharashtra covering 5.66% of the area of the State. The main source of income is from agriculture and allied activities. Seventy Nine percentage of the household depend on agriculture as the primary livelihood source

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and about 7 % on non agri labour. The majority of the households depend on agriculture which is totally subjected to vagaries of weather. Project Components Project aims to development adaptive capacities of communities for climate change. The project includes components such as agro-meteorology for tracking weather patterns at the village level leading to generation of advisories to farmers on what steps to take in emergency conditions. This is also linked to water budgeting, crop planning, adaptive and sustainable agronomic practices and irrigation management.

Kisan Credit Card

Union Finance Minister announced in his budget speech for 1998-99 that NABARD would formulate a Model scheme for issue of Kisan Credit Cards to farmers, on the basis of their land holdings, for uniform adoption by banks, so that the farmers may use them to readily purchase agricultural inputs such as seeds, fertilisers, pesticides, etc. and also draw cash for their production needs. As a pioneering credit delivery innovation, Kisan Credit Card Scheme aims at provision of adequate and timely support from the banking system to the farmers for their cultivation needs including purchase of inputs in a flexible and cost effective manner. Salient features of the Kisan Credit Card (KCC) Scheme

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Eligible farmers to be provided with a Kisan Credit Card and a pass book or card-cum-pass book.

Revolving cash credit facility involving any number of drawals and repayments within the limit.

Entire production credit needs for full year plus ancillary activities related to crop production to be considered while fixing limit.

Sub-limits to cover short term, medium term as well as term credit are fixed at the discretion of banks.

Card valid for 3 to 5 years subject to annual review. As incentive for good performance, credit limits could be enhanced to take care of increase in costs, change in cropping pattern, etc.

Each drawal to be repaid within a maximum period of 12 months. Security, margin, rate of interest, etc. as per RBI norms. Operations may be through issuing branch (and also PACS in the case of Cooperative Banks) through other designated branches at the discretion of bank.

Policy Advocacy - Agri Insurance

Crop Insurance Agriculture Insurance Company of India Ltd. (AICI) was established in 2002 with the authorised and paid up capital of Rs.1,500 crore and Rs.200 crore, respectively. NABARD and General Insurance Company (GIC) have contributed 30 and 35 per cent, respectively, and four other Insurance Subsidiaries, at 8.75 per cent each to the equity. One of the objectives for the formation of AICI was to act as the implementing agency for the Government's 'National Agriculture Insurance Scheme' (NAIS). The premium rates in respect of food crops and oilseeds are determined on the basis

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of flat rates of premium or actuarial rates whichever is less as per the scheme in accordance with the decision of Government of India . The rates are ranging from 1.5-3.5% of sum insured in respect of these crops under both kharif and rabi.

In respect of annual commercial / horticulture crops, the premium rates are charged on actuarial basis.

The actuarial premium rates are worked out on the basis of yield of the past ten years as per the data provided by the State Government concerned. The premium rates, for example, are high in the case of groundnut and cotton (risky crops) because of high variation in yield whereas in case of sugarcane and wheat, the rates are comparatively low since these are stable crops.

The small and marginal farmers are entitled to a subsidy of 50% of the premium charged.

The scheme provides for compulsory coverage in respect of loan farmers whereas non-loan farmers may opt for insurance cover on voluntary basis

Withdrawals through slips/cheques accompanied by card and passbook.

2. Research and development fund

Established by the Bank, in accordance with the provisions of the NABARD Act 1981, the Research and Development (R&D) Fund aims at acquiring new insights into the problems of agricultural and rural development through in-depth studies The R&D Fund is utilised for formulating policies on matters of importance to agricultural operations and rural development, including facilities for training, dissemination of information and promotion of research by undertaking techno-economic studies and other surveys in the fields of agriculture, rural banking and rural development. Corpus of the R& D Fund is Rs. 50 crore.

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Grant support for:

Research projects and studies. International, National and Regional Seminars/ Conferences/Symposia, Workshops, etc.

Chair Units. Providing training for personnel of constituent banks. Summer Internship Programme.

3. Institutional Building Institutional Building Regional Rural Banks

Rural finance is an important tool for rural development and poverty reduction. Building sustainable financial institutions is the key to uninterrupted and steady supply of credit to the rural clientele. It is towards this end that the following functions are being taken by NABARD.

Policy formulation and guidance/interpretation on Government of India of India policies relating to the RRBs

Appointment of Chairman of RRBs and various matters relating to staff management arising out of Govt. of India policies of Regional Rural Banks Act and Staff Regulations

Conduct of various special studies relating to Regional Rural Banks Scrutiny of proposals received for amalgamation of RRBs and recommendations to Government of India in the matter

Coordination between sponsor banks RRBs to sort out various issues Institutional Building Cooperative Banks

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Various aspects of policy matters relating to short term and long term structure Preparation of various policy notes for Govt. of India, RBI, Parliamentary Committees and various other agencies Review of functioning of ST & LT cooperatives Coordination with apex Cooperative Credit Institutions as also State Government and Government of India on the matters relating to cooperatives and convening of periodical Meets of Registrars . Conduct of various special studies relating to cooperative credit structure The scheme of Co-operators Awareness Programme for exposure of cooperative functionaries for best practices in other States / Banks

4.3 LATEST SCHEMES OF NABARD

1.

Million shallow tubewells programme Programme (MSTP)

The Million Shallow Tubewells

which was approved by the Planning Commission, Govt. of India in March 2001 for the State of Bihar. The objective of the programme is to install one million

shallow tubewells with pumpsets to bring an additional two million hactres of land under irrigation and increase the agricultural production and productivity of the State. The Scheme is being implemented by NABARD through Commercial Banks and Regional Rural Banks that have branches in rural areas in the State. The funding pattern of the scheme is as follows : Margin money contributed - 20% by the farmers
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Subsidy - 30% Bank Loan - 50%

All non-defaulting individual farmers of all categories will be eligible for assistance under the scheme. The total subsidy for the programme is Rs. 45.50 crores which has been released by Government of India to government of Bihar

2. Nabard to provide funds for swarojgar awareness scheme On NABARD has launched a pilot scheme to provide funds to select banks to create awareness about the Swarojgar credit card scheme. Under the promotional scheme, financial grants will be provided to select regional rural banks and cooperative banks to support publicity programmes on the Swarojgar credit card scheme. The idea is to create greater awareness about the swarojgar credit card scheme, which has been developed by Nabard to provide adequate and timely bank credit to small artisans, handloom weavers, rickshaw owners and other micro-entrepreneurs. 3. Nabard's refinance scheme for kerala co-op bank The Regional Office of Nabard has released schematic refinance to the tune of Rs 15.29 crore to the Kerala State Cooperative Agricultural and Rural Credit Bank (KSCARDB). An official spokesman said here that, of this, Rs 9.47 crore was directed to the rural housing sector while the rest would go into various non-farm sector activities, including road transport operators. 4. LPG connection finance scheme from united bank ON 1ST June, 2006 UNITED Bank of India has introduced a special scheme under Nabard's refinance facility for financing LPG connections in rural areas.

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The scheme covers the cost of supplying a regulator, a cylinder and accessories and a burner stove. The maximum amount of loan to be available under the scheme is Rs 3,500 at 7.5 per cent rate of interest with quarterly rest, payable between three and five years,

5. New scheme to increase production of crops The centre has launched a new scheme "On-Farm Water Management for increasing crop production in Eastern India" in 10 states of Eastern India.. An amount of Rs.15 crore has been released during 2001-02 to NABARD as the share of the Government of Indias assistance under the scheme The scheme aims at developing irrigation facility at the command of the farmers by tapping ground water resources of the region in a planned manner with proper spacing. Thus, there will be a substantial increase in agricultural production and productivity and per capi

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4 .4 MICRO FINANCE IN INDIA WITH SELF HELP GROUP LINKAGE Microfinance is the provision of financial services such as loans, savings, insurance, and training to people living in poverty. It is one of the great success stories in the developing world in the last 30 years and is widely recognized as a just and sustainable solution in alleviating global poverty. Microfinance Micro-Finance is provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi urban or urban areas for enabling them to raise their income levels and improve living standards.

Evolution of Microfinance in India

Microfinance has been in practice for ages (though informally). Legal framework for establishing the co-operative movement set up in 1904. Reserve Bank of India Act, 1934 provided for the establishment of the Agricultural Credit Department. Nationalisation of banks in 1969 Regional Rural Banks created in 1975. NABARD established as an apex agency for rural finance in 1982. Passing of Mutually Aided Co-op. Act in AP in 1995.

Importance of Microfinance: The Gap between Demand & Supply

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Since the 1950s, various governments in India have experimented with a large number of grant and subsidy based poverty alleviation programmes. Studies show that these mandatory and dedicated subsidized financial programmes, implemented through banking institutions, have not been fully successful in meeting their social and economic objectives According to a 1995 World Bank estimate, in most developing countries the formal financial system reaches only the top 25% of the economically active population - the bottom 75% have no access to financial services . Structural rigidities and overheads lead to high cost of making small loans All this gave rise to the concept of micro-credit for the poorest segment along with a new set of credit delivery techniques. With the support of NGOs an informal sector comprising small Self Help Groups (SHGs) started . NABARD's 'SHG Bank Linkage' Programme The launching of the Pilot phase of the SHG (Self Help Group) Bank Linkage programme in February 1992 could be considered as a landmark development in

banking with the poor. A SHG is a group of about 20 people from a homogeneous class, who come together for addressing their common problems. They are encouraged to make voluntary thrift on a regular basis. They use this pooled resource to make small interest bearing loans to their members In such a group the poorest would come together for emergency, disaster, social reasons, economic support to each other have ease of conversation, social interaction and economic interactions Mainstreaming of SHG Bank linkage programme

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The Pilot phase was followed by setting up of a Working Group on NGOs and SHGs by the Reserve Bank of India in 1994, which came out with wide ranging recommendations on internalisation of the SHG concept as a potential intervention tool in the area of banking with the poor. .

4.5 SUGESSTIONS AND GUIDELINES Sugesstions On NABARD To improve the efficiency of NABARD; s schemes the followings measures could be taken

Spreading education Leadership development programmes Effective organizational and financial management Engage in productive and income generating activities More participation of banks Corporate governance for SHGs Having own apex regulatory body Giving relaxation in interest rates Training centers at block level Technological intervention Evaluation of NABARD;s schemes

Guidelines of NABARD
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Section 35(6) of the Banking Regulation Act, 1949, empowers NABARD to conduct inspection of State Cooperative Banks (SCBs), Central Cooperative Banks (CCBs) and Regional Rural Banks (RRBs). In addition, NABARD has also been conducting periodic inspections of state level cooperative institutions such as State Cooperative Agriculture and Rural Development Banks (SCARDBs), Apex Weavers Societies, Marketing Federations etc., on a voluntary basis.

Objectives of Supervision To protect the interest of the present and future depositors To ensure that the business conducted by these banks is in conformity with the provisions of the relevant Acts/Rules, regulations/Bye-Law. To ensure observance of rules, guidelines, etc., formulated and issued by NABARD / RBI/ Government. To examine the financial soundness of the banks. To suggest ways and means for strengthening the institutions so as to enable them to play more efficient role in purveying rural credit

Supervision The Board of Supervision (BoS) (for SCBs, CCBs and RRBs) has been constituted by NABARD under Section 13(3) of NABARD Act, 1981 as an Internal Committee to the Board of Directors of NABARD. The broad powers and functions of the Board of Supervision are as under :

Giving directions and guidance in respect of policies and on matters relating to supervision and inspection, reviewing the inspection findings and suggesting appropriate measures

Identifying the emerging supervisory issues in the functioning of cooperative banks / RRBs such as recovery, investment portfolio, credit monitoring system, management practices, frauds, etc.

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Suggesting necessary follow-up measures for improving the functioning of supervised banks.

Recommend to RBI for issue of directions and other regulatory action against supervised banks.

Undertake any other functions entrusted from time to time by the Board of Directors of NABARD.

The Board of Supervision reviews periodically the financial position of Cooperative Banks and RRBs based on the inspections of these banks by NABARD. 4.6 CHALLENGES Farmers comitting suicide The principal agriculture development bank has to witness unprecedented crisis in the agricultural front with hundreds of farmers committing suicides in at least 31 districts spanning over five states. A study conducted by the Indira Gandhi Institute of Development Research (IGIDR)says the small and marginal farmers(holding lands up to 5 acres)were more vulnerable to suicide. In spite of NABARD and public sector banks glorious existence for the more than two and three decades respectably, 51 percent of cultivator household is outside the ambit of any form of credit at all and out of 49 percent of the indebted cultivator households, only 27 percent are indebted to the formal sources. Crisis in mobilizing resources In the twenty-fifth year of its existence, NABARD is facing a crisis of sort in mobilizing resources from the market with its cost of resource mobilization The governments abolition of long term capital gains tax has, in turn, deprived NABARD of a comparatively cheap source of fund by way of capital gains bond, the
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average interest burden of which in 2005-06 being 5.45 percent . The problem of cheap credit for farmers, even during distress,(as NRC-STAB fund is utilized to res7chedule loans during calamities like flood, drought, and farmers suicide).

NABARD unable to be rural credit bank It is a quiet admission of poor credit flows to the needy in the rural and urban centers despite many government- subsidised programmes. Bankers do okay big size corporate loans on a call from New Delhi. Reports are the Government and the RBI could be looking afresh at flow of bank funds into agriculture and rural development in general. Inside NABARD , officers have been discussing the agenda for the organization in coming years. Most would back the idea of Nabard turning a universal bank by picking up the branches of the Regional Rural Banks (RRBs) to mobilise retail deposits.

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Chapter 5 Conclusion
Reserve Bank of India (RBI) entrusted NABARD (National Bank for Agriculture and Rural Development) in 1981 to look after agriculture and rural development through all the Cooperative and other Nationalized banks of India From the beginning ,NABARD has grown into a unique kind of apex hybrid organization combining best of central and development bank practices like planning, regulation of credit and supervision of rural financial institution like agriculture cooperative banks (both short and long term structures),Regional RuralBank (RRB) etc. It also plays a unique institution building role that was instrumental in safe guard of many a loss making RRBs and Cooperative Banks in various parts of th ecountry. It may not be out of place to mention here that NABARD is the pioneer in the Self Help Group(SHG)Bank linkage programme in the country that has brought the taste of banking to doorsteps of the poor.

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ANNEXURE

Questionnaire

1. Which type of loan is provided by NABARD? ANS ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------2. What is the interest rate charged by NABARD? ANS -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3. How does NABRD provides you various schemes? ANS -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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4. What are the subsidies rates available in interest? ANS -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5. What are the various development done by NABARD? ANS -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6. What are the challenges faced by NABARD in lending loans? ANS -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7. What is the percent of loan for priority lending sector? ANS -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8. What is the period of repayment of loan?

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ANS ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9. What are the procedures of acquiring loan? ANS -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10. How does NABARD makes provision for lending? ANS -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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BIBLIOGRAPHY

Web
www.wikipedia.com www.nabard.org.com Google BOOKS and journals

NABARD and Rural transformation by N. Lalitha Articles on banking news and headlines today Newspaper times of India.

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