Get to know about NABARD Functions and Objectives, Full form, Benefits, Interest Rate & Subsidy
NABARD stands for National Bank for Agriculture and Rural Development. This bank was established in 1982 to foster rural prosperity. NABARD has been authorised to provide credit and other financial facilities to promote and develop agriculture, cottage industries, small-scale industries, village industries, handicrafts, and more.
The role of NABARD includes the funding of any agricultural activities with respect to rural development in India, as the institution's primary goal is the nationwide growth of India's rural community. There are three sectors around which schemes of NABARD work: development, supervision, and finance.
NABARD Scheme: Interest Rate on Refinance to Banks (per annum)
Here’s the list of rates of interest charged by NABARD on refinancing to banks and other NBFCs under different schemes:
Short Term refinance assistance |
4.50% onwards:
5.50% for ST – Additional SAO/ST(Others)/ST (SAO) - SCARDBs (Annual Product) 8.10% for StCBs/RRBs – Conversion of Short Term – Crop loans into Medium Term loans |
Long Term refinance assistance |
8.50% onwards |
Regional Rural Banks (RRBs) and State Cooperative Banks (StCBs) |
8.35% onwards |
State Cooperative Agriculture and Rural Development Banks (SCARDBs) |
8.35% onwards |
Direct Lending |
Bank Rate – 1.50% |
Please note that the above-mentioned interest rates are subject to change at the discretion of NABARD and RBI. The stated rates do not include GST and service tax.
In order to aid the farming sector, the NABARD loan scheme also offers specially developed schemes like the Dairy Entrepreneurship Development Scheme. This NABARD dairy loan aims to help potential entrepreneurs of the dairy market and enable them to enlarge their businesses by setting up dairy farms and boosting growth.
The main objectives of NABARD for dairy farming are -
Increasing the number of modern-day farms for milk production.
Technological upgrades increase the production of milk and promote it on a commercial scale.
Promoting self-employment and making infrastructural improvements.
Conserving breeding stock and encouraging heifer calf-rearing.
The current plan and policies under the schemes of NABARD is quite extensive and aims to encourage people to opt for agricultural as well as non-agricultural employment opportunities making them self-sufficient. However, the government has to walk the extra mile to successfully implement the NABARD subsidy scheme in the country.
Recently, the Self-Reliant program or Atma Nirbhar scheme has been launched under the NABARD scheme that will render capital assistance to aspiring entrepreneurs of the rural area in the agriculture sector.
The NABARD scheme was established in 1982 for the development of small-scale industries, cottage industries, and other urban or rural projects.
The advantages of the NABARD scheme are as follows:
It provides support for refinancing and funding.
It promotes the infrastructural growth of rural communities in India.
The scheme helps in creating credit plans at a district level.
Supervises the cooperative banks and Regional Rural Banks (RRBs) in India.
State Cooperative Banks (StCBs), State Cooperative Agriculture and Rural Development Banks (SCARDBs), Primary Agricultural Credit Societies (PACS), and District Central Cooperative Banks (DCCBs) comes under the NABARD Scheme.
Self-employed individuals as well as established business owners can opt for the loans under NABARD. Since there are many loans offered under this scheme, all of them has different eligibility criteria. So, it will be sensible if you consult with their respective organisation.
The age limit for taking a loan under NABARD scheme ranges between 21 years and 65 years.
There are various types of funds available under the NABARD scheme:
Direct Lending
Warehouse Infrastructure Fund
Food Processing Fund
Long -term Loans
Long-term Irrigation Funds
Short-term Loans
Rural Infrastructure Development Fund
Primary Agriculture Credit Societies
Pradhan Mantri Awaas Yojana - Gramin
Credit Facility to Marketing Federations
NABARD Infrastructure Development Assistance