New Delhi, Feb 7: The Union Cabinet today approved raising the authorised capital of the National Bank for Agriculture and Rural Development, (NABARD) to 20,000 crore rupees from 5,000 crore rupees.
By increasing the authorized capital of NABARD to Rs 20,000 crore from Rs 5,000 crore, the ability of NABARD to mobilize resources from the market will be enhanced, thereby new credit products, new credit linkages and new clients will be developed.
The amendments allow NABARD to lend to new institutions, mainly Societies covered under multistate cooperative societies act and other central laws, producer organizations or such class of financial institutions, which are approved by the Central Government.
This is likely to benefit a larger segment of the financially excluded farmers in the country. The amendments allow combination of credit, creation of short term operations fund and swapping of debt of farmers.
The decision of the Government to transfer the balance one percent shares to the Government of India from Reserve Bank of India (RBI) in NABARD shall be carried out, which will provide for increased public accountability, as the Government will acquire the equity held by RBI.
NABARD will combine the post of Chairman and the post of Managing Director, into one, therefore Chairman and Managing Director, under the provisions of the NABARD Act relating to these two posts. This shall ensure a distinct line of command.
NABARD was established on 12 July 1982 to provide sharp focus to agriculture credit and rural development.
NABARD adopted, as its mission, the promotion of sustainable and equitable development of agriculture and rural prosperity through effective credit support, related services, institution development and other innovative initiatives. (ANI)