- NABARD was established in 1982 under the National Bank for Agriculture and Rural Development Act, 1981.
- NABARD is an apex refinancing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.
- It is responsible for the development of the small industries, cottage industries, and any other such village or rural projects.
- NABARD also provides direct term loans at affordable rates of interest to certain activities like Designated Food Parks (DFPs) and food processing units in the DFPs.
- In 2019, the RBI has sold its entire stake in the National Housing Bank (NHB) and the National Bank for Agriculture & Rural Development (Nabard), by selling its entire stakes to the government, making them fully government-owned.
Why in News?
- The National Bank for Agriculture and Rural Development has announced a special refinance facility of ₹800 crore for FY21 to support the Government of India’s Water, Sanitisation and Hygiene (WASH) programme.
- NABARD will provide concessional refinance to all eligible financial institutions including commercial banks, regional rural banks and cooperative banks with a repayment period of up to 36 months.
- WASH is the collective term for Water, Sanitation and Hygiene. Due to their interdependent nature, these three core issues are grouped together to represent a growing sector. While each a separate field of work, each is dependent on the presence of the other.
- For example, without toilets, water sources become contaminated; without clean water, basic hygiene practices are not possible.