The Union Government has allowed National Bank for Agriculture and Rural Development (NABARD) to disburse Rs 21,000 crore to help cash-starved farmers to sow Rabi crops.
The money will be disbursed by NABARD to District Central Cooperative Banks (DCCBs) which will enable them to pass on grant funds to the primary agriculture cooperatives.
The farm cooperatives will further pass it to farmers for meeting crop loan requirements in Rabi season. Besides, banks also have been asked to ensure regional rural banks (RRBs) and district cooperative banks have required cash available to satisfy the sowing needs of farmers.
The Union Government’s demonetisation move which has swept away 86% of currency in circulation, has badly hit farmers leaving them without cash just ahead of the Rabi sowing season. Due to restrictions placed on bank withdrawals after demonetisation announcement has badly hit the farmers ahead as they are left with very little cash to buy seeds and fertilisers. It is estimated that more than 40% of small and marginal farmers take crop loans from cooperative institutions. District Central Cooperative Banks (DCCBs) receive their cash from currency chests of banks and state cooperatives. Thus, disbursement of funds from NABARD will help in the smooth flow of credit for farmers to enable them to undertake Rabi requirements.
About National Bank for Agriculture and Rural Development (NABARD)
- NABARD is an apex development bank in India. The Reserve Bank of India (RBI) holds the majority stake in it.
- Headquarters: Mumbai, Maharashtra.
- Established: 1982 on the recommendations of Shivaraman Committee to implement the National Bank for Agriculture and Rural Development Act, 1981.
- It has been entrusted with matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India.
- It is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.
- Mandate: (i) Facilitate credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.
- (ii) Support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas.