New Delhi: The Union cabinet on Thursday raised the authorized capital of the National Bank for Agriculture and Rural Development (NABARD) to Rs.20,000 crore from Rs.5,000 crore and enlarged its operations.
At a meeting here, the cabinet approved amendments to the NABARD Act 1981 to expand the apex rural and farm development financial institution's capital base and ability to introduce new credit products, forge new linkages and develop new clients.
It also approved merging the posts of the chairman and managing director and transfer the balance one percent shares to the government from Reserve Bank of India (RBI), which will provide for increased public accountability.
Once the amendments are carried out, NABARD would be able to issue new credit products, lend to new institutions, mainly societies covered under multi-state cooperative societies act and other central laws, producer organizations or such class of financial institutions which are approved by the central government.
The amendments would allow a combination of credit, creation of short-term operations fund and swapping of debt of farmers.
This is likely to benefit a larger segment of the financially excluded farmers in the country, said an official release.
NABARD was set up in 1982 to facilitate agriculture credit and rural development.