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The role of NABARD in the Indian Agro-Economy
The National Bank for Agriculture and Rural Development (NABARD) was set up in July 1982. It became the apex institution to play a pivotal role in the sphere of policy planning and providing refinance facilities to rural financial institutions and for augmenting their resource base. It was set up by the Government of India as a development bank with the mandate of facilitating credit flow for promotion and development of agriculture and integrated rural development. Being an apex institution , it handles matter concerning policy, planning and operations in the field of credit for agriculture and for other economic and developmental activities in rural areas. Essentially, it is a refinancing agency for financial institutions offering production credit and investment credit for promoting agriculture and developmental activities in rural areas.
This national bank was established with a mandate to uplift rural India by facilitating credit flow in agriculture, cottage and village industries, handicrafts and small-scale industries. It is also required to support non-farm sector while promoting other allied economic activities in rural areas. NABARD functions to promote sustainable rural development for attaining prosperity of rural areas in India.
NABARD does not help the farmers and other rural people directly, rather it flows the credit to these people through co-operative banks, commercial banks, RRBs, etc. It is thus working as an apex body dealing with policy, planning and other operational aspects of rural credit for the around development of rural economy.
It is basically concerned with matters concerning policy, as well as planning and operations in the field of credit for agriculture and other economic activities in rural areas in India. The objectives of NABARD was to be able to provide adequate assistance to the millions of farmers in rural India who were not being given any importance in the quick and ever rising economic boom that was happening with Indian markets and industries. The functions of NABARD in brief now are credit control which mainly involve credit plans for districts and issuing policy and operational guidelines and developmental functions concerning strengthening the credit functions and making credit productive along with supervisory functions over cooperative banks and regional rural banks. NABARD’S task was to be to promote innovations and encourage initiatives in the agricultural sector and also to promote substantial and equitable agricultural and the rural development which was long due to the Indian farmers through effective credit support and other services.
The bank realizes the potential of the agricultural sector and terms non credit worthy farmers as credit worthy ones, these farmers were long rejected by other financial institutions due to the lack of guarantee on their credit. But recent statistics show that the farmers have lived up to the confidence instilled in them and are actually creating profit and are now operating hassle free when it comes to financing their activities.Various schemes and funds allow farmers to innovate and create new methods and inventions that help them in their field and this is solely because of the investments done by the rural bank.