Reserve Bank of India

abhishreshthaa

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RBI had shown keen interest in agricultural credit and maintained a separate department for this purpose. RBI extended short-term seasonal credit as well as medium-term and long-term credit to agriculture through State level co-operative banks and land developments banks.


RBI had also set up the Agricultural Refinance Development Corporation (ARDC) to provide refinance support to the banks to promote programmes of agricultural development, particularly those requiring term credit.


With the widening of the role of bank credit from “agricultural development” to “rural development” the Government propo9sed to have a more broad-based organization at the apex level to extend support and give guidance to credit institutions in matter relating to the formulation and implementation of rural development programmes.


A National Bank for Agriculture and Rural Development (NABARD) or National Bank was, therefore, set up to take over the agricultural credit functions of RBI on the on hand and the refinance functions of ARDC on the other.
 
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