Union Cabinet chaired
by the Prime Minister Shri Narendra Modi has approved the following
(a) Amendments to National Bank for Agriculture and Rural Development
Act, 1981 as proposed in the draft Bill with such changes of drafting
and of consequential nature, as may be considered necessary by
Legislative Department. The Amendments, include provisions that enable
Central Government to increase the authorized capital of NABARD from Rs.
5,000 crore to Rs. 30,000 crore and to increase it beyond Rs. 30,000
crore in consultation with RBI, as deemed necessary from time to time.
(b) Transfer of 0.4 per cent. equity of RBI in NABARD amounting to Rs.
20 crores to the Government of India.
The proposed amendments in NABARD Act, include, certain other amendments
including changes in long title and certain Sections to bring Medium
Enterprises and Handlooms in NABARD’s mandate.
The proposed increase in the authorized capital would enable NABARD to
respond to the commitments it has undertaken, particularly in respect of
the Long Term Irrigation Fund and the recent Cabinet decision regarding
on-lending to cooperative banks. Further, it will enable NABARD to
augment its business and enhance its activities which would facilitate
promotion of integrated rural development and securing prosperity of
rural areas including generation of more employment.
The transfer of entire shareholding in NABARD held by RBI to the Central
Government will remove the conflict in RBI's role as banking regulator
and shareholder in NABARD.