Lok Sabha passes bill to raise Nabard’s capital to Rs30,000 crore
Nabard is a premier organisation which was established in 1982 and it provides loans for agriculture, small scale industries among others.india Updated: Aug 03, 2017 22:19 IST
A bill to enable exit of Reserve Bank of India (RBI) from Nabard and increase authorised capital of the development institution six times to Rs 30,000 crore was passed by the Lok Sabha on Thursday.
The National Bank for Agriculture and Rural Development (Amendment) Bill, 2017 also seeks to amend certain clauses in the light of reference of the Micro, Small and Medium Enterprises (MSMEs) Development Act, 2006 in the proposed legislation.
Minister of state for finance Santosh Kumar Gangwar said the law was a “major step” towards doubling farmers’ income by 2022.
This is a small bill but irrespective of that, 28 members put their views on this legislation, which reflects the interest of members’s on agriculture related issues, he said.
He said as this was a short bill, suggestions made by members would be considered when the detailed bill will come.
On concerns being raised by few members such as NK Premachandran (RSP) and KC Venugopal (Congress) on including MSMEs in place of SSIs (small scale industries), he said Nabard would always support agriculture and not corporates.
Earlier while moving the bill for consideration and passage, Gangwar in his introductory speech said Nabard is a premier organisation which was established in 1982 and it provides loans for agriculture, small scale industries among others.
In the last three decades, there has been diversification in the functioning of Nabard and in the last three years, after the BJP government came to power, the bank has underwent a lot of changes, he said.
“There has been changes in its priority and policies in the area of agriculture and rural development. Now Nabard is refinancing and providing direct loan in the agriculture and rural areas,” he added.
The balance sheet of Nabard has increased from Rs 1.82 lakh crore in March 31, 2012 to Rs 3.10 lakh crore in March 31, 2016, he said adding that means, there has been an increase of around 70% in the activities of Nabard.
At present the authorised capital of Nabard is Rs 5,000 crore and there is a proposal to increase it to Rs 30,000 crore, Gangwar said. “According to the need, the government can increase the authorised capital from time to time. If there is a need to increase this authorised capital above Rs 30,000 crore, then after discussions with RBI it can be increased,” he added.
There is another suggestion that at present in Nabard, the Centre has a share of 99.6% and the RBI has the remaining share, he said adding there is a conflict in the role of the RBI.
As RBI is also a regulator, its 0.4% equity will be transferred to Centre, he said adding as a result, 100% equity will come to the Centre.
Participating in the discussion, BJD member B Mahtab suggested that the NABARD can have an authentic data bank on rural credit.
Agriculture credit is a major issue and that disbursement is dominated by private banks in certain states, he added.