1. March 30, 1979 - A Committee to Review the Arrangements For Institutional Credit for Agriculture and Rural Development (CRAFICARD) was formed on 30 March 1979, under the Chairmanship of Shri B. Sivaraman. 2. 28 November 1979 - The committee submitted its report. 3. 1981 - The formation of [NABARD](https://www.nabard.org/content1.aspx?id=8&catid=8&mid=488&csrt=1254518974983554849), based upon the suggestions of this committee, was approved by the Parliament through Act 61 of 1981 4. July 12, 1982 - [NABARD](https://financialservices.gov.in/beta/en/nabard-act) was founded with initial capital of Rs 100 crore, and RBI and govt held 50-50% stake in it. 1. Conceived as an exercise in [decentralisation](RBI_Annual_Annual%20Report_1982.pdf#page=45&selection=115,0,131,1) of the Reserve Bank's functions in the sphere of rural credit, it took over the entire undertaking of the Agricultural Refinance and Development Corporation (ARDC) as well as the refinancing functions from the Reserve Bank in relation to State co-operative banks (StCBs) and Regional Rural Banks (RRBs). 2. Funds 1. For its short-term operations, the NABARD drew funds mainly Reserve Bank's credit line (GLC-I and II). The Reserve Bank can extend loans to NABARD under Section 17(4E) of the RBI Act, 1934 1. Before NABARD, Agricultural Refinance and Development Corporation (ARDC) availed this facility. 2. For its term loan operations, it will draw funds from the Government of India, float bonds in the open market and also drew, to the extent needed, from its National Rural Credit (Long-term Operations) Fund and the National Rural Credit (Stabilisation) Fund. 1. NABARD Act, 1981 allowed for the creation of these funds under section 42 and 43 under the NABARD Act, 1981 and directed RBI to make annual contributions to it. 2. The two funds maintained by the Reserve Bank, viz., the National Agricultural Credit (Long-term Operations) Fund and the National Agricultural Credit (Stabilisation) Fund were transferred to the above funds of the NABARD, on September 10, 1982. ==In other words, NRC (LTO) and NRC (Stabilisation funds) were earlier known as NAC (Stabilisation) Fund and NAC (LTO) Fund, respectively, and were maintained at RBI before the formation of NABARD on July 12, 1982.== 3. NAC funds with RBI were established after the RBI act was amended in 1955. 4. Section 46A of the RBI act was amended in year 1981, effective July 12, 1982. It required RBI to transfer funds to NRC funds. 3. After the creation of NABARD, financial needs of State co-operative banks were mainly attended by the NABARD. [^1] 5. Union Budget 1992-93 - After govt. announced its plans for fiscal consolidation and reduction of the budgetary deficit, which involved higher dividend earnings from PSUs and a larger surplus transfer from the RBI, fund transfers to NRC funds by RBI discontinued. 6. ==Since then RBI has been transferring a token amount of Rs 1 crore to these funds every year given the legal provisions.== 7. June 30, 2009 - [BOX IV-1 Augmentation of the Resource Base of SIDBI, NHB and NABARD](RBI_Annual%20Report_2009.pdf#page=237&selection=46,0,47,58) in RBI's Annual Report-2009 8. October 13, 2010 - RBI sold its stake its remaining stake of around 72.5% in NABARD worth Rs 1430 (71.5 % of 2000) crore as per the decision of the Government of India 1. The Reserve Bank divested its stake in NABARD as per the decision of the Government of India. Thus, out of 72.5 per cent of NABARD’s total share capital (face value $\times$ outstanding shares) of Rs. 2,000 crore earlier held by the Reserve Bank, 71.5 per cent was transferred to Government of India at par on October 13, 2010. Thus, Reserve Bank holds only 1% of shareholding in NABARD. 9. [NABARD](https://www.nabard.org/content1.aspx?id=8&catid=8&mid=488&csrt=1254518974983554849) does not lend directly to individuals in rural areas, but provides [credit](https://www.nabard.org/content1.aspx?id=8&catid=8&mid=488&csrt=1254518974983554849) to various institutions for agriculture, rural development, etc. ## Rules & Regulations 1. Ministry of Finance/Department of Financial Services/Public Financial Institutions/[NABARD](https://financialservices.gov.in/beta/en/nabard-act) ## References ### [[Publications (Data Releases) & Research#Research|Research]] [Half-Yearly Occasional Papers](https://rbi.org.in/scripts/OccasionalPapers.aspx) 1. Tapas Kumar Chakrabarty. Feb 4, 2005. Rural Income : Some Evidence of Effect of Rural Credit During Last Three Decades. Half-Yearly/Occasional Papers. [Link](https://rbi.org.in/scripts/PublicationsView.aspx?Id=7211) | [pdf](RBI_Research_Occasional%20Papers_200502_Occasional%20Papers%20-%20Winter%202003.pdf#page=228&selection=15,0,17,13) ### Others 1. Department of Financial Services. Public Financial Institutions/NABARD. Retrieved on March 22, 2026. [Link](https://financialservices.gov.in/beta/en/nabard-act) 2. Website of [NABARD](https://www.nabard.org/EngDefault.aspx) [^1]: Tapas Kumar Chakrabarty. Feb 4, 2005. Rural Income : Some Evidence of Effect of Rural Credit During Last Three Decades. Half-Yearly/Occasional Papers. [Link](https://rbi.org.in/scripts/PublicationsView.aspx?Id=7211) | [pdf](RBI_Research_Occasional%20Papers_200502_Occasional%20Papers%20-%20Winter%202003.pdf#page=228&selection=15,0,17,13)