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Bar News Acts League

The National Bank for Agriculture and Rural Development Act, 1981 (NABARD Act) is an Indian legislation passed by the Parliament of India. An Act to establish NABARD for providing and regulating credit and other facilities for the promotion and development of agriculture. It contains 52 sections organized across 10 chapters.

The National Bank for Agriculture and Rural Development Act, 1981

Act ID: national-bank-for-agriculture-and-rural-development-act-1981

The National Bank for Agriculture and Rural Development Act, 1981

"An Act to establish NABARD for providing and regulating credit and other facilities for the promotion and development of agriculture."

Overview

What is The National Bank for Agriculture and Rural Development Act, 1981 (NABARD Act)?

The The National Bank for Agriculture and Rural Development Act, 1981 (NABARD Act) is an Indian legislation containing 52 sections across 10 chapters. An Act to establish NABARD for providing and regulating credit and other facilities for the promotion and development of agriculture.

Sections52 across 10 chapters

JurisdictionRepublic of India

Passed byParliament of India

AbbreviationNABARD Act

Verified by Law on Tips Editorial Team · Browse the complete table of contents below

Table of Contents

52 Sections

Ch. IP

reliminary

S.1Short title, extent and commencement .-(1) This Act may be called The National Bank for Agriculture and Rural Development Act, 1981 S.2Definitions .-In this Act, unless the context otherwise requires,

Ch. IIE

stablishment Of The National Bank For Agriculture And Rural Development And Capital Thereof

S.3Establishment and incorporation of National Bank for Agriculture and Rural Development .-(1) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint, there shall be established for the purposes of this Act, a bank to be known as the National Bank for Agriculture and Rural Development S.4Capital .-(1) The Capital of the National Bank shall be one hundred crores of rupees:

Ch. IIIMa

nagement Of The National Bank

S.5Management .-(1) The general superintendence, direction and management of the affairs and business of the National Bank shall vest in a Board of Directors, which shall exercise all powers and do all acts and things which may be exercised or done by the National Bank S.7Term of office of Chairman and other directors, retirement and payment of fees .-(1) The Chairman shall hold office for such term not exceeding five years and shall receive such salary and allowances as the Central Government may, at the time of appointment, specify [and shall be eligible for re-appointment]:S.8Term of office of Managing Director and whole-time directors, conditions of service, etc .-(1) The Managing Director and any whole-time director appointed under sub-section (3) of section 6 shall,S.9Disqualifications .-(1) No person shall be a director who S.10Vacation and resignation of office by directors .-(1) If a director S.12Meetings of Board .-(1) The Board shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be prescribed S.6Board of Directors .- [(1) The Board of Directors of the National Bank shall consist of the following, namely:S.13Committees of National Bank .-(1) The Board may constitute an Executive Committee consisting of such number of directors as may be prescribed S.14Advisory Council .-(1) [The Board may] constitute an Advisory Council consisting of such number of directors and such other persons who, in the opinion of the Board, have special knowledge of agriculture, agricultural credit, co-operation and rural economics, [micro-enterprises, small enterprises and medium enterprises] [Substituted 'small-scale industries' by Act No. 7 of 2018, dated 18.1.2018], village and cottage industries and handicrafts and other rural crafts or have special knowledge and appreciation of the country's overall developmental policies and in particular overall monetary and credit policies, which is considered by the Board as useful to the National Bank

Ch. IVT

ransfer Of Business To The National Bank

S.17Dissolution of the Corporation and repeal of Act 10 of 1963.-On the date appointed under sub-section (1) of section 16,S.18Transfer of business from Reserve Bank .-(1) On such date as the Central Government may, in consultation with the Reserve Bank, by notification, appoint, the assets and liabilities with the Reserve Bank relating to S.16Transfer of assets and liabilities of Agricultural Refinance and Development Corporation .-(1) On such date as the Central Government, in consultation with the Reserve Bank may, by notification, appoint, the entire undertaking of the Agricultural Refinance and Development Corporation (hereafter in this Chapter referred to as the "Corporation") including all business, property, assets and liabilities, rights, interests, privileges and obligations of whatever nature, shall stand transferred to and vest in the National Bank

Ch. VB

orrowings By The National Bank

S.19Borrowings by the National Bank .-The National Bank may, for the purpose of carrying out its functions under this Act,S.20[ Borrowings in foreign currency

Ch. VICr

edit Functions Of The National Bank

S.23Rescheduling of loans to artisans, small-scale industries, etc .-Where the National Bank is satisfied that owing to unforeseen circumstances the rescheduling of any loans and advances made to artisans, [village and cottage industries, micro enterprise, small enterprises and medium enterprises and those engaged in the field of handicraft, handlooms and other rural crafts], by any State co-operative bank, regional rural bank or any such financial institution or any financial institution falling under such class of financial institutions as may be approved by the Reserve Bank in this behalf, has become necessary, it may provide to such bank or institution such financial assistance as it may deem fit by way of loans and advances repayable on the expiry of fixed periods not being less than eighteen months and not exceeding seven years against such securities as may be specified in this behalf by the National Bank:S.24Investment credit-Medium term .-The National Bank shall provide such financial assistance as it may consider necessary by way of making to State co-operative banks, regional rural banks, loans and advances repayable on the expiry of fixed periods not being less than eighteen months and not exceeding seven years against such securities as may be specified, in this behalf, by the National Bank and such loans or advances may be made for agriculture, rural development or such other purposes as the National Bank may, from time to time, determine:S.26[ Purchase and sale of shares S.21Production and marketing credit .-(1) The National Bank may provide by way of refinance, loans and advances, repayable on demand or on the expiry of fixed periods not exceeding eighteen months, [to State co-operative banks, Central co-operative banks, regional rural banks], or to any financial institution or to any class of financial institutions, which are approved by the Reserve Bank in this behalf, for financing S.28Security for credit .-(1) No accommodation shall be granted by the National Bank under clause (a) or clause (c) of sub-section (1) of section 25 or section 30 or section 32 to an institution other than a scheduled bank unless it is fully and unconditionally guaranteed by the Government as to the repayment of principal and payment of interest:S.30[ Direct loans S.29Amounts and securities to be held in trust .-(1) Any sums received by a borrowing institution in repayment or realisation of loans and advances refinanced either wholly or partly by the National Bank shall, to the extent of the accommodation granted by the National Bank and remaining outstanding, be deemed to have been received by the borrowing institution in trust for the National Bank, and shall accordingly be paid by such institution to the National Bank, as per the repayment schedule fixed by the National Bank S.36Validity of loan or advance not to be questioned .-Notwithstanding anything to the contrary contained in any other law for the time being in force, the validity of any loan or advance granted by the National Bank in pursuance of the provisions of this Act shall not be called in question merely on the ground of non-compliance with the requirements of such other law as aforesaid or of any resolution, contract, memorandum, articles of association or other instrument:S.22[ Conversion loan for production credit S.32[ Issue of guarantees S.34[ Power to call for repayment before agreed period S.35National Bank to have access to records .- [(1) The National Bank shall have free access to all such records of a borrower seeking to avail of any credit or other facilities from the National Bank under this Act and also to all such records of any person seeking to avail of any credit or other facilities from such borrower, perusal whereof may appear to the National Bank to be necessary in connection with the providing of finance or other assistance to such borrower or the refinancing of any loan or advance made to such person by the borrower.]S.37A[ Prohibited business S.25Other investment credit .-(1) The National Bank may provide such financial assistance as it may consider necessary for promoting agriculture and rural development by S.27Loans to State Governments for share capital contribution .-The National Bank may make loans and advances to State Governments, repayable on the expiry of fixed periods not exceeding twenty years from the date of making such loans and advances, from the National Rural Credit (Long Term Operations) Fund established under section 42 for enabling them to subscribe directly or indirectly to the share capital of a co-operative credit society

Ch. VIIO

ther Functions Of The National Bank

S.41Credit information .-The National Bank may, for the purpose of the efficient discharge of its functions under this Act, collect from or furnish to the Central Government, the Reserve Bank or any banking company or such other financial institution as may be notified by the Central Government in this behalf, credit information or other information S.38Other functions of National Bank .-The National Bank S.40[ Deposits and investments

Ch. VIIIF

unds, Accounts And Audit

S.43National Rural Credit (Stabilisation) Fund .-(1) The National Bank shall establish and maintain a Fund to be known as the National Rural Credit (Stabilisation) Fund S.42National Rural Credit (Long Term Operations) Fund .-(1) The National Bank shall establish and maintain a Fund to be known as the National Rural Credit (Long Term Operations) Fund S.44Research and Development Fund .-(1) The National Bank shall establish and maintain a Fund to be known as the Research and Development Fund, to which shall be credited S.46Preparation of balance sheet, etc., of National Bank .-(1) The balance sheet and accounts of the National Bank shall be prepared and maintained in such form and manner as may be prescribed S.47Disposal of surplus .-After making provision for bad and doubtful debts, depreciation of assets and all other matters for which provision is necessary or expedient or which is usually provided for by bankers, and for the Funds referred to in sections 42, 43 and 45, the National Bank shall transfer S.48Audit .-(1) The accounts of the National Bank shall be audited by auditors duly qualified to act as auditors under sub-section (1) of [section 141 of the Companies Act, 2013], who shall be appointed by the Central Government in consultation with the Reserve Bank, for such term and on such remuneration as the Central Government may fix

Ch. IXS

taff

S.50Staff of National Bank .-(1) The National Bank may appoint such number of officers and other employees as it considers necessary or desirable for the efficient performance of its functions and determine the terms and conditions of their appointment and service

Ch. XMis

cellaneous

S.51Obligation as to fidelity and secrecy .-(1) The National Bank shall not, except as otherwise required by this Act or any other law, divulge any information relating to, or to the affairs of, its constituents except in circumstances in which it is, in accordance with the law or practice and usage customary among bankers, necessary or appropriate for the National Bank to divulge such information S.52Defects in appointment not to invalidate acts, etc .-(1) No act or proceeding of the Board or of any committee of the National Bank shall be questioned on the ground merely of the existence of any vacancy in, or defect in the constitution of, the Board or the committee, as the case may be S.54Indemnity of directors .-(1) Every director shall be indemnified by the National Bank against all losses and expenses incurred by him in, or in relation to, the discharge of his duties, except such as are caused by his own wilful act or default S.55Section 55 S.56Penalties .-(1) Whoever in any return, balance-sheet, or other document or in any information required or furnished by or under or for the purposes of any provision of this Act, wilfully makes a statement which is false in any material particular, knowing it to be false, or wilfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine S.57Offences by companies .-(1) Where an offence has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:S.60Power of Board to make regulations .-(1) The Board may, with the previous approval of the Central Government and in consultation with the Reserve Bank, by notification, make regulations not inconsistent with this Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act S.62Power to remove difficulty .-If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the difficulty:S.52A[ Agreement with National Bank on appointment of directors to prevail