• The National Bank for Agriculture and Rural Development (NABARD) unveiled its Climate Strategy 2030 document on the occasion of Earth Day (April 22).

• It aims to address India’s escalating need for green financing.

• Despite the pressing demand, where India requires approximately $170 billion annually to reach a cumulative total of over $2.5 trillion by 2030, current green finance inflows are critically insufficient. 

• As of 2019-20, India garnered about $49 billion in green financing, merely a fraction of what is needed. 

• With the majority of funds earmarked for mitigation, only $5 billion was allocated towards adaptation and resilience, reflecting the minimal private sector engagement in these areas due to challenges in bankability and commercial viability.

NABARD’s Climate Strategy 2030 is structured around four key pillars:

i) Accelerating green lending across sectors.

ii) Playing a broader market-making role.

iii) Internal green transformation of NABARD.

iv) Strategic resource mobilisation.

What is the role of NABARD?

• The National Bank for Agriculture and Rural Development (NABARD) is the premier organisation dealing with policy, planning and operations in the field of credit for agriculture and other activities in rural areas.

• NABARD was established in 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC).

• It was set up under an Act of Parliament for supporting and promoting agriculture and rural development. 

• NABARD has been playing a crucial role in the development of various activities in the farm and non-farm sector in the country. 

• In its journey of more than four decades, the premier development financial institution has transformed lives in Indian villages through agri-finance, infrastructure development, banking technology, promotion of microfinance and rural entrepreneurship.

• Headquartered in Mumbai, NABARD has a very strong regional presence with 31 offices, 355 district offices and 29 cluster offices across the country. 

Functions of NABARD:

Financial, Developmental and Supervision are three broad heads which enable NABARD to touch almost every aspect of rural economy. 

It includes:

i) Providing refinance support.

ii) Building rural infrastructure.

iii) Preparing district level credit plans.

iv) Guiding and motivating the banking industry in achieving credit targets.

v) Supervising Cooperative Banks and Regional Rural Banks (RRBs) and helping them develop sound banking practices. 

vi) Designing new projects for rural development.

vii) Implementing Centre’s development schemes.

viii) Training handicraft artisans and providing them a marketing platform for selling their articles among others.

• This strategic initiative not only reinforces NABARD’s commitment to environmental stewardship but also positions it as a pivotal player in India’s transition towards a resilient and sustainable economy.

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