Economics • Banking & FinanceHard
What is the primary role of the 'National Bank for Agriculture and Rural Development (NABARD)' in the Indian financial system?
A. To serve as an apex development bank providing refinancing facilities for agriculture, small-scale industries, and rural development✓ Correct Answer
B. To act as the primary regulator and licenser of all urban cooperative banks and commercial lending institutions
C. To formulate monetary policy interest rates and manage foreign exchange reserves for rural development ministries
D. To operate the retail payment systems including Unified Payments Interface and immediate payment service networks
💡 Solution & Explanation
National Bank for Agriculture and Rural Development is an apex development financial institution established in 1982 to provide refinancing support for agriculture, cottage industries, and rural infrastructure projects. Distractors incorrectly assign urban bank licensing, monetary policy formulation, or retail payment system operations to it. It was established based on the recommendations of the B. Sivaraman Committee under an Act of Parliament. NABARD also supervises regional rural banks and state cooperative agriculture and rural development banks.
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