Economics • Banking & FinanceHard
Evaluate the mandate of the 'National Bank for Agriculture and Rural Development' in India. Which of the following functions falls directly under its apex jurisdiction?
A. Regulating benchmark lending rates for private multinational commercial banks✓ Correct Answer
B. Providing refinancing facilities for agricultural credit, small scale industries, and rural infrastructure development
C. Issuing currency notes and managing foreign exchange reserves of the nation
D. Conducting open market operations in government bond markets
💡 Solution & Explanation
NABARD acts as an apex development bank providing refinancing support for agriculture, small scale industries, cottage industries, and rural crafts while supervising regional rural banks and cooperative banks. Benchmark lending rate regulation and currency issuance remain statutory responsibilities of the Reserve Bank of India. Open market operations are executed exclusively by the central bank. Established in 1982 on the recommendation of the B. Sivaraman Committee, NABARD drives rural financial inclusion.
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