New Delhi, March 22 (IANS) The Union Cabinet on Wednesday approved amendments to the Nabard Act to increase its authorisd capital from Rs 5,000 crore to Rs 30,000 crore, an official statement said.
A Cabinet meeting chaired by Prime Minister Narendra Modi approved amendments to National Bank for Agriculture and Rural Development (Nabard) Act, 1981, which “include provisions that enable the central government to increase the authorised capital of Nabard to Rs 30,000 crore and increase it beyond the amount in consultation with the RBI, as deemed necessary from time to time,” an official statement said.
The Cabinet also approved transfer of 0.4 per cent equity of Reserve Bank of India in Nabard amounting to Rs 20 crore to the Government of India.
“The proposed increase in authorised capital will enable Nabard to respond to the commitments it has undertaken, particularly in respect of Long-Term Irrigation Fund and recent Cabinet decision on on-lending to cooperative banks,” the statement said.
The transfer of entire shareholding in Nabard held by the RBI to the central government will remove the conflict in RBI’s role as banking regulator and shareholder in Nabard.
Nabard is an apex development bank of country and is engaged in agricultural credit and other economic activities in rural areas.