NABARD (Amendment) Bill, 2017

Question: After the approval of the Rajya Sabha on January 2nd, 2018, the Parliament passed the NABARD (Amendment) Bill, 2017. Consider the following statements related to this?
(i) The Bill seeks to increase the authorized capital of NABARD from Rs 5000 to Rs 30,000 crore.
(ii) The proposed bill has been made by the central government to acquire the central bank’s stake in NABARD.
(iii) There is a provision to include micro and medium enterprises in the proposed bill.
Which of the above statements is true?

(a) Only (i)
(b) Only (iii)
(c) (ii) and (iii)
(d) All of the above
Answer: (d)
Related facts:

  • On January 2, 2018; after the approval of the Rajya Sabha, Parliament passed the ‘NABARD (Amendment) Bill, 2017’.
  • This bill has been passed already by the Lok Sabha in August, 2017.
  • This Bill attempts to make NABARD more powerful by amending the NABARD Act, 1981.
  • Some of the key provisions of this bill are as follows:
  • Under the NABARD Act, 1981, the authorized capital could be up to Rs 100 crore, which can be increased by the Central Government to the extent of Rs 5000 crore by the advice of Reserve Bank of India. There is a provision to make this capital upto Rs. 30,000 crores in the current bill, which can be extended by the central government with the advice of RBI.
  • The central government’s minimum stake in NABARD has been fixed at 51 percent.
  • According to the NABARD Act, 1981, there was a provision to keep the combined share of the central government and the Reserve Bank at a minimum of 51 percent in NABARD.
  • The proposed bill provides for the central government’s takeover of the Reserve Bank’s stake in NABARD. At present, the share of the Reserve Bank is 0.4 percent, which is equivalent to about 20 crore rupees.
  • The share of Government of India in NABARD is 99.6 per cent and after acquisition it will be a wholly owned Central Government entity.
  • Under the provisions of the year 1981, NABARD provides only loans for small scale industries and cottage and village industries.
  • There is a provision in the proposed bill to include micro and medium enterprises in this group.

Reference:
http://www.prsindia.org/billtrack/the-national-bank-for-agriculture-and-rural-development-amendment-bill-2017-4726/
http://www.livemint.com/Companies/x9q2syyJlDyqO5EXrgG5TP/Parliament-passes-bill-to-raise-Nabards-capital-to-Rs30000.html