National Bank for Agriculture and Rural Development (Amendment) Act, 2017

The National Bank for Agriculture and Rural Development (Amendment) Act, 2017 seeks to amend the National Bank for Agriculture and Rural Development Act, 1981 which established NABARD. NABARD is responsible for providing and regulating facilities like credit for agricultural and industrial development in the rural areas.

Amendments: The act has made the changes like -

• Increase in Capital of NABARD: The act allows the central government to increase the capital available with NABARD from 5,000 crore to Rs 30,000 crore. The capital may be increased to more than Rs 30,000 crore by the central government in consultation with the RBI.
• Transfer of RBI’s Share to the Central Government: Under the 1981 Act, the central government and the RBI together must hold at least 51% of the share capital of NABARD. The act provides that the central government alone must hold at least 51% of the share capital of NABARD. The Act transfers the share capital held by the RBI to the central government
• Micro, Small and Medium Enterprises (MSME): The Act replaces the terms ‘small-scale industry’ and ‘industry in the tiny and decentralized sector’ with the terms ‘micro enterprise’, ‘small enterprise’ and ‘medium enterprise’. NABARD is now responsible for providing credit and other facilities to industries having an investment of up to Rs. 10 crore in the manufacturing sector and Rs. 5 crore in the services sector. Under the new amendment, experts from MSME enterprises are to be included in the Board of Directors and the Advisory Council of NABARD.
• Consistency with the Companies Act, 2013: The Act substitutes references to provisions of the Companies Act, 1956 under the NABARD Act, 1981, with references to the Companies Act, 2013. These include provisions that deal with definition of a government company and qualifications of auditors.