Rajya Sabha passes NABARD (Amendment) Bill, 2017
The National Bank for Agriculture and Rural Development (Amendment) Bill, 2017 has been passed by the Parliament’s upper house, Rajya Sabha. The Lok Sabha had passed the bill by voice vote during its Monsoon Session in August 2017.
The National Bank for Agriculture and Rural Development (Amendment) Bill, 2017 was passed by the Parliament’s upper house, Rajya Sabha on 2 January 2018.
Parliament’s lower house, Lok Sabha had passed the bill by voice vote during its Monsoon Session in August 2017. The Bill will now be presented to the President for his assent and only after his approval it will become a law.
The Bill seeks to amend the National Bank for Agriculture and Rural Development Act, 1981.
Key Provisions of the bill
• The Bill will allow the central government to increase the authorised capital of NABARD from Rs 5,000 crore to Rs 30,000 crore.
• It will also allow the government to increase the capital further beyond Rs 30,000 crore in consultation with the Reserve Bank of India (RBI), if necessary.
• The Bill replaces the terms ‘small-scale industry’ and ‘industry in the tiny and decentralised sector’ with the terms ‘micro enterprise’, ‘small enterprise’ and ‘medium enterprise’ as defined in MSME Development Act, 2006.
• It also allows NABARD to provide financial assistance to banks if they provide loans to the MSMEs.
• It also substitutes references to provisions of the Companies Act, 1956 with references to the Companies Act, 2013.
• It also includes provisions dealing with definition of a government company and qualifications of auditors.
• It also provides that the Union Government alone must hold at least 51% capital share of NABARD.
• Further, it transfers share capital held by the RBI valued at Rs 20 crore to the Union Government.
Currently, RBI holds 0.4 per cent share of NABARD, while the Union Government holds remaining 99.6 per cent. NABARD is primarily responsible for providing and regulating facilities like credit for agricultural and industrial development in the rural areas.