NABARD was established in terms of the Preamble to the Act, "for providing credit for the promotion of agriculture, small scale industries, cottage and village industries, handicrafts and other rural crafts and other allied economic activities in rural areas with a view to promoting IRDP and securing prosperity of rural areas and for matters connected therewith in incidental thereto".
The main objectives of the NABARD as stated in the statement of objectives while placing the bill before the Lok Sabha were categorized as under :
The National Bank will be an apex organisation in respect of all matters relating to policy, planning operational aspects in the field of credit for promotion of Agriculture, Small Scale Industries, Cottage and Village Industries, Handicrafts and other rural crafts and other allied economic activities in rural areas.
The Bank will serve as a refinancing institution for institutional credit such as long-term, short-term for the promotion of activities in the rural areas.
The Bank will also provide direct lending to any institution as may approved by the Central Government.
The Bank will have organic links with the Reserve Bank and maintain a close link with in.
National Bank for Agriculture and Rural Development