A

PROJECT REPORT ON

“TO STUDY THE ACTUAL WORKING OF NABARD WITH

REFERENCE TO INDIAN MONEY MARKET”

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

UNDER THE SYBJECT OF

“LEGAL ASPECTS OF FINANCE AND SECURITY”

FOR THE PARTIAL FULFILMENT OF THE

BACHELOR OF BUSINESS ADMINISTRATION

SUBMIT BY:

SAMIMA HASAN SHAIKH

TYBBA

SEAT NO: 5580

UNDER THE GUIDANCE OF

PROF.DR. MANISH PAWAR

GOKHALE EDUCATION SOCIETY

R.N.C. ARTS, J.D.B COMMERCE & N.S.C. SCIENCE

COLLEGE OF NASHIK ROAD

2024-2025
 Gokhale Education Society’s

R. N. C. ARTS, J. D. B. COMMERCE & N. S. C. SCIENCE COLLEGE,

NASHIK ROAD- 422101

This is to certify that, Mr./ Ms. ____________________________________________________of

class TYBBA, Semester V, Seat No. ____________ has satisfactorily completed the Project

Work in Legal Aspects in Finance and Security Laws as per the guidelines given by Savitribai

Phule Pune University, Pune, on the topic _________________________________________ in

the academic year 20 - 20

Date :

Place :

Project Guide : ___________________ Principal : ___________________

Internal Examiner: ___________________ External Examiner: __________________

 ACKNOWLEDGEMENT

It gives me great pleasure to acknowledge my deep sense of gratitude to all of those who have
helped me in completing this project successfully.

First of all I would like to thank University of Pune for providing me an opportunity to undertake
a project as a partial fulfillment of BBA Degree.

I express my sincere thanks to our Principal Dr. Manjusha Kulkarni Ma’am and Vice Principal
Dr. Akash Thakur Sir for their encouragement.

I express my deep sense of gratitude to all the personages who responded promptly and
enthusiastically to my request for frank comments despite their congested schedules.

I thank them all for providing me with necessary information and also suggesting their valuable
views regarding the completion of the project.

I owe my deep gratitude and regards to my project guide Dr. Manish Pawar Sir for his exemplary
guidance, monitoring and constant encouragement throughout the course of this project.

Last but not the least I am thankful to my family members and friends for their wholehearted
support.

DATE: SAMIMA HASAN SHAIKH

 DECLARATION

I hereby declare that, I SAMIMA HASAN SHAIKH the student of Gokhale Education Society’s
R.N.C. Arts, J.D.B. Commerce & N.S.C. Science college of Nashik Road has completed the
project report entitled “Legal Aspects Of Finance And Security Laws” submitted by me to the
Savitribai Phule Pune University in partial fulfillment of the requirements for the award of the
course Bachelor Of Business Administration under the guidance of Dr. Manish Pawar sir. The
report is my original work and the conclusions drawn therein are based on the material collected
by myself.

The project report submitted is my own work and has not been duplicated from any other source.
I shall be responsible for any unpleasure moment/situations.

SAMIMA HASAN SHAIKH

 INDEX

Sr No. Particulars Page No.

1 Introduction 1
2 Research Methodology 3
3 Data Analysis 7
4 Findings 34
5 Conclusion 38
 CHAPTER 1: INTRODUCION

 Introduction to Indian Money Market

1.Definition:

A money market is a segment of the financial market where short-term, low-risk, and
highly liquid financial instruments are bought and sold. It provides a platform for borrowers and
investors to interact and facilitate the flow of funds.

2.Characteristics:

 Short-term focus: Instruments with maturities ranging from overnight to one year.
 Low risk : Investment are Typically considered safe and secure.
 High liquidity: Assets can be easily converted into cash.
 Large transactions: Typically involves large sums of money.

3.Objectives:

 Providing Liquidity: Facilitating the availability of short-term funds to meet financial

obligations.
 Managing Short-term Interest Rates: Influencing the interest rates for short-term borrowing
and lending.
 Regulating Money Supply: Controlling the amount of money circulating in the economy.

Facilitating Cash Management: Enabling efficient management of cash flows.

 Financing Short-term Needs: Providing funds for temporary or seasonal requirements.

 Investing Surplus Funds: Offering low-risk investment opportunities.

4.Function:

Functions of money market include price discovery, liquidity management, trade financing, risk
mitigation, supports government funding needs, and central bank operations. The money market

1
is a vital part of the financial world that deals with short-term borrowing, lending, and trading of
financial instruments

 INTRODUCTION TO NATIONAL BANK FOR AGRICULTURE

AND RURAL DEVLOPMENT

1.Definition: NABARD (National Bank for Agriculture and Rural Development) is a premier
financial institution in India that focuses on rural development and agriculture. It was established
in 1982 to promote sustainable agriculture, rural prosperity, and economic growth.

2.Overview: Mission: "To promote sustainable and equitable agriculture and rural
development through innovative financial solutions, empowering rural India."

3.Obejectives: The major objective of the National Bank for Agriculture and Rural
Development is to focus on creating sustainable agriculture and promoting rural development. It
also provides development functions which includes assisting rural banks in creating action plans
for developmental activitics.

4.Functions: NABARD, as a Development Bank, is mandated for providing and regulating

credit and other facilities for the promotion and development 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

2
 CHAPTER 2:RESEARCH METHODOLOGY

 Meaning of research
Research is a systematic inquiry into a specific topic or problem, aimed at discovering
new knowledge or understanding. It involves the collection, organization, analysis, and
interpretation of data to answer questions, test hypotheses, or develop new theories.In
essence, research is a process of exploring the unknown to gain new insights and advance
our understanding of the world around us.

 Meaning of research methodology

Research Methodology is the process researchers use to design, conduct, and analyze a
study to answer research questions. It includes the techniques and procedures for
collecting and analyzing data, as well as the timeline for completing the study.Research
methodology is important because it helps to ensure that research is valid, reliable, and
robust. It also allows readers to evaluate the study’s validity and reliability, and to
understand how the research was conducted

 Components of Research Methodology

1.Research Design

This is the overall plan for conducting your research. It includes:

 Research questions: The specific inquiries your research aims to answer.

 Hypothesis: A testable statement about the relationship between variables.
 Research Design: The specific approach, such as experimental, correlational, or case study.
 Sampling: The process of selecting participants or units for study.

2. Data Collection Methods:

3
 Qualitative data: Non-numerical data, such as interviews, observations, and focus group
 Quantitative data: Numerical data, such as surveys, experiments, and statistical analysis.
 Primary data: Collected directly by the researcher.
 Secondary data: Collected by others.

3. Data Analysis:

 Qualitative analysis: Analyzing textual or narrative data.

Quantitative analysis: Analyzing numerical data using statistical methods

4. Ethical Considerations: Ensuring that research is conducted ethically, respecting

participant rights and minimizing harm.

 Types of Research Methodology

1. Quantitative Research

The focus of the research is on the collection of numerical data, summarizing this data and the
drawing of inferences form such data. Usually, the objective of quantitative research is to
determine whether the predictive generalizations of a theory hold true.

2. Qualitative Research

This research is based on non-numerically and unquantifiable elements this research is used in
case of a phenomena relating to or involving quality or kind. These elements include words,
feelings, emotions, sounds etc. Qualitative research is based on direct observation of behavior or
on transcripts of unstructured interviews with respondents (subjects).

3. Descriptive Research

Descriptive research is an attempt to determine, descried, or identify something and pulls

knowledge or information together. It is simply, a description of the state of affairs a sit exists at
present. The aim of this type of research is to describe the data and characteristics about the
phenomena/object/entity/being studied.

4
4. Analytical Research

In an Analytical study, an in-depth study and evaluation of available information is made in an

attempt to explain complex phenomenon. Analytical research thus, involves critical thinking
skills and the evaluation of facts and information related to the research being conducted.

5. Conceptual Research

Conceptual research related to some abstract idea or theory, such research is usually used by
philosophers and thinkers to develop new concepts or to reinterpret existing concepts. In case of
conceptual research, the researcher sits at his desk with pen in hand and tries to solve these
problems by thinking about them. He does no experiments but may make use of observations by
others.

6. Basic Research

Also known as Fundamental Research or Pure Research, Basic research is undertaken to

determine or establish fundamental facts and relationships withing a discipline or field of study.

 Meaning of Data Collection

Data collection is the process of gathering information form various sources to answer research
questions or test hypotheses. It involves systematically collecting data using different methods
and techniques, such as surveys, interviews, observations, experiments, or existing database.The
collected data can be quantitative (numerical) or qualitative (descriptive), depending on the
nature of the research.

5
 Components of Data Collection

1. Data sources:

 Primary sources: Directly collected data from individuals or organizations. Examples

include surveys, interviews, observations, and experiments
 Secondary sources: Existing data collected by others. Examples include
government statistics, published research papers, and database

2. Data Collection Methods:

 Surveys: Questionaries administered to a sample of individuals to gather their opinions,

attitudes, or behaviors.
 Interviews: Structured or unstructured conversations with individuals to obtain detailed
information.
 Observations: Systematic watching and recording of behaviors or events in a natural setting.
 Experiments: Controlled studies designed to test hypotheses by manipulating variables.
 Existing Data: Utilizing existing datasets collected by others, such as census data or medical
records.
 Factors to Consider in Data Collection
 Research Design: The overall plan for conducting the research, which influences the choice
of data collection methods and instruments.
 Data Quality: Ensuring the accuracy, reliability, and validity of collected data.
 Ethical Considerations: Adhering to ethical guidelines in data collection, such as obtaining
informed consent and protecting privacy.
 Time and Resources: Considering the time and resources required for data collection,
including costs, personnel, and equipment.
 Data Analysis: Planning for how the collected data will be analyzed to answer research
question

6
 CHAPTER 3: DATA ANALYSIS

DATA ANALYSIS ON MONEY MARKET

 INTRODUCTION

The Money market is a component of the economy that provides short-term funds. The money
market deals in short-term loans, generally for a period of a year or less.

As short-term securities became a commodity, the money market became a component of the
financial market for assets involved in short-term borrowing, lending, buying and selling with
original maturities of one year or less. Trading in money markets is done over the counter and is
wholesale

There are several money market instruments in most Western countries, including treasury bills,
commercial paper, banker's acceptances, deposits, certificates of deposit, bills of exchange,
repurchase agreements, federal funds, and short-lived mortgage- and asset-backed securities.The
instruments bear differing maturities, currencies, credit risks, and structures. A market can be

7
described as a money market if it is composed of highly liquid, short-term assets. Money market
funds typically invest in government securities, certificates of deposit, commercial paper of
companies, and other highly liquid, low-risk securities. The four most relevant types of money
are commodity money, fiat money, fiduciary money (cheques, banknotes), and commercial bank
money.Commodity money relies on intrinsically valuable commodities that act as a medium of
exchange. Fiat money, on the other hand, gets its value from a government order.

Money markets, which provide liquidity for the global financial system including for capital
markets, are part of the broader system of financial markets.

WHAT ARE MONEY MARKET?

The money market is a component of the economy that provides short-term funds. The money
market deals in short-term loans, generally for a period of a year or less.

As short-term securities became a commodity, the money market became a component of the
financial market for assets involved in short-term borrowing, lending, buying and selling with

8
original maturities of one year or less. Trading in money markets is done over the counter and is
wholesale.

There are several money market instruments in most Western countries, including treasury bills,
commercial paper, banker's acceptances, deposits, certificates of deposit, bills of exchange,
repurchase agreements, federal funds, and short-lived mortgage- and asset-backed securities.[1]
The instruments bear differing maturities, currencies, credit risks, and structures.[2] A market
can be described as a money market if it is composed of highly liquid, short-term assets. Money
market funds typically invest in government securities, certificates of deposit, commercial paper
of companies, and other highly liquid, low-risk securities. The four most relevant types of money
are commodity money, fiat money, fiduciary money (cheques, banknotes), and commercial bank
money.[3] Commodity money relies on intrinsically valuable commodities that act as a medium
of exchange. Fiat money, on the other hand, gets its value from a government order.

HOW MONEY MARKET FUNDS WORK

9
When it comes to investing in the financial markets, diversification is key. Investors are
constantly seeking ways to create a portfolio that is well-balanced and spread across various
asset classes. One popular investment option that has gained attention in recent years is money
market funds. These funds are a type of mutual fund that invests in short-term, low-risk debt
securities, such as treasury bills, commercial paper, and certificates of deposit. Money market
funds are designed to provide investors with a safe haven for their cash, while also generating
returns that are higher than traditional savings accounts or checking accounts.

Here are some key points to understand how money market funds work:

1. Money market funds aim to maintain a stable net asset value (NAV) of $1 per share. The fund
manager invests in short-term securities that mature in less than one year, which helps to ensure
that the fund's NAV remains stable.

2. The returns generated by money market funds are relatively low compared to other types of
investments, such as stocks or bonds. However, they offer a higher yield than traditional bank
accounts, making them a popular choice for investors looking for a low-risk, low-return
investment option.

3. Money market funds are highly liquid, which means that investors can easily buy and sell
shares of the fund. This makes them an attractive option for investors who want to be able to
access their cash quickly and easily.

10
4. Money market funds are regulated by the securities and Exchange commission (SEC) and
must comply with strict rules and regulations. This helps to ensure that the fund is managed in
the best interests of the investors.

5. Money market funds can be a useful tool for diversifying your portfolio. By investing in a
money market fund, you can add a low-risk, stable investment option to your portfolio that can
help to balance out more volatile investments.

For example, let's say that you have a portfolio that is heavily weighted towards stocks. By
investing in a money market fund, you can reduce your overall risk exposure and create a more
balanced portfolio. Additionally, money market funds can be a useful tool for investors who are
saving for a short-term goal, such as a down payment on a house or a vacation. By investing in a
money market fund, you can earn a higher yield on your cash while still maintaining a high
degree of liquidity.

“EVOLUTION OF MONEY MARKET IN INDIA”

The Money market in India is a component of financial markets in India for short-term funds
with maturity ranging from overnight to one year including financial instruments that are deemed
to be close substitutes of money.Similar to developed economies the Indian money market is
diversified and has evolved through many stages, from the conventional platform of treasury
bills and call money to commercial paper, certificates of deposit, repos, forward rate agreements
and most recently interest rate swaps.

The Indian money market consists of diverse sub-markets, each dealing in a particular type of
short-term credit. The money market fulfills the borrowing and investment requirements of
providers and users of short-term funds, and balances the demand for and supply of short-term

11
funds by providing an equilibrium mechanism. It also serves as a focal point for the central
bank's intervention in the market.

The evolution of the money market in India has been quite a journey. Prior to the 1990s, the
market was characterized by a lack of instruments, depth, and distortions in the market micro-
structure ¹. It mainly consisted of uncollateralized call markets, treasury bills, commercial bills,
and a few other instruments ¹.

Key Milestones:

- Pre-1960s: The Indian treasury bill market was relatively free, but its development was
hindered by deficit finance trends ².

- 1990s: India transitioned to indirect, market-based instruments of monetary policy, marking a

significant shift in the money market's development ³ ¹.

- Post-1990s: The money market began to deepen, with the introduction of new instruments and
participants with varying risk profiles .

Reforms and Developments:

- Administered interest rates: Removed to promote market-driven rates .

- Risk management systems: Implemented to improve market efficiency .

- Market micro-structure: Reforms aimed at reducing distortions and improving liquidity .

Current State:

- Diversified instruments: The money market now includes a range of instruments, such as
commercial paper, certificates of deposit, and repo markets .

- Increased participation: Broader participation from banks, corporations, and institutional

investors .

12
The Reserve Bank of India (RBI) has played a crucial role in shaping the money market's
evolution, with a focus on stability and development . Today, the Indian money market continues
to grow, with ongoing efforts to enhance its efficiency and depth.

TYPES OF MONEY MARKET

There are several types of money markets, categorized based on various criteria:

By Geography:

 Domestic Money Market: Operates within a country's borders.

 International Money Market: Transcends national boundaries, involving foreign
currencies.

By Instruments:

 Call Money Market: Deals with short-term, unsecured loans.

 Commercial Paper Market: Issues unsecured, short-term debt.
 Certificate of Deposit (CD) Market: Time deposits with fixed interest rates.
 Repo Market: Short-term lending secured by securities.
 Bill Market: Deals with treasury bills and commercial bills.

By Participants:

 Interbank Money Market: Transactions between banks.

 Corporate Money Market: Involves large corporations.
 Government Money Market: Government securities and treasury bills.

By Maturity:

 Overnight Market: Loans with one-day maturity.

 Short-term Market: Instruments with maturities up to one year.
 Long-term Market: Instruments with maturities exceeding one year.

13
By Structure:

 Organized Money Market: Formal exchanges and markets.

 Unorganized Money Market: Informal, non-institutional lenders.

Other Types:

 Primary Money Market: Issues new securities.

 Secondary Money Market: Trades existing securities.
 Electronic Money Market: Online platforms for money market transactions.

These categories help understand the diverse nature of money markets, catering to
various needs and participants

Here's more information on money market instruments:

1. Treasury Bills (T-Bills)

 Issued by governments to finance short-term needs

 Maturity: 91-365 days
 Risk-free, low return

14
2. Commercial Paper (CP)

 Unsecured, short-term debt issued by companies

 Maturity: 30-270 days
 Low risk, competitive return

3. Certificates of Deposit (CDs)

 Time deposits offered by banks

 Maturity: 30 days-5 years
 Fixed interest rate, low risk

4. Repurchase Agreements (Repos)

 Short-term loans secured by securities

 Maturity: Overnight-30 days
 Low risk, variable return

5. Bankers' Acceptances (BAs)

- Short-term credit facilities for trade finance

- Maturity: 30-180 days

- Low risk, competitive return

MONEY MARKET INSTRUMEENT:

Money market instruments are financial contracts that are traded in the money market for periods
of less than a year. The institutions that offer money market instruments to the lenders (investors)
include commercial banks, corporations, government, non-banking financial institutions, etc.

Some of the examples of money market instruments include commercial papers, treasury bills,
certificates of deposits, etc.

15
What are the Types of Money Market Instruments?

In India, the different types of money market instruments offer stable returns to investors looking
for low-risk investment options. Some of the popular money market instruments have been
defined below:

Certificate of Deposit (CD)

These certificates are issued directly by a commercial bank at a discounted rate, and their tenure
usually ranges from seven days to one year. CDs function similarly to a bank fixed deposit,
except for the higher negotiating factor and higher liquidity.

Introduced by the Reserve Bank of India (RBI) in 1989, CDs have become a popular investment
option for investors looking for short-term assets since they carry no risk while offering interest
rates greater than those offered by fixed deposits.

16
Treasury Bills

These are issued by the Government of India when it requires funds to meet its short-term
requirements. The treasury banknotes are issued at a discounted value and are traded on primary
and secondary markets.

Since treasury bills are backed by the sovereign, the associated risk is negligible. However, these
securities do not generate any interest. The only profit is the difference between the maturity
value of the bill and its discounted purchase price.

Commercial Papers

This is an unsecured money market instrument issued by well-established corporations as

promissory notes. The maturity period of these instruments is less than a year; hence, the interest
rate is quite low if you compare it with other debt securities.

This money market instrument enables corporate borrowers to avail of short-term borrowing by
raising capital directly from the market.

Repurchase Agreements

Also known as buybacks, these are formal agreements between two parties where the issuer
offers a guarantee to repurchase the security in the future. These transactions can only be made
between two parties that are approved by RBI, as repurchase agreements usually involve trading
of government securities. The date of purchase and interest rate is predetermined.

Banker’s Acceptance

Issued by commercial banks, this is a financial document that guarantees a future payment to the
lender. The document clearly mentions the repayment terms, including the date of repayment and
the amount to be repaid. The maturity period of this safe and reliable instrument usually ranges
from 30 days to 180 days.

17
Why are Money Market Instruments Important?

The presence and functioning of the money market is crucial for the seamless functioning of the
economy. Money market instruments help the government, corporations, and financial
institutions raise short-term debt for immediate needs.

These safe, liquid, short-term financial instruments operate within a regulated environment;
hence, they are a popular option for people who are looking to invest in secure securities for the
short term.

BENEFITS OF INVESTING IN MONEY MARKET INSTURMENTS:

Secured and Stable Returns: These financial instruments offer stable and guaranteed
returns, making them suitable for risk-averse investors. They usually offer interest payments or
come with discounted face value prices, allowing depositors to earn a predictable return upon
maturity.

Highly Liquid: Money market instruments can be easily bought or sold in the over-the-
counter market. This means investors can get access to their deposits easily, making it a

comparatively safe option.

Portfolio Diversification: By investing in money market instruments, investors can

diversify their portfolios. Well-established banks and corporations generally issue these
instruments; hence, they are a safe investment option to include in one’s portfolio.

18
STURCTURE OF MONY MARKET

The Indian monetary market has two broad categories – the organized sector and
the unorganized sector.

Organized Sector: This sector comprises of the governments, the RBI, the other commercial
banks, rural banks, and even foreign banks. The RBI organizes and controls this sector. Other
corporations like the LIC, UTI, etc also participate in this sector but not directly. Other large
companies and corporates also participate in this sector through banks.

Unorganized Sector: These are the indigenous banks and the local money lenders and hundis
etc. Their activities are not controlled by the RBI or any other body, so they are the unorganized
sector.

19
Objectives of the Money Markets

20
The main objectives of the monetary market are as follows,

 The main objective is to provide borrowers with short-term funds at reasonable rates.
And since the securities are all short-term the lenders will also have the benefit of
liquidity.
 Turns savings and idle funds of the public into effective investments. This is beneficial
for the entire economyAllows the Reserve Bank of India to regulate the levels of liquidity
in the economy. This is one of the main functions of the RBI.
 Companies and corporations have short-term deficits from time to time. They may also
need help with their working capital requirements. The money market will facilitate the
funds necessary.
 Helps the government implement monetary policies via their open market operations
which are direct and effective in nature.

Data Anaylsis on NABARD:

 Introduction

21
The importance of institutional credit in boosting rural economy has been clear to the
Government of India right from its early stages of planning. Therefore, the Reserve Bank of
India (RBI) at the insistence of the Government of India, constituted a Committee to Review the
Arrangements For Institutional Credit for Agriculture and Rural Development (CRAFICARD) to
look into these very critical aspects. The Committee was formed on 30 March 1979, under the
Chairmanship of Shri B. Sivaraman, former member of Planning Commission, Government of
India.

The Committee’s interim report, submitted on 28 November 1979, outlined the need for a new
organisational device for providing undivided attention, forceful direction and pointed focus to
credit related issues linked with rural development. Its recommendation was formation of a
unique development financial institution which would address these aspirations and formation of
National Bank for Agriculture and Rural Development (NABARD) was approved by the
Parliament through Act 61 of 1981.

NABARD came into existence on 12 July 1982 by transferring the agricultural credit functions
of RBI and refinance functions of the then Agricultural Refinance and Development Corporation
(ARDC). It was dedicated to the service of the nation by the late Prime Minister Smt. Indira
Gandhi on 05 November 1982

22
NABARD initiatives are aimed at building an empowered and financially inclusive rural India
through specific goal oriented departments which can be categorized broadly into three heads:
Financial, Developmental and Supervision. Through these initiatives we touch almost every
aspect of rural economy. From providing refinance support to building rural infrastructure; from
preparing district level credit plans to guiding and motivating the banking industry in achieving
these targets; from supervising Cooperative Banks and Regional Rural Banks (RRBs) to helping
them develop sound banking practices and onboarding them to the CBS platform; from
designing new development schemes to the implementation of GoI’s development schemes;
from training handicraft artisans to providing them a marketing platform for selling these
articles.

NABARD (National Bank for Agriculture and Rural Development) is India's apex development
financial institution for agriculture and rural development.

Establishment:

NABARD was established on July 12, 1982, under the National Bank for Agriculture and Rural
Development Act, 1981.

Objectives:

 Promote agriculture and rural development

 Provide credit to rural areas
 Support rural infrastructure development
 Enhance rural livelihoods
 Foster sustainable agriculture practices

Functions:

 Refinancing: Provides loans to banks and financial institutions for agriculture and rural
development

23
  Direct Lending: Provides loans to farmers, rural artisans, and entrepreneurs
 Credit Guarantee: Guarantees loans to rural borrowers
 Rural Infrastructure Development: Finances rural infrastructure projects (e.g., irrigation,
roads)
 Capacity Building: Trains rural stakeholders (e.g., farmers, bankers)
 Research and Development: Conducts research on rural development and agriculture

Initiatives:

 Kisan Credit Card (KCC) Scheme: Provides credit to farmers

 Rural Infrastructure Development Fund (RIDF): Finances rural infrastructure projects
 National Rural Livelihoods Mission (NRLM): Supports rural livelihoods
 4. Microfinance: Provides small loans to rural entrepreneurs
 5. Climate Change Initiatives: Supports climate-resilient agriculture practices

Products and Schemes:

 Agriculture Credit
 Rural Housing Finance
 Rural Infrastructure Finance
 Microfinance
 Livestock Finance
 Farm Mechanization Finance
 Crop Insurance

Impact:

 Increased rural credit flow

 Improved rural livelihoods
 Enhanced agricultural productivity
 Increased rural employment
 Better rural infrastructure

Financials:

24
  Authorized Capital: ₹30,000 crores
 Paid-up Capital: ₹10,000 crores
 Total Assets: ₹4.5 lakh crores (approx.)
 Loan Portfolio: ₹3.5 lakh crores (approx.)

The National Bank for Agriculture and Rural Development (NABARD) is an All India Financial
Institution (AIFI) and an apex Supervisory Body for overall supervision of Regional Rural
Banks, State Cooperative Banks and District Central Cooperative Banks in India. It was
established under the NABARD Act 1981 passed by the Parliament of India. It is fully owned by
Government of India and functions under the Department of Financial Services (DFS) under the
Ministry of Finance.

HEAD OFFICE OF NABARD

 HISTORY OF NABARD
The importance of institutional credit in boosting rural economy has been clear to the
Government of India right from its early stages of planning. Therefore, the Reserve
Bank of India (RBI) at the insistence of the Government of India, constituted a

25
 committee to Review the Arrangements For Institutional Credit for Agriculture and
Rural Development (CRAFICARD) to look into these very critical aspects. The
Committee was formed on 30 March 1979, under the Chairmanship of Shri B.
Sivaraman, former member of the Planning Commission, Government of India.
The Committee’s interim report, submitted on 28 November 1979, outlined the need
for a new organizational device for providing undivided attention, forceful direction
and pointed focus to credit related issues linked with rural development. Its
recommendation was the formation of a unique development financial institution which
would address these aspirations, and the formation of National Bank for Agriculture
and Rural Development (NABARD) was approved by the Parliament through Act 61
of 1981.

 ROLE
NABARD has been instrumental in grounding rural, social innovations and social
enterprises in the rural hinterlands. As of may 2023, NABARD operates at 31 Regional
Offices in the country. It has in the process partnered with about 4000 partner
organisations in grounding many of the interventions, be it the SHG-Bank Linkage in soil
and water conservation, increasing crop productivity initiatives through the lead crop
initiative or dissemination of information flow to agrarian communities through farmer
clubs. Despite all this, it pays huge taxes too, to the national treasury - figuring in the top
50 tax payers consistently. NABARD virtually ploughs back all the profits for
development spending. Thus, the organization had developed a huge amount of trust
capital in its 3 decades of work with rural communities.

 MISSION
Promote sustainable and equitable agriculture and rural prosperity through effective
credit support,related services,institutional development and other innovation initiatives.

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 MANAGEMENT
The management of NABARD is vested with the board of Directors comparising the
chairman,managing directors,representatives of RBI,Gol,state governments,and Directors
nominated by the gol.

 STRUCTURE
Head Office and Governance:-NABARD's head office is located in Mumbai, and it
is governed by a Board of Directors. The Board consists of a Chairman, Managing
Directors, and other directors appointed by the Government of India. The Chairman is the
chief executive officer responsible for overall policy formulation and decision-making.

Regional Offices:-NABARD has 28 Regional Offices across India, each headed by a

Regional Chief General Manager. These offices oversee the implementation of
NABARD's policies and programs at the regional level.

District Offices:-NABARD has 441 District Offices, which serve as the primary
interface with rural communities. These offices are responsible for promoting and
financing rural development projects, providing training and capacity-building programs,
and monitoring project implementation.

Subsidiaries:-NABARD has five subsidiaries:

 NABARD Financial Services Limited (NFSL)
 NABARD Consultancy Services Limited (NCSL)
 NABARD Rural Services Limited (NRSL)
 NABARD Property Services Limited (NPSL)
 NABARD Skill Development Limited (NSDL)

These subsidiaries provide specialized services such as financial consulting, rural

infrastructure development, and skill development.
 Departmental Structure

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 NABARD's head office has various departments, including:

o Agriculture and Rural Development Department

o Finance Department
o Planning and Policy Department
o Human Resources Department
o Information Technology Department

Each department is responsible for specific functions, such as policy formulation, financial
management, and human resource development.

Autonomous Institutions:-

NABARD has established autonomous institutions, including:

 National Centre for Financial Education

 Rural Development and Self Employment Training Institutes (RUDSETI)

These institutions provide training and capacity-building programs for rural youth and
entrepreneurs.

Overall, NABARD's structure is designed to facilitate effective implementation of its rural

development and agriculture finance initiatives across India.

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  FUNCTIONS OF NABARD
 Primary Functions:
 Refinancing: Provides loans to banks and financial institutions for agriculture and rural
development.
 Direct Lending: Provides loans to farmers, rural artisans, and entrepreneurs.
 Credit Guarantee: Guarantees loans to rural borrowers.

 Rural Development Functions:

 Rural Infrastructure Development: Finances rural infrastructure projects (e.g., irrigation,
roads).
 Rural Livelihoods Promotion: Supports rural livelihoods and self-employment.
 Rural Skill Development: Provides training and capacity-building programs.

 Agriculture Finance Functions:

 Agriculture Credit: Provides loans for agricultural activities.
 Crop Insurance: Provides insurance coverage to farmers against crop losses.
 Farm Mechanization: Promotes farm mechanization for improved productivity.

 Supportive Functions:
 Research and Development: Conducts research on rural development and agriculture.
 Monitoring and Evaluation: Monitors and evaluates projects and programs.
 Capacity Building: Provides training and capacity-building programs for stakeholders.

 Regulatory Functions:
 Regulation of Rural Financial Institutions: Regulates and supervises rural financial
institutions.
 Policy Formulation: Formulates policies for rural development and agriculture finance.

 Other Functions:
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  . Microfinance: Provides small loans to rural entrepreneurs.

 . Climate Change Initiatives: Supports climate-resilient agriculture practices .

 Collaboration with International Organizations: Partners with international organizations
for rural development.

These functions enable NABARD to promote rural development, agriculture, and rural
livelihoods in India.

 Challenges and Opportunities

NABARD, the National Bank for Agriculture and Rural Development, has played a vital role in
India’s rural development. However, it faces several challenges and opportunities in its ongoing
efforts.

Challenges:-

1. Financial Constraints: Rising Interest Rates: Increasing interest rates can make it more
difficult for NABARD to provide affordable credit to rural borrowers. Resource Allocation:
Balancing resource allocation between different rural development priorities can be
challenging.
2. Geographical Disparity: Reaching Remote Areas: Reaching remote and inaccessible
rural areas with financial services and development programs can be difficult. Infrastructure
Gaps: Lack of infrastructure, such as roads and telecommunications, can hinder
NABARD’s operations in certain regions.
3. Changing Rural Landscape: Urbanization: Rapid urbanization is leading to changes in
rural demographics and economic structures, requiring NABARD to adapt its strategies.
4. Climate change: Climate change poses significant challenges to rural livelihoods and
agricultural production, affecting NABARD’s operations.
5. Non-Performing Assets (NPAs): Loan Recovery: Managing NPAs and ensuring timely
loan recovery is a critical challenge for NABARD. Risk Management: Implementing
effective risk management strategies is essential to mitigate the impact of NPAs.

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6. Competition from Other Financial Institutions: Increased Competition: NABARD
faces competition form other financial institutions, including commercial banks and
microfinance institutions. Market Share: Maintaining market share and staying competitive
in a dynamic financial landscape is crucial.

 OPPORTUNITIES:-
1. Digital Financial Services: Financial Inclusion: Leveraging digital technologies can
help NABARD reach unbanked and underbanked rural populations. Efficiency:
Digitalization can improve operational efficiency and reduce costs.

2. Value-Added services: Beyond Credit: NABARD can expand its offerings to include
value-added services, such as agricultural advisory, market linkages, and risk
management solutions. Diversified Revenue Streams: These additional services can
provide diversified revenue streams and enhance NABARD’s sustainability.
3. Climate-Smart Agriculture: Sustainable Practices: NABARD can promote climate-
smart agricultural practices to help farmers adapt to climate change and reduce their
environmental impact. Green Financing: Investing in climate-resilient infrastructure and
technologies can create new opportunities for green financing.

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 4. Rural Entrepreneurship: Job Creation: Supporting rural entrepreneurship can create
employment opportunities and boost local economies. Innovation: Incubating and
funding innovative rural enterprises can drive economic growth and development.
5. Public-Private Partnerships (PPPs): Resource Mobilization: PPPs can help
NABARD mobilize resources and leverage the expertise of private sector partners.
Efficiency: PPPs can improve efficiency and effectiveness in delivering rural
development services.

 Recent Initiatives and Projects of NABARD

NABARD, the national Bank for Agriculture and Rural Development, has been actively involved
in various initiatives and projects aimed at promoting rural development and agricultural growth
in India. Here are some recent examples:

1. Digital Initiatives: NABARD e-Governance Network (NeGN): This platform

provides a unified platform for various NABARD activities, including loan applications,
sanctioning,and disbursement. Digital Financial Inclusion: NABARD has been

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 promoting digital financial inclusion through initiatives like the Pradhan Mantri Jan
Dhan Yojana and the National Financial Inclusion Mission.
2. Agricultural Development: Agri-Value Chains: NABARD has been supporting the
development of agri-value chains to enhance farmers’ incomes and reduce post-harvest
losses. Sustainable Agriculture: NABARD has been promoting sustainable agriculture
practices, including organic farming, precision agriculture, and climate-smart
agriculture.
3. Rural Infrastructure Development: Rural Roads: NABARD has funded the
construction and improvement of rural roads to enhance connectivity and market access
for rural communities. Rural electrification: NABARD has supported rural electrification
projects to improve the quality of life in rural areas.
4. Microfinance: Self-Help Groups (SHGs): NABARD continues to support the growth
of SHGs,providing them with credit, training, and other support services. Microfinance
Institutions (MFIs): NABARD has been promoting the growth of MFIs to provide
financial services to the underserved rural population.
5. Rural Entrepreneurship: Rural Enterprises: NABARD has been supporting the
establishment and growth Of rural enterprises, providing them with credit, technical
assistance, and market linkages.Women Entrepreneurship: NABARD has been focusing
on promoting women entrepreneurship in rural areas.
6. Climate Change Mitigation and Adaption: Climate-Smart Agriculture: NABARD
has been promoting climate-Smart agriculture practices to help farmers adapt to climate
change.
7. Renewable Energy: NABARD has been supporting renewable energy projects in
rural areas to reduce dependence on fossil fuels. These are just a few examples of
NABARDs recent initiatives and projects. The bank continues to play a vital role in
promoting rural development and agricultural growth in India.

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 Challenges Faced by the NABARD in the Current Economic Climate

NABARD, despite its crucial role in India’s rural development, faces several challenges in the
current economic climate:

 Non-Performing Assets (NPAs): The agricultural sector, being sensitive to weather

fluctuations and marketprices, can lead to loan defaults. This can strain NABARD’s
financial health and limit its lending capacity.
 Economic Slowdown: A slowdown in the economy can lead to reduced demand for
agricultural products, impacting farmers income and their ability to repay loans. This
can affect NABARDs lending activities and its ability to achieve its development
 objectives. Competition from Private Financial Institutions: Private financial
institutions, with their wider range of products and services,are increasingly
competing with NABARD in the rural market. Thiscompetition can erode NABARDs
market share and put pressure on itsprofitability.
 Regulatory Changes: Frequent regulatory changes can increase NABARDs
compliance burden and divert resources from its core activities. Adapting to new
regulations can pose operational challenges and impact efficiency.
 Climate Change and Natural Disasters: Climate change and natural disasters can
adversely affect agriculturalproductions, leading to financial losses for farmers and
increasing NPAs.NABARD needs to develop effective risk management strategies to
mitigate the impact of these events.

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 CHAPTER 4.FINDING

Definition: A market for short-term (less than 1 year) debt securities, providing liquidity and
facilitating borrowing/lending.

Characteristics:

 Short-term maturity (overnight to 1 year)

 Low risk, high liquidity
 Large transaction volumes
 Wholesale market (institutional investors)

Instruments:

 Commercial Paper (CP)

 Treasury Bills (T-Bills)
 Certificates of Deposit (CDs)
 Repurchase Agreements (Repos)
 Federal Funds
 Bankers' Acceptances
 Short-term Government Securities

Functions:

 Liquidity provision
 Risk management
 Interest rate determination
 Monetary policy implementation
 Facilitating trade and commerce

Benefits:

 Efficient allocation of capital

 Risk management for investors
 Liquidity for businesses and governments

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  Low transaction costs
 Diversification opportunities

Participants:

 Banks
 Corporations
 Institutional investors (e.g., pension funds)
 Central banks
 Money market mutual funds

Factors influencing money market:

 Interest rates
 Economic indicators (GDP, inflation)
 Monetary policy
 Global events (e.g., geopolitical tensions)
 Regulatory changes

Key statistics:

 Global money market size: ~$5 trillion (2022)

 Average daily trading volume: ~$1.5 trillion
 Top money market centers: New York, London, Tokyo

Challenges and trends:

 Regulatory reforms
 Digitalization and fintech
 Global economic uncertainty
 Interest rate volatility
 Sustainable finance integration

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  NABARD

The National Bank for Agriculture and Rural Development (NABARD) is an all-India Financial
Institution (AIFI) and an apex Supervisory Body for overall supervision of Regional Rural
Banks, State Cooperative Banks and District Central Cooperative Banks in India.

 Establishment

The Government of India established NABARD on July 12, 1982, as a development bank to
promote rural and agricultural development.

 Founder

This was established under the able Chairmanship of Shri B. Sivaraman, former Member of
Planning Commission on 30 March 1979.

 Mission

NABARD’s mission is to promote equitable and sustainable rural and agricultural development
through financial and non-financial interventions, technology, and institutional development.

 Functions

NABARD’s functions include financing, planning, monitoring, supervision, and refinancing.

 Structure

NABARD has its headquarters in Mumbai, 31 regional offices, four training establishments, and
414 district development managers.

 Partners

NABARD partners with state cooperative banks, state cooperative agricultural and rural
development banks, primary agricultural credit societies, and district central cooperative banks.

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 Tagline

NABARD’s tagline is “Goan Badhe toh Desh Badhe”.

 Chairman

Dr. G.R. Chintalal is the current chairman of NABARD.

 Role in the economy

NABARD’s role is important because a large part of India’s population lives in ruralareas, and
the country’s economy was primarily agricultural after independence.

 Benefits

It provides financial support for agricultural and rural development projects, which can help to
improve the lives of those in poverty. NABARD offers various schemes and programs that can
benefit farmers and rural dwellers, such as training and capacity-building programs,
microfinance initiatives, and more.

 Scope

Providing refinance facilities to banks and other financial institutions that lend to agriculture,
rural development, and other allied sectors. Providing credit facilities farmers and rural
entrepreneurs through direct lending or through its partnership with other financial institutions.

 Schemes run by NABARD

Kisan Credit Card (KCC) Scheme, the Rural Entrepreneurship Development Program (REDP),
and the Dairy Entrepreneurship Development Scheme (DEDS).

 Achievements

NABARD has launched a new product Rural Infrastructure Assistance to State Governments
(RIAS) for financing long-term infrastructure needs of State Governments with special focus on
Eastern & Northeastern States and Aspirational & Border districts.

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 CHAPTER 5: CONCLUSION AND SUGGSSTION

 MONEY MARKET

Money Market Funds serve as symbols of stability and potential in an ever-changing

stock market. With a focus on safety and potential returns, they offer a dependable
solution for consumers seeking financial security.The call money market decreases
the repo rate, but the bank manages the cheaper money of their surplus breakdown
through reverse repo rate. The bank has to report this issue to RBI within to week.
Rastogi says that the Indian money market has achieved more from the
preliberalization era. In his research he concluded that although markets have
achieved integration in some of its branches, but they still have to attain full
integration The money market is usually for short-term period i.e. less than one year.

 KEYTAKEWAY

 The money market is a vibrant market, affecting our everyday lives. As the shortterm market
for money, money changes hands in a short time frame and the players in the market have
to be alert to changes, up to date with news and innovative with strategies and products.
 The withdrawal of non-bank entities from the inter-bank call-money market is linked to the
improvement of settlement systems.
 Any time-bound plan for the evolution of a pure inter-bank call/notice money market would
be ineffective till the basic issue of settlements is addressed.
 Money market securities are very liquid, and are considered very safe. As a result, they offer
a lower return than other securities.

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 NABARD

A large population of India is dependent on agriculture. Rural infrastructure investments

help in raising the socio-economic status of the rural people through increased income
levels and quality of life.

NABARD being an apex institution for providing credit facilities and capacity building to
Indian rural economy, it has great a opportunity for poverty reduction and socio-
economic empowerment of rural India.

NABARD initiatives are aimed at building an empowered and financially inclusive rural
India through specific goal oriented departments which can be categorized broadly into
three heads: Financial, Developmental and Supervision. Through these initiatives we
touch almost every aspect of rural economy.

NABARD is a Development Bank with a mandate for providing and regulating credit for
the development of agriculture, small-scale industries, cottage and village industries,
handicrafts and other allied economic activities in rural areas to promote prosperity of
rural areas.

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