Question

NABARD provides Medium Term credits for a period of up to ----.

• A. 5 years
• B. 10 years
• C. 15 years
• D. 7 years

Answer 1

Answer:

D. 7 years

Credit Functions of NABARD:

1. It provides Short-Term Credit to State Co-operative Banks (SCB), Regional Rural Banks (RRBs) and other Financial Institutions approved by the Reserve Bank. (This is usually for a period of 18 months.)

2. It provides Medium Term credit to State Co-operative Banks, State Land Development Banks, RRBs and other Financial Institutions approved by Reserve Bank. (This loan is extended for a period of up to 7 years.)

3. It provides Long Term Credit to State Land Development Banks, Commercial Banks (CBs), RRBs. State Co-operative Banks and other Institutions approved by the Reserve Bank. (This loan is extended for a period up to 25 years.)

4. Provides re-finance to eligible institutions, normally to SCBs and RRBs for conversions and re-scheduling of Fans under conditions of drought, famine or other national calamities and so on.

5. Financing Cottage/village/small scale industries, etc. located in rural area are also eligible for re-finance from NABARD

6. Cooperative Development Fund ie., National Agricultural Credit Stabilization Fund and National Long Term Operations fund for the development of Cooperative Institution.