The National Bank for Agriculture and Rural Development Act, 1981

(1) This Act may be called the National Bank forAgriculture and Rural Development Act, 1981. (2) It extends to the whole of India. (3) It shall come into force on such date 1as the Central Government may, by notification in theOfficial Gazette, appoint, and different dates may be appointed for different provisions of this Act, andany reference in any provision to the commencement of this Act shall be construed as a reference to thecoming into force of that provision.

In this Act, unless the context otherwise requires,-- (a) "agriculture" includes horticulture, animal husbandry, forestry, dairy and poultry farming,pisciculture, and other allied activities, whether or not undertaken jointly with agriculture and theexpression "agricultural operations" shall be construed accordingly. Explanation.--For the purposes of this clause, "pisciculture" includes the development offisheries, both inland and marine, catching of fish and all activities connected therewith or incidentalthereto; (b) "Agricultural Refinance and Development Corporation" means the Corporation establishedunder section 3 of the Agricultural Refinance and Development Corporation Act, 1963 (10 of 1963),and renamed under section 3A of that Act as the Agricultural Refinance and DevelopmentCorporation; (c) "Board" means the Board of Directors of the National Bank; (d) "central co-operative bank" means the principal co-operative society in a district in a State,the primary object of which is the financing of other co-operative societies in that district: Provided that in addition to such principal society in a district, or where there is no such principalsociety in a district, the State Government may declare any one or more co-operative societiescarrying on the business of financing other co-operative societies in that district to be also or to be acentral co-operative bank or central co-operative banks within the meaning of this definition; (e) "Chairman" means the Chairman 1*** appointed under section 6; (f) "co-operative society" means a society registered, or deemed to be registered, under theCo-operative Societies Act, 1912 (2 of 1912) or any other law relating to co-operative societies forthe time being in force in any State; (g) "crops" includes products of agricultural operations; (h) "director" means a director appointed under section 6; 2* * * * * (j) "Managing Director" means the Managing Director appointed under section 6; (k) "marketing of crops" includes the processing of crops prior to marketing by any agriculturalproducers or any organisation of such producers; 3[(ka) "micro enterprise", "small enterprise" and "medium enterprise", shall have the samemeanings as are respectively assigned to them in the Micro, Small and Medium EnterprisesDevelopment Act, 2006 (27 of 2006)]; (l) "National Bank" means the National Bank for Agriculture and Rural Development establishedunder section 3; (m) "notification" means a notification published in the Official Gazette; (n) "primary rural credit society" means a co-operative society, by whatever name called,-- (1) which has as its object or business the provision of financial accommodation to itsmembers for agriculture or agricultural operations or for the marketing of crops, or for ruraldevelopment; and (2) the bye-laws of which do not permit admission of any other co-operative society asmember: Provided that this sub-clause shall not apply to the admission, as a member, of a co-operativesociety, which is a State co-operative bank or a central co-operative bank by reason of such banksubscribing to the share capital of the co-operative society out of funds provided by the StateGovernment for the purpose; (o) "prescribed" means prescribed by regulations made under this Act; (p) "regional rural bank" means a regional rural bank established under section 3 of the RegionalRural Banks Act, 1976 (21 of 1976); (q) "rural development" means development of rural areas through any activities conducive tosuch development. Explanation.--For the purposes of this clause,-- (a) activities conducive to development of rural areas include activities relating to productionof goods or provision of services in rural areas and activities for the promotion of cottage andvillage industries, 4[micro-enterprises, small enterprises and medium enterprises, handicrafts,handlooms] and other rural crafts; (b) "rural area" means the area comprised in any village and includes the area comprised inany town, the population of which does not exceed ten thousand or such other figure as theReserve Bank may specify from time to time; (r) "Reserve Bank" means the Reserve Bank of India constituted under section 3 of the ReserveBank of India Act, 1934 (2 of 1934); (s) "scheduled bank" means a bank for the time being included in the Second Schedule to theReserve Bank of India Act, 1934 (2 of 1934); 5* * * * * (u) "State co-operative bank" means the principal co- operative society in a State, the primaryobject of which is the financing of other co-operative societies in the State: Provided that in addition to such principal society in a State, or where there is no such principalsociety in a State, the State Government may declare any one or more co-operative societies carryingon business in that State to be also or to be a State co-operative bank or State co-operative bankswithin the meaning of this definition; (v) "State land development bank" means the co-operative society which is the principal landdevelopment bank (by whatever name called) in a State and which has as its primary object theproviding of long-term finance for agricultural development: Provided that, in addition to such principal land development bank in a State, or where there is nosuch bank in a State, the State Government may declare any co-operative society carrying on businessin that State and authorised by the bye-laws of such co-operative society to provide long-term financefor agricultural development to be also or to be a State land development bank within the meaning ofthis definition; (w) words and expressions used herein and not defined but defined in the Reserve Bank of IndiaAct, 1934 (2 of 1934), shall have the meanings respectively assigned to them in that Act; (x) words and expressions used herein and not defined either in this Act or in the Reserve Bank ofIndia Act, 1934 (2 of 1934), but defined in the Banking Regulation Act, 1949 (10 of 1949), shall havethe meanings respectively assigned to them in the Banking Regulation Act, 1949.

(1) With effect from such date as the Central Government may, by notification in theOfficial Gazette, appoint, there shall be established for the purposes of this Act, a bank to be known as theNational Bank for Agriculture and Rural Development. (2) The Bank shall be a body corporate with the name aforesaid having perpetual succession and acommon seal with power, subject to the provisions of this Act, to acquire, hold and dispose of propertyand to contract, and may by that name sue and be sued. (3) The head office of the National Bank shall be at 1[Mumbai] or at such other place as the CentralGovernment may, by notification, specify. (4) The National Bank may establish offices, branches or agencies at any place in India, and with theprevious approval of the Central Government and in consultation with the Reserve Bank, at any placeoutside India.

(1) The capital of the National Bank shall be one hundred crores of rupees: 1[Provided that the Central Government may, by notification, increase the said capital up to thirtythousand crore rupees: Provided further that the Central Government may, in consultation with the Reserve Bank and bynotification, further increase the said capital to such amount as it may deem necessary from time to time]. 2[(2) The capital of the National Bank which has been subscribed to by the Reserve Bank valued attwenty crore rupees as on the date immediately preceding the commencement of the National Bank forAgriculture and Rural Development (Amendment) Act, 2018 shall, on such commencement, standtransferred to, and vested in, the Central Government: Provided that the National Bank may issue capital to such institutions and persons in such manner asmay be notified by the Central Government: Provided further that the combined shareholding of the Central Government and the Reserve Bankshall not at any time be less than fifty-one per cent. of the total subscribed capital. (3) The Central Government shall give to the Reserve Bank an amount equal to the face value of thesubscribed capital, valued at twenty crores of rupees, referred to in sub-section (2), in cash, for transfer to,and vesting in the Central Government of the capital of the National Bank which has been so subscribedto by the said Bank.]

(1) The general superintendence, direction and management of the affairs andbusiness of the National Bank shall vest in a Board of Directors, which shall exercise all powers and doall acts and things which may be exercised or done by the National Bank. (2) Subject to the provisions of this Act, the Board in discharging its functions, shall act on businessprinciples with due regard to public interest. (3) Subject to the provisions of sub-section (1) and save as otherwise provided in the regulationsmade under this Act, the Managing Director shall also have powers of general superintendence, directionand management of the affairs and business of the National Bank and may also exercise all powers and doall acts and things which may be exercised or done by the National Bank: 1[Provided that during the period of any casual vacancy of the nature referred to in section 11 in theoffice of the Managing Director, the Chairman may also exercise the powers and discharge the functionsof the Managing Director until the person appointed by the Central Government under section 11 to act asManaging Director enters upon his office.] (4) Any whole-time director appointed under sub-section (3) of section 6 shall assist the ManagingDirector in the discharge of his functions under sub-section (3) and perform such duties as the Board mayentrust or delegate to him. (5) In the discharge of his powers and functions under sub-section (3), the Managing Director shallfollow such directions as the Chairman may give. (6) In the discharge of its functions under this Act, the National Bank shall be guided by suchdirections in matters of policy involving public interest as the Central Government, in consultation withthe Reserve Bank, or the Reserve Bank, may give in writing.