SUMMARY

CHAPTER 7
APEX BODIES
Apex bodies are institutions set up to promote a particular industry or
initiative and is one that is of priority. They are called apex bodies as they
have authority adhere directives have to be adhered to by banks and other
bodies. The 3 apex bodies in India are:
• National Bank for Agricultural and Rural Development (NABARD)
• Export Import Bank of India (EXIM)
• National Housing Bank (NHB)

National Bank for Agriculture and Rural Development (NABARD)

NABARD was established by an act of Parliament on 12th July 1982 to

implement the National Bank for Agriculture and Rural Development Act
1981. It replaced the Agricultural Credit Department (ACD) and Rural
Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural
Refinance and Development Corporation (ARDC).

NABARD is a fully owned subsidiary of RBI: It is responsible for

regulating and supervising the functions of co-operative banks and RRBs. It
takes various initiatives in association with the Government of India and
RBI to improve the health of Co-operative banks and regional rural banks.

NABARD's refinance is available to State Co-operative Agriculture and

Rural Development Banks (SCARDBs), State Co-operative Banks (SCBs),
Regional Rural Banks (RRBs), Commercial Banks (CBs) and other financial
institutions approved by RBI. While the ultimate beneficiaries of investment
credit can be individuals, partnership concerns, companies, State-owned
corporations or co-operative societies, production credit is generally given to
individuals

Role of NABARD

1. serves as an apex financing agency for the institutions providing

investment and production credit for promoting the various
developmental activities in rural areas
2. takes measures towards institution building for improving absorptive
capacity of the credit delivery system, including monitoring,
formulation of rehabilitation schemes, restructuring of credit
institutions, training of personnel, etc.
3. co-ordinates the rural financing activities of all institutions engaged in
developmental work at the field level and maintains liaison with
 Government of India, State Governments, Reserve Bank of India
(RBI) and other national level institutions concerned with policy
formulation
4. undertakes monitoring and evaluation of projects refinanced by it.

Functions of NABARD

• Credit functions
• Development and Promotional Functions
• Supervisory Functions
• Supervisory Functions
• Institutional and Capacity Banking

Export-Import Bank (EXIM BANK)

IT was established in 1982. It is a public sector financial institution and is
the principle financial institution for financing, facilitating and promoting I
India’s foreign trade. Exim Bank is managed by a Board of Directors,
which has representatives from the Government, Reserve Bank of
India, Export Credit Guarantee Corporation (ECGC) of India, a
financial institution, public sector banks, and the business community.

The Bank's functions are segmented into several operating groups

including:

Corporate Banking Group which handles a variety of financing programmes for

Export Oriented Units (EOUs), Importers, and overseas investment by Indian
companies.

Project Finance / Trade Finance Group handles the entire range of export credit
services such as supplier's credit, pre-shipment credit, buyer's credit, finance for
export of projects & consultancy services, guarantees, forfeiting etc.

Lines of Credit Group Lines of Credit (LOC) is a financing mechanism that

provides a safe mode of non-recourse financing option to Indian exporters,
especially to SMEs, and serves as an effective market entry tool.

Agri Business Group, to spearhead the initiative to promote and support Agri-
exports. The Group handles projects and export transactions in the agricultural
sector for financing.

Small and Medium Enterprises Group to the specific financing requirements of

export oriented SMEs. The group handles credit proposals from SMEs under
various lending programmes of the Bank.
Export Services Group offers variety of advisory and value-added information
services aimed at investment promotion

Fee based Export Marketing Services Bank offers assistance to Indian

companies, to enable them establish their products in overseas markets.

Besides these, the Support Services groups, which include: Research & Planning,
Corporate Finance, Loan Recovery, Internal Audit, Management Information
Services, Information Technology, Legal, Human Resources Management and
Corporate Affairs.

National Housing Bank

Established on 9th July 1988 the National Housing Bank Act, 1987 to
function as a principal agency to promote Housing Finance Institutions and
to provide financial and other support to such institutions.

The National Housing Bank Act empowers National Housing Bank or

NHB to:

o Direct and regulate the functioning of housing finance institutions for fair
practices
o Provide loans, advances or any other financial assistance to Banks and housing
finance institutions for slum improvement
o Supervise mobilization of resources and extension of credit for housing

NHB has the main objective of promoting a network of highly efficient and
dedicated housing finance institutions to cater to the finance needs from
various regions and income groups. In order to upgrade the housing stock in
the country, National Housing Bank undertakes augmentation of supply of
buildable land and building materials.

The main businesses and finance products of NHB include:

o Raising Resources by issuing bonds or debentures, borrowing from reserve bank

of India and other financial institutions
o NHB launched "Swarna Jayanti Rural Housing Finance Scheme" to make
housing loans accessible for housing development works in rural India on the
golden jubilee of India's Independence
o Mortgage Backed Securitisation and development of secondary mortgage
market in India
o Mortgage Credit Guarantee scheme for protection of lenders against any
default.
o Providing Refinance to Housing Finance Institutions
o National Housing Bank also engages in Project Finance for large-scale housing
projects
o The finance products by NHB include Equity Support and Reverse Mortgage
loans along with the above listed services