Subsidiaries of RBI - Short Notes

Subsidiaries of RBI at a Glance

Deposit Insurance and Credit Guarantee Corporation (DICGC):

On 15th July, 1978, The Deposit Insurance Corporation was merged with the Credit Guarantee Corporation of India Ltd. and was named the Deposit Insurance and Credit Guarantee Corporation. 

The Deposit Insurance and Credit Guarantee Corporation (DICGC) has to major functions – 

• Credit Guarantee functions, such as peasant, village, artisans, especially among small borrowers, provide guaranteed support to the credit lenders for small loan borrowers. Especially SSI units are also involved in the weak and neglected classes of society. 
• Insurance cover for deposit insurance functions such as bank's small depositors.

National Housing Bank (NHB) :

In December 1987 National Housing Bank were established. On 9th July, 1988, the NHB has been established as a statutory corporation. The NHB has following functions – 

• Preparing a plan for accumulating wealth and expansion of credit for the home, especially to meet the needs of economically weaker sections of society. 
• Housing Finance Institution and Scheduled Banks Rehabilitation Facility. 
• Coordinating to work with all organizations associated with housing. 
• Guarantee and written facility in Housing Finance Institutions. 
• Promote and develop specialized housing finance organizations for credit expansion for promotion and housing. 
• Provide guidelines for housing finance companies for their healthy growth.

Agriculture Credit Funds:

• Reserve Bank of India (RBI) established the National Agriculture Credit (Long- Term Operations) Fund in February 1956, to enable the Bank to provide long term loans and advances to land development banks and the state governments’ for participating in the share capital of Co-operative banks and credit societies. Later, it was named after the National Rural Credit Fund, in addition to the agriculture of others in rural areas, its funding was arranged. 
• Another fund of the Reserve Bank of India, which is known as the National Agricultural Fund, was formed by the bank in June, 1956 due to the drought, famine, etc. due to bank's intervention by the State Cooperative Banks (SCB) to provide medium term loans. A position for the bank to repay their short-term debt. 
• The National Agricultural Credit Fund was set up by the Bank for the purpose of grants to the Co-operative Credit Agency through State Governments to enable them to stop their ineffective arrears due to severe famine.

Kisan Credit Card (KCC) Scheme:

• In August 1998, the Kisan Credit Card scheme introduced for short term loans for seasonal agricultural operations, has made significant progress in outreach and making available timely and cost effective credit to the agricultural sector. The Co-operative banking sector has made the most significant progress in expanding the KCC’s outreach. 
• NABARD further enhances the scope of the scheme to provide term loan for agriculture and related activities. That is – 
• KCC only issues appropriate guidelines for their branches for crop loans. 
• Identify farmers with verbal lexicon and identify possible efforts to provide loan and renewal of KCC. 
• In order to enable them to get benefits from the scheme, a deadline was introduced to encourage the lender to pay their arrears.