Move to reposition Nabard as ‘commercial entity' irks staff

The All-India Nabard Employees' Association (AINEA) has described as retrograde the move to reposition the apex-level bank as a ‘commercial entity'.

The association has twice moved the management against the move, Mr Jose T. Abraham, Vice-President, AINEA, told Business Line here.

ROLE STRIPPER

The repositioning, as proposed by the Boston Consulting Group (BCG), is aimed at stripping Nabard of its ‘development finance' role, the association said.

Mr Tapas Sen, Member of Parliament, has written to the Finance Minister requesting his intervention in the matter.

The repositioning/restructuring design must be subjected to the review and scrutiny of appropriate forum, including Parliament, which gave birth to Nabard through an Act, he said.

BCG has reportedly suggested turning Nabard into a commercial entity with more focus on direct lending to big private corporate entities.

This would obfuscate its role as the only development finance institution dedicated to the services of landless, small and marginal farmers of the country.

Any dilution of its objective would be prejudicial to the cause of the rural masses, especially during these ‘uncertain times' for both agriculture and rural India.

Mr Sen also flagged the resource crunch at Nabard after the Reserve Bank stopped contributing to its national rural credit (long-term operations) and national rural credit (stabilisation) funds from 1993.

LONG-TERM FUNDS

These funds are critical in sustaining long-term investment credit to agriculture, which has lacked adequate long-term institutional credit and investment, Mr Sen said.

No less crucial is the need to restore the general line of credit, which meets the short-term credit needs of the farmers.

vinson@thehindu.co.in