Not all stakeholders are happy with Nabard Amendment Bill

Passing of the Nabard (Amendment Bill) 2017 and transfer of the Reserve Bank of India’s token stake in the National Bank for Agriculture and Rural Development to the Centre has evoked mixed reactions.

Union Minister of State for Finance Santosh Kumar Gangwar had tabled the Bill in the Lok Sabha, saying Nabard will have a major role in realising the Centre’s professed objective of doubling farmers’ income by 2022.

The Bill also seeks to increase Nabard’s authorised capital to ₹30,000 crore from ₹5,000 crore now since the present level is not sufficient to fulfil its future requirements.

Currently, the RBI holds 0.4 per cent of Nabard’s paid-up capital, while the rest is held by the Centre. This causes conflict of interest in the RBI’s role as the banking regulator and a shareholder in Nabard, it was argued.

The All India Nabard Employees Association (AINBEA) is strongly opposed to the complete transfer of the RBI’s shares to the Union government, said Jose Abraham, President, AINBEA. The relationship between the central bank and the development institution will help the cause of agriculture and rural development at a critical juncture when the country is faced with a serious agrarian crisis, he said.

AINBEA has demanded that the organic relationship between Nabard and the RBI be maintained by appointing a Deputy Governor as Chairman of Nabard as it was in vogue during its initial days.

Meanwhile, at least 31 MPs participated in the discussion over the Bill, which lasted for about four hours in the Lok Sabha on August 3.

Gajanan Kirtikar of Shiv Sena said that as an offspring of the RBI, Nabard had shared a similar work culture, ethos and development orientation. He feared that snapping the link would be to the disadvantage of both.

While the RBI would lose an important supervisory and development institution in rural credit activity, Nabard stands to forfeit the sagacity and guidance that it sourced generously from the RBI, Kirtikar said.

Disproportionate distribution of agri-credit has all along been to the disadvantage of marginal and poor farmers. All these have given rise to an unprecedented agrarian crisis in the country leading to farmer suicides, he added.

Jitendra Choudhury of the CPI(M) from Tripura East said the intention with which Nabard was created has not been fulfilled. Small and marginal farmers in rural areas have not enjoyed the expected benefits from it.