The state-run National Bank for Agriculture and Rural Development (Nabard) will engage a leading professional consultancy agency to carry out its repositioning exercise. The repositioning or restructuring exercise will cover business process re-engineering, product development, resource mobilisation, HRD, organisational structure and IT.
Besides, the repositioning exercise envisages Nabard’s transition from development finance institution (DFI) to development facilitating and financing institution (DFFI). It also includes setting up of direct financing subsidiary, develop infrastructure delivery as independent business, link various development initiatives to generate business in a credit plus approach, segregate Nabard Consultancy Services (Nabcons) as an indepedent subsidiary and establish an independent micro-finance and financial inclusion unit.
Nabard official told FE “Nabard will invite expression of interest to engage a professional agency to work out implementation plan to reposition the bank. It has already set up a sub-committee chaired by RBI deputy governor Usha Thorat to assist expeditious restructuring or repositioning exercise. The other members include Amitabh Veerma, joint secretary in the finance ministry and Nabard directors Ram Tarneja, Lakshmi Chand.”
On completion of its 25th year, Nabard undertook a self-assessment of its performance vis-à-vis the mandate and the emerging requirements of its operating environment. A view emerged that Nabard had pioneered many initiatives like the (self help group) SHG-Bank Linkage Programme, Natural Resource Management, Kisan Credit Card. "It was also felt that growth of the rural economy comprising agriculture and non-land based SMEs and businesses would continue to be critical, as over 60% of the workforce depends on it.
In order to enhance the impact of its functioning, especially in distressed and resource-poor regions, Nabard should not only re-design and re-engineer its product range and work processes for the current set of operations using appropriate technology platform but also foray into new business areas, offer new products using different delivery mechanisms, and forge new partnerships with institutions in the public, private and voluntary sectors enabling them to leverage funds for development initiatives.
The financial sector reforms, especially those taking place in the cooperative sector, would also require Nabard to factor business risks in its operations more effectively. Such initiatives would also require organisational restructuring, capacity building of its human resources as well as additional financial resources. Nabard board has already approved a comprehensive strategy to reposition or restructure the bank," the official noted.