Congratulations to all of you on our great organisations foundation day.
As NABARD enters 33rd year of its glorious existence on 12/07/2014, we can look with legitimate pride and satisfaction to our meaningful existence and presence as we contribute through our assigned mandate towards the development of the most important and challenging domain of our country i.e. the Rural sector development.
Foundation days are meant to be celebrated, with enthusiasm and vigour and the smile on the faces of each one of us today is a testimony to our joy and happiness, as we bow our heads to almighty, for giving us a chance to serve and be a part of this great organisation.
Foundation days are also meant to look back and introspect and renew our energies, both internal and external and channelize them to chart out a brighter future and to meet and overcome the emerging challenges.
NABARD has been created with a sole objective of ensuring a vibrant and sustainable rural development in the country by ensuring effective credit deployment and its availability, institutional development and policy interventions. A fact that Ground level Credit (GLC) flow from the formal credit deployment channels has increased from a mere Rs. 5000 crore in 1982-83 to Rs.700000 crore in 2013-14 underlines the role and importance of banking sector and NABARD, as an apex DFI, can look back with satisfaction the important role played by it towards this end. As the number of cultivators grew from 9 crore in 1982-83 to approximately 14 crore by the end of FY 2012-13, in addition the millions of landless rural inhabitants to cater to, the challenge of having an effective outreach to bring them under the ambit of formal credit has also been met with a great degree of success by the Indian banking sector. NABARD, with the help of its innovative tools such as KCC, SHG-Bank linkage program and JLG based intervention has contributed immensely in making it possible.
NABARD has also been able to keep pace with ever changing and increasingly demanding requirements of the development sector. As we look back to our journey path, we can fondly and proudly remember some of the milestones which we created, starting from development of Rural Non-Farm (which we today call as Off Farm) to Vikas Volunteer Vahini (VVV) to SHG-Bank Linkage Program to Rural Infrastructure Development Fund (RIDF) to Joint Liability Groups to Producers Organisations to Effective administrators of Government’s credit linked subsidy schemes to taking Cooperatives and RRBs towards Computer based Environment and to developing an Effective Supervisory System of Rural Financial Institutions, to name a few most important ones.
In the process we also embarked upon and created organisational off-shoots in the form of very cost effective but very efficient DDM offices, training institute of excellence like BIRD, well received subsidiaries like NABCONS, ADFC and NABFIN.
All this and more could be achieved only because of the faith reposed in us by our countrymen , support and guidance provided by GoI& our mother institution RBI, ensured participation by the banking industry, effective governance by our top management and sincere, tireless efforts and commitments put forth by our officers and employees. We are sure that this would continue to be with us in future too. We, specially, look towards RBI, with certain legitimate professional and emotional rights, to remain our friend, philosopher and guide and help us build a stronger, vibrant and sustainable NABARD.
Friends, our stakeholders and the country is looking towards us with greater expectations, as is evident from the GoIs current budget document presented in the Lok Sabha yesterday. As we commit ourselves towards meeting these expectations, AINBOA would like to bring forth a few points of concern.
As NABARD’s balance sheet grew from a scratch to upwards of Rs.2.0 lakh crore our capital base grew from Rs.100 crore merely to Rs. 4000 crore. It requires immediate augmentation to atleast Rs 15000 crore.
Based on current projections we estimate our balance sheet in the vicinity of Rs. 3.25 lakh crore by 2018-19 and with constantly decreasing margins and RoR on assets our bottom lines can be adversely impacted. As our Interest Income as % to Average Working Fund (AWF) remains at 6.25 to 6.5 during the last 5 financial years, the Interest Expenditure as % to AWF has increased from 3 to 4 in the same period leading to a reduction of available margin from 3.5 to 2.5 or so. One major reason contributing to increase in Interest expenditure and reduced margin is the fact that our dependence on costlier market borrowings has almost doubled in the last 5-6 years (From Rs. 27779 crore in 2008-09 to Rs 50377 crore in 2012-13) and as such GoI and RBI have to look into the avenues to provide NABARD with cheaper funds as our mandate doesn’t provides us to take only commercially viable decisions. We are sure that our stake holders shall always keep in mind that NABARD has to cater to the opportunity starved weaker segment of the society who require user friendly credit and services.
We take pride in telling that our Per Employee Business grew from Rs.24 crore to Rs 49 crore and the per employee profit from Rs.0.40 crore to Rs.0.60 crore during the period 2008-09 to 2012-13. NABARD’s Establishment Cost as % to Income remains steady at 9 and our Salary & Allowances as % to Income remains steadfast at 65 during the same period and these are comparable to the best in the Industry and outside. These are reflective of our officers and employees efficiency parameters and we are sure that our top management and stake holders are committed to keep the motivational levels of their human capital at a high pedestal by providing them the best in the industry both in financial as also in non-financial terms.
The average age profile of our officers and employees is not commensurate to the young age profile of the country as also the Young NABARD of 32 years and as such it warrants infusion of young blood at the entry levels so as to ensure a young, vibrant and technology savvy work force in years to come.
As part of foundation day celeberations NABARD is organising a high level Seminar on Rural Credit issues at New Delhi. We are happy to note that Hon’ble Cabinet Minister of Finance, GoI and Hon’ble Minister of State for Finance, GoI, besides the other highly placed dignitaries will be addressing this seminar. Though, as AINBOA representatives, we may not be there to have a first- hand account of deliberations, we are sure that speakers and decision makers will dwell upon and address some of the important macro level issues raised above by us at the seminar.
We also take this opportunity to thank GoI and RBI for reposing their faith in the capabilities of NABARD which is so highly reflective in the budget speech and allocations.
Once again, we, on behalf of AINBOA, congratulate each one of you on our Foundation day and we wish many such happy returns of the day and call upon each one of you to rededicate our sincere services to this great organisation of ours…
With Fraternal Greetings and best wishes on NABARD Day
(Dr. D. S. Chauhan) (K. Malligaraj)
General Secretary President11/07/2014