GUWAHATI, Feb 4 � At a time when the Centre is laying thrust on revival of short-term rural cooperative credit � and for which the State Government had signed an MoU with the National Bank for Agriculture and Rural Development (NABARD) in 2008 � all may not be well in the State�s cooperative sector.
In view of the increasing realization of the destructive effects of politicization, intrusive state patronage, and the consequent harm to the role of cooperatives in general and of credit cooperatives in particular, several expert committees � the latest being the Vaidyanathan Committee � recommended a number of measures for revamping and streamlining the regulation and supervision mechanism, introducing prudential norms and bringing cooperative banks fully under the ambit of the Banking Regulation Act-1949.
The Assam Cooperative Apex bank, too, was a party to the agreement signed among the State Government, Government of India and NAARD on May 26, 2008. As per the MoU, the Apex Bank was to be transformed into a �democratic, self-reliant, autonomous and professionally managed institution.�
Sources in the cooperative sector, however, are unhappy with the bank�s functioning, as they feel that little has been done to check politicization or political control in the affairs of the bank. As per the MoU, the State Government had agreed to represent only one nominee in the bank management but that has not materialized in the true spirit, with political functionaries still dominating the bank�s affairs.
In the latest instance, the staff association of the bank has taken exception to the selection of the managing director (MD), as the candidate was found to be falling short of a basic criterion laid down for selection.
One of the qualifications required the MD to have at least eight years of service at middle/senior level in banking but the selected person had only five years experience and as such did not satisfy the laid-down norm.
It is to be noted that only a professional banker with the necessary qualifications is to be appointed as MD with prior consent of NABARD � something mandated by the MoU and clearly stated in by-law 37 of the bank.
It has also been pointed out that since the selected MD was also a project manager of a private firm entrusted with the Apex Bank�s core banking migration till last year, there could be a conflict of interest once he was appointed. Though he has now resigned from the firm, the agreement between the bank and the firm is still in subsistence.