Nabard chief’s appointment challenged in High Court

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Mumbai, Aug 24 : In a significant development, regulator-cum-refinance agency National Bank for Agriculture and Rural Development (Nabard) chairman Umesh Chandra Sarangi’s appointment has been challenged by a Nabard official in the Uttarakhand high court. The petitioner has argued that Sarangi’s appointment is illegal and should be cancelled forthwith.

Sarangi, who is a senior IAS officer of the Maharashtra cadre, took over as the Nabard chairman on December 3 last year for a three-year term. The petition filed by a middle ranking Nabard officer has prayed that a new chairman be appointed as Sarangi’s selection took place after sidelining the names of those empanelled by the selection committee. Sarangi’s name was reportedly included in the eleventh hour and was later accepted by the Centre.

The petitioner has made the central government, Nabard and Sarangi as defendants. The Uttarakhand high court has set the hearing in the matter for September.

Sarangi confirmed this development and told FE: “The petitioner has challenged my appointment as Nabard chairman. The Centre and I have been made parties to the petition and we are in the midst of preparation of our reply. The case is slated for hearing in September.”

Nabard sources said that this is for the first time since its inception in 1983 that an appointment of chairman has been challenged in the court of law. Sources did not rule out the possibility of the involvement of certain vested interests within the organisation behind this move.

Sarangi’s appointment has been challenged at a time when Nabard is currently involved in the implementation of the Centre's ambitious debt-waiver programme for small and marginal farmers across the country. As reported by FE, Nabard has initiated several measures to provide liquidity to co-operative banks and regional rural banks (RRBs) that are short of cash following the farm loan relief package.

Of the Rs 71,000 crore package, these banks together settled outstanding debt amounting to over Rs 35,400 crore. Since they depend on recovery of dues to finance fresh lending, the banks are complaining of cash constraints in disbursing fresh loans.