But the institution is rife with scepticism regarding the rationale behind the selection.

What is even more crucial is that this discontent, which looms precariously close to industrial unrest within the organisation, foreshadows the agitation that is likely to rock the entire financial sector where large state-run banks remain headless for months and financial institution chiefs are kept on tenterhooks about possible extensions till the very evening before their retirement. This is happening at a time when only quick decision-making can ensure the survival of even public sector institutions.

As a result of this frustration, strong aspersions are being cast on the selection process at the appointments committee, thefinal clearance at the prime minister's office and even on the rationale behind the recommendations that come from the Reserve Bank of India. Reports about the recommendation for the Nabard chairman have sent shock waves throughout the organisation.

A couple of questions plague the Nabard workforce: One, why an apex institution has been without an officially designated head for so long, since this holds up decision making? Two: (this question will remain even if Vaidya does not accept the appointment), on what grounds can the senior-most official of the largest public sector bank, who was reportedly not considered for the SBI chairmanship because he did not have exposure to international banking, be considered for Nabard chairmanship? Going by the same logic, he does not have exposure to the regulatory aspects of rural banking, rural infrastructure development and micro-finance either. Did this skewed selection not undermine the stature of a specialised institution and reveal the discriminatory attitudeagainst Nabard vis-a-vis SBI? "The whole matter smacks of knee-jerk decisions, rather than any clear-cut policies," point out sources at Nabard.

Insiders refer to PR Nayak's tenure, when Nayak, earlier with the Karnataka government and then as deputy governor with the RBI overseeing the RPCD in the central bank, had to spend the major part of his tenure at Nabard grappling and trying to get a feel of his new assignment. And that too in spite of the common culture between the RBI and Nabard. As against that, P Kotaiah, the last chairman who served the organisation in various capacities, had a very successful innings.

What Nabard employees are pointing out is this: While outsiders should be inducted when the situation merits it, in this case there is no reason to induct a commercial banker because there are enough options within the organisation itself. There are some issues worth considering: One option could be to give PVA Rama Rao, the current managing director, an extension as chairman as happened inthe case of Ramakrishnayya or PR Nayak, earlier chairmen of Nabard. In this case, that would mean YC Nanda, the senior-most of the executive directors -- he has been ED for two years and still has five more years of service -- would move up to the MD's rung.

In case that does not happen, the other option would be to promote YC Nanda as MD for a month and then to the position of chairman, while SD Sharma, who is the ED next in seniority, moves up to the MD's position then, making way for two other chief general managers to move up to the ED rank. Inducting a chairman from outside will therefore affect promotions all down the hierarchy. It is noteworthy that V Janakiraman, the SBI deputy MD who is its chairman designate, is also going to be promoted as MD for a month before he is slated to take up chairmanship. The question is if this can happen at SBI, why can't it happen at Nabard?

If status and board experience is an issue, the DMD rank at SBI is on par with the ED's rank at Nabard. And if thesenior-most of SBI DMDs sit on the board, Nabard EDs are also permanent special invitees on the board, in addition to which they have the necessary relevant experience of being on the board of co-operatives.

Formulating a promotion policy for the senior-most levels in the financial sector is doubtless becoming an increasingly formidable task, what with seniority no longer being the only criterion -- exposure, merit, suitability are now posing various permutations and combinations that will throw up challenges in selection. But regulators must get down to some concrete policy-making if massive industrial unrest is to be avoided. This is hardly a problem that can be wished away.