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Tags: All-India licence, cooperative bank, eknath thakur, Reserve Bank of India, saraswat bank
World is there for us to conquer : Chairman, Saraswat Bank
Posted on 13 June 2011 by Akshay Kumar

The Cooperative giant in Urban Cooperative Banks, Saraswat Bank is upbeat on getting green signal from RBI for going ahead with all India operation. Talking to Indiacooperative.com, Mr Eknath Thakur, Chairman and the man behind the miracle said that we have mega expansion plans in the wake of RBIS permission. Reserve Bank of India has given licence to Saraswat Bank for all India operation. While other UCBs, barring a few are struggling to find feet, Saraswat bank miraculous growth is testimony of power of idea of cooperative movement. Mr Eknath Thaur, Chairman of the Bank told Indian Cooperative.com that in the beginning we would concentrate in Western and Southern India but would soon spread to other parts of the country.World is there now for us to conquer, said a ecstatic Thakur to Indian Cooperative.Com. Next five year would prove turning point for the bank as we aim at doubling the total number of Banks branches to 500 from the present number of 226, said the Chairman. Many people are to be hired as the existing personnel would not be able to handle all the pressure.

We have a work force of 3338 which, by the end of 2016 would become more than 9000. This year alone 1250 persons are to be recruited, said Mr Thakur. Operating currently in six states Maharashtra, Goa, Karnataka, Gujarat, Madhya Pradesh and Delhi-NCR, the Bank proposes to open branches in more cities across India. The bank has plans to open 100 new branches this financial year, including 77 in the six states where it is now present. The bank has raised its business volume target to Rs. 75,000 crore in 2016 from Rs.

28,000 crore currently. Saraswat Cooperative Bank recently became the largest cooperative bank in the country after achieving business mix of Rs. 28,000 crore surpassing the erstwhile largest cooperative bank, Maharashtra State Co-operative Bank with a business mix of Rs. 27,800 crore. Even otherwise, MSCB is caught in never ending political battle of Congress and NCP. Earlier, Saraswat Bank tied up with Anil Ambanis ADAG to sell Core Banking Solutions Swift Core which has been developed by Saraswat Infotech Limited, a subsidiary of Saraswat Bank. It should not be forgotten that majority of urban cooperative banks numbering 1750 are getting reprimanded by RBI from time to time on flouting this norm or that. And the story of Madhavpura mercantile bank created such a fear in the minds of depositors that the very survival of Urban Cooperative Banks became shaky. Saraswat Banks growth story has suddenly restored confidence that all is not lost yet. Comments (2)

Tags: ajit, Congress, MSCB, nabard, Pawar

MSCB:Congress scores over NCP

Posted on 01 June 2011 by Dipak Kumar From Virag Pachpore EVEN as the Maharashtra State Cooperative Bank (MSCB), the apex bank of progressive state of Maharashtra was celebrating its centenary year, the Reserve Bank of India (RBI) on May 4, dissolved its 52-member board of directors and appointed administrators. The action was initiated as the NABARD indicted the MSCB into financial irregularities. The MSCB was dominated for years together by the Nationalist Congress Party (NCP). It may be noted that the Deputy Chief Minister Ajit Pawar has virtually established his single handed rule over the MSCB in last some years. As such this action by the RBI has given rise to speculations in cooperative and political sectors in Maharashtra. With this swift and secret move the Congress Party has scored over the Nationalist Congress Party(NCP) in Maharashtra. The RBI decision, based on NABARD report indicting the MSCB in large-scale irregularities, has come as a shot in the arms of the Congress Party in the state. With this the Congress, under the leadership of Chief Minister Prithviraj Chavan, can hope to come out of the domination of the NCP in the state politics. The haste and secrecy with which the RBI acted on the NABARD report clearly indicated a political design underneath to unsettle the NCP in state politics. Meanwhile, BJP MLA Devendra Fadanvis has alleged in the State Vidhan Sabha a few days ago that though the MSCB board of directors altered its balance sheet to show a profit of Rs 2.87 crore, actually it suffered a loss of Rs 775 crore. The MSCB has thrown to winds the directives of NABARD and RBI bringing the bank at the brink of bankruptcy. 75 per cent of the loans given to the cooperative sugar factories and spinning mills in the state was not repaid that too when most of these factories are owned and dominated by Congress and NCP leadership. The NABARD conducted an inquiry into the negative performance of the MSCB for the year 2008-09 and submitted that report in 2009-10. For the last one year the RBI did not take any action against the MSCB. But suddenly it woke up to the irregularities committed by the bank and dissolved the board of directors in the current financial year. This belated action points to the struggle of political one-up-man-ship going on in the ruling Congress-NCP coalition in Maharashtra. The MSCB, which came into existence in 1961 when the Bombay State Co-op Bank and Vidarbha Co-op Bank merged with the formation of the state of Maharashtra. As such it has branches only in Nagpur and Mumbai. MSCB is the apex bank and gets funds from NABARD for agriculture refinancing. NABARD loans are routed through the apex bank to district central co-op banks, and credit societies in a three-tier structure. Moreover, the MSC is the source of latest information on the state of agriculture as it updates the report every year.

The MSCB has certain restrictions on refinancing. It can provide loans for agricultural practices but not to sustain the sugar factories and spinning mills which are run on cooperative basis. In Maharashtra most of the sugar factories and spinning mills are owned by Congress and NCP stalwarts. The MSCB, following the directions of the state government, financed these factories and mills extending a loan of Rs 17,500 crore in last two years. Interestingly, the same people dominate the Government administration, MSCB and sugar factories and spinning mills. So, they play a triple role in managing all these spheres of power. Since 1999 to 2009 the NCP dominated the State politics for a number of reasons. During 1999-2004, while the UPA I dispensation at the Centre which had its own problems of survival, the Congress-NCP coalition in the State enjoyed a wafer thin majority. The 2004-09 period was also dominated by political rivalries in the state. The NCP, under the leadership of Sharad pawar and his nephew Ajit Dada Pawar, consolidated their position in the State. During this period the NCP virtually controlled the MSCB with Sharad Pawar having his final say over the matters of appointment of Chairman, and board of directors. The NCP has consolidated its base to the rural sector in at least 10 districts of Maharashtra including Kolhapur, Sangli, Sholapur, Ahmednagar, Satara, Pune, Nasik, Jalgaon, Dhulia and Nandurbar. The party has developed a strong army of grass-root workers in these districts making it difficult for the Congress to break into its bastion. But as the position of the Congress party improved at the Centre and at the State level with Chief Minister Prithviraj Chavan taking over, the Congress did not spare a single chance to show NCP its place in the politics. In Kolhapur the one time staunch Pawar supporter Sadashiv Mandlik was made to contest the Lok Sabha election as independent against the NCP candidate, a case was registered against another Pawar loyalist who is chairman of Singhgarh Institute in Pune. Not only this, Deputy Chief Minister Ajit Pawar and his wife Sunetra Pawar were indicted in encroachment case in Pune river bed, and strictures against Pawar regarding the Lavasa project near Pune are too well known. Political observers feel that this is being done to facilitate the merger of the NCP into the Congress. There have been attempts earlier also but the NCP in the State was against the merger. They have, over the years, developed a strong base in the state. The NCP has 1800 ZP members, 3500 Panchayat members, nearly 3000 members in urban bodies plus 3000 office bearers of various committees of the party and the government boards, corporations etc. It is most unlikely that the NCP would give up this political clout they wield in the State so easily. So the Congress resorted to arm twisting tactics through the RBI in dissolving the NCP dominated MSCB board. Meanwhile, Union Agriculture Minister and NCP Supremo Sharad Pawar held the State Government responsible for the RBI action on the MSCB. Pawar said that the Government did not consult the board before initiating this action. He claimed that the apex bank advanced loans to sugar factories at the recommendations of the state government as such it was the responsibility of the government to find a way out to tide

over the outstanding. Though the government had promised financial help to MSCB to tide over the crisis, it did not extend the same in time to avoid the RBI action, Pawar alleged. Denying that there was corruption in the bank, Pawar said that there were certain irregularities which could have been rectified after discussion. There was no need for dissolving the board of directors and appoint administrators on the bank, he said. The MSCB Chairman, Manikrao Patil, a staunch NCP leader also echoed Pawars views. Political observers feel that the RBI decision came as a personal setback to Sharad Pawar and his nephew Ajit Pawar, who was virtually controlling the bank for last 15 years. Courtsey:Organizer Comments (0)

Tags: ajit pawar, chavan, Congress, Mahaeashtra State Cooperative Bank, NCP, sharad pawar
MSCB: Truce better than Fighting
Posted on 26 May 2011 by Dipak Kumar Political maturity has at last begun to bring the two allies-NCP and Congress close again,After the in initial fire work and acrimonious exchanges, saner mind is prevailing once again. NCP chief Sharad Pawar said in N Delhi that the row over the issue of the Maharashtra State Cooperative Bank (MSCB) will not have any impact on the ties between his party and the Congress in the state. The Union Agriculture minister also indicated that his party and the Congress would contest the local body elections scheduled by 2011 end separately. The Reserve Bank of India has been requested by the state government to consider allowing the bank to continue its business as its net worth for the fiscal last ended figured to a positive amount of Rs 238.14 crore. Earlier, Prithavi Raj Chavan ,the Chief Minster has told media that the dissolution of Board of MSCB was not political. It was not aimed at weakening the grip of NCP on the

farmers community who are backing NCP for the benefits they got through cooperative banks. A truce is inevitable given the fact that Shiv Sena, BJP and now Athawale have joined hands to take on Congress-NCP combine. The tone and tenor of leaders of each parties Congress as well as NCP has softened over the weeks. Meanwhile, there is report that NABARD may refinancing the MSCB. The state government has made a strong pitch with RBI for this purpose. Meanwhile, the political heat over ot MSCB between the ruling allies Congress and NCP is easing slowly with each realizing the futility of this showdown. The Reserve Bank of India has been requested by the state government to consider allowing the bank to continue its business as its net worth for the fiscal last ended figured to a positive amount of Rs 238.14 crore. Comments (0)

Tags: chavan, Congress, cooperative, maharashtra, MSCB, mumbai, NCP, Pawar

MSCB: Row between NCP and Cong may ease
Posted on 19 May 2011 by Vimal Kumar Twelve days after the battle-lines were drawn between the Congress and its ally, the Nationalist Congress Party (NCP) in the state over the dissolution of the board of directors of the Maharashtra State Cooperative Bank (MSCB), the first signs of a diffusion in tension emerged. Chief minister Prithviraj Chavan called for a meeting of the state cabinet of ministers on May 20. Some NCP ministers had earlier accused the Congress of targeting the party to score political points. The NCP is considered to have control over the banks operations. Deputy chief minister Ajit Pawar has been on its directorial board for a decade-and-a-half. On May 7, the Reserve Bank of India (RBI) asked the state government to dissolve the board, in view of alleged discrepancies in the functioning, and appoint administrators in their place. Pawar had accused the Congress leadership at the Centre of plotting the move.

The state deputy chief minister has skipped government functions presided over by Chavan ever since the controversy erupted. The two leaders will finally meet in Delhi on May 19, as part of an official state delegation, to the finance ministry for approval to the budgeted plan size for 2011-12. Congress party is trying to get a hand on the NCP bank so they removed all NCP men now they have put there men in place. Comments (0)

Tags: ajit pawar, Congress, MSCB, mumbai, nabard, NCP

MSCB: Skelatons are out of cupboard
Posted on 13 May 2011 by Ajay Jha Next phase of war between NCP and Congress has begun with leaders of each party not mincing words against each other. On the occasion of foundation day celebration of NCP Ajit Pawar openly named congress leaders who have benefitted from MSCB. Two cotton mills owned by Amrish Patel and P.K. Anna Patil owed the bank Rs. 380 crore and they were among the highest defaulters, Mr. Pawar pointed out. Comparing NCP with Congress he said that Congress sold sugar mills for a song while those sold by NCP are doing fine. Mr. Pawar stated that the government had sold off sick sugar cooperative factories at very low rates Rs. 3.36 crore to Rs. 12 crore and in some cases the full amount was not even recovered from the buyers. One of the buyers was a former Congress Chief Minister. On the other hand, the MSC Bank had sold sugar factories for much higher rates and in some cases they were being run very successfully. Meanwhile, Nabard reports which are trifling in paints a very bleak picture of MSCB.The report says that MSCB is unlicenced as it is unable to maintain the 4% CRAR (capital to risk weighted asset ratio) as prescribed by the RBI. The bank should have recorded a loss of Rs1,014 lakh in 2008-09, instead of a profit of Rs1,778.2 lakh had it truthfully made a requisite provision as per the IRAC (income recognition, asset classification) norms.

MSCB had not declared a dividend during 2008-09 and hence it was wrong for the bank to claim Rs300 lakh towards the centenary year celebrations of the cooperative movement in 2010. The Nabard report criticises the bank for camouflaging the NPA position by violating laid down norms and not reflecting a true picture of its financial position as on March 31, 2010. An amount of Rs66,390.50 lakh pertaining to non-performing assets (NPA) and Rs8,035.91 lakh pertaining to overdue interest receivable was removed from the balance sheet, thereby camouflaging the NPA position, the report says. Ajit Pawar on his part says that Head of MSCB was chosen after much exercise and is an engineer by profession. In the coming days much fire work can be expected between the two ruling allies as ghost of MSCB refuses to disappear. Comments (0)

Tags: ajit pawar, cooperative, MSCB Board, prithvi Raj Chavan, sharad pawar
MSCB :Chavan denies politics
Posted on 10 May 2011 by Akshay Kumar Maharashtra Chief Minister Prithviraj Chavan on Tuesday asserted that there was no political reason for the dissolution of the board of Maharashtra State Cooperative Bank. The decision to dissolve the board of the bank was taken by the Reserve Bank. Our interest is that the bank should not go into liquidation, he said. The board of MSCB controlled by Sharad Pawars NCP was recently dissolved by the RBI based on a report prepared by NABARD, which pointed out various irregularities in the bank. Meanwhile, referring to restarting air connectivity between Mumbai and Kolhapur, and Solapur, he said one private airline company has shown interest in resuming air services to both the cities, but there was problem of congestion at the Mumbai airport, which needs to be attended first. Courtsey:PTI Comments (0)

Tags: DISTRICT COOPERATIVE BANK, MSCB, nabard, PUNE COOPERATIVE BANK

MSCB:Was NABARD Report leaked?
Posted on 09 May 2011 by Vimal Kumar The rot in the Maharashtra State Cooperative bank is deeper than it looked. The confidential NABARD report submitted to state government for sacking the Board of MSCB was leaked leading to cash withdrawal by some banks controlled by NCP. Such withdrawal indeed calls for investigations as it would seem that anybody who is powerful can have his way with the government confidential documents. Rushed withdrawal also leads to scramble among depositors leading to fund crisis which is easily avoidable. MSCB is comfortable so far as fund situation is concerned. It has a huge deposit of Rs 27,000 crores. The newly appointed administrator is convincing people repeatedly not to get nervous. The bank has not only government backing but even NABARD is there to bail it out should situation warrant. But NCPs smart act has raised many eyebrows. Its five banks have withdrawn nearly Rs 3000 crores. The banks include Pune District Cooperative banks and four more District cooperative banks. Comments (0)

Nanded coop bank directors to face enquiry

Posted on 01 April 2010 by Ajay Kishor MUMBAI: Five years after gross irregularities were detected in the Nanded District Central Cooperative Bank Limited, which was headed by Maharashtra Chief Minister Ashok Chavans brother-in-law and of which his sister is a former director, an inquiry will begin later this month.

For the first time since the bank was closed, the former directors have been issued notices for the inquiry under Section 88 of the Maharashtra Cooperative Societies (MCS) Act, 1960 for assessment of damages, according to official sources. The authorised officer for the inquiry conducted the proceedings on March 23. The directors will be heard out. Their list is quite illustrious and includes Mr Chavans sister and brother-in -law, Bhaskarrao Patil Khatgaonkar, who was elected Nanded MP last year. The bank, set up in 1923 in Nanded, hometown of the Chief Minister, was doing well till the end of the 1990s. According to a confidential inspection report, dated November 11, 2005, of the National Bank for Agriculture and Rural Development (Maharashtra Regional Office, Pune), the management of the cooperative bank was vested in a board consisting of 34 directors (elected 27 and nominated 7) elected on August 16, 2002, for five years till August 2007. However, after financial irregularities were observed in sanctioning of loans and functioning of the board against the public interest, the Commissioner for Cooperation and Registrar of Cooperative Societies superseded the board of directors with effect from March 19, 2005 under Section 110A(iii) of the MCS Act. The bank had a staff of 920 as on March 31, 2005 and 978 primary agricultural societies were affiliated to it. The official sources said the fact-finding inquiry under Section 83 of the Act was still under way. Last year Mr Chavan tried to revive the bank with a grant of Rs 110 crore but the Reserve Bank of India disallowed the proposal. Reopening of the bank was an issue in the Lok Sabha and Assembly elections, and Mr Chavan promised the over 8,00,000 depositors that they would be able to withdraw money soon. The NABARD report, apart from slamming the banks performance, pointed to the lack of professionalism on the part of the board of directors. Annual general body meetings had not been conducted during the last four years, nor was liquidity problem as well as funds management given due attention. There is a decline in advances, deposits and recovery, coupled with a liquidity crisis. The net worth of the bank is negative. Maintenance and balancing of books was a grey area and the bank was exposed to high risks of fraud and embezzlement. The bank gave loans to cooperative sugar factories which had a negative net worth and no borrowing power. Despite overdues from other factories, a new factory was given a loan of Rs 5 crore. The report said non-performing assets, at Rs 443.77 crore, constituted 67.4 per cent of the banks total loans and advances. It had been incurring losses continuously for the last five years and the accumulated losses stood at Rs 272.03 crore on March 31, 2005. There was a 42 per cent deposit erosion. There were arrears in balancing of books, default in maintenance of the Cash Reserve Ratio (CRR) and the Statutory Liquidity Ratio(SLR), and an overextended position of loans and advances throughout the period covered in the inspection (between September 15, 2005 and October 4, 2005). Apart from deficient internal checks and controls, the bank defaulted on repayment of loans to the Maharashtra State Cooperative Bank (MSCB) to the tune of Rs 85.86 crore on due dates. (The loans were later repaid).

The bank was not complying with the provisions of Section 22 (3) (a) of the Banking Regulation (BR) Act (according to which a company shall be in a position to pay its present or future depositors in full as their claims accrue); and Section 22 (3) (b), which says the companys affairs shall not be conducted in a manner detrimental to depositors interests. The bank defaulted on maintenance of the CRR on 19 occasions over 113 days and the SLR on 12 occasions involving 220 days during the period covered by the inspection. The bank rented out its premises as shops to various vendors, again violating the BR Act, and invested in the shares of six cooperative institutions outside its area of operation and without RBI permission. The defects recorded in the previous inspection reports persisted. The NABARD report lists a large number of violations of banking rules and regulations. Though a Rs 1.5-crore loan had been sanctioned to a society, the Sahakari Patpedhi Shikshan Vibhag Maryadit, Zilla Parishad, for provision of colour television sets to its members, no supply was made till the close of the inspection. The bank sanctioned loans for buying vehicles to 15 directors and six former directors or their close relatives at a concessional rate of interest, without adhering to prescribed norms. Four directors and three former directors have repaid the loans after some action by the bank, but six accounts are overdue. As on March 31, 2005, the total overdues of the bank amounted to Rs 446.17 crore, mainly under crop loan (52.10 per cent) and from sugar factories (26.05 per cent). The recovery process was also very poor. Comments (0)

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