Maharashtra State Cooperative Bank (MSCB) is always hot copy for the media. This time round the bank has gone out of its way defending the state deputy chief minister Ajit Pawar whose name figures in a petition before the Bombay high court seeking registration of FIR in a scam involving a largescale diversion of funds of the bank.

MSCB has told the high court that Mr Ajit Pawar’s name is being mentioned to gain cheap publicity.

One Mr Shankarao Bhosale from Satara has filed the controversial petition.

Mr Bhosale states depite the appointment of a board of administrators on the advice of RBI, the board has done nothing to recover defaulted loans and therefore urges the court to direct them to start criminal proceedings with the economic offences wing.

MSCB has told the court that the petitioner who is vice-president of a sugar factory has taken loans from the bank and has been defaulting on them. The petitioner is therefore only blackmailing the bank and hiding his own illegalities.

The petioner, however, maintains Mr Ajit Pawar’s followers and associates who are also members of the NCP have availed themselves of crores of rupees of loans from the bank and are not willing to repay these loans.

It is no secret that Mr Pawar and his followers have decisively been dominant over the years in the management board of MSCB.

Union Agriculture Minister Sharad Pawar’s party NCP in Maharashtra must be heaving a sigh of relief as the RBI has issued banking licence to the Maharashtra State Cooperative Bank controlled by the party.

The RBI had dissolved the board of directors of the bank on the ground that the bank had indulged in serious financial irregularities. It was Nabard that had checked the bank’s financial transactions and hit upon the gaps in them.

Readers could recall that dissolution of MSCB Board had led to much heartburn among NCP supporters and a flash point was averted between Congress and NCP at the behest of Senior Pawar.  Ajit Pawar, Deputy Chief Minister was peeved with the Chief Minister who cited NABARD recommendations as the basis behind his action.

MSCB also happened to be the largest cooperative bank of the country which was soon overtaken by the Saraswat Bank headquartered in Mumbai only.

Following the dissolution of the bank’s management by the RBI, there was some uncertainty surrounding the future of the NCP controlled bank.

The RBI move has come as a much needed relief especially to Ajit Pawar whose acolytes were at the helm in the bank.

Informed sources say, there are hundreds of banks in the country that are sans the RBI licence. These banks have to obtain the RBI licence or they cease to be banks.

The dissolution of the board of directors of NCP controlled Sangli District Central Cooperative Bank in Maharashtra has fuelled speculation in the country’s cooperative circles that the banks controlled by the politicians would soon come under  RBI’s scanner.

The RBI move has shocked Sharad Pawar the doyen of the country’s cooperative movement.

Readers may recall that RBI has already made a move to bring cooperative banks and their societies directly under it. A constitutional amendment to this effect has already been set in motion in the Parliament. Till now cooperative banks are controlled by state governments and respective cooperative registrars of the states.

Mr Pawar and his acolytes are crying foul over the move. They suspect that the congress party may have probably played some role in it. The incident has already triggered a slanging match between the allies.

According to informed sources, the corrupt transactions and gross violations of the Banking Regulation Act by Sangli coop bank have necessitated the RBI move.

Sources add Nabard’s inspectors found the Sangli Bank indulging in serious irregularities and infractions of laws. They concluded that the bank was not functioning as a responsible financial institution. They sent a report to the RBI recommending an immediate dissolution of the management of the bank.

In a first taste of change of regime, many cooperative sugar mills have been denied pre season loan by Maharashtra State Cooperative Bank. Readers can recall that the State govt had sacked the Board following adverse report by NABARD.

Cooperative sugar mills take loan in pre season for the upkeep and maintenance of their factories but the changed mood due to bad performance by MSCB has reduced the size of the loan cake.

About Rs 500 crores was disburded last year but this year it has been reduced to Rs 350 crores.

Deputy Chief Minister Ajit Pawar who is said to be controlling the levers of power in MSCB, had crossed sword with Congress on the issue of sacking of Board.

Changed regime has begun to tell upon the sugar cooperatives as the new management has decided to offer loan to them only who have  paid the old loan.

There seems to be no end of troubles for Sharad Pawar’s nephew and Maharashtra Deputy Chief Minister Ajit Pawar. While the burn of  Maharashtra State Cooperative Bank fiasco has hardly healed , in yet another incident, one of his so-called aids has been implicated in a cooperative society cheating case to the tune of Rs 43 crores.

Former chairman of Someshwar cooperative sugar mill, Shahji Kakade has been named as one of the suspects who are alleged to have misappropriated Rs 43 crore through a cooperative society. They are said to have  provided bogus documents and securities in order to swindle Rs 43 crores.

The police said the suspects had allegedly taken Rs 43.21 crore as loan from the Pune District Central Co-operative Bank by submitting forged documents and securities.

Bhagwan Bhotare , the government auditor lodged a first information report at Wadgaon Nimbalkar police station in Baramati in Pune against the suspects. No arrests have been made so far. They have been charged with cheating, criminal breach of trust, misappropriation and forgery.Investigations are going on and arrest are likely soon.

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.

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.

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 Pawar’s 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

The supercessation of Board of Maharashtra State Cooperative bank has raised the political temperature of Mumbai politics. Luckily or unluckily, Sharad Pawar’s nephew and State Deputy Chief Minister Ajit Pawar was on the board and act of RBI is being interpreted as move to decimate Sharad Pawar’s clout.

Readers may be aware that RBI superseded Board of Maharashtra State Cooperative Bank on the recommendation of NABARD. Bank is found to be guilty of giving unsecure loan to many of the sugar factories. Sugar cooperative is the strong hold of NCP as Sharad Pawar is seen as product of Sugar cooperatives.

It is true that NCP was controlling levers of power at the bank as it has to oblige many of its constituencies. NCP circle sees in this move, a Congress attempt to rob its power.

Not only that, voice demanding resignation of Ajit Pawar as Deputy Chief Minister is also getting louder. Sena executive president Uddhav Thackeray sought the resignation of Deputy Chief Minister Ajit Pawar.

“Why should different yardsticks be applied to Ashok Chavan and Ajit Pawar? Chavan was forced to quit after the Adarsh housing scam. So many of alleged irregularities committed by Pawar are coming to light these days,” Uddhav said.

Sena leader said Pawar should quit his post to ensure impartial inquiry into the bank’s affairs.

Congress is fighting hard to prove to the world that the act of RBI is not political. Maharashtra Pradesh Congress Committee (MPCC) president Manikrao Thakre said RBI’s action was a follow-up on a report by NABARD and Nabard falls under Agricultural Ministry. He said that Ajit Pawar need not resign as case of Bank is different from that of Adarsh Society scam.

Meanwhile NAFSCOB, the apex body of state cooperative bank has been reduced to mere spectator in the whole drama. Talking to Indian Cooperative.com, its Chairman Bijender Singh said “ I am going to Mumbai to find out the truth”.

Submitting fake loan proposals and withdrawing money in collusion with bank officials is an old modus operendi of fraud in banks. But urban cooperative banks seem to have perfected this art with finness.

Maharashtra Deputy Chief Minister and nephew of Maratha strongman Sharad Pawar Ajit Pawar’s close aid Shivaji Kale has been charge sheeted in one of such case involving an urban cooperative bank in Pune.

Former chairman Vilas Balwant Sarnobat used 40 fake loan proposals to earn Rs 9.99 crore. Former director Kishore Vasant Kunjir submitted 23 such proposals and earned Rs 8.96 crore. former deputy speaker of khed panchayat samiti Rajesh Vasant Jawalekar had submitted 39 fake loan proposals and collected Rs 10.9 crore from the bank while former director Rajendra Vasant Konde submitted five fake loan proposals amounting to Rs 5.82 crore.These were mentioned in the chargesheet filed by Economic offence wing.

Incidently the bank’s name is also Ajit Cooperative bank where Shivaji Kale, Ajit Pawar’s aid was Director at the time of fraud two years ago.Ajit Pawar’s reaction is awaited.