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 Pawar’s 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.