The elections to the various milk unions of Gujarat Cooperative Marketing Milk Unions (GCMMF) are underway. But this time it somewhat different. A new player Parivartan Party floated by Keshu Bhai is giving headach to Narendra Modi.

Modi’s protégé and former Chairman of GCMMF Parthi Bhatol is contesting elections from Banas milk union. Talking to Indian Cooperative Bhatol pooh-poohed the factor of Parivartan Party. He said that already 3 union elections have been won by us where our candidate romped home uncontested.

Talking about Banas dairy election slated for September 9, Bhatol said “My victory is certain, I will 100 per cent”. Banas Milk Union was mired into a host of controversies with corruption charges leveled against Bhato.

“Let the electorate decide, we have made Banas dairy fastest growing unit and our detractors have no idea the kind of confidence I enjoy from our members”, a confident Bhatol told Indian Cooperative.

Traditionally BJP and Congress were major players in this election but Keshu Bhai has decided to test the water before he plunges into assembly election slated for November. So far he has not been able to succeed  and Modi has captured majority of seats. Whether the colour of GCMMF would change or not would be clear by the next fortnight.

A few years ago who would have believed that Maharashtra State Cooperative Bank- the jewel among the cooperative banks would struggle to obtain banking licence. Controlled by Ajit Pawar men the Bank looked sure-footed till yesterday.

But it has not been able to obtain a banking licence from the Reserve Bank of India. The bank had to obtain it by the close of March.

The take-over of Bank had generated such a political storm in the State that at one point of time it seemed to lead to an end of relation between the two ruling allies-Cong and NCP. But the deft move by senior Pawar saved the situation.

When an administrator was appointed it was thought that MSCB would be put on track sooner than later.

The cooperative department of the Maharashtra govt has expressed its hope that the apex bank would soon issue the licence.  According to the dept. officials, MSCB has met the conditions laid down by the RBI and Nabard.

There are more than a hundred   banks that have failed to get the RBI licence and the case of MSCB is not unusual.

In the event of these banks not being able to get the RBI licence , they  have no choice but to  transform into  a cooperative credit society or unite  with another bank.

The MSCB’s failure to obtain the licence has seriously affected its reputation.

There are certain things, however, that present a different picture of the bank. For example, MSCB has risk weighted assets worth nearly ten thousand crore and its non-performing assets count a mere couple of hundreds of crore.

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.

Buoyed up by a joy of winning the Mansa assembly by-election in Gujarat, the congress Party has begun waging virtually a psychological warfare against its rival the Modi led BJP in the state.

As if on elections winning spree, the congress party has had a cakewalk in a recent poll for Gujarat’s Junagarh district Cooperative Bank. The congress annexed 17 out of 22 seats on the board of directors.

The coming of this electoral triumph on the heels of the party’s win in the Mansa by-election has demoralized its opponent the BJP.

That the popular support for the BJP is fraying around the edges is evident from the fact that the party could manage to get a mere seven seats on the board of the district cooperative bank.

Some analysts, however, have blamed the BJP’s defeat on narrow considerations that swayed the cooperationists. The BJP led board of the bank had shown a good performance, they said.

Madhya Pradesh Congress president Kantilal Bhuria has demanded dismissal of the State
Cooperative Minister Gauri Shankar Bisen for allegedly making ‘derogatory’ remarks against tribals.

The state Congress chief said in a statement that Bisen’s remarks had caused anger among the tribals and added that his party would fight a ‘no-holds-barred’ battle to protect the dignity of tribals.

Chief Minister Shivraj Singh Chouhan was trying to protect Bisen who had made offensive remarks against tribals recently at Chhindwada, Bhuria said.

According to the Congress leader, Bisen had said tribals might receive higher education but they still lacked understanding.

Bisen is fond of remaining in controversy. Only couple of days back the entire Patwari of the state went on strike after the cooperative minister made a patwari do sit-ups publicly.

MSCB loss is nationalized bank’s gain. So it is the case with farm credit loans being routed through them and not through cooperative banks.

Earlier, nationalized bank share in farm loan disbursal used to be 31 percent but this time it has jumped to 51 percent. The three tier cooperative structure has crumbled to two tier with nationalized banks at the top and Primary Cooperative societies at the bottom.

It was the intervention of Sharad Pawar, the warring state factions of each parties sat on the negotiating table and hammered out a truce treaty. Details of the truce are not known to public.

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.

Courtsey:Organizer

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.

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 bank’s 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.

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.