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.

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.

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.

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”.

The panel of NCP’s Sunil Funde, supported by BJP MLA Nana Patole, retained reins of power in the elections of Bhandara District Central Cooperative Bank (BDCCB) in Maharashtra.

It won all 21 seats of directors. Earlier, 11 directors were elected unanimously and remaining ten candidates of the panel registered victory in the election held on Sunday.

Funde is the immediate past president of BDCCB. The surprising result was former MLA and senior BJP leader Madhukar Kukde losing the election.

The panel of NCP’s Sunil Funde, supported by BJP MLA Nana Patole, retained reins of power in the elections of Bhandara District Central Cooperative Bank (BDCCB). It won all 21 seats of directors.

Caught between Congress-NCP and Shiv Sena- BJP politics sugar cane growers are a helpless lot in the state of Maharashtra. Politics in the name of farmers is so deep that actual benefit is hardly accruing to the farmers.

Once again on Friday the new Chief Minster Mr Prithvi Raj Chavan has threatened the powerful cooperative sugar industry to refrain from demanding “crutches” in form of the government support and asked the sector to adopt “professional and transparent management” practises.

His statement comes after the court’s observation that more than half the co-operative sugar factories in the state were financially sick. The court said there was a need to revive or close the sick mills. It sought the Comptroller & Auditor General of India’s audit reports for these mills from April 2007 within six weeks.

“I am going to ask the co-operatives minister to make it compulsory for every factory to put its balance-sheet on website,” Chavan said and expressed his scepticism as to what extent the state government could assist the sector which needed “fiscal discipline”.

Hitting at Shiv Sena, Chavan said those who were spearheading current agitation in the state demanding hike in prices for sugar cane growers saying the farmers were being misled.

“What is important is the final price that is given to the cane growers and not the quantum of advance payment,” he added.

Union agriculture minister Sharad Pawar along with his nephew and deputy chief minister Ajit Pawar,  was sharing dais with Mr Chavan.

Sarad Pawar said the mills should crush the standing cane in the current season but be prepared for crushing bumper cane in the 2011-12 season. He hinted at various innovative solutions to the issues faced by the sugar industry.

“The government took the decision permitting export of 500,000 tonnes of sugar yesterday and a notification to that effect will be issued this week,” Pawar  said.

Chavan and Pawar were speaking near Pune at the annual general meeting of the Federation of Cooperative Sugar Factories in Maharashtra, a representative body of a little over 170 mills in the state.

NCCF chairman has a new job. Nationalist Congress Party  has set up a cooperative cell inside the  party and NCCF Chairman Mr Virender Singh has been put in charge of this cell . According to  Mr Singh  Union Agriculture Minister has decided to  focus on party activities more and more. It is obvious that IPL controversy has dented the image of Pawar in a big way and now he wants to bat from home turf which is cooperatives for him.

Virender Singh has earned a name for himself in Maharashtra cooperative horizon despite the fact that  he  belongs to Varanasi in UP. Though situation at NCCF  is far from normal, how much time Singh will be able to spare in realizing  Pawar’s  dreams  remains to be seen .

NCCF has recently got a new Managing Director. The MD Mr G C  Gupta is so busy cleaning up the mess that even after a dozen calls,  Indian cooperative.com could not elicit a positive response from him. NCCF board  will have its  election in August.