Mumbai District Central Cooperative Bank is alleged to be mired into irregularities with advancing unsecured loans to customers. Two petitioners have charged the bank of irregularities to the tune of Rs 1,500 crore.
The Bombay High Court has issued notices to its directors and the co-operative department of Maharashtra. A division bench headed by Justice S F Vajifdar, which heard the PIL yesterday, sought replies in two weeks.
The apex cooperative bank of Mumbai is said to have given loans to cooperative societies in violation of rules and in most cases borrowers defaulted. They went ahead with giving loans despite adverse remark by the loan inspector in many cases, the petitioners alleged.
In some cases the bank did not bother to find out if an applicant cooperative society is functioning or not. It is also alleged to have kept Rs 1,000 crore with Madhya Pradesh State Industrial Corporation as fixed deposits.
Strangely the bank waived Rs 150 crore in interest without seeking clearance from RBI or NABARD.
