Rising number of frauds in the co-operative sector has rattled depositors
VAIBHAV PARWAT
Chhatrapati Sambhajinagar: The rising number of frauds in the cooperative sector has rattled depositors, with the recent Rs 203 crore scam by the Adarsh Nagari Sahakari Patsanstha, an urban co-operative credit society.
Meanwhile, the Reserve Bank of India (RBI) has taken action against 103 co-operative banks in Maharashtra including ten banks in Marathwada, of the 34 district central cooperative banks in the financial years 2021-22 and 2022-23, following a rise in frauds in the cooperative sector. The move comes after the Central Government amended the Banking Regulation Act in June 2020, giving powers to regulate civil cooperative banks to the Reserve Bank. The Chhatrapati Sambhajinagar district has reported action against only Adarsh Nagari Sahakari Bank. In the past two years, with the Punjab and Maharashtra Cooperative Bank fraud amounting to a staggering Rs 25,000 crore.
Only 22 banks were penalized in the state
The transfer of regulation to RBI has led to an increase in penal actions against civic cooperative banks. In 2022, the year the regulation began, only 22 banks were penalized in the state. RBI's action against co-operative banks is aimed at ensuring that depositors interests are protected and maintaining the integrity of the banking system, said Vidyadhar Kulkarni, banking expert.
297 cooperative banks under scrutiny
According to the RBI's data, penal actions have been taken against 320 banks in the country in the last two financial years, including 297 cooperative banks, 8 multinational banks, 7 corporate banks, and 8 nationalized banks. Among co-operative banks, the maximum action has been taken against 103 banks in Maharashtra, which accounts for about 30 percent of total operations in the state.
19 percent NPA of cooperative banks
The expected 15 per cent NPA is allowed for cooperative banks. As of September 30, 2021, the state has reported Rs 1.68 lakh crore outstanding from the agricultural sector. The latest data from the department of cooperation show that the average non performing asset percentage in these 10 banks is around 19.
Target to disburse Rs 4.61 lakh crore
The lower disbursal of credit, especially in Marathwada and Vidharbha, has become a concern for the banks. By the end of September last year, of the Rs 4.61 lakh crore target, only Rs 1.75 lakh crore i.e; 38 per cent of the target was disbursed.
RBI’s action on co-operative banks (April 2021 to March 2023)
Banks in Marathwada:
Chhatrapati Sambhajinagar: 1
Hingoli : 1
Parbhani: 2
Latur: 2
Jalna : 2
Beed: 2
Banks in the country:
Maharashtra : 103
Gujarat : 50
Madhya Pradesh : 27
Uttar Pradesh : 13
Tamil Nadu : 12
Chhattisgarh : 11
Andhra Pradesh : 11