Internal transactions in borrowers’ NPA accounts at Ambajogai Peoples Co-op bank

Chhatrapati Sambhajinagar: A case has come to light at the CIDCO branch of Ambajogai Peoples Co-operative Bank, where three borrowers’ accounts declared Non-Performing Assets (NPA) after defaults were subjected to unauthorized internal transactions by the bank. In addition, the bank reportedly placed a lien not only on the collateral but also on other assets of the borrowers. The borrowers subsequently filed a complaint with the Regional Registrar of Cooperative Societies. Following an inquiry, the Registrar annulled the recovery orders issued by the sub-registrar.

The borrowers Abhijit Pawar, Akash Pawar, and Anita Pawar had applied for a total loan of ₹2 crore in 2020 for construction purposes. On January 22, 2020, the CIDCO branch sanctioned ₹1 crore to each borrower. As security, the three borrowers pledged a combined 10 acres and 17 gunthas of land along with buildings in the Satara area. The bank disbursed the loan in four installments totaling ₹50 lakh within three months.

During the COVID-19 pandemic, the borrowers were unable to make repayments. Consequently, under Section 101 of the Maharashtra Cooperative Societies Act, the bank classified the accounts as NPAs in 2022 and filed recovery applications with the sub-registrar. The sub-registrar issued recovery orders, which the borrowers, through advocate Sudhir Kulkarni, appealed to the Regional Registrar Sharad Jare. After thorough deliberation, the Registrar observed serious irregularities in the bank’s internal dealings, canceled the recovery orders, and instructed that 50% of the collected amount be refunded to the borrowers within seven days. The borrowers have also filed complaints with the Economic Offences Wing and other authorities. Attempts to reach the branch manager and senior officials for comment were unsuccessful.

“Borrowers’ interests must also be protected”

“Under cooperative law, both depositors and borrowers are important for the bank. No one should carry out unauthorized transactions in borrowers’ accounts. Like depositors, the interests of borrowers must also be safeguarded,” said Sharad Jare, Regional Registrar, Cooperative Societies.