How politicians put bank in trouble by not paying dues
Even as the ruling alliance partners Congress and the National Congress Party (NCP) slug it out over the present predicament of the Maharashtra State Co-operative bank, recent balance sheet of the bank shows that sugar co-operatives controlled by politicians from both the parties owe huge amounts to the bank.mumbai Updated: May 11, 2011 01:35 IST
Even as the ruling alliance partners Congress and the National Congress Party (NCP) slug it out over the present predicament of the Maharashtra State Co-operative bank, recent balance sheet of the bank shows that sugar co-operatives controlled by politicians from both the parties owe huge amounts to the bank.
Sugar co-operatives, which form 40 % of bank's clients, owe the bank an outstanding amount of Rs 4,416 crore as of March 31, 2011. The total Non Performing Assets (NPA) of the sugar sector stands at Rs 708.60 crore and the overdues to be paid on March 31 stand at Rs 601 crore.
The spinning mills, also largely controlled by ruling alliance leaders owe the bank outstanding dues worth Rs 591 crore.
Debtors of the bank are largely from the Congress-NCP that has dominated co-operative politics and hence the rural economy in the state.
Some of the political heavyweights who individually or through family control sugar factories that owe the bank outstanding amounts includes former NCP minister Vijaysinh Mohite Patil, forest minister Patangrao Kadam (Congress), former Chief Minister Shivajirao Nilangekar Patil (Congress), former union minister Suryakanta Patil (NCP), Congress leader Annasaheb PK Patil, NCP MLA and bank director Dilip Sopal, former state Congress chief Ranjit Deshmukh, NCP legislator Kamal Kishor Kadam, higher and technical education minister Rajesh Tope, independent MLA Bharat Bhalke (supporting the government), independent MP Sadashivrao Mandlik, former BJP minister Daulatrao Aher.For instance, Patangrao Kadam-controlled Sonhira sugar factory owes the bank an outstanding of Rs 114 crore, Mohite-Patil's family controlled sugar co-operative owes Rs 85.92 crore, Bhalke controlled factory owes Rs 174.82 crore and so on.
Suryakanta Patil told HT, “Sugar co-operatives go through lows and highs depending on the sugar production, one cannot merely look at profit and losses in this sector. RBI's decision is wrong and will deepen co-operative crisis.''
She also blamed the government, saying it should have supported the guarantees it had promised to the bank.
But, a senior official with the co-operatives department said, “The bank has sufficient liquidity but it was being run in a totally unprofessional fashion. Loans have been sanctioned without even completing paperwork.... and properties attached were sold at below offset prices."
Kadam and Tope were not available for comments.