Maharashtra dissolves Solapur district coop bank board over irregularities
The bank was under the control of the Nationalist Congress Party (NCP), as most of its directors are party members.mumbai Updated: May 31, 2018 01:24 IST
Acting on the orders of the Reserve Bank of India (RBI), the Maharashtra government on Wednesday dissolved the board of directors of Solapur District Central Co-operative Bank and appointed Avinash Deshmukh, the district deputy registrar, as its administrator.
The bank was under the control of the Nationalist Congress Party (NCP), as most of its directors are party members. Former Solapur NCP MLA Rajan Patil is the chairman of the bank. In its order, the RBI had asked the state to take action against the board over financial irregularities by the bank, the officials said.
Deshmukh said, “I have taken charge as the administrator of the bank, following orders from state cooperation commissioner Vijay Khade, issued on Tuesday.”
Taking note of complaints of financial irregularities, the National Bank for Agriculture and Rural Development (Nabard) in 2016-17 conducted an inspection of the bank and submitted its report to the RBI. According to a senior official from the state cooperation department, Nabard found many financial irregularities, mainly related to loans that were disbursed without mortgaging assets. “It was found that the bank gave loans more than the permissible limits, affecting its financial health. The non-performing asset (NPA) of the bank rose every year. This year, NPA of the bank rose to ₹342 crore,” said a senior official. “While ₹ 650 crore was disbursed as loan to various individuals and others, the performance of the bank was below expectation in terms of recovery, compelling RBI to take action,” he said.
The matter was challenged in the Bombay high court (HC). Based on court’s orders, then Solapur district deputy registrar BT Lavand conducted a probe for the state. The primary findings of the report weren’t different from that of Nabard, the officer said.
First Published: May 31, 2018 01:24 IST