SIT set up to probe Maharashtra State Co-operative Bank fraud

The then deputy chief minister, other ministers, directors and senior members of the bank, officials of district central co-operative banks across Maharashtra and sugar co-operatives that got the loans are among the 76 accused in the FIR.

The Mumbai police on Tuesday formed a special investigation team (SIT) of officers from the banking unit of economic offences wing (EOW) to investigate the Maharashtra State Co-operative (MSC) Bank fraud.

While the complainant has claimed the worth of the scam is ₹25,000 crore, the value is yet to be ascertained. Image used for representational purpose only. (PTI)

The case pertains to thousands of crore obtained in loans by sugar cooperatives, spinning mills and other processing units from district and cooperative banks.

Acting on the directives of the Bombay high court (HC), the city police on Monday registered an FIR into the case. The then deputy chief minister, other ministers, directors and senior members of the bank, officials of district central co-operative banks across Maharashtra and sugar co-operatives that got the loans are among the 76 accused in the FIR. The police have not named any of the accused. “Considering the volume, the serious nature of the case and alleged involvement of political bigwigs, a detailed investigation is required for which the SIT has been formed. The SIT will have five handpicked officers [of the ACP, senior inspector and inspector rank] from banking and other units of the EOW. The functioning will be monitored by DCP (special task force) and joint commissioner of police (EOW),” said a senior EOW official.

Rajvardhan Sinha, joint commissioner of police (EOW), said, “As the offence is registered under sections of the Prevention of Corruption Act, an ACP rank officer will be the investigation officer and will head the SIT. We will also take help from forensic auditors and other experts.”

The FIR is based on a complaint by activist Surinder Mohan Arora, a 64-year-old Andheri resident, who had filed a public interest litigation (PIL) in the HC, alleging police inaction into the fraud. While the complainant has claimed the worth of the scam is ₹25,000 crore, the value is yet to be ascertained.

The Maharashtra State Co-operative Bank, the apex bank that controlled credit to the co-operative sector in the state and was handled by then ruling politicians, landed in trouble in 2011, after an inquiry report by the National Bank of Agriculture and Development (Nabard) found the bank was in red, with a negative worth of ₹144 crore. The report indicted the board of directors of the bank for financial mismanagement that led to ballooning of non-performing assets. This was largely due to handing out of loans to sugar co-operatives and spinning mills in violation of all norms. The report said balance sheets had been fudged to show a profit of ₹2 crore, when the bank was facing losses of ₹798 crore.

The board had 76 directors, of which 44 were elected – 25 from the NCP, 14 from the Congress, 2 each from BJP and PWP and one from the Shiv Sena.