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Vinod Mathew

GANDHINAGAR, Oct. 4

THE co-operative banking sector in Gujarat continues to be in a shambles despite over half a dozen UCBs falling like nine pins in the last couple of weeks. The State Government, which has gone on an overdrive on the election front, despite no firm dates being declared, is yet to give a clear-cut directive to the cooperative department or even the Home department to formulate plans on recovering thousands of crores of rupees which has simply disappeared from these banks.

The last Cabinet meeting on Tuesday made grandiose statements as to how it was mandatory to recover all dues within a three-month span. However, there are no guidelines to the Home department that is investigating the scam as to how these funds are to be recovered. The major problem for the investigative agencies is that almost all the absconding directors and their relatives of these UCBs that have gone under enjoy the protection of one political party or the other.

A classic case is that of Mr Bhorabhai Patel, Chairman of the Visnagar Nagrik Sahkari Bank, easily the biggest state UCB to bite the dust in recent times, who has done the disappearing act, as has much of the money from the bank. While the police department claims they have no clue about Mr Patel who is declared absconder, the VNSB Depositors' Association charges that they have time and again tipped the cops about Mr Patel's whereabouts but to no avail. The State police authorities claim that they would attach all his assets after 30 days, provided there are any in his name by then.

Out of Rs 400 crore worth of advances made by the VNSB, as much as Rs 250 crore was made to only 19 entities. Out of this list of 19, eight VNSB defaulters were issued notices to repay at least 25 per cent of their outstanding by September 30. While one defaulter has repaid Rs 50 lakh, the other seven have even not responded to the notice.

The State co-operative banking sector has been put on notice by the RBI whereby it has instructed all 358 UCBs in the State not to make any fresh advances as also not allow premature withdrawal of fixed deposits for the next six months. Also, the Managing Director and the branch managers of the UCBs have been given special powers for the fast recovery of bad debts.

However, with the police department seemingly in no hurry to arrest some of the prominent scamsters and the board of directors of the various UCBs themselves being the culprits, it looks like a long haul ahead for this sector which has witnessed the erosion of over Rs 5,000 crore in the last one year.

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