The Hindu Business Line : `No cause for panic on co-op banks'

With rumours flying thick and fast about the status of co-operative banks in the State, the Co-operatives Commissioner of Maharashtra, Mr Anil Diggikar, has assured the public that there is no cause for panic.

He has also pointed out that with the administrators taking over the banks, many of them have had a turn around.

Talking to newspersons, he said the State is also in the process of signing a memorandum of understanding with the Reserve Bank of India for better management and running of urban co-operative banks (UCBs) in the State. This MoU will lead to the formation of a State-level task force on co-operative urban banks (Tafcub).

With this, the RBI would get better supervisory control and said that the role of the registrar of co-operatives and that of the RBI would be well defined.

State UCBs

The Tafcub comprises two representatives from the RBI, two from the co-operative departments and one each from the Maharashtra Urban Co-operative Banks' Federation and the National Federation of the UCB.

Mr Diggikar said there were around 2,106 UCBs in the country of which about 626 were in Maharashtra. These banks have a total deposit base of Rs 65,000 crore and advances of around Rs 34,000 crore. The credit co-operative society has a total deposit base of Rs 13,000 crore, taking the total deposit base to Rs 78,000 crore.

He said that only 16 banks have been brought under the Administrator, while the remaining 610 banks were under their board of directors.

Other banks

Giving details of some of the banks, he said the deposits of Satguru Sahakrai Bank now stood at Rs 330 crore and the loans stood at Rs 184 crore with an NPA of 11 per cent.

The Suvarna Sahakari Bank has a total deposit base of Rs 200 crore and advances of Rs 116 crore. He noted that the administrator was appointed at the time of home trade scam and it had lost close to Rs 5.65 crore. But for the past four years, the bank has been making profit and for the last couple of years, with the prior permission of the RBI, it has given its members a 10 per cent dividend.

Asked about the Rupee Co-operative Bank, Mr Diggikar said a stay has been ordered on two of its directors and an enquiry is on regarding two other directors. He said a meeting would be held with the RBI, as the administrator's term comes to an end in February 2007.

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`No cause for panic on co-op banks'