The Comptroller and Auditor General (CAG) has passed strictures against the Maharashtra Government for extending “injudicious” assistance of Rs 118.50 crore to the Nanded District Central Cooperative Bank.

The financial assistance has been wasted, CAG said. The Ashok Chavan government had approved the assistance to the bank in Mr Chavan's home district in August 2009, with retrospective effect from March 2008.

Last year, Mr Chavan was forced to quit as Chief Minister after being linked to the Adarsh housing scam and is among those named in the Central Bureau of Investigation's FIR in the scam.

The CAG report, for the State government's accounts for the year ended March 31, 2010, was tabled in the State Assembly yesterday.

The report said the loan was sanctioned despite the Nanded bank's poor financial condition. An inspection report by the National Bank for Agriculture and Rural Development (Nabard) in September 2009 revealed the bank's net worth was negative at the end of 2008-09 and its crop loan disbursements were on decline during 2004-09, it said.

The bank did not comply with the RBI's directives regarding acceptance and payment of deposits, and also defaulted on repayment to the Maharashtra State Cooperative Bank (MSCB).

The Nanded bank's borrowing power under the Banking Regulation Act's rules remained nil and non-performing assets (bad loans) as a percentage to loans outstanding had increased to 70.7 per cent as on March 31, 2009, from 58.5 per cent as on March 31, 2008, it said, adding, the net worth remained negative during 2009-10.

The government's assistance of Rs 118.50 crore came in handy to the cooperative bank only to discharge its liabilities, which were around Rs 310.67 crore. However, the real objectives for sanctioning of the grant, especially for the improvement of net worth and increasing crop loan disbursements, were not achieved, it said.

‘Poor facilities forMedical education'

CAG has also rapped the Maharashtra Government for not having any policy or programme for improvement of medical education.

“There is no specific policy or programme for improvement of medical education in the State, particularly in tribal areas. The number of medical seats was not increased despite the rise in population and demand,” the recently released CAG report said.

It also pointed out at inadequate research activities and non-compliance with norms laid by the Medical Council of India (MCI) regarding teaching staff, infrastructure and diagnostic equipment. The report found that majority of government hospitals, out of a total of 14, lacked super speciality treatment.

“Sasoon in Pune and a hospital in Nagpur do not have facility for kidney transplantation. Akola hospital had none of the super speciality facilities while Ambejogai, Aurangabad and Miraj were found lacking in open heart and plastic surgery and kidney transplant,” it said.

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