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Investors who have put their money in the Maharashtra State Cooperative Bank should not withdraw in panic, as the bank is now under an administrator, Mr Ajit Pawar, Deputy Chief Minister of Maharashtra and Chairman of the bank until last week, said on Thursday.
. Nephew of Mr Sharad Pawar, Union Agriculture Minister and supremo of the Nationalist Congress Party (NCP), the junior Pawar was addressing a meeting of senior NCP leaders.
The deposits, of over Rs 17,500 crore, in the bank are safe, he said, adding that those opposed to the NCP are conspiring to malign the party and the bank.
Swipe at Congress
Taking a swipe at the Congress party, its collation partner at the Centre and State, Mr Pawar said that members of the Congress party owe about Rs 380 crore to the bank. Banks and financial institutions managed by NCP are doing well, he said.
On Saturday, the 44-member board of the bank was dissolved by the State Government. Its administration was handed over to two civil servants from the State Government. The action was triggered by an annual inspection of the bank by the National Bank for Agriculture and Rural Development, which had found deficiencies in the bank's key financial parameters.
Way forward
Though officially Mr Ajit Pawar was addressing a meeting to discuss arrangements for the forthcoming founder's day celebrations, finding itself on the top on the agenda was the Maharashtra State Cooperative Bank.
Sources in the NCP indicated that the top leadership will chart its future course of action based on the talks held by the leadership on Thursday and the election results from the four states, which would be declared on Friday. In all likelihood, the party's power equations in Maharashtra and the Centre will be reviewed.
According to a veteran political analyst, the disbanding of the NCP-controlled board would not be taken lightly by the NCP party leadership. All efforts would be made to restore the board by putting pressure on the Finance Ministry to get the RBI to review its decision.
Powerful tool
The bank is a powerful tool in the hands of the party and if the NCP losses control then a wrong message could go to the party cadres, he added.
In rural Maharashtra, the bank gives credit to cooperative institutions such as sugar and cotton spinning mills, dairies, district central cooperative banks, and cooperative credit societies. These bodies are the main cog wheels of the rural economy, over which NCP has a good hold.
The control of the co-operative institutions can sway the electoral fortunes of candidates. The party derives its main strength from this sector.
“The party members are angered and confused by the actions of the Chief Minister, Mr Prithviraj Chavan, and they feel that the government is trying to corner the NCP. In a way it has become a fight for the very identity of the party,” a senior NCP party member told Business Line .
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