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Pawar meets PM, protests against crackdown on cooperatives

Our Bureau Pune | Updated on July 18, 2021

NCP chief Sharad Pawar meets Prime Minister Narendra Modi in New Delhi   -  PTI

In letter to Modi, says the RBI’s interventions are unconstitutional

As the Enforcement Directorate (ED) tightens the noose around the Nationalist Congress Party (NCP) co-operative barons in various cases including money laundering, NCP chief Sharad Pawar met Prime Minister Narendra Modi on Saturday.

The leaders had nearly an hour-long meeting. Pawar objected to the amendments to the Banking Regulation Act ( BRA), saying that excessive power given to the regulator without any checks and balances seems to be unnecessary and interfering with the autonomous functioning of co-operative banks and run the risk of being misused.

NCP leaders in Maharashtra are facing ED probes in various cases. Recently, Pawar’s nephew and Deputy Maharashtra CM, Ajit Pawar, came under the ED scanner. The ED has also slapped notices on four co-operaitve banks that gave loans totalling ₹750 crore to a sugar mill taken on lease by a company linked to Ajit Pawar.

Also read: Amendments in Banking Act against cooperatives: Pawar tells Modi

NCP leaders including Anil Deshmukh, Chhagan Bhujbal and Eknath Khadse are also on the ED radar. Pawar’s meet with Modi coincides with former Maharashtra Chief Minister and BJP leader Devendra Fadnavis’ New Delhi visit. Political circles were abuzz with talk of a new political alignment between the NCP and the BJP as Pawar had recently expressed unhappiness about State Congress President Nana Patole’s statements where he criticized NCP and Sena.

State subject

Pawar, who tweeted the letter he submitted to PM Modi, said the terms of incorporation, regulation, and winding up of co-operative societies were State subjects under the Constitution. However, the Reserve Bank, on the basis of various new provisions, directly intervenes in the functioning of co-operative banks. “Therefore, I opine that the said provisions are unconstitutional and ultra vires, for having been passed without legislative competence,” he added.

“The powers bestowed on the Reserve Bank to deal with matters pertaining to the issuance and refund of share capital, appointment or disqualification of directors, the constitution of board of management, the appointment of CEO, audit obligations etc. can be construed as excessive regulation. The amended Act overrules various provisions of the Co-operative Act in regard to the formation of the board and election of chairman, the appointment of managing director, etc., by holding a caveat in terms of such appointments,” Pawar said.

He also questioned the amendments to raise equity capital from the public and voting rights, refund of shares, the RBI’s right to issue an approval for the appointment of statutory auditors and removal of CEO. The letter also objected to the amendment that the audit should be completed within three months instead of 6.

‘Maharashtra govt stable’

The Pawar-Modi meeting raised eyebrows in Maharashtra’s political circles. Shiv Sena Rajya Sabha MP Sanjay Raut told a TV channel that “vindictive” actions were initiated against leaders in the co-operative sector. Raut said the Shiv Sena-NCP-Congress government will complete its term.

Published on July 17, 2021

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