Maharashtra: Another Co-Operative Bank's Board Dismissed Over 'Serious Irregularities'

Close on the heels of crisis at PMC Bank, the cooperative department of the Maharashtra government has dismissed the board of directors of Pune- headquartered Shivajirao Bhosale Cooperative Bank Ltd. The development at the bank, promoted by Anil Shivajirao Bhosale, NCP leader and Member of Maharashtra Legislative Council (MLC), has left around one lakh customers in the lurch. A special scrutiny conducted by the Reserve Bank of India in April 2019 revealed several "adverse" features and "serious irregularities" in the functioning of the bank, said the order issued by Commissioner of Cooperation Satish Soni on October 9.

The Commissioner of Cooperation and Registrar of Cooperative Societies, in consultation with the RBI, superseded the present board of directors, and appointed Narayan Aghav, district deputy registrar, as administrator, the order said. Mihir Thatte, member of a group which takes up the cause of depositors of distressed banks, said some one lakh account-holders of Shivajirao Bhosale Cooperative Bank are not being able to withdraw their money at present.

Loans of Rs 300 crore were disbursed by the bank to bogus borrowers at the behest of politicians, bringing about the present crisis, he said. Recently the RBI appointed imposed restrictions on withdrawal of funds from Punjab and Maharashtra Cooperative (PMC) Bank, which operates in Mumbai and rest of Maharashtra, following discovery of a Rs 4,350 crore scam.

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On Friday, the Reserve Bank's central board on Friday discussed in detail the regulatory and supervisory architecture of commercial and cooperative banks against the backdrop of Rs 4,500 crore scam at the PMC Bank. The meeting of the central board, held in Chandigarh, came a day after Finance Minister Nirmala Sitharaman announced setting up of a panel to recommend legislative changes to ensure better governance at cooperative banks.

Besides, the board reviewed the current economic situation, global as well as domestic challenges, and various areas of operation of the Reserve Bank of India (RBI). "In this context, the board also discussed in detail the current state of the financial sector with special focus on the regulatory and supervisory architecture of commercial and cooperative banks as also NBFCs," the central bank said in a statement.