The recent election to the board of directors to the Kolar-Chickballapur District Cooperative Central Bank (KCDCC Bank) is being considered as a major step towards reviving the apex cooperative financial body of the undivided Kolar district.
The election was held after a gap of nine years and the bank has been under an administrative control for almost a decade.
K. Srinivasa Gowda, former Kolar MLA and a former Agriculture Minister said: “Mismanagement by the administrative board a decade ago caused irreparable loss to the institution. Misuse of funds meant for the welfare of the backward classes gave a big blow to the bank. It ran into problems owing to alleged nepotism, mal-administration and misappropriation of funds by some of the cooperative leaders as well as some officials and they brought the bank to the brink of collapse.”
According to Karnataka Prantha Raitha Sangha State unit vice-president G.C. Bayya Reddy, unrecovered loans pushed the institution towards bankruptcy.
H.S. Mahadev Prasad, Minister for Cooperation, said in the Assembly during the recently concluded winter session of State Legislature in Belgaum that Kolar-Chickballapur DCC Bank was one among the eleven DCC Banks facing charges of misappropriation of funds.
It is said that the financial indiscipline reached a peak with the alleged misappropriation of deposits including that made by the government employees, who are still struggling to get their deposits back. In 2004, the bank’s losses stood at Rs. 41 crore.
The precarious financial condition put the people in general and farmers in particular of the perennial drought affected region in the lurch as they could not avail themselves of loans for agricultural activities forcing them rely on private money lenders and other institutions who levy hefty interests. As the bank’s financial condition began to improve, the Reserve Bank of India, which had restrained the banking activities of KCDCC Bank due to its bad financial position, permitted it to resume banking transactions in April 2012.
As many as 89 cooperative societies in the twin districts are awaiting the release of Rs. 33.91 crore as recapitalisation assistance following S. Vaidyanathan committee recommendations. It was expected to strengthen the financial condition of the bank once this amount was received as it will help rejuvenate them.
