Report says bank made unauthorised payments worth Rs. 406.64 crores during 2004-05
THIRUVANANTHAPURAM: The Government has ordered an inquiry into certain transactions of the Kerala State Cooperative Agricultural and Rural Development Bank executed during 2004-05.
The inquiry has been ordered on the basis of a special audit report, which said that the bank had made unauthorised payments worth Rs.406.64 crores during the period.
Official sources told The Hindu Joint Registrar (SC/ST) K.G. Vijayakumar would be probing the lapses mentioned in the report. An audit team submitted a special report on detecting serious irregularities that warrant urgent action and Mr. Vijayakumar has been directed to submit the report within a month, sources said.
The special audit report said that the bank had withdrawn Rs.2.37 crores from the Reserve Investment Fund meant to meet unforeseen loss without mandatory Government sanction. The bank authorities were also found to have withdrawn money from the fund in violation of the commitment made to the Government.
An investment to the tune of Rs.390.12 crores as certificate deposit and sinking investment fund with various commercial and private banks against the provisions of the Kerala Cooperative Societies Act, 1969, will be subjected to scrutiny. In the case of the sinking fund investment, the annual interest is added to the principal and it keeps on accumulating over the years.
The bank authorities had informed the audit team that the investments were made on the strength of an interim High Court order. But the report said that the bank authorities had not replied to confirm whether they had been permitted to make such investments. The report had also suggested a detailed inquiry into the decision to invest 20 per cent of the working capital in these banks.
The report said that the chief executive had surpassed his administrative jurisdiction and took decisions in violation of procedures, which inflicted monetary loss to the bank. The decision to invest Rs.3.13 crores in UTI schemes was pointed out as one instance. It was pointed out in the report that the bank had not made effort to identify the sundry debtors and realise the outstanding amount of Rs.13.26 crores.