Mistake mainly due to lack of guidelines, says Ex MLCs

Former MLCs Vijay Sankeshwar and Mohan Limbikai have demanded an inquiry into the financial transactions of all 77 banks which received funds from the Reserve Bank of India, for implementation of the Union government farm loan waiver scheme announced in 2007–08.

Addressing presspersons here on Wednesday, Mr. Sankeshwar and Mr. Limbikai, who are shareholders of Gurusiddheshwar Cooperative Bank (GCB), Hubli, said the Comptroller and Auditor General (CAG) had found irregularities in the implementation of the scheme due to the lack of proper guidelines from the Reserve Bank of India (RBI). They claimed the banks were not responsible for the mistake.

Earlier, based on a complaint filed by the Registrar of Cooperative Societies, Dharwad, the Hubli police registered a case against the directors and officers of GCB, regarding Rs. 5.3 crore paid to ineligible beneficiaries under the Union government’s loan waiver scheme.

Mr. Limbikai said what was being portrayed as financial irregularities committed by the board of directors of Gurusiddheshwar Cooperative Bank, had been caused due to lack of proper guidelines from the RBI.

The RBI wrote to the bank in 2007–08 seeking details about possible beneficiaries under the loan waiver scheme.

“The bank sent a list of 1,390 beneficiaries on September 6, 2008. The RBI took almost a year to approve it and released Rs. 5.3 crore in 2009, which the bank immediately credited to beneficiaries,” he said.

Mr. Limbikai pointed out after the scheme had been implemented, the auditors from the RBI and the Department of Cooperative Societies verified the bank’s accounts several times and gave the bank ‘A’ grade for its audit.

After the CAG pointed out procedural lapses, the RBI asked the Chairman of Gurusiddheshwar Cooperative Bank to repay Rs. 1.05 crore, which the bank duly paid on July 2, 2013.

Subsequently after re-verification, the RBI asked the bank to remit an additional Rs. 3.07 crore, which was paid on July 15, 2013.

He said the Registrar of Cooperative Societies had neglected the role of auditors who had verified the accounts many times.

“If an inquiry is to be done, it has to include the officials who audited accounts,” Mr. Sankeshwar said.


The leaders said they would would announce their positions only after party founder and former Chief Minister B.S. Yeddyurappa decided whether to merge with the BJP or to align with it.

To a query, Mr. Sankeshwar said he had always been anti-Congress and would continue to work against it.

He added that he believed Karnataka required a strong regional party and he still held the same view. “I will take a stand after Mr. Yeddyurappa makes the final decision,” he said.