In a blow to the Opposition Congress and Nationalist Congress Party (NCP), who enjoy control over district central cooperative banks (DCCB), the representation of these banks on the board of directors of the Maharashtra State Cooperative Bank Ltd. (MSC Bank), the apex bank in the cooperative banking sector in the State, has now been reduced from 12 to seven.
The decision to reduce the number of DCCB representatives was taken in the 107th annual general meeting held on Tuesday.
“This decision was taken to ensure that the representatives of a particular sector should not cross the 50% limit, which leads to a monopoly of that sector on the bank’s functioning. There will be six representatives from each revenue division and one expert member from the election process,” said Vidyadhar Anaskar, Administrator, MSC Bank.
Unanimous decision
When asked whether the decision was made to cut-short the political strength of the Opposition, Mr. Anaskar said it was taken unanimously and no political discrimination takes places within the bank functioning.
For the first time, the board of directors will also have representation from over 25,000 credit cooperative societies in the State and 1.11 lakh housing cooperative societies, with each sector getting one representative.
Further, the number of representatives of urban cooperative banks is increased from two to four and sugar factories and spinning mills will get two representatives instead of one.
Open for merger
With an amendment in the bye-laws of the bank, the MSC Bank is now open for the merger of troubled urban cooperative banks as well and will be entering the retail banking sector.
“The merger will take place keeping the bank balancesheet in mind and with approval of the Reserve Bank of India (RBI) and State government,” said Mr. Anaskar.
The MSC Bank, which forms the backbone of the cooperative sector in the State, was embroiled in controversy prior to 2014 due to the hundreds of crores of losses it suffered and growing number of NPAs.
Prior to 2014, the Opposition Bharatiya Janata Party (BJP) had accused Congress-NCP for using the bank for their political purposes by giving loans to cooperative sugar factories which later turned into NPAs.
With intervention from the RBI and appointments of administrators by the former CM Prithviraj Chavan — which is continued by the present government— the bank recovered and has now registered a net profit of ₹201 crore.
