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KSCB to recover bad loans

State Cooperative Bank president Kadakampally Surendran alleges graft in sanctioning loans.  

Special Correspondent

Bank president alleges graft

THIRUVANANTHAPURAM: The Kerala State Cooperative Bank (KSCB) has taken steps to recover outstanding loans from defaulters in a time-bound manner, its president Kadakampally Surendran has said.

Addressing a meet-the-press programme organised by the Press Club here on Wednesday, Mr. Surendran said criminal proceedings would be initiated against those who had sanctioned loans in violation of norms and the defaulters. The non-performing asset (NPA) of the bank was Rs. 78 crore in 2002, Rs. 418 crore in March 2006 and Rs. 498 crore in September 2006. As many as 142 loans were sanctioned above Rs. 10 lakh and 19,272 below that sum. Most of them had defaulted on payment.

NABARD had detected serious irregularities in sanctioning loans to private institutions and individuals, including resorts and tourist homes, traders as well as those for educational purposes and agriculture land purchase.

Mr. Surendran pointed out specific instances involving the former president K. Aravindakshan, vice-president M.K. Raghavan and Board members Sooranad Rajasekharan and Shamsudeen. The former committee had spent Rs. 9 crore on computerisation, but the process had not yet been completed. A report of NABARD said that loans of Rs. 3.5 crore were sanctioned against rules at the behest of Mr. Rajasekharan and Mr. Shamsudeen for buying agriculture land. Educational loans of Rs. 37 crore were sanctioned in violation of all rules. The bank had detected that the loans were sanctioned to students studying in certain nursing schools in Karnataka through a private agency in Ernakulam. Most of the institutions which had availed themselves of the loans did not exist, and the bank had deputed officials to recover the money at the earliest.

There was a shortfall of Rs. 364 crore in deposits between March and November. This was mainly because of competition from new-generation and private banks, he said.