Page 18 - Banking Finance February 2018

CO-OPERATIVE BANK NEWS

CO-OPERATIVE BANK

NEWS
NEWS
NEWS
NEWS
NEWS

Regional Rural Bank's net up 15% in 2016-17 Irregularities observed in
The Regional Rural Banks witnessed a growth of 15 percent in net profit during Delhi Nagrik Sehkari Bank
2016-17 in spite of an increase in provisioning due to
higher NPA's. According to the RBI's report on 'Trend Delhi Assembly's Petitions Committee
and Progress of Banking in India' for 2016-17, as many in its in-
as 56 RRBs operating in the country recorded a net terim
report
profit of Rs. 2,300 crore during 2016-17 as against Rs.
into the
2,000 crore in 2015-16.
alleged
The report attributed the growth to the increase in scam in Delhi Nagrik Sehkari Bank has
both interest and other income coupled with decline in operating expenses. The observed that Illegal memberships
net interest income stood at Rs. 16,000 crore (Rs. 11,600 crore), and other in- and failure of government officials to
come at Rs. 3,600 crore (Rs. 2,100 crore) during the period. The provisions and act against them were the prime ir-
contingencies increased from Rs. 2,100 crore to Rs. 4,200 crore during the pe- regularities.
riod. The gross NPAs (non-performing assets) of these banks stood at 8.1 per cent
The report, which was presented in
(6.8 per cent) during the period.
the House by committee chairperson
RBI, Nabard raise objection for inclusion of coopera- Saurabh Bharadwaj, found that the
cooperative bank had many members
tive banks in FRDI Bill with dual memberships or bulk mem-
The RBI and the National Bank for Agriculture And Rural Development have berships, when one person is allowed
raised few objections to including 'eligible cooperative only one. The committee's investiga-
banks' under the purview of the Financial Resolution and tion found that relatives of ex-direc-
Deposit Insurance (FRDI) Bill. tors of the bank, many of whom had

As per Clause 120 of the FRDI Bill, 'eligible cooperative been debarred from contesting, were
banks' are deemed 'insured service providers' for two made to contest the elections for the
years, extendable by one year. The Bill also provides for managing committee of the bank.
the liability of the proposed Resolution Corporation (RC) to insured depositors of In addition, officers of the Registrar
eligible cooperative banks. The RBI said that according to the Bill, an eligible co- of Cooperative Societies failed to act
operative bank is defined as a co-operative bank other than a multi-state co- against these members and were in
operative bank, and if the RC wants the power to supersede the board of a bank a hurry to conduct the elections. They
or to wind one up, the State cooperative law will have to be amended. also failed to present the facts before
The RBI is learnt to have told the panel to seek clarification from the Centre on the committee during hearings, the
including the eligible cooperatives under the FRDI's ambit. report said.

18 | 2018 | FEBRUARY | BANKING FINANCE

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