Page 18 - Banking Finance July 2019

40 Co-op banks in UP hit by fraud
ATM vans at doorstep for
A recent investigation has revealed that at least 40 of the total 50 co-operative
farmers of rural areas
banks in Uttar Pradesh have been hit by fraud involving
In a bid to make accessibility to cash
various ‘modus operandi’ like fictitious fixed deposits,
easy in rural areas of Agra, ATM vans
forging loan amounts, embezzlement of money recov-
of government cooperative bank
ered from the accounts declared as Non-Performing
have been launched by the district
Assets (NPAs) and siphoning of subsidy money from ben-
administration, which will reach vir-
eficiary accounts in connivance with bank officials.
tually to the doorsteps of farmers.
More than 50% of the rural credit is disbursed by the co-operative banks and the
As much as 30 such vans have been
National Bank for Agriculture & Rural Development (NABARD) is responsible for
provided all over the state so that
the regulation and supervising of the functions of these banks. As much as 46
farmers can easily access cash.
branches of Zilla Sahkari Bank, Muradabad have been hit by fraud, as revealed by
Former state cabinet minister and
documents. Out of 19 branches of the Aligarh Zila Sahkari Bank Limited, at least
current district cooperative bank
four branches have been compromised. A committee that was built to conduct
chairperson Raja Aridaman Singh
investigate the fraud has found that Rs 9.5 crores were swindled through fake
flagged off the ATM van. Comment-
loans and more than Rs.1.70 crores were siphoned off from saving accounts.
ing on the occasion, Singh said, “A
majority of farmers have cooperative As per the investigation team, during the BSP regime in 2011, the fraud has
bank accounts. Availability of an ATM began and different methods were used for fund embezzlement like fixed de-
van at their doorstep will not only posits were closed before maturity, loan amounts were released without ob-
help farmers to have easy accessibil- taining details of borrowers and amount transferred to certain fraud accounts
ity to cash but will help them to know in a pool. Term loans were arranged in a fraudulent manner and the amount
latest government schemes available was transferred to third-party accounts and siphoned off through the modes of
for the benefit of farmers.” The cash payments and online transfers.
project was approved by CM Yogi
The investigation team has revealed fraud in 157 saving bank accounts. Agricul-
Adityanath and state cooperative
ture loans were given to 1961 farmers from 2010 to 2015, covering BSP and SP
bank minister Mukut Bihari.
rule, the report further said. None of those 1961 farmers could be identified
during the investigation.
RBI imposes penalty on
United India Co-op Bank Election process for new board of Goa State Coop Bank
The RBI has imposed a monetary begins
penalty on United India Co-operative The Registrar of Cooperative Societies (RCS) has begun the election process for
Bank Ltd., Nagina, UP in exercise of
the board of directors of Goa State Cooperative Bank, after
powers vested in it under.
the high court of Bombay at Goa bench directed.
The bank was held guilty of violation
The court has ordered the RCS to complete the election
of RBI Instructions/Guidelines on
process before September 2. “We have published the provi-
Know Your Customer and submission
sional list of voters and have given 15 days for members to
of compliance to RBI Inspection Re-
check the list and verify if there are any additions or dele-
port. A Show Cause Notice has been
tions,” registrar of cooperative societies Menino D’Souza
sent to the bank by RBI, in response
said.
to which a written reply was given
With a writ petition, members of the bank had approached the high court seek-
by the bank.
ing directions that the board of directors be elected. In its order dated Septem-
After considering the facts of the
ber 2, the court had issued directions calling for the elections to be held within
case, the bank’s reply in the matter,
four months. “The election date will be fixed after the voters list is verified,” said
the RBI came to the conclusion that
D’Souza. “The unhealthy position of the bank compelled the government to take
the violations were substantiated
immediate steps to improve the financials of the bank and to protect the interest
and warranted imposition of penalty.
of large number of depositors and stakeholders,” said a bank official.
18 | 2019 | JULY | BANKING FINANCE