* Grants approval to revised package of Rs 445.65 cr including State
share of Rs 277.98 cr, keeping in mind the financial condition of these
banks on March 31, 2015
* Asks for appointment of administrative board headed by respective District Collector
Staff Reporter
In
what could be a big relief for beleaguered Nagpur, Wardha, and Buldhana
District Central Co-operative Banks (DCCBs) in Vidarbha region,
Maharashtra Government has cleared revised revival package for these
banks. Also, State has released Rs 212 crore for their revival as its
share in the package that involves contributions of Central Government
and National Bank for Agricultural and Rural Development (NABARD).
The
revival package, however, is conditional. The conditions include
appointment of an administrative board headed by respective District
Collector, 50 per cent of recovery against non-productive assets (NPA)
of these banks to be deposited with the Government for share capital, no
fresh recruitment or increment to existing employees without prior
approval of State Government, etc.
Still, the most important
condition is that Nagpur DCCB will have to raise funds for repaying the
share capital to the Government through sale of its building in Mahal.
Similarly, Buldhana and Wardha DCCBs have been asked to sale their seven
and five plots respectively. These three banks have been asked to raise
money through sale of these properties within one year.
These banks
landed in trouble owing to several reasons including the infamous Gilts
Scam in Nagpur DCCB. These banks also could not get banking license
from the Reserve Bank of India (RBI) as they failed in fulfilling the
condition of 4 per cent Capital to Risk (Weighted) Assets Ratio (CRAR).
There was a demand for revival of these banks, and the State Government
had given in-principle approval to make available financial assistance
of Rs 319.54 crore as share capital to improve the CRAR of these banks.
The approval was granted considering financial condition of these banks
as on March 31, 2014.
Later, on November 17, 2014, Central
Government announced a scheme for revival of 23 beleaguered DCCBs in the
country. These banks included Nagpur, Wardha, and Buldhana DCCBs from
Vidarbha region. As per the Central Government’s scheme, a revival
package of Rs 379.67 crore was finalised so as to help these banks
improve CRAR to 7 per cent, considering the financial condition as on
March 31, 2015. The package involved Rs 129.70 crore as share of Central
Government, Rs 212 crore as Staet’s share, and Rs 37.97 crore as
NABARD’s share.
A few days ago, before the end of financial year
2014-15, State Government released its share of Rs 212 crore for revival
of Nagpur, Wardha, and Buldhana DCCBs. Of this amount, Rs 65.87 crore
is meant for Nagpur DCCB, Rs 77.59 crore for Wardha, and Rs 68.54 crore
for Buldhana DCCB. Of this amount also, these banks would get Rs 15.80
crore, Rs 7.19 crore, and Rs 12.51 crore in the form of share capital.
However,
the amount would be inadequate. As per the latest report of
Commissioner (Coo-operatives) and Registrar of Co-operative Societies,
these three banks would require financial assistance to the tune of Rs
445.65 crore to maintain 7 per cent CRAR considering their financial
condition on March 31, 2015. As per the revised figure, State’s
contribution increases to Rs 277.98 crore. Still, the revised amount for
revival would be sanctioned only after ‘Snap Audit’ of these banks by
NABARD. Of the total amount of Rs 445.65 crore in revised revival
package, Rs 35.50 crore would be released as share capital, and
remaining amount as financial assistance.
(April 5, 2015)
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