Cooperative bank reforms: Political vendetta should not be behind ban on elections to board

Former CM Chavan says MSCB reforms during his tenure were not targeted at NCP.

Written by Shubhangi Khapre | Mumbai | Published: January 6, 2016 2:31:10 am

Speaking about the Maharashtra government’s decision to ban any erring chairman of cooperative banks from contesting board elections for 10 years, former Chief Minister Prithviraj Chavan on Tuesday said the intention should not be political vendetta. Saying that he was in favour of framing rules that strengthened the cooperative sector, he said reforms in Maharashtra State Cooperative Bank (MSCB) taken during his tenure were aimed at exposing those who had committed wrongs, and not intended to target alliance partner NCP, as misunderstood.

Chavan said, “Today’s cabinet decision by Devendra Fadnavis government suggesting enforcement of ten year ban on erring chairman of the cooperative bank from contesting elections needs to be seen on whether it smacks of political vendetta or framing of rules to strengthen the cooperative sector. Unless I study it in detail, it would be wrong to comment.”

In May 2011, the MSCB was dissolved following rampant charges of corruption. At that time MSCB was controlled by NCP. In 2011, reforms in cooperative banks began which was extended to district cooperative banks.

The Centre-state worked to impose stricter laws to bring more accountability and check misuse of this sector by politicians.

However, Chavan said he never suggested election ban on chairmen of cooperative banks.

“My government took the decision to dissolve the Board of Directors of Maharashtra State Cooperative Bank after receiving the directives from the Reserve Bank of India for mismanagement.” He said, “All those responsible for looting the cooperative should face action and it should not be selective.”

While recalling the decision that had led to souring of equations between Congress and NCP, Chavan said, “I had to follow the directives of the RBI to act against MSCB. There were huge losses upto Rs 1100 crore. And some of the instances of financial mismanagement brought to my notice were shocking. It included releasing of loans and gross misuse of power by those at the helm of MSCB board of directors.”

The former chief minister feels all those responsible for the mismanagement of the apex bank in the state should be acted upon and punished within the given framework of laws that bind the cooperative sector.

“To begin with, we took the decision to dissolve MSCB board of directors and replace it with two administrators. The principal secretary Sudhir Goyal and Sudhir Shrivastav were appointed as administrators. In less than three years the MSCB which was reeling under Rs 1100 crore losses showed Rs 700 crore profit.”

Clearing the air, he said, “I would like to clarify there was a misunderstanding against me by some section within NCP that the decision related to reforms was at the behest of party president Sonia Gandhi to check NCP. It was absolutely not correct.”

Commenting on cooperative banking, Chavan said, “I believe the government should take measures to strengthen financial institutions. It should not engage in using its power to undermine political rivals.”

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