The Hindu : Another coop bank scam in Gujarat

Online edition of India's National Newspaper
Thursday, Jun 12, 2003

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Another coop bank scam in Gujarat

By Our Special Correspondent

GANDHINAGAR JUNE 11. In yet another cooperative bank scam in Gujarat, a police complaint has been lodged against a Minister in the Narendra Modi Cabinet and several others for allegedly duping the Panchamahals Central Cooperative Bank.

The complaint was lodged by the State Government-appointed administrator of the bank against the Minister of State for Pilgrimage Centres, Prabhatsinh Chauhan, who is also the vice-chairman of the bank, a former BJP member of the Lok Sabha and chairman of the bank, Gopalsinh Solanki, and some of the directors including a couple of Congress — former and sitting — members of the Assembly.

According to the complaint filed in the Dahod police station this afternoon, the administrator while going through the bank records had detected irregularities to the tune of about Rs. 126 crores, including bogus land records and documents to sanction loans to some non-existent persons.

Mr. Chauhan, claimed that though he continued to be the vice-chairman of the bank, he was not attending its board meetings for sometime and the entire powers were concentrated in the hands of the chairman. He also claimed that there were no irregularities in the bank operations and the financial problems for the bank were caused by the inability of the farmers to repay the loans.

The Minister for Cooperatives, Bhupendrasinh Chudasma, refused to bail out his colleague and said the law would take its course and the Minister, if found guilty in the police inquiry, would also be punished. The Pradesh Congress president, Shankarsinh Waghela, while demanding an inquiry into the scam, said the party would also seek clarifications from its members if they were found involved in the irregularities.

The bank which had deposits of Rs. 195 crores but advances of about Rs. 348 crores with a share capital of Rs. 8.95 crores and its own capital of Rs. 62.74 crores, was superseded and an administrator appointed by the State Government last month on the advice of the Reserve Bank of India. The bank's financial position had been deteriorating since 1996-97 but could survive all these years due to financial support from the state cooperative bank, the apex cooperative bank in the State, and NABARD. The RBI advised its supercession after the apex cooperative bank and NABARD expressed their inability to support the bank indefinitely.

There was however a plan to bail out the bank. At a meeting convened by the State Government last month attended among others by the representatives of the RBI, NABARD, and the State Cooperative Bank, it was decided to provide an additional assistance of Rs. 30 crores to be shared by various district cooperative banks to help the Panchamahals District Bank to resume operations. A governing body was also set up to execute the plan. It is the third case of involvement of senior BJP leaders in a co-operative bank scam in the State after the arrest of C. R. Patil, in connection with the Surat District Bank fraud and Deepak Patel, a BJP MP from Anand, in connection with the Charotar cooperative bank fraud last week.

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Another coop bank scam in Gujarat