Next phase of war between NCP and Congress has begun with leaders of each party not mincing words against each other. On the occasion of foundation day celebration of NCP Ajit Pawar openly named congress leaders who have benefitted from MSCB.
Two cotton mills owned by Amrish Patel and P.K. Anna Patil owed the bank Rs. 380 crore and they were among the highest defaulters, Mr. Pawar pointed out.
Comparing NCP with Congress he said that Congress sold sugar mills for a song while those sold by NCP are doing fine. Mr. Pawar stated that the government had sold off sick sugar cooperative factories at very low rates — Rs. 3.36 crore to Rs. 12 crore — and in some cases the full amount was not even recovered from the buyers. One of the buyers was a former Congress Chief Minister.
On the other hand, the MSC Bank had sold sugar factories for much higher rates and in some cases they were being run very successfully.
Meanwhile, Nabard reports which are trifling in paints a very bleak picture of MSCB.The report says that MSCB is unlicenced as it is unable to maintain the 4% CRAR (capital to risk weighted asset ratio) as prescribed by the RBI. The bank should have recorded a loss of Rs1,014 lakh in 2008-09, instead of a profit of Rs1,778.2 lakh had it truthfully made a requisite provision as per the IRAC (income recognition, asset classification) norms.
MSCB had not declared a dividend during 2008-09 and hence it was wrong for the bank to claim Rs300 lakh towards the centenary year celebrations of the cooperative movement in 2010.
The Nabard report criticises the bank for camouflaging the NPA position by violating laid down norms and not reflecting a true picture of its financial position as on March 31, 2010. “An amount of Rs66,390.50 lakh pertaining to non-performing assets (NPA) and Rs8,035.91 lakh pertaining to overdue interest receivable was removed from the balance sheet, thereby camouflaging the NPA position,” the report says.
Ajit Pawar on his part says that Head of MSCB was chosen after much exercise and is an engineer by profession. In the coming days much fire work can be expected between the two ruling allies as ghost of MSCB refuses to disappear.