The new cooperation minister in Maharashtra has expressed worries about the financial difficulties being faced by 517 urban cooperative banks in the state. The minister Chandrakant Patil said the banks are on a financial knife edge primarily because they are unable to recover their non-performing assets.
The new govt in Mumbai has extended the deadline for recovery of bad loans to March next year.
Sources say most of the banks had given loans without adequate collateral. What was still worse, the banks had been subject to political pressure not to get back their money from their defaulters, sources add.
The buzz is the new govt. is deadly serious about recovery of loans and would not flinch from taking tough decisions.