In a ground-breaking move for the cooperative sector, the Maharashtra State Cooperative Bank (MSCB) has been appointed as the Institutional Administrator of the Nagpur District Cooperative Bank (NDCCB).
This marks the first-ever appointment of its kind in the history of India’s cooperative sector, reinforcing the commitment to strengthening the three-tier credit system, informs a press release from the MSCB.
District Cooperative Banks (DCCBs) play a crucial role as the bridge between the State Cooperative Banks and Primary Agricultural Credit Societies. Recognizing their significance, the government has been implementing various schemes to ensure their empowerment. As part of this initiative, MSCB has been entrusted with the responsibility of administering NDCCB, also assuming the role of an Authorized Officer.
This appointment is expected to set a precedent for the effective restructuring of other struggling DCCBs across Maharashtra and beyond.
With this development, MSCB will leverage its robust financial and managerial resources to facilitate the growth and stability of NDCCB.
As the highest net-worth bank in the Indian cooperative sector, MSCB boasts a strong financial position as of March 31, 2024, with a net worth of Rs 4,618 crore, a CRAR of 16.34%, own funds of Rs 7,121 crore, deposits amounting to Rs 23,583 crore, and loans totaling Rs 33,682 crore. Additionally, MSCB recorded a profit of Rs 615 crore, with a gross NPA of 9.15% and an audit classification of ‘A’.
The appointment comes at a critical time when Nagpur District Cooperative Bank is facing significant financial distress.
As of March 31, 2024, its financial health indicators paint a concerning picture, with a net worth of (-Rs 40 crore), a CRAR of (-8.94%), own funds of Rs 254 crore, deposits amounting to Rs 702 crore, and loans totaling Rs 448 crore. Additionally, the bank is burdened with an accumulated loss of Rs 290 crore, a gross NPA of 45.11%, and an audit classification of ‘D’.
The appointment of MSCB as the Institutional Administrator is expected to pave the way for NDCCB’s revival.
If employees, overdue borrowers, and depositors cooperate, a successful turnaround is achievable. The concept of ‘Cooperation Among Cooperatives’ is poised to be a game-changer in restoring financial stability.
To mark this historic occasion, an official ceremony will be held on March 30, 2025, on the auspicious occasion of Gudi Padwa. Dignitaries and officials will be present to formally welcome MSCB in its new role as the administrator of NDCCB. This landmark decision signals a new era of cooperative banking reforms and instills hope for the sustainable growth of DCCBs across the state.
