Mumbai:
It's the largest cooperative bank in Asia, a bank controlled by the NCP with politicians from several parties on its board.
Now an audit of the Maharashtra State Cooperative Bank reveals shocking losses - how the bank's powerful management has run it to the ground.
The audit shows the bank is deeply in the red with losses of over Rs 1000 crore. Its credit rating is also very poor.
Shockingly, the bank did not include massive bad debts in its balance sheet, declaring a profit of nearly three crores.
In fact the audit says the bank did not present a true picture of its finances.
Maharashtra is famous for its farming and banking cooperatives meant to help farmers. Largely controlled by Congress-NCP politicians, these banks get massive loans from their own government.
This bank's audit shows it has lent large sums to factories controlled by its own management - a fact that was not revealed in its returns.
• Rs 51 crores were lent to a sugar factory controlled by then director and MP Sadashivrao Mandlik, earlier with the NCP.
• Rs 104 crore to a sugar factory controlled by then director and former Congress MP Gangadhar Kunturkar
The bank has also lent large sums to failing cooperatives like the Osmanabad Cooperative Bank, controlled by the family of former NCP minister Padamsinh Patil.
Politicians on the banks board including the NCP's Ajit Pawar. The bank has challenged the audit. Its officials say the audit counted bad debts beyond the norm. It also claims that institutions controlled by its management got loans on merit.
"Last year the auditor said there was a Rs 20 crore shortfall. Now over one year, it jumped 911 crores. We have a dispute or difference of opinion," said the Managing Director of the bank.
What's most worrying is that the Maharashtra Government has guaranteed Rs 1800 crore to the bank in the event of any default public money it could well stand to lose.