Mumbai:
Trouble between the National Congress Party and Congress is out in the public domain with NCP targeting its coalition partner the Congress for the storm surrounding Asia's largest cooperative bank. NCP chief Sharad Pawar has reacted strongly to the Reserve Bank of India dissolving the board of the powerful Maharashtra State Cooperative Bank, which had Pawar's son Ajit as one of its directors.
''I don't think the bank's management has done anything wrong. They were told to give these amounts; they were given guarantees by the state government," said Pawar.
However, Maharashtra Chief Minister, Prithviraj Chavan has refuted Pawar's claims. ''Whatever decisions were taken till now were by the board of directors. Now these decisions will be taken by the administration, said Chavan.
NDTV had first reported on the bank's fudged audit and massive losses last year. We now have details of the NABARD report on which the RBI based its decision. The report shows the shocking mismanagement of the bank and how it's politically powerful management had run it to the ground.
According to the report, the bank's net worth had reduced dramatically in just one year -- from 44 crore in 2009 to -144 crore in 2010. The bank showed fake profits by excluding bad debts worth Rs 663 crore from its balance sheet.
At least 30% of the bank's loans were bad debts, given to loss-making spinning and sugar mills owned or promoted by politicians, including Rs. 300 crore that was given to Priyadarshini Spinning Mill controlled by Congress MLC Amrish Patel.
The government is now trying tries to clean up the mess which could cost it the Rs. 1800 crore guarantee, which it pledged to the bank.
On the other hand, NCP is also fighting hard to regain control of the bank. After all cooperatives in Maharashtra are the ticket to controlling rural vote.