Bank Scams- Scams in Co-Operative Banks in India.

 Scams in Co-operative Banks.

Just as in USA, our country is not immune from bank scams. 

The Co-operative banks were formed to regularize unaccounted money. 

Scams in millions of INR in co-operative banks have come to lime-light. 

More are on its way.  Every nook and corner of the village, town, and the city,

was gifted with a co-operative bank in the country.

Banks were nationalized with a stroke of Pen in l969.

The Bank sour loans scam has threatened the economic and financial stability.

Loans were distributed as if they were a donation or a gift, or a charity. 

They are not recovered. Nationalized Banks, Other important banks and

Co-operative Banks run into scams of millions and billions.

Banks have been struggling with bad loan problem. Nobody speaks. 

Nobody wants to say the figure.   All know. All murmur but keep quiet.

If the economy faltered it could get worse. It is reliably learnt that more than

half the loans have not been recovered. They are classified as non-performing

and lost. Big banks are struggling with bad loans; small co-operative banks

throughout the length and breath of the country are struggling to hide their faces.   

Co-operative banks disbursed loans to non-existent parties with fictitious guarantors.

This is an understatement. They have funneled huge sums of money into

state enterprises because of political pressure and or personal ties to the borrowers.

The Bank Managers wanted to protect their jobs and their face in the local community

and went on carrying out the wishes of Board of Directors.

The Directors do not want to take the blame. They toss the blame on the Managers.

Government has to promulgate an Ordinance on lines of MISA,  put them in jail behind Bars.

The Government will have to recapitalize the system. It may help for a while. 

It can not stop the hemorrhaging from bad non- collectable loans and by the end of the Year average capital adequacy ratio may fall around five percent, that is below the Eight percent of the global standard. Accountability is a powerful weapon. Use it. The bureaucrats shudder with name of accountability. The period of slogans is over.