SCAMS in CO-OPERATIVE BANKS.

Herein below is a very sensational piece of information.

As always the TIME is the first to report to its Readers that an unprecedented type of Bank Crisis is in the offing.

Our Country is passing through a very serious Bank-Crisis worse than any Country in the world has ever witnessed or experienced.

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

It has turned sour. 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 avoiding contact. Co-operative banks disbursed huge 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 and send all of them first of all in jail behind the Bars. The Government will have to recapitalise the system. It may help for a while. 

It can not stop the hemorrhaging from bad non- collectable loans and by the end of theYear 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.