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Mumbai:
NCP chief Sharad Pawar has written to Prime Minister Narendra Modi, saying that the “existence” of cooperative banks and their “cooperative character” have to be protected.
The former Union minister moreover sought to debunk the notion that cooperative banks are faring worse than totally different banks, or altering them into personal entities would end frauds or irregularities.
Mr Pawar revealed the letter dated August 15 on his Twitter account on Tuesday night. The letter referred to PM Modi’s Independence Day speech.
I’ve written a letter to Hon. @PMOIndia Shri @narendramodi to express my deep concern regarding the preservation of the ‘Co-operative’ character of Co-operative banks having legacy of better than 100 years. pic.twitter.com/CZ6IBu4kZ1
— Sharad Pawar (@PawarSpeaks) August 18, 2020
“You (PM Modi) said that cooperative banks are brought under the supervision of the Reserve Bank from the point of view to protect the interest of the middle class.”
“I welcome and appreciate the objective”, he talked about. “However, at the same time, I honestly feel that the existence of cooperative banks and their “cooperative” character shall be preserved,” Mr Pawar talked about.
The cooperative banking sector has been the backbone of the agricultural financial system, he talked about.
Due to their widespread division neighborhood, the Reserve Bank (RBI) finds it unattainable to conduct inspection of all Urban Cooperative Banks (UCBs) throughout the nation yearly, he talked about.
Therefore the Central monetary establishment has been attempting to remodel the UCBs into personal banks since 1993, nonetheless has not succeeded, Mr Pawar claimed.
“Sir, though I agree with you that there should be financial discipline in the banks, but certainly it would be incorrect to say that such conversion of cooperative sector into private sector would completely or partially prevent misappropriation of funds, financial irregularities and frauds in the banking sector,” the letter talked about.
In fiscal 2019-20, in accordance with RBI, public sector and private sector banks reported 3,766 and a few,010 frauds, whereas cooperative banks reported solely 181 frauds, he recognized.
The amount involved in frauds in public sector banks was Rs 64,509.90 crore or 90.20 per cent of the entire amount involved in frauds in the middle of the fiscal, whereas that in personal sector banks was Rs 5,515.10 crore or 7.69 per cent, he talked about.
“In the financial year 2019-20, an alleged fraud of Rs 4,355 crore was identified in PMC Bank scam, while during the first half year itself a fraud of approximately Rs 95,700 crore was reported in nationalised banks,” Mr Pawar talked about.
“Therefore, it is not correct to say that misappropriation of fund or financial irregularities are observed in cooperative banks only,” he talked about.
The RBI usually alleges that cooperative banks bear from an absence of professionalism, Mr Pawar well-known.
However, as per the RBI’s private information, gross and web NPA percentages of enterprise banks are 9.68 per cent and 5.31 per cent; alternatively, the gross and web NPA percentages of UCBs are 7.51 per cent and a few.53 per cent, he talked about.
Out of the 1,544 UCBs solely 70 are throughout the “D” class, Mr Pawar talked about, together with that subsequently, “it is ridiculous to state that there is no professionalism in cooperative banks”.
He moreover talked about that what occurred at Punjab and Maharashtra Cooperative (PMC) Bank was a “fraud” and by no means a “business failure of cooperative banks.”
“I, therefore, earnestly request you to kindly look into the matter personally and give justice to the cooperative banking sector…,” Mr Pawar talked about throughout the letter.
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