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Bank dupes depositors

While everyone might be speaking about the public sector bank scam but even cooperative banks are under scanner for duping investors’ hard earned money. Rajendra Patil, a member and customer of Karad Janata Sahakari Bank Ltd (KJSB) Karad, in Satara district has filed a PIL against the bank for its failure to recover the fake loan amount of Rs 250-300 crore sanctioned to borrowers. According to him, if the bank fails to recover the outstanding loan amount then it will only increase the hardships of customers. There were reports about KJSB planning to merge itself with strong banks but if the bank’s non-performing assets (NPA) increase then it will cause a huge hindrance in the merger process. Patil said that the bank should not misguide members and investors by publishing fake news in media.

When AV spoke to Rajendra Patil, he said, “The chairman of the bank has committed a fraud of Rs 250 to 300 crore. RBI has imposed direction on the bank due to fake loan sanctioned by it. They are spreading rumours about the bank’s merger to misguide investors. Even though we had filed a PIL but the bank is yet to recover the loan amount sanctioned by it thereby resulting in a rise in non-performing assets. The bank’s merger is not possible due to fraudulent activities carried out by it. Strict action must be taken against the bank for indulging in forgery.”

Patil also mentioned that the financial audit of the bank is in its last step as people will know about the true financial position of the bank and it will be exposed before everyone. He is planning to expose the true financial standing of the bank before the public and will take steps to ensure that customers get their money back. A protest too will be organised by him to create awareness among customers and fight for their rights.

Advocate Manisha Rote commented, “Board members of the bank have misused the money by sanctioning fake loans amounting to Rs 250-300 crore. They have submitted fabricated reports to RBI. The bank also charge high amount of interest of 22 per cent from customers and seize homes of defaulters. They have submitted false data to RBI. The bank is misusing the hard-earned money of the common man. As a result of this people are undergoing severe stress.”

The Reserve Bank of India (vide directive DCBS.CO.BSD-I/D-4/12.22.126/2017-18 dated November 07, 2017) had placed the Karad Janata Sahakari Bank Ltd under Directions. According to the Directions, depositors will be allowed to withdraw a sum not exceeding ₹ 1000 (Rupees One Thousand only) of the total balance held in every saving bank or current account or any other deposit account by whatever name called, subject to conditions stipulated by the regulator’s directions. RBI has stated that that bank will also not be able to grant or renew any loans and advances, make any investments, incur any liability including borrowal of funds and acceptance of fresh deposits, disburse or agree to disburse any payment and sell, transfer or otherwise dispose any of its properties or assets, without its approval.

On the condition of anonymity an official from Karad Janata Sahakari Bank stated, “Kolhapur Urban Bank had conducted an audit of our bank’s securities and NPAs. But they didn’t disclose anything about the merger process. We are also in talks with three to four other banks for merger and it is likely to happen in the next six months. Loan amount sanctioned to sugar factories is yet to be recovered. A litigation process is going on in this regard.”

Corporator Shakeel Sayyad too is planning to hold agitation for the protection in consumers’ interest. Sayyad demanded that the bank should refund the depositors money. According to him, investors have been demanding a refund of their money since last six months. The RBI has imposed restriction on the bank and its style of functioning is responsible for this. When Sayyad tried to contact the CEO of KJSB on phone, he remained unavailable for the comment. When he contacted the branch manager, he only washed off his hands citing that RBI has imposed direction on the bank. He alleged that the bank has conducted fake transactions to the tune of Rs 250-300 crores.

On the other hand, Rajesh Patil Chairman of Karad Janata Sahakari Bank Ltd has stated that bank is taking corrective steps to address this issue and said that no major fraud has occurred in the bank. RBI has conducted an investigation of the bank. The regulator has also given six months to the bank to recover the outstanding loan amount. Patil said that the bank is in the process of reducing its non-performing assets which is more than 17 per cent permitted by RBI. Patil assured that they would soon hold an auction to sell its assets worth Rs 70 crore. However, the RBI restrictions have created more hardships for depositors as their hard-earned money is locked up in the bank.

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