Protect cooperative banks, Sharad Pawar writes to PM Modi

NCP chief Shar Pawar has written to Prime Minister Narendra Modi, saying that "existence" of cooperative banks and ir "cooperative character" should be protected.

former Union minister also sought to debunk tion that cooperative banks are faring worse than or banks, or converting m into private entities would end frauds or irregularities.

Pawar published letter dated August 15 on his Twitter account on Tuesday night. letter referred to Modi's Independence Day speech.

"You (Modi) said that cooperative banks are brought under supervision of Reserve Bank from point of view to protect interest of middle class." "I welcome and appreciate objective", he said.

"However, at same time, I honestly feel that existence of cooperative banks and ir `cooperative' character shall be preserved," Pawar said.

cooperative banking sector has been backbone of rural ecomy, he said. Due to ir widespre branch network, Reserve Bank (RBI) finds it impossible to conduct inspection of all Urban Cooperative Banks (UCBs) in country every year, he said.

refore Central bank has been trying to convert UCBs into private banks since 1993, but has t succeeded, Pawar claimed.

"Sir, though I agree with you that re should be financial discipline in 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 banking sector," letter said.

In fiscal 2019-20, according to RBI, public sector and private sector banks reported 3,766 and 2,010 frauds, while cooperative banks reported only 181 frauds, he pointed out.

amount involved in frauds in public sector banks was Rs 64,509.90 crore or 90.20 per cent of total amount involved in frauds during fiscal, while that in private sector banks was Rs 5,515.10 crore or 7.69 per cent, he said.

"In financial year 2019-20, an alleged fraud of Rs 4,355 crore was identified in PMC Bank scam, while during first half year itself a fraud of approximately Rs 95,700 crore was reported in nationalised banks," Pawar said.

"refore, it is t correct to say that misappropriation of fund or financial irregularities are observed in cooperative banks only," he said. RBI often alleges that cooperative banks suffer from a lack of professionalism, Pawar ted.

However, as per RBI's own data, gross and net NPA percents of commercial banks are 9.68 per cent and 5.31 per cent; on or hand, gross and net NPA percents of UCBs are 7.51 per cent and 2.53 per cent, he said.

Out of 1,544 UCBs only 70 are in `D' category, Pawar said, ding that refore, "it is ridiculous to state that re is professionalism in cooperative banks".

He also said that what happened at Punjab and Maharashtra Cooperative (PMC) Bank was a "fraud" and t a "business failure of cooperative banks.

"I, refore, earnestly request you to kindly look into matter personally and give justice to cooperative banking sector...," Pawar said in letter.

(Photo Credit: PTI)