The board of the Jalna District Central Co-operative Bank (JDCC) has been dissolved by the Commissioner for Co-operation & Registrar of Co-operative Societies on the recommendations of the Reserve Bank of India (RBI). | |
| Exceptionally high level of non-performing assets (NPAs), amounting to over 50 per cent of the outstanding advances, erosion of own funds and deposits are believed to have led to the dissolution of the bank's board. |
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| "Yet another DCC bank has gone under. The registrar of co-operative societies has dismissed the board of the Jalna District Central Co-operative Bank," said Babasaheb Tupekar, minister of state for co-operation, Maharashtra, at a function organised by the Maharashtra State Co-operative Banks' Association. |
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| The Jalna Bank has become the 12th DCC Bank in the state to fall under Section 11, whereby own funds have been eroded substantially. |
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| The minister lashed out at the RBI and the National Bank for Agriculture and Rural Development for shackling the functioning of the co-operative sector. |
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| "I fail to understand why directors of co-operative banks should be precluded from taking loans from their own banks. The collateral offered by the directors can always be liquidated in case something goes amiss. I think both the regulators are out to finish the sector," said Tupekar. |
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| Pointing to the sorry state that the office of the Commissioner for Co-operation & Registrar of Co-operative Societies had been reduced to, the minister said the commissioner of co-operative societies had become a rubber-stamp meekly following the instructions of the RBI. |
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| Tupekar said he had send out instructions to the effect that directors of all co-operative societies in the state will have to sign the joint and several liability bond within 15 days of their election to the board. |
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| The joint and several liability bond is aimed at ensuring accountability for the decisions taken by the directors. |
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