PAC raps Mah govt for not allowing transfer of funds from DCBs

The Public Accounts Committee (PAC) has slammed the Maharashtra government for not allowing the transfer of Rs 520 crore from six district co-operative banks (DCBs) in the state that were in financial distress.
The PAC, in its report tabled in the state legislative assembly here yesterday, observed that the money in these banks was locked and could not be used for public purposes.
The committee said that in 2012, it had pointed out that four district central co-operative banks - namely Buldhana, Nagpur, Osmanabad and Wardha - were in dire financial straits.
"Despite the NABARD's statement about the financially troubled co-operative banks conveyed to the then state chief secretary, the government did not do anything. Rs 368 crore in three banks and Rs 59 crore in Osmanabad bank were locked," the PAC said in the report.

"The government delayed its decision allowing transfer of funds to the nationalised banks from these banks. But it did not help then. The transactions in the banks were stopped after the RBI's instruction in May 2012," the report stated.
The apex bank gave similar instructions to Dhule and Nandurbar DCBs. But the banks continued their transactions and Rs 93 crore got locked in the banks till August 26, 2014, the report said.

The PAC suggested that the the CEO of zilla parishads should take measures so that the deposits in the banks are protected. The ZP CEO should also review financial status of the banks.

It also pointed out that customers should be protected by any institution, and here the zilla parishad is the main customer of the district banks, it said.
The PAC also questioned the government as to why it did not pay attention to the banks earlier. "Now that the banks are in trouble, the department is paying attention. But had it paid attention earlier, the situation would have never occurred," it said.
Advising the government that the accounts of the DCBs should be checked every two years, the PAC added that a zilla parishad CEO alone cannot be held responsible for the financial situation.

"If the government departments, zilla parishads do not keep their deposits in the district banks, then the common people, businessmen would doubt about the banks' functioning. The district banks help the rural people. It lends loans to farmers and small businessmen, and hence it is necessary to protect them," it said.