The Hindu : Many cooperative banks functioning without licence

Online edition of India's National Newspaper
Sunday, Dec 21, 2003

National

National

Many cooperative banks functioning without licence

By Our Special Correspondent

NEW DELHI DEC. 20. Despite being in the eye of many a scam, as many as 419 cooperative banks in the country are functioning without a licence from the Reserve Bank of India, though they have been permitted to carry on banking operations until their licence applications are rejected by the RBI.

The 419 banks operating without any licence include 108 urban cooperative banks, 17 state cooperative banks and 294 district central cooperative banks.

According to information made available by the Union Finance Ministry, during the course of inspection by the RBI, major irregularities were found in 91 urban cooperative banks while frauds and misappropriation were reported in 22 such banks and 21 state cooperative banks.

The number of frauds and misappropriations found in district central cooperative banks turned out to be 290, as of March 31, 2003.

As per the official information, the maximum number of district central cooperative banks functioning without licences was in Uttar Pradesh where 42 such banks were in operation.

Madhya Pradesh had 34 such banks while Rajasthan had 26.

Bihar and Maharashtra had 22 banks each functioning without licence, while Andhra Pradesh had 19, Karnataka and Tamil Nadu 17 each while Haryana had 16 and Gujarat 15 such banks.

The maximum number of urban cooperative banks functioning without licence was in Gujarat where 29 such banks were in operation.

West Bengal had 14 such banks, Karnataka 12, Tamil Nadu 10 and Maharashtra 8 such banks.

The maximum number of urban cooperative banks involved in reports of irregularities as of March 2003 was in Gujarat, followed by West Bengal while Maharashtra, Tamil Nadu, Andhra Pradesh and Uttar Pradesh had their fair share too.

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