Tamil Nadu - Erode   

20 coop. banks in deep crisis

R. Sundaram

ERODE: Mismanagement, murky politics and illegal advancement of loans have pushed 20 Primary Agricultural Cooperative Banks in the district to the verge of closure.

The strong cooperative movement in the district has helped farmers raise money during an emergency and they used to deposit their hard-earned money - averaging Rs. 25,000 per year - in these banks. Now these banks are unable to return even the matured amount. There are 221 cooperative banks in the district.

Norms violated

It is reported that during 1998-2001 loans were advanced violating norms. Loans were advanced to persons who could not even repay the first instalment of the loan taken earlier, it is stated. Many of the depositors who approached the banks were either given a small per cent of the principal amount or nothing.

Salary hiked

It is alleged that salary of some of the employees were raised several fold resulting in huge expenditure.

Even a secretary of a cooperative bank is drawing more salary than that of the Joint Registrar of Cooperatives, it is alleged. Now efforts are on to reduce the salary. Though severe drought conditions that prevailed in the district has resulted in the non payment of loans, the banks' financial situation worsened mainly because of mismanagement, it is alleged. Now authorities are planning to take criminal action against some officials. There is also a move to obtain money from the Central Cooperative Bank or the Nabard to tide over the crisis.

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