Mumbai: The state government has extended significant support to the Mumbai District Central Co-op Bank (MDCC Bank), popularly known as Mumbai Bank, which is led by MLC Pravin Darekar, a close ally of Chief Minister Devendra Fadnavis. On Thursday, the state government approved the opening of accounts at the bank for the disbursal of salaries and allowances to government employees.
Additionally, the cabinet has authorised the opening of individual pension accounts and the investment of surplus funds from government projects and state-run corporations, such as CIDCO, MHADA, and state transport, in the Mumbai Bank.
This decision was made during the first cabinet meeting following its expansion, in the absence of Deputy Chief Minister and Finance Minister Ajit Pawar, who was reportedly on vacation abroad.
It is well known that Darekar is a staunch supporter of Fadnavis and has often defended him during controversies. Despite his loyalty, Darekar was not included in the cabinet after the recent Mahayuti alliance's significant electoral victory, sparking speculation that the cabinet’s decision is a form of compensation.
This isn’t the first instance of the government showing preference for the Mumbai Bank. Under the previous Eknath Shinde-led administration, the bank received similar support on multiple occasions.
Earlier, on August 26, 2024, the cabinet had greenlighted a proposal to allot MHADA-owned land in Sion to the bank for the construction of a training centre for the cooperative sector. Initially, the government had proposed allocating land in Aarey Colony for the cooperative building, but local opposition led to a reversal of the plan.
Similarly, on December 3, 2023, the cabinet allowed the Mumbai Bank to conduct government transactions despite objections from the Cooperation Department.
By regulation, banks must maintain an “A” audit rating for five consecutive years to qualify. However, the department’s assessment revealed that the Mumbai Bank had a “B” rating in one of those years, making this an exception to the rules.
According to sources, as of October 2023, 15 banks meeting the 'A' audit rating criteria for five consecutive years were eligible to handle salary disbursements. However, the Mumbai Bank was initially excluded as it had failed to meet the 'A' rating for one year. Since then, the bank has reportedly improved its standing by fulfilling the criteria and increasing its credit reserve ratio to 9%.
The Mumbai Bank has been no stranger to controversies under Darekar’s leadership. He had to resign from the bank’s board after it was revealed that he used false documents to secure his position as a director representing the labour category. Despite this, he was elected chairman of the bank in June 2022 after the formation of the Shinde government.
In 2015, an FIR was filed against the Mumbai Bank for alleged irregularities involving cheating and criminal conspiracy. However, in 2022, the Economic Offences Wing of the Mumbai Police gave the bank a clean chit.
