Shiv Sena (UBT) member Anil Parab and others made a strong demand for the dissolution of the State Transport Employees Cooperative Bank board of directors, accusing its chairman, Gunaratna Sadavarte, of total mismanagement that could lead the bank to bankruptcy.
Parab raises the matter during question hour
Raising the matter in the state legislative council during the question hour, Parab said that the bank, which once had very strong financial fundamentals, was going down under the leadership of Sadavarte, threatening the fortunes of thousands of state transport corporation employees who had parked their savings in it.
Parab alleged that Sadavarte ruled roughshod over the bank without paying heed to others. While Sadavarte and his wife were inducted as technical board members, his barely 23-year-old brother-in-law with no adequate experience in the profession was appointed as the Managing Director of the bank. Moreover, the new directors have slashed the interest rate on deposits from 9% to 7%, causing a capital flight.
Fixed deposits totalling Rs 180 crore have already been withdrawn by the account holders, while applications for the withdrawal of Rs 450 crore are pending before the bank. Parab said that among the 18 board members, 14 had objected to the functioning of Sadavarte, and the Reserve Bank of India served a notice to the bank, hence the government should dissolve the present board of directors and appoint an administration to save the crores of FD and accounts of poor ST workers.
Jayant Patil says bank has been built with hard work of ST employees
PWP member Jayant Patil said that the bank has been built with the hard work of ST employees. Sadavarte's dictatorship was ruining the bank's prospects, as deposits of several crores have been withdrawn since the appointment of the new board of directors. The Cash-Deposit ratio of the bank has gone above 95 percent, and it will increase the problems of the bank in the coming days.
Leader of the Opposition Ambadas Danve, Sena (UBT) member Sachin Ahir, and others created noisy scenes in the House on the issue and demanded the immediate dissolution of the board and the appointment of an administrator. They were pointing out that most of the directors are unhappy over the working style of Sadavarte.
Responding to the question, Minister for Cooperatives Dilip Wadse-Patil admitted that his department and the Reserve Bank of India had received complaints against the directors of the bank. The cooperative department had initiated an inquiry against irregularities under the cooperative rule of 89 (A) after the RBI intervention.