Nishar Mohammed & Vikramaditya
Sir Vijaya Puram, July 29: The Andaman and Nicobar State Cooperative Bank (ANSCB) held a press conference today to address growing concerns among the public regarding the safety of their deposits, following a recent investigation into alleged loan irregularities. The bank’s current management sought to quell fears and clarify the situation, asserting that all public deposits are 100% safe and accessible.
The press conference was attended by Mr. P.G. Paul, the newly appointed Chairman of the bank and a retired DANICS officer, along with Mr. Nand Kishore Singh, the Vice Chairman, and several other board members.
The key message conveyed by the bank officials was a strong reassurance to the public that their money deposited in the Andaman and Nicobar State Cooperative Bank is entirely secure. They emphasized that depositors can access their funds at any time. The officials noted a significant spread of rumors about the bank’s stability, which has led to a surge in withdrawal requests at various branches, causing operational difficulties and requiring cash transfers from Port Blair to manage the demand.
“This case and the ongoing inquiry do not currently affect the bank in any way,” stated Mr. P.G. Paul, who took charge as Chairman on June 30th. “It does not mean that the bank’s money is gone, that all money has been stolen, or that depositors will not get their money back. That is incorrect.” He clarified that the inquiry pertains to some large loan amounts disbursed, not the bank’s overall financial solvency.
Mr. Paul elaborated on the ongoing investigation, stating that it began after the new management committee took over. “We received information that some previous individuals had committed errors, which is why the CID inquiry started,” he explained. He confirmed that some individuals, including the former Chairman, Managing Director, Vice Chairman, and a Loan Manager from the bank, as well as three to four private individuals who received loans, are currently in judicial custody in connection with the inquiry.
Mr. Nand Kishore Singh, the Vice Chairman, added that the bank was established in 1966 by islanders and cooperative societies and has consistently received awards for its services and development. He acknowledged that “irregularities in loan disbursal” and “violation of rules and regulations” by the previous management, involving loans to shell companies, are under investigation. He assured that the present board is fully cooperating with the police and administration, which are moving in the correct direction, as evidenced by the arrests made.
Despite the challenges, the bank officials presented figures to underscore its stability:
Total Deposits: ₹1079 crore.
Deposit Insurance: All deposits are covered under RBI’s DICGC (Deposit Insurance and Credit Guarantee Cover) scheme, ensuring 100% safety.
Statutory Reserve: Approximately ₹85 crore.
Capital Adequacy Ratio (CRAR): 14.3%, significantly higher than the RBI mandated 9%.
Total Loans Outstanding: ₹975 crore.
Questions were raised by media persons about the high Gross Non-Performing Assets (NPA), which stood at 49% when the new board took charge and has since risen to 57%. Given that nationalized banks typically maintain single-digit NPAs, it was asked why the public should trust a bank with such a high NPA, especially when deposits and outstanding loans are almost equal.
In response, Chairman Mr. Paul and Vice Chairman Mr. Singh outlined the proactive steps being taken by the new board to address the NPA and restore public confidence:
Mr. Nand Kishore Singh, the Vice Chairman said that the new board, in office for less than a month, has immediately initiated vigorous recovery efforts, including legal steps to recover money by disposing of mortgaged assets. They are exploring options like engaging Asset Reconstruction Companies (ARCs) to quickly acquire NPA assets and provide liquidity to the bank.
He said that properties that were previously mortgaged against defaulted loans, such as a hotel in Bhatubasti and a property in Dairy Farm, are being processed for open auction. While some properties might have accrued significant compound interest, exceeding their current market value, the bank is seeking legal advice on how to best recover the maximum possible amount and pursue civil suits for the remaining balance.
While acknowledging temporary cash withdrawal limits at some branches due to abnormal withdrawal patterns, the bank emphasized that there are no restrictions on digital transactions (RTGS, online transfers). They stated that the board has decided to increase cash withdrawal limits to ease public panic.
The new board pledged to operate transparently and without political bias, a stark contrast to previous instances where the bank was allegedly utilized for political benefits. “This is a non-political organization,” stated Mr. Paul. “When it comes to the cooperative bank, our sole aim is to further its banking operations, not to gain political advantage from it.”
They also addressed the issue of outdated information on the bank’s website, promising a comprehensive review and update of all administrative and financial figures, adhering to RBI and NABARD guidelines, to ensure transparency.
The bank plans to resume issuing fresh loans, prioritizing farmers (KCC loans) and cooperative societies. Large-scale loans will remain suspended for now.
Mr. Saran Singh, one of the Directors and a veteran from the cooperative sector and a farmer leader, emotionally appealed to the public and borrowers. He reminded everyone that the cooperative bank was founded by farmers in 1966 for the welfare of the farming community and has since grown significantly. He urged those who have taken loans to repay them, emphasizing that the bank is for transactions and trust. He condemned the spread of false rumors, stating, “Farmers are the food providers, and it is not good to put false allegations on them.” He stressed that if anyone has taken a loan after signing bonds and declarations, they should understand their obligation to repay and not let the farmers’ bank fail.
The ANCSCB management is hopeful that their concerted efforts to recover NPAs and instill confidence will stabilize the bank and allow it to continue serving the community effectively.
