With six co-operative banks in Gujarat going in for liquidation in the past 18 months, the state government and the Reserve Bank of India (RBI) are disputing over who should be blamed for this.
Senior members of the co-operative banking industry in Gujarat feel RBI officials cannot claim innocence in the issue as they are expected to monitor the activities of banks.
On Tuesday, state minister for co-operation Vadibhai Patel blamed RBI officials for the Visnagar Nagarik Sahakari Bank debacle. However, regional director of the RBI, V S Das, said regulating banks was not their (the RBI's) job.
"It is the job of RBI officials to see through happenings inside banks. They go for annual checkings at every bank. If they found something abnormal, why did the officials not put it on record and inform the state government. At least we could do something within our limitations," Vadibhai said.
"The Registrar of Co-operative Societies in the state is only responsible for registration process of banks and we only carry out periodic checks," said the minister. He added that the RBI has the sole responsibility of looking after complications like non-performing assets, statutory liquidity ratios or cash liquidity.
But RBI's regional director countered. "The power to supersede a bank's board of directors or appoint a custodian lies with the state Registrar of Co-operative Societies. RBI only has the responsibility to point out lapses in the banks," he said.
Chairman of a co-operative bank in Rajkot, requesting anonymity, said: "The RBI inspectors come annually to check bank documents. But, in most cases, even if something is found wrong, they hardly bother as their vested interests are concerned with marking a bank sick."
Mansukhbhai Patel, a co-operative activist and a senior member of the industry, said: "There should a close co-ordination between the state government and the RBI and they should keep exchanging notes regarding the status of co-operative banks in the state".
"After so many similar cases, including the latest of Visnagar, the RBI cannot remain silent and reluctant all the time. It should come out with some remedies and more stricter monitoring which only can nail the directors of such banks and save the interest of the depositors," he added.
