Raghav Guleria

Dharamsala, July 26

The Board of Directors (BoDs) of Kangra Central Cooperative Bank are up in arms gainst a recent decision of the Secretary Cooperation, which excludes the bank's Managing Director (MD) from recovery cases.

According to them, it is unjustified to keep the MD out of the loan recovery cases. If he is included in the committee approving loan cases, how can he shy away from the responsibility of recovery? This proposal was passed by the Kangra Central Cooperative Bank's BoDs at its headquarters in Dharamsala through a voice vote.

The non-performing assets of the bank are 7.10 per cent at present. The bank management had approved loans to many people recently, which are posing difficulty in their recovery.

A retired manager of the bank told The Tribune that crores of rupees of the bank are stuck with defaulters. He said, "Recovery is not being done even after repeated notices. One such case has come to light, wherein an initial loan of Rs 20 crore, which has accrued to over 40 crore now, was allotted, but the person concerned was not paying the due instalments."

Inside sources reveal that instead of issuing the loan in four equal instalments as per the established practice, it was transferred in the borrower's account in one go. Surprisingly nothing has come up on ground.

The BoDs had referred this matter to the Registrar of the Himachal Pradesh Cooperative Societies Department for recovery. While hearing this case, the RCS had said that in case of default, the loan amount should be paid by the bank management or the guarantor or the member of the bank's BoDs, who had approved this huge loan.

It was precisely this decision, which was appealed by the MD before the Secretary Cooperation. After hearing the case, it was announced that the MD should be excluded from recovery cases.

It is being argued by the BoDs that when the MD is involved in the sanctioning of loan cases, why he should not be a part of the recovery.

A member of the BoDs said, "The loan sanctioning committee includes the Board of Directors, MD as director and general manager as secretary."

They opine that the bank officials cannot escape from their responsibility as they are expected to be satisfied on all accounts before disbursing any loan. It was learnt that the BoDs are taking up this matter to the high court for a durable and just solution.