Fri, 28 Feb, 2020

Trouble brews in Goan cooperatives

During the recent assembly session, it was revealed that many cooperative credit societies and cooperative banks in Goa face serious problems with non-performing assets, and savings of many Goans could be in trouble as RBI places restrictions on these banks

13th February 2020, 02:25 Hrs

#TGLife


During the recent session of the state assembly, a shocking revelation was made by the government regarding the fragile economic health of some of the state’s banks and cooperative societies. The amount of NPA for cooperative banks in the state now stands at around Rs 400 crore, and in a fresh development, the Reserve Bank of India has placed restrictions on Margao Urban and Mapusa Urban banks, which has jeopardize the safety of around Rs 600 crore worth of deposits of Goan people held by these banks. 

The numbers were revealed in a written reply given by cooperation minister Govind Gaude to a question from Ponda MLA Ravi Naik during the session.  Reports also suggest that even as they battle NPAs, audit of many cooperative societies has not been carried out.

According to the recently published economic survey of the state, there area total of 824 branches of various banks in Goa, and the banking activity in the state has been lagging behind compared to the rest of the country. Bank deposits in Goa grew at aruond 8.66 percent this year, while loans grew by around 11.66 percent. Even so, Goa’s Cash Deposit Ratio remained at 30 percent, when it has actually been fixed at 40 percent. 

With many of the state’s banks and cooperatives reeling from financial crisis, questions are being raised whether the savings of Goans in these banks will be safe or not.


Three reasons why

A number of bankers and bank customers spoke to TG Life on condition on anonymity, and offered information on why the condition of banks in question could have become weak. They suggested the following reasons:

Mining: It is a well known fact that ban on mining resulted in a considerably high number of bad debts for banks around Goa.

Corruption: In nationalised or pan-India banks, there are officers from various regions of the country and they are transferred on a regular basis. This reduces the changes of corruption. However, in case of local cooperative banks, the staff comprises of locals, which leaves scope customers to dupe the bank using acquaintances with the staff.

Negligence:  Small cooperatives and banks need to follow the rules stringently when operating, but that does not always happen. For instance, when customers take gold loan, they may offer fake or low quality gold, which the banks accept without checking the quality. Thus, when the loan remains unpaid, the banks end up discovering that the gold that was pawned by the customer cannot recover the loan amount upon auction. 



mounting NPAs

Cooperative societies 

with the most NPAs (In Rupees)

VPK Urban, Mardol 823722442.00

Quepem Urban 129597020.00

Gokul Urban, Ponda 107235800.00

Dhavali Urban,Ponda 67214161.00

Shri Kalika Urban, 51065531.00

Mapusa

Total: 1178834954.00


NPAs of cooperative banks 

Goa Urban 1036613862.56

Bicholim Urban 136006923.00

Margao Urban 48007000000

Citizen Co.op Bank  97693249.00

The Women’s 20657020.52

Co.op Bank

Goa State Co.Op 10977.44

Total: 1,77,10,52033.02

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