Can we call it a scam, blatant and brazen corruption or just a loot or the blend of all the three, which has taken place in Jammu and Kashmir State Cooperative Bank Limited (JKSCBL) where a non- existent building society that has credentials nothing more than merely existing on papers, getting a whooping amount of a “loan” of Rs. 223 crore for construction of a satellite township at Shivpora, Srinagar. On perusal of the nitty gritty of the loan facilities which in very soft banking parlance can be called as accommodative loans but which is looked at again from the point view of the banking standards and procedures, as being against the norms, procedures, rules and regulations and hence illegal. The manner in which this loan was arranged to be “sanctioned” , how basic and elementary procedures were trampled under the feet lead overwhelmingly to the motive of mopping of illegal personal pecuniary gains or adopting of corrupt and illegal ways to indulge in massive corruption. Post ‘sanctioning’ of the loot amount by the said Cooperative Bank , where the role of the entire Board of Directors in the major scam is implicitly non contestable, the UT Government has swung into action and rendered the Board of this bank ineffective by superseding it with intent to mean business to have a crackdown against such acts of corruption.
It is learnt that with this loan amount, 257 kanals of land was purchased at Shivpora , Srinagar or per kanal @ nearly Rs.87 lakh which is a Seed Farm that has now been attached by the Government as one of the steps to deal with the loot indulged in by those who were committed by duty, law and conscience to protect the interests of the bank and remain as faithful and honest trustees of the confidence and trust of the constituents of the bank. It is worth noting that with impunity and knowingly, all basic and non negotiable terms and conditions mandatorily associated with the sanctioning of an advance and that too of such a huge amount, were conveniently thrown to wind.
Certain questions do arise as to whether a system of post sanction scrutiny of loans in such banks exists or not? Whether reporting of such sanctions are made without fail to the National Bank of Agriculture and Rural Development , Reserve Bank of India and other supervising and controlling authorities? If such reporting was made, whether immediately after releasing the first instalment of the loan, end use of the money was verified. Who scrutinised the Balance Sheet, Profit and Loss Account, Income Tax and other related papers of this Building Society? Was the past experience, the expertise and the like of this Society in building housing societies etc verified before entertaining the loan proposal? Was Registrar Cooperatives referred to both in person and in writing about knowing the antecedents of the Building Society? Were non banking persons – influential, political, master swindlers and experts in scams involved and deeply hand in glove with the Directors on the Board of the JKSCBL ? And last but not the least, were the loan documents scrutinised and, verified particularly in respect of how the loan was secured by a matching, easily saleable and marketable security by the external auditors, internal auditors, auditors from the RBI and the NABARD?
We have been consistently stressing upon the dire need of subjecting all institutions involving money transactions, in one or the other way, to austere audits and inspections, not to speak of banks which besides regular internal auditing have to be mandatorily audited by ‘external’ auditors, usually by some reputed Chartered Accountants besides by the RBI etc. Since the cat is out of the bag, deep inquiries into the entire circumstances under which a criminal conspiracy looks to have taken place to facilitate siphoning of the whooping amount of Rs. 223 crore from the bank under the alibi of a loan for constructing satellite township. The authorities at all levels supposed to have an eagle eyed surveillance of the functioning of the bank concerned should have been doubly alert based on and keeping in view the modus operandi of a massive fraud in Punjab and Maharashtra Cooperative Bank where 21000 fake accounts were created to hide fraudulent loans. With the appointment of new Chairman and Managing Director by the Government and appointing other members on the Board, we hope more details about the scam would come to light but in the mean time, all the culprits should be subjected to the rigours of the law in such a way as to set an example.
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