Kangra Cooperative Bank NPAs underplayed last year: Top official

Lalit Mohan

Tribune News Service

Dharamsala, July 24

The authorities of Kangra Central Cooperative Bank (KCCB) have underplayed the non-performing assets (NPAs) in the last financial year. A letter written by the managing director of the bank to various branches highlights the fact.

In the letter, a copy of which is available with The Tribune, the MD of the bank has written to the branch managers that it is a matter of grave concern that marking of the NPAs is not as per the income recognition and asset classification (IRAC) norms in most of the branches on a monthly basis. The letter states that it has been observed in the system-generated report that there are 3,633 accounts of Rs 169.36 crore that have not been marked as NPAs by the branches.

Keshav Korla, director of the KCCB, who has been alleging that the NPAs of the bank was increasing due to faulty loans, while talking to The Tribune, said the letter had proved that the management had been understating the NPAs of the cooperative bank.

He said in the last financial year, the NPAs of the bank had risen sharply due to bad loans given by the bank management. The NPAs was well above 15 per cent. The NPAs of the bank increased from Rs 402 crore on March 31, 2016, to Rs 542 crore in March 2017. The NPAs increased by Rs 140 crore in one year, Korla alleged.

However, the letter of the MD illustrated that the NPAs worth Rs 170 crore were hidden in the balance sheet. He alleged that the letter of the MD illustrated that in the last financial year, the NPAs of the bank rose by Rs 270 crore instead of Rs 140 crore. He also alleged that it also raised question over Rs 55 crore profit declared by the bank.

Korla has been opposing the recent recruitment being done by the KCCB through the Himachal Pradesh Board of School Education. He has been saying that as per the RBI guidelines, no fresh recruitment can be carried out in the bank if its NPAs are above 10 per cent. As per the latest figures, the NPAs of the bank seem to have gone beyond 17 to 18 per cent, Korla said.

PC Akela, managing director of the bank, admitted that he had issued a letter to branches regarding Rs 169.36 crore unmarked NPAs account. However, he said that the letter was a warning to the branches. As per norms, if a loan account holder failed to deposit three consecutive instalments his account was declared as NPAs. After the letter was issued, the bank managers swung into action and Rs 70 crore had already been recovered from the classified NPA accounts, he said. The real figure on the NPAs was only calculated at the end of the financial year.When asked, he admitted that there were more NPA accounts in the bank branches of Una district and the management was trying to tackle the situation. The issue of undeclared NPA accounts, however, is likely to raise a political storm as opposition parties have already been alleging corruption in the KCCB recruitments and operations.