Kangra cooperative bank faces leadership vacuum, financial scrutiny

Kangra Central Cooperative (KCC) Bank Ltd is facing a leadership vacuum and financial scrutiny, raising concerns over its functioning. The bank had reported a profit of Rs 117.86 crore in the last financial year.

The 105-year-old bank has been without a permanent Managing Director (MD) for several months. On Friday, 2017-batch IAS officer Zafar Iqbal took over as its officiating MD, the third officer to occupy the post on a rotational basis.

Earlier, Dharamsala Settlement Officer Sandeep Kumar was given the charge on September 3, while his predecessor Aditya Negi had also officiated as the bank MD for nearly a year. The frequent changes at the top have created confusion and uncertainty within the bank and the stakeholders. “People want to know who is taking decisions and where the bank is headed,” says social activist Atul Bhardwaj. He cautioned that prolonged instability can affect decision-making, loan recovery and long-term planning.

The bank has 216 branches in five districts of the state, more than 1.20 lakh account holders and deposits of around 1,500 cooperative societies. It is considered the backbone of the rural economy in Kangra and the adjoining areas. Any disruption in its functioning, observers warn, can directly impact farmers, small businesses and cooperative societies.

The bank is also under scrutiny of the Enforcement Directorate (ED), which had last month sought the records of loan waivers granted under the One-Time Settlement (OTS) scheme. Under this scheme, 5,461 non-performing asset (NPA) cases involving Rs 198.37 crore were settled and Rs 185.38 crore loans were waived while the borrowers paid Rs 112.12 crore. In 4,420 cases that were fully closed, loan waivers amounted to Rs 122.15 crore.

The state government had suspended the bank’s elected Board of Directors on September 12 after a National Bank for Agriculture and Rural Development (NABARD) audit report flagged governance failures and financial irregularities. The Divisional Commissioner, Dharamsala, Vinod Kumar, has been appointed its administrator.

Not only this, the election to the bank’s Board of Directors scheduled for September 28 was postponed indefinitely. According to the NABARD report, 1,090 loans were sanctioned outside the bank’s operational area, 80 per cent of which became NPAs. The audit report also pointed to lapses in Know Your Customer (KYC) and anti-money laundering protocols, improper classification of loans, delays in fraud reporting and weak operational oversight.

Officiating MD

• Zafar Iqbal has assumed the charge as the officiating Managing Director of Kangra Central Cooperative Bank Ltd
• He says that his top priority will be to restore the confidence of the account holders and other stakeholders
• He stresses on improving banking services, introducing technological upgrades, ensuring strict adherence to service rules, enhancing profitability and reducing NPAs that had been troubling the bank for several years