On May 30, 1987, Goa became a state and at that particular moment, Mapusa Urban Cooperative Banks jurisdiction was Goa, Daman and Diu. The State Reorganisation and the Multi-State Cooperative Act states that even if in an account of reorganization of a state, the jurisdiction of a multi-state cooperative society is deemed as multi-state cooperative society. Hence, Mapusa Urban Cooperative Bank remained the multi-state cooperative bank.
Ramakant Khalap, senior Congress leader and director of the Mapusa Urban Cooperative Bank told Herald that, “Soon after Goa became a State, the then Government of Goa, when Pratapsingh Rane was the Chief Minister, did not take this sportingly and issued an order under an Act which is not applicable to us and directed the bank to amend its jurisdiction and restrict Mapusa Urban to Goa. It was followed by appointment of an administrator and dismantling the elected management. Both these orders were illegal. We landed in court and in 1997 High Court declared that Mapusa Urban is a deemed multi-state cooperative bank. The then government again challenged it in Supreme Court and in another two years the Supreme Court also said the same as High Court.”
Even after this fiasco, the bank had no machinery for recovery and the recovery over dues figures touched to Rs 110 crore but the loans were covered by collateral security. In 1999, Reserve Bank of India came up with non-performing asset rules which was applicable across the board for all cooperative banks. “We got caught in a pincer. Our argument showing the collateral security was not good enough for the RBI as the money had not been recovered as we had no powers to do so. So we had to make a provision of Rs 70 crore against Rs 110 crore and that was the loss shown in the balance sheet. Yes, this was notional loss but it was according to the rule of RBI it had to be done. It then affected our share capital base and networth became negative and RBI them imposed restrictions on us in 2002,” said Khalap.
He further added that from 2002-2006, BJP came to power with Manohar Parrikar as Chief Minister. “The BJP politicians then made allegations that there was a loot of Rs 110 crore by Mapusa Urban Cooperative Bank and told people that bank is collapsing and customers of the bank started withdrawing their saving and there was a huge rush. It was only a political gimmick which panicked the people and just to tarnish my image,” said Khalap.
However, politically, Khalap requested the then Deputy Chief Minister of Goa Francis D’Souza to become the chairman of the Mapusa Urban Cooperative Bank. “Had the government at that time put in a share capital of Rs 25 crore and bought some of our stressed assets which had no buyers during that time, this bank would have turned around forever. However, we all board members resigned and handed over the bank in 2002 to the Goa government led by Manohar Parrikar. Parrikar appointed an administrator and they managed the banks during 2002-2006 and during that period, the Rs 110 NPA rode to a figure of Rs 140 crore as there were no attempts to recover. The only effort was made to find out frauds and irregularities which never happened. I was just a whipping boy for them,” added Khalap.
In 2006 there was a change in government and Congress came back to power. “We had requested the BJP government in 2002 to buy our assets and pump in a share capital of Rs 25 crore but nothing happened till 2006. The administrators simply ran away and the bank became a headless chicken for nearly eight months. We got elected and we managed the bank from 2006-16. During these ten years the NPAs which had touched almost Rs 150 crore was reduced to Rs 25 crore and share capital which was Rs 2.5 crore went up to Rs 26 crore and with great pestering personal engagement we did recover the bad debts,” said Khalap.
Meanwhile, the RBI which had imposed restrictions in 2002 also gradually started to relax the restrictions. “My son also became the chairman of the same bank but he remained there only for 8-9 days as he was asked to step down by the BJP government. Suddenly with the new chairman coming in, RBI imposed restrictions again. The political games continued and RBI said liquidate or merge. We also had DNS Bank coming up for the merger but it did not work out. Now it is PMC and we are heading in a positive direction. I can say that the money of all depositors is safe and there is no need to worry at all. If required, we have assets covering all deposits,” said Khalap.