KASARGOD: A day after a Rs 100-crore fraud was reported at Thrissur’s Karuvannur Cooperative Society Bank, the BJP-controlled Mugu Service Cooperative Bank in Kasaragod’s Puthige grama panchayat has reported a Rs 32-crore loan fraud.Mugu co-op bank — set up in 1952 — slipped into red in 2013 and is today crippled by bad loans. “We have a cash liquidity of just Rs 10,000,” said chief executive officer Vijayan Panoor, appointed a month ago to clear the mess in the bank.
Mugu bank has a loan portfolio of Rs 50 crore, of which Rs 32 crore is on the brink of being declared non-performing assets, said its president and BJP leader P Venkataramana Bhat, who became president in 2018. He alleged his predecessors defrauded the bank by giving loans to their relatives and other customers without due diligence and in some cases by indulging in cheating. Bhat said the new board requested Kerala Bank, the lending bank of the cooperative bank, to appoint a CEO to put the house in order. Vijayan, the chief accountant of Kerala Bank’s Mullleria branch, was appointed as the CEO last month.
Vijayan found out that 80% of the bank’s borrowers were ineligible. The biggest frauds were committed by P Narayanan Nambiar, who was the secretary of the bank for 33 years from 1980 to 2013, his predecessor Shankara Bhat, who was the secretary from 2013 to May 2020, and BJP leader Narayana S, who was the president of the bank for 10 years from 2008 to 2018, said president Venkataramana Bhat.
“Together, the three former officials and their families owe Rs 5.72 crore to the bank,” he said. Nambiar and his family owe the bank Rs 3.69 crore. He gave loans to his mother, wife, children, and sister. “He took five different loans by pledging the same property. He also took a home loan for a non-existing house,” said the CEO.
Nambiar’s successor Shankara Bhat took charge in 2013 when the bank started reporting losses. It has been reporting losses since then. Today, the bank with a turnover of Rs 70 crore has a cumulative loss of Rs 38 crore.
But that did not stop Shankara Bhat from indulging in similar irregularities, said Vijayan. He took a loan of Rs 2 crore under various schemes. He still owes Rs 1.03 crore to the bank and Narayana S has an outstanding loan of Rs 1 crore. After the BJP took control of the bank, the party started appointing staff affiliated to the party, said IUML leader Abdulla Mugu, who was the director of the bank for 25 years.
“It was a UDF bank and back then we had directors from all parties. Today, all the directors are from the BJP. There is no check and balance which is another reason for the decline of the bank,” he said. Mugu Co-op bank has filed complaints with the Vigilance and Anti-Corruption Bureau and the Kerala Police. The Kasaragod DySP held talks with the three former officials and set deadlines to repay the loans. “The DySP has brokered a repayment agreement between the three men and the bank,” he said.
But there is no roadmap to recover the rest of the loan given to the 2,000-odd customers. “It will be a long road to recovery. The three officials clearly indulged in cheating and criminal conspiracy to defraud the bank. We will not give up our money,” said Vijayan.