BHUBANESWAR: As the Orissa State Cooperative Agriculture and Rural Development (OSCARD) bank is lying defunct with a liability to the tune of Rs 252 crore, the Cooperation department has sought the approval of the state government for its liquidation. The decision to initiate the process of liquidation of the apex cooperative credit structure and 45 Cooperative Agriculture and Rural Development (CARD) banks operating at primary level was taken at a high-level meeting chaired by Cooperation Minister Ranendra Pratap Swain on August 31, 2019.
The OSCARD bank’s liability includes loan debenture of Rs 251.48 crore sanctioned by the state government and the Centre and outstanding loan against borrowers out of the refinance support from the Nabard is Rs 48.41 crore as on March 31, 2018. Sources in the department said the claim of the OSCARD bank against the CARD banks was about Rs 200.50 crore.
Lending operation (long-term credit for farm and non-farm activities) by the cooperative credit structure came to a standstill from 2003 after Nabard withdrew refinance support in view of poor recovery performance, mismanagement of loan portfolio by primary banks, mounting non-performing assets (NPA) and huge accumulated loss. A committee headed by the Registrar of Cooperative Societies (RCS) examined the possibility of revival of the long term cooperative credit structure and recommended to the State Government for its vertical merger with the Odisha State Cooperative Bank (OSCB).
However, the Finance department rejected the proposal observing that such a decision will be prejudicial to the financial health of the state. While turning down the proposal for conversion of the State Government’s loan to equity, the department suggested that the matter be referred to Nabard to study the feasibility of OSCARD bank revival.
The demand of mass voluntary retirement by 78 existing employees of CARD and OSCARD banks has been rejected by the department due to poor recovery of loan from the farmers. Though the Public Enterprise department has released Rs 2.22 crore towards VRS for 39 employees in 2018-19, the OSCARD bank is yet to fully utilise the fund, the sources said.