Co-operative Bank Scams in India
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MMCB was established on October 10, 1968 in Ahmedabad, Gujarat, to cater to the varied financial needs of wholesale grocery traders in Ahmedabad's Madhavpura spice market.
Scams in Cooperative Banks
In 2001, MMCB was rocked by a scam. The bank had lent Rs. 10.5 billion to the equity market. There was no security or collateral issued against the money taken as a loan. This exposure was almost equivalent to its deposit base of Rs. 10.56 billion in the financial year 1999-2000.
Reviving Cooperative Banking
Cooperative banks have for long been the back bone of rural banking. Since their inception, they have been doing excellent work in the field of rural and cooperative banking. The recent scams in cooperative banks have been a jolt to cooperative banking system. Many analysts have suggested that cooperative banks should be brought under the complete control of RBI ending the dual control by the State governments and RBI-NABARD. According to N. Patel, Vice-Chairman of Gujarat Urban cooperative Banks Federation, control by a single authority will ensure smooth governance of cooperative banks. Some analysts also feel that interference from the registrar of cooperatives should be minimized...
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