Banking News

EOW again files closure report in Rs 25,000-crore Maharashtra cooperative bank ‘scam’

The Mumbai police’s Economic Offence Wing (EOW) has filed a closure report — its second one since 2020 — in a court here in the alleged Rs 25,000-crore scam at the Maharashtra State Cooperative Bank (MSCB) involving Deputy Chief Minister Ajit Pawar and others, a government lawyer said on Wednesday. The EOW, while filing the closure report, said nothing incriminating was found during its second probe.
It has been almost one-and-a-half years since the probe agency informed the court it was re-investigating the case. The EOW had filed its first first closure report in September 2020, which was accepted by the court. However, in October 2022, the probe agency had informed the special court dealing with cases against MPs/MLAs that it was conducting further investigation into the matter based on points raised by the protest petitioners (complainants) and the Enforcement Directorate (ED).

The government lawyer said they filed the closure report on January 20 as nothing incriminating was found even after considering the points raised by the protest petitioners. The court will hear the matter on February 17. The EOW had filed a first information report (FIR) in 2019 in the case under IPC sections 406 (criminal breach of trust) and 420 (cheating), relevant provisions of the Prevention of Corruption Act and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act against Pawar and 70 others, including former functionaries of the bank.

The alleged scam pertained to disbursal of loans of thousands of crores of rupees to sugar cooperatives, spinning mills and other entities by district and cooperative banks without following norms. MSCB is Maharashtra’s apex cooperative bank.

Its main function is to refinance district central cooperative banks (DCCBs) which primarily cater to the financial needs of the farm sector. Besides Pawar, who served as deputy CM in the earlier Congress-NCP government, the FIR named government officials, politicians, then-directors and officials of MSCB, among others. It was been registered following a Bombay High Court order in August 2019. As per the FIR, the state exchequer suffered losses of Rs 25,000 crore between January 1, 2007 and December 31, 2017 due to “irregularities” in the apex cooperative bank. Banking and RBI regulations were violated while disbursing loans to sugar mills at very low rates and selling off assets of defaulter businesses at throw-away prices, it alleged.

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