JAMMU, Feb 20: Several BJP MLAs on Wednesday termed the crisis in the J&K State Co-operative Agriculture & Rural Development Bank Ltd (SCARD) as an “economic fraud and offence” and sought clarification on whether the Managing Director had the authority to transfer over ₹180 crore from the bank.
Cooperatives Minister Javid Ahmed Dar, however, assured the agitated legislators that those found responsible would not be spared and that a Liquidator would be appointed shortly. He also said that issues concerning the bank’s employees would be addressed.
During Question Hour, BJP MLA RS Pathania described the episode as a “₹223 crore scam”, alleging violation of Reserve Bank of India (RBI) guidelines. Other BJP members, including Dr Rajeev Kumar Bhagat, Vikram Randhawa, Surjeet Singh Slathia and Vijay Sharma, raised supplementary questions demanding accountability.
Slathia questioned who authorised the transfer of ₹180 crore and whether the Managing Director had the legal mandate to do so, noting that around 22,000 account holders were worried about their deposits. Randhawa said the bank appeared virtually bankrupt, though not officially declared so, and demanded details of defaulters and loanees.
Rajeev Bhagat urged the Government to release at least 25 per cent of depositors’ money immediately to help families meet urgent needs such as marriages and medical treatment. Vijay Sharma said farmers as well as retired employees had deposited their savings in the bank and criticised the absence of a clear timeline for repayment.
Responding to the concerns, the Minister acknowledged that the bank’s financial condition had deteriorated over the past two to three years, with liabilities amounting to around ₹180 crore. He said the process to appoint a Liquidator has been initiated to identify genuine claims and assess assets.
Clarifying the regulatory position, Dar said SCARD is not registered under the Banking Regulation Act, 1949, and therefore does not fall under the RBI’s jurisdiction. He added that the bank is currently under the control of the UT Government through the Registrar of Co-operative Societies and the Administrative Department of Cooperatives.
He informed the House that the Government has initiated liquidation proceedings under the Jammu and Kashmir Co-operative Societies Act, 1989, due to prolonged financial and operational distress. The bank’s troubles, he said, stemmed from accumulated losses, weak governance, poor loan recovery, liquidity stress, and inadequate refinance support from NABARD, along with limited financial assistance from the UT Government.
The Minister said payments of matured fixed deposits have been halted due to liquidity constraints, and depositors’ claims will be settled in phases after the issuance of a winding-up order and appointment of Liquidator(s), strictly as per statutory provisions. A comprehensive KYC verification exercise has been completed to authenticate depositor claims.
He further clarified that the Deposit Insurance and Credit Guarantee Corporation (DICGC) mechanism has not been invoked, as it applies only to banks registered under the Banking Regulation Act, 1949.
Reaffirming the Government’s commitment to protecting depositors’ interests, Dar said a detailed projection of liabilities has been prepared and submitted for consideration, including possible budgetary provisioning in accordance with law. (Agency)
