Source: The Sangai Express
Imphal, October 21 2009:
Owing to low rate of loan recovery coupled with below-par performance of the Manipur State Cooperative bank (MSCB) in the distribution of loan to beneficiaries, under the Central-sponsored Special Employment Generation Programme (SEGP), the Reserve bank of India (RBI) is likely to cease transaction of the MSCB.
An informed source recounting the Central Government's grant of Rs 150 crore to the MSCB in the 2004-05 fiscal to execute the SEGP plan in the State, said the amount was meant for coverage of 15,000 educated un-employed youths.
In the financial years of 2005-06 and 2006-07, the MSCB extended loans to 10,000 individuals to take up income generation ventures which included setting up piggery farms and purchase of auto-rickshaws among others.
the beneficiaries were reportedly screened and selected by the respective District Level Committees which had Deputy Commissioners concerned as the chairmen.
even though the loan provision could benefit a substantial number of educated unemployed section of the population, the source cited physical complication in the loan recovery drive at hill district areas and legal wrangling putting on hold disbursal of loan to Thoubal district beneficiaries as some of the factors for decline in the MSCB's non-performing assets (NPA).
With the NPA hovering around the 50 percent mark, the RBI is likely to reconsider roping in service of the MSCB as the fund distribution agency to execute SEGP works by sealing the bank's transaction activities.
According to the source, in case RBI goes ahead with its decision of ceasing transaction of the MSCB, it would automatically mean total collapse of the State-run banking institution.
The only other way for the MSCB to tide over the embarrassing situation is either the RBI waiving the loaned amount or the MSCB bringing down the NPA rate to an acceptable level.
Prevailing uncertainty in the law and order situation of the State is said to be another important reason impeding free movement of MSCB employees in their loan recovery activities, the source added.