[ Amar Sangno ]
ITANAGAR, 9 May: Rigged and riddled with scams, irregularities, and unauthorised loans, the Apex Bank is once again on the verge of declaring a bank default, as it is barely surviving on depositors’ capital amounts and depending on loan from the State Bank of India.
Currently, the Apex bank has total non-performances asset (NPA) of 31 percent, amounting to Rs 121.94 crores.
With the report of a show-cause notice being issued to the Roing branch manager (BM) by the managing director of the Arunachal Pradesh Apex Bank surfacing on the digital portal NewsFY on Monday, the Apex Bank is once again in the headlines for the wrong reasons.
The show-cause notice was served to Roing BM Anisha Apum, who is the wife of incumbent Dambuk MLA Puinnyo Apum, on 27 April. The notice clearly stated that a gross violation has been observed in cash credit to Account No 190002664733 at the Roing branch. The account number is found to be a kisan credit card (KCC) account in the name of M/s Hapi Enterprise, a private firm. However, KCC accounts have a loan limit of not more than Rs 3 lakhs; nevertheless, the transaction records of the KCC account reveal that nearly Rs 14 crores were disbursed as a loan to said private firm.
The amount was transacted between 2 February, 2024 and 23 August, 2024, in the mentioned account. The abnormal transactions have not only grossly violated the KCC account norms but also caught the attention of the Apex Bank’s MD, leading to her (Roing BM’s) suspension.
It has also been found that a similar notice had already been served to the Roing BM on 12 September, 2023, and subsequently, she was summoned to appear before the disciplinary committee at the MD’s office in Naharlagun on 10 October, 2023, which she did not comply with.
When a clarification was sought, BM Apum reacted, “These are just baseless allegations with malicious intent and political backing, aimed at maligning the image of my husband. To unearth the factual position regarding the aforementioned show-cause notice, you may visit the head office in Naharlagun and check the status or meet the MD of the Apex Bank.
“Moreover, under my management, the Roing branch has received an award for turning over Rs 82 crores from Rs 3 crores within a short span of time,” she claimed.
However, BM Apum did not respond to the query about the abnormal transactions of nearly Rs 14 crores in the KCC account of M/s Hapi Enterprises.
It is further learnt that four branch managers (in Deomali, Aalo, Basar, and Roing) are under suspension for alleged involvement in fraudulent transactions, and several other branch managers have reportedly been suspended for dereliction of duty or unauthorised loans.
Managing Director Bittu Kri acknowledged the discrepancies to NewsFy, saying that over 100 accounts with similar issues, and some even involving higher figures, have been identified. Kri also admitted that the bank is facing operational struggles stemming primarily from misconduct and unethical practices by certain officials in key positions, but ruled out systemic failure.
Kri further informed that the bank has set a six-month deadline, starting from March, for the Roing branch manager to regularise the account. She has reportedly acknowledged the directive and has made some payments, with the latest being Rs 1 crore in March.
Among the top defaulting borrowers are incumbent Chayang Tajo MLA Hayeng Mangfi, whose 2019 case is under investigation by the Anti-Corruption Bureau’s Special Investigation Cell, allegedly involving an amount of Rs 17 crores, and former Dumporijo MLA Paknga Bage, who is involved in a Rs 5-crore loan from 2018, and whose matter is sub judice in the court.
The Arunachal Times further explored how the Apex Bank has been systematically rigging by the defaulters in collusion with the bank administrators, branch managers and corrupt officials. The modus operandi of all fraud or defaulted cases is identical, such as unauthorised loan to private beneficiaries without approval from the higher authorities; deliberate non-renewal of cash credit accounts; weak monitoring and supervision of loan account; and poor record-keeping. These are attributed to be high NPA in the bank.
These corrupt officials are often given shelter by politicians and influential people in the state. The Apex Bank of Arunachal must be the only cooperative bank in the country which has a record number of rigging, suspensions and court cases. Interestingly, in many cases of fraud and default, neither the accused have any valid documents, nor does the bank. It is learnt that the bank does not have automatic classification in the system.
Another factor attributing to higher NPA and the bank’s bad debts is limited legal recovery mechanism for the bank’s dead and doubtful loan, poor system of appraisal of loan proposals, and poor recovery of loan and advances.
“If you don’t have bank credit policy, how would you judge the defaulter? Now we are framing the policy to put the rules in place. As part of reformation, now I don’t allow branch to park the money,” said MD Kri.
The managing director has initiated certain reformative steps to save the Apex Bank from collapsing again. Among those reformative initiatives are enrolment with credit information companies (CIC) and adoption of mandatory inclusion of CIC reports as part of credit appraisal; implementation of one-time settlement scheme and special one-time settlement scheme; restructuring and shadow accounting initiated to reduce NPA; bi-weekly meeting on recovery status; adoption of HO module software; centralised salary system for automatic deduction of loans for APSCABL employees, etc.
The bank commenced its banking business on 11 September, 1978 with its head office in Naharlagun under the Arunachal Pradesh Cooperative Societies Act. It faced considerable debacles, forcing it to be declared a defaulter by 2004. Prior to 2005-06, the bank was managed by an elected board of directors consisting of 11 members, comprising the chairman and managing director as member secretary.
Following the bank’s crisis in 2005, the board of directors was superseded on 30 November, 2005.
Late chief minister Dorjee Khandu had revived the defaulting Apex Bank by handing over a Rs 225-crore cheque to the Apex Bank; however, it is reported that only Rs 180 crore was debited to the Apex bank account, as Rs 20 crores was soft loan.
