The government has decided to strengthen the vigilance wing of the cooperative department and also to bring in necessary changes in the cooperative laws to put an end to corruption, Vasavan said.
The government is in the process of appointing an officer from the Indian Audit and Accounts Service in the post of cooperative audit director. The minister said that all these steps are being taken in the wake of the Karuvannur bank scam. A three-member committee has already been constituted to suggest amendments in cooperative laws to curb irregularities.
In the AR Nagar bank fraud, it has been detected that the KYC guidelines were not followed while accepting deposits. Several people who have customer IDs did not have membership in the bank. Several customer IDs were given under one name and through this Rs 2.66 crore was disbursed as loan. Several employees and their relatives are also having a number of deposits in the bank. The rules and regulations were not followed during disbursement of loans.
The minister said that it has been noticed that in several instances when there is default in loan repayment, the banks are increasing the interest rates and allowing the…