Maha Cabinet allows Mumbai co-op bank to open salary accounts of employees from govt corporations

Mumbai, Jan 2 The Maharashtra Cabinet chaired by Chief Minister Devendra Fadnavis on Thursday gave its approval for the Bharatiya Janata Party (BJP) MLC Pravin Darekar-led Mumbai District Central Co-operative Bank (MDCCB) to open salary accounts of government employees and accept investment of surplus funds from government corporations such as City and Industrial Development Corporation, Mumbai Metropolitan Region Development Authority, Maharashtra Housing and Area Development Authority and Slum Rehabilitation Authority.

The state government in October 2023 had already sanctioned similar permission to 14 district central cooperative banks (DCCBs) with criteria that these banks should have "A" class in annual audit for five years and credit reserve ratio at nine per cent.

The MDCCB then did not fulfil the criteria as it had received a 'B' class in one of the years and the ratio too had come down from nine per cent.

Darekar is the chairman of the bank.

Apart from the permission to open salary accounts, the government corporations including the City and Industrial Development Corporation, Mumbai Metropolitan Region Development Authority, Maharashtra Housing and Area Development Authority and Slum Rehabilitation Authority can now park their excess funds in the MDCCB.

In March 2020, the Maharashtra government directed all departments to open salary and pension accounts in nationalised banks only.

In August 2020 and later in November 2020, the decision was modified and co-operative sector banks were also allowed for the above-mentioned transactions.

The list of cooperative banks gets updated every year based on the criterion of annual audit and credit reserve ratio.

The 14 DCCBs allowed in October 2023 are Thane, Raigad, Ratnagiri, Sindhudurg, Ahmednagar, Pune, Satara, Sangli, Kolhapur, Latur, Akola, Bhandara, Chandrapur and Gadchiroli.

The BJP leader-led MDCC bank was included in this list as a special case in the Cabinet meeting on Thursday.

"It was a small technical issue which has been rectified and based on the proposal to grant permission to Mumbai bank was pending. It needed cabinet approval and the proposal was moved today and cleared," said an official from the Finance department.

"I thank the government for showing trust in our bank. We are in the 'A' grade and thanks to the trust shown by the government, we will continue to do good work," said Darekar.

In the previous government, Darekar-led MDCC bank had received a 2,566.57 square-metre MHADA plot in the prime Sion area (South Central Mumbai).

The plot was leased to Mumbai District Central Co-operative Bank, despite negative remarks from the Finance department.

Source: IANS