Dharamshala (S Gopal Puri)
The recent FIR lodged by the Vigilance and Anti-Corruption Bureau in the Rs 20 crore Kangra Central Cooperative Bank loan repayment case is set to shake Himachal Pradesh’s political landscape.
While both BJP and Congress could face political repercussions, the BJP appears more vulnerable, as much of the alleged loan irregularities reportedly occurred during its tenure. This FIR also comes shortly after the BJP criticised Congress leader Satpal Raizada over bank loan by Kangra Cooperative Bank, raising concerns about the timing and political motives behind the case.
Constitutional and Regulatory Concerns
The case highlights potential violations of constitutional responsibilities under Article 43B, which emphasises cooperative societies’ accountability.
It also raises questions about compliance with banking rules, including those under the Reserve Bank of India (RBI) and Cooperative Banking Act, governing loan disbursement and repayment practices. Alleged irregularities, such as procedural lapses and favouritism in the Rs 20 crore loan, undermine the fiduciary duties mandated for cooperative banks.
Background of the case
The controversy revolves around a Rs 20 crore loan granted by a Kangra Bank branch in Una for the construction of a hotel in Manali. Allegations of improper loan approvals and questionable repayment terms have lingered in political discussions for years. However, no concrete action was taken until now.
An RTI response earlier disclosed crucial details about the loan repayment, spread across a 29-page document highlighting multiple discrepancies. Further complicating the issue, a One-Time Settlement (OTS) introduced on September 9, 2022, during the BJP’s rule, raised suspicions about procedural lapses and possible favoritism.
Investigations during BJP regime
During the BJP-led government, the Cooperative Department’s Additional Director conducted a preliminary investigation into the loan. The report identified seven critical irregularities in the loan approval and repayment process. On January 16, 2021, these findings were submitted to the Registrar of Cooperative Societies in Shimla, raising significant objections to the OTS and the bank’s settlement methods.
The current FIR follows these earlier findings, signalling a continuation of concerns raised during the BJP’s tenure. Critics argue that this development could bring heightened scrutiny to BJP leaders involved in the bank’s management and financial decision-making.
Political implications
This case has reignited political tensions, with both BJP and Congress coming under the scanner. While Congress may face questions over its initial role in the loan approval, the BJP is likely to bear the brunt of the fallout, as the alleged procedural lapses and the controversial OTS occurred during its regime.
The BJP’s strategy to target Congress MLA Satpal Raizada over KCC irregularities may backfire as the FIR redirects public and political attention toward the Kangra Bank scandal. With allegations of favouritism and financial mismanagement, this case could dent the credibility of key BJP leaders.
Broader impact on cooperative banking
Beyond political ramifications, the case underscores the need for stricter oversight in cooperative banking institutions. Violations of established norms not only tarnish the credibility of cooperative banks but also undermine public trust in financial governance.
As investigations proceed, the political and regulatory dimensions of this case will continue to unravel, potentially reshaping the narrative for both parties.
