State funded financial institutions and co-operative banks have always been a happy hunting ground for politicians. It will be recalled that over the last decade there have been any number of scandals relating to cooperative banks in Maharashtra. Cooperative banks in the country and in the state of Goa have always been manipulated and misused and abused by politicians.

Which is extremely tragic because the very rationale of setting up and running cooperative banks has been to help the common man. Cooperative banks as the very expression implies symbolise the coming together of members of a community to help each other. Cooperative banks have always been more attractive than even the public sector banks because they have tended to charge lower rates of interest. But as with all democratic institutions cooperative banks have historically been hijacked by self seeking politicians because the members of the society which constitute the bank

very seldom if ever assert their rights. As in the case of other political

spheres in Goa including electoral politics the attitude has been loot and

let loot. The vast majority of members of such institutions remain mute

spectators to the loot and plunder.

In theory and on paper there are several checks and balances in place. There

is a Registrar of Cooperatives who is expected to monitor the functioning of

these peoples banks. Cooperative banks are also subject to Reserve Bank of

India regulations in respect of cash credit ratio. There are norms for

extending loans. Banks are in theory expected to check on just on the

adequacy but the legitimacy of the surety offered against loans. In the case

of disputes between the bank and the borrower there is an arbitration

machinery. But with members of the cooperative movement complacent to the

point of indifference cooperative banks continue to be looted and plundered

by a small coterie of directors aided and abetted by politicians. In Goa it

is politicians who have been controlling the cooperative banks. The

overwhelming majority of cooperative banks are headed either by a MLA or an

ex MLA. Our cover story reveals how politicians have spread their tentacles

over not only cooperative banks but tax payer funded financial institutions

like the Economic development Corporation.

The tragedy of it all is that when an individual from the middle class or

the lower middle class takes a small loan to purchase a consumer durable or

a taxi or a truck or a petty business the executives and the board of the

bank hound them and harass them. All financial institutions including the

new multinational banks are very generous in offering loans. But are even

more ruthless in collecting their dues. But this ruthlessness only extends

to the small borrower. If you borrow money to buy a two wheeler and you

default on your instalment, the bank is likely to take possession of your

two wheeler. If you yield to the high pressure sales talk of banks and

financial institutions offering you credit cards absolutely free and do not

repay they will send goons after you. But if you are a big industrial unit

or just brazen enough to borrow a hundred crores or a thousand crores, the

banks will be very sweet to you. They will be anxious to offer you one-time

settlements. They will be eager to waive off not just the penalty but even

the interest to get their money back. Money they should not have lent in the

first place given the credentials of the borrower. This is particularly true

of Goa where the most popular and widely offered security is land. In theory

the back officials are expected to ensure that the property mortgaged has a

clear title. But given the Uniform Civil Code in Goa it is difficult if not

impossible to find properties wit