Curbs on VPK Urban to accept deposits, offer loans removed

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Panaji: Just over a month after imposing restrictions on Mardol-based VPK Urban Cooperative Credit Society, the government on Thursday relaxed most of the restrictions.

As per the order issued by the state office of the Registrar of Co-operative Societies, VPK Urban now has no curbs on accepting deposits and sanctioning of loans.

The limit on the withdrawals for depositors has been increased from existing Rs 20,000 per month to Rs 40,000 per month.

Depositors can also withdraw Rs one lakh for medical treatment and Rs five lakh for surgery. Further they are also permitted to withdraw money to pay education fees, hostel charges, etc.

The registrar has also lifted the existing freeze on staff salaries for the cooperative society. With the relaxations given the only restrictions that continue to exist are in sitting fees and travelling allowance of directors and bar on opening of new branches.

“The easing in the restrictions on VPK Urban is on the recommendation of a Task Force Committee for Credit and Urban Societies (TAFCUS) set up by the government and after hearing the directors,” said Vikas Gaunekar, Registrar of Co-operative Societies.

He said that the relaxations are to allow VPK Urban to continue carrying on with its ongoing business and prevent it from facing a liquidity crunch.

“Since VPK Urban is a financial institution, it cannot be put under a one-jacket formula. It has to be given breathing space,” he said.

Gaunekar added that the credit society continues to remain “under review.”

It may be noted that following an inquiry and a misfeasance report, the government had on June 11, 2020, placed VPK Urban under six-month restrictions. The inquiry and misfeasance report had revealed serious financial wrongdoings by the cooperative society from March 2017.

The misdoings included sanctioning of loans beyond the permissible limit, undertaking heavy expenditure for purchase of land, inauguration of branches and permitting 518 cases of one-time settlement to defaulting borrowers. The inquiry revealed that the credit society ran up huge accumulated losses worth Rs 12.7 crore and is non-compliance with norms relating to share capital and reserves.

Established in September 1993, VPK Urban is the state’s largest cooperative credit society with the highest number of branches.