MSCB bailout: Prithviraj Chavan calls cabinet meet

Chief minister Prithviraj Chavan has convened a cabinet meeting on Friday after NCP urged him to pull the Maharashtra State Cooperative Bank (MSCB) out of the financial crisis.

Highly placed sources revealed, “All the cooperative units (sugar/cotton) which are reeling under massive debt and cannot be salvaged. Unlike in the past where the units were sold off as scrap undermining its land value, the government this time will ensure transparent deals by inviting tenders to ensure vested interests don’t fudge the costs, which runs into several hundred crores.” However, the immediate concern for the chief minister is to get the cabinet approval for Rs400-500 crore to be invested in the MSCB to avert agrarian crisis across rural Maharashtra. The chief minister and deputy chief minister will be together in Delhi to discuss the state plan size with the ministry of finance and planning.

A senior NCP cabinet minister said, “From the beginning I had warned that it was pointless to stretch the war against Congress over the MSCB. There was no need for blaming the Congress and Chavan for RBI action against MSCB.” Sensing the confrontation the NCP chief Sharad Pawar urged the state leaders not to continue their tirade against Congress.

Insiders indicated, “The state’s plea to centre to bail them with a special package is unlikely as it would set a trend for other apex cooperative banks across the state. Instead, Maharashtra will have to mobilise resources to pump the funds to restore the bank’s credibility and later seek centre’s grant to consolidate its functioning.”