Karimnagar Coop Bank In Turmoil Over Ouster Of Leaders

The decision, taken during a meeting a few days ago, has sent shockwaves through the bank’s administration. Vilas Reddy said that the memberships were cancelled based on a High Court order, holding the former directors responsible for alleged financial irregularities between 2007 and 2017.

However, former chairman Karra Rajashekar strongly opposed the action, arguing that the meeting was held without the required quorum. He alleged that no investigation was conducted into the transactions of the past decade and that the directors were not served notices before their memberships were cancelled. He further accused Vilas Reddy, who lost to him in a previous election, of acting out of political revenge to clear the field for future polls.

Established in 1980, KCUB has shown significant growth over the years. It has its main office in Karimnagar and branches in Jagtial, Gangadhara, and Madhuranagar. The bank’s deposits grew from ₹24 crore in its first 24 years to ₹60 crore between 2007 and 2017.

In the past eight years, deposits have risen by another ₹8 crore. The bank earns profits primarily from short-term loans against gold and property, as well as from its growing deposits. The voter list, which once stood at 19,286, was revised to 9,000 members after a door-to-door survey ordered by the court in 2017.

The bank has not held governing body elections in eight years. The term of the last elected body ended on April 14, 2017. A subsequent attempt to conduct elections was stalled after objections were raised over the voter list, resulting in a court stay. Since then, the bank has been run by a series of nominated committees, with the current PIC chairman, Vilas Reddy, appointed by the government in January.

Meanwhile, the absence of a permanent governing body has reportedly led to the Reserve Bank of India (RBI) downgrading the bank’s rating. Allegations of irregularities in loan sanctions have also tarnished the bank’s reputation. Despite these issues, the Cooperative Department, which is responsible for oversight, has not taken any action to date.