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Our Economic Bureau/
Entire episode of Srijan Mahila Vikash Sahayog Samity is the classic example of failure of check and balance!
Special investigating team (SIT) today conduct raids at the Nazarat (the office of district magistrate which deals with financial matters) in connection with the much talked Srijan scam. The raid was mainly to ascertain what actually was happened and what was the exact process to grab huge government funds.
However, the most important feature of this scam in the tune of more than Rs 500 crores, that the role played by department of cooperative societies, government of Bihar. Since the registration to the said NGO was granted by the registered, cooperative societies, how one could ignore the responsibility of the cooperative department?
The said NGO was operating so called bank without the license granted by Reserve Bank of India. It was operating daily deposits, saving/current accounts, granting advances like a bank by opening cash credit and term loan account. Not only general people believed that it is a licensed cooperative bank but even district administration, branch of bank of Baroda and Indian bank, auditors and even the income tax department at Bhagalpur.
General public opened their deposits and advances accounts and transected with the said so called bank, even district administration, Bhagalpur has been parking its money under different schemes with the so called bank for more than last 10 years. A survey in the year 2011 was conducted by the income tax department Bhagalpur in the premises of the said NGO even the income tax department believe that it was licensed cooperative bank. Otherwise income tax department would have reported the fact of illegal parking of huge government money with the said NGO. Auditors of the said NGO also failed in reporting about the banking activity and parking of government money.
However, the office of register, cooperative society, government of Bihar, district cooperative office, Bhagalpur and the district cooperative bank, Bhagalpur was well aware about the illegal banking activity by the said NGO. What prompted the three government’s units to create an atmosphere of confusion which ultimately helped to believe many including the government departments and banks that the said NGO was nothing but a licensed bank.
The intensity of the offence increased when the government funds parked with the said NGO was misappropriated. Intensity of the offence increases many folds when the funds are misappropriated by an organization which is registered under one of the department of the government, ie, department of cooperative, government of Bihar. The department giving registration failed out rightly in monitoring the activists of cooperative society registered under it. So government money under the custody of district administration, Bhagalpur was parked with the registered cooperative society, under register of cooperative, government of Bihar through the branches of nationalized banks.
Branches of national banks openly violated the banking rules and directions of RBI, even the auditors of the said branches failed to stop such violations. All the mechanism to regulate the activities of branches of nationalized banks failed in relation to transaction of money with so called Srijan bank.
Officials of income tax department, Bhagalpur involved in conducting survey and scrutinization of books of account of the said NGO failed in reporting the huge money transfer to the bank account of the said NGO.
Hence checks and balances failed either due to incompetency or such corrupt practices by concerned persons.