No cause for panic, says MD; ANSCB governed by RBI and NABARD, records ₹7.61 crore profit
Sri Vijaya Puram, June 3: Amid rising public concern and reports of heavy withdrawals in the North and Middle Andaman districts, the Andaman and Nicobar State Cooperative Bank (ANSCB) has issued a formal statement urging customers not to panic. K. Murugan, Managing Director of ANSCB, reassured the public that the bank is financially sound and that “all fixed deposits are safe.” He added that the bank operates under the regulatory framework of both the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD), and there is “no cause for worry.” https://thewaveandaman.com/fir-against-kuldeep-rai-sharma-loan-irregularities-anscb/
Murugan disclosed that the bank’s unaudited net profit for this year is ₹7.61 crore and that the bank recorded a profit of ₹7.45 crore for the financial year 2023-24. As of the latest internal reporting, ANSCB holds total local deposits of ₹1,336 crore. Of this, ₹250 crore is parked in safe investment instruments, ₹246 crore in government bonds and securities, ₹86 crore as fixed deposits with commercial banks, and ₹33 crore as floating balances in current accounts. The bank also maintains a standard loan book of ₹575 crore. According to Murugan, the bank is actively reviewing non-performing accounts and working to strengthen recovery mechanisms. He confirmed that total non-performing assets currently stand at 32 percent of the loan portfolio, a figure that reflects legacy issues and is now under phased review.
Despite these assurances, branch-level activity over the past fortnight tells a more anxious story. In towns such as Diglipur, Rangat, Mayabunder, and Billiground, customers have continued to withdraw funds in unusually high volumes. Locals report standing in long queues to close fixed deposits and redirect savings to nationalised or private-sector banks. The movement appears to be driven by a growing trust deficit, fuelled by governance-related complaints that have trailed the institution for years, including irregularities in loan disbursals, delays in board appointments, and a perceived lack of transparency.
The latest trigger was the lodging of an FIR on May 15 against Kuldeep Rai Sharma, vice chairman of ANSCB and a former Congress Member of Parliament. As reported by The Wave Andaman on May 23, the FIR was filed by the Deputy Registrar of Cooperative Societies (HQ) and lists a series of procedural violations in the sanctioning of loans, such as bypassing the loan screening committee, ignoring CIBIL reports, and issuing advances with incomplete documentation. Some site verification forms reportedly lacked mandatory branch manager signatures. The FIR also names other board members, bank officials, and beneficiaries. Police are currently reviewing loan files and initiating an investigation.
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Within the bank, staff in affected branches described the atmosphere as “tense but under control.” One employee from the Diglipur branch, speaking on condition of anonymity, noted that while daily operations were continuing smoothly, the volume of withdrawal requests had spiked. “People are unsettled, especially those with long-term deposits. They’re asking more questions than usual,” he said.
The ANSCB has historically served as a key financial institution for rural and semi-urban communities across the Andaman and Nicobar Islands, offering credit to farmers, small business owners, and cooperative societies. But recent years have seen persistent delays in board elections, allegations of political interference, and questions about asset quality. Critics have long argued that cooperative institutions in Union Territories suffer from fragmented oversight, falling between the mandates of local administrations and central financial regulators.
With no clear resolution timeline and a police investigation underway, the bank’s leadership faces an uphill task in restoring confidence.
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