Pratibha Mahila Sahakari Bank
| Company type | Cooperative bank |
|---|---|
| Industry | Banking |
| Founded | 1973 |
| Founder | Pratibha Patil |
| Defunct | 2003 |
| Fate | Licence cancelled by Reserve Bank of India |
| Headquarters | Jalgaon , India |
| Products | Banking services aimed at women's empowerment |
Pratibha Mahila Sahakari Bank was a cooperative banking institution located in Jalgaon, Maharashtra, India. Established in 1973 by Pratibha Patil, who later became the President of India, the bank aimed to promote women's empowerment.
Patil held positions as chairperson and director, accompanied by several family members. She is one of 34 individuals named in a case currently before the Aurangabad bench of the Bombay High Court, which involves allegations of mismanagement and misappropriation of funds.
In 2003, the Reserve Bank of India (RBI) cancelled the bank’s licence after uncovering various irregularities, including unlawful waivers of interest on loans granted to Patil’s relatives.
Inquiries and closure
The RBI categorized the bank as "weak" as early as 1995. A probe conducted under the Maharashtra Cooperative Societies Act in July 2001 revealed losses amounting to Rs 1.35 crore, leading to the resignation of the chairperson along with eight directors. Following complaints from employees and small-scale depositors, the Ministry of Finance requested an RBI investigation into financial discrepancies in April 2002.
By February 2003, the RBI withdrew the bank’s licence citing severe financial irregularities. The investigation exposed a dubious loan policy that disproportionately benefited Patil’s family members, including her brothers and nephews, through interest waivers. The bank’s board lacked individuals with expertise in banking or management. Among the ten largest loan defaulters, six were connected to Patil’s family. Additionally, the institution had a negative paid-up share capital and reported gross non-performing assets totaling Rs 391.20 lakh.
Post-closure events
Numerous depositors, drawn by Patil’s association with the bank, suffered considerable financial losses despite deposit insurance covering the initial Rs 1 lakh. When Patil was nominated for the presidency, some depositors who had yet to receive their balances accused the bank of functioning as a "family fiefdom." Representatives for Patil maintained that she did not participate in loan sanctioning during her brief tenure as chairperson and emphasized that the RBI report did not implicate her directly.
In 2007, a petition filed in the High Court by depositors and former staff alleged that Rs 4,556 collected from employees’ wages intended for Kargil War relief were never transferred to the national fund. Additional claims included misuse of bank assets by Patil’s brother, Dilip, and deviation from the bank’s core mission of lending primarily to women by extending loans to male relatives within Patil’s family. The Indian National Congress refuted any involvement on her part, stating that the bank functioned properly until 1993. However, local INC members and employee unions contested this narrative, accusing Patil of enabling unsecured loans to family members and approving interest waivers despite worsening financial conditions after 1995. The total defaults on these family loans were reportedly close to Rs 225 lakh.
In 2011, Rajesh Chakrabarti from the Indian School of Business observed that scandals at Pratibha Mahila Sahakari Bank along with other Urban Co-operative Banks significantly damaged UCBs’ reputation in the early 2000s.