..............As per the NABARD’s assessment note the non compliance of norms in the appraisal for disbursal of loans is one of the main reasons for default. During the assessment it was also found that the co-operative banks lended to the sugar co-operatives even when they were in losses and this was done without any guarantee from the state government on repayment before the loans were released.
Chief General Manager of NABARD, M V Ashok, said “Six of the unlicenced district co-operative banks were poorly managed and lack of compliance of the credit appraisal system norms led to the financing of undeserving units leading to the heavy NPAs.”................
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