Pune civic body move to deposit Rs 500 crore in Cosmos Coop Bank draws Congress criticism

The Pune civic body's decision to borrow money for acquiring land for major road projects by placing Rs 500 crore in a fixed deposit at Cosmos Cooperative Bank has sparked criticism from opposition parties. The Congress party has objected to the move, alleging that it might be influenced by pressure from the BJP or RSS for a cooperative bank's benefit.

Standing committee chairperson Shrinath Bhimale confirmed that the civic administration had approved depositing Rs 500 crore in a fixed deposit at Cosmos Cooperative Bank and seeking a 95% loan against it. Municipal commissioner Naval Kishore Ram explained that Cosmos Cooperative Bank had approached the Pune civic body to deposit its funds, which the bank would then lend to the civic body at a 95% overdraft rate.

The Pune civic body currently deposits its money in nationalized banks, including HDFC and ICICI, which are on the list of RBI-declared systemically important banks. Cosmos Cooperative Bank offered an interest rate of 7.40% for 16 months with quarterly interest payouts, along with an overdraft facility at 7.70% per annum on the deposited amount.

Congress corporator Arvind Shinde questioned the bank's selection, citing the presence of other eligible banks in Pune with competitive interest rates and expressing concerns over the lack of transparency and potential political influence.