BHUBANESWAR: The Odisha State Cooperative Bank (OSCB) has come under intense scrutiny following allegations of gross financial mismanagement and the unauthorized payment of penalties to the National Payments Corporation of India (NPCI).
The All Odisha Cooperative Leaders’ Association (AOCLA) has formally petitioned Odisha Chief Minister Mohan Charan Majhi, demanding a special audit and the fixation of criminal liability on responsible officials.
Key Highlights of the Controversy:
Unauthorized NPCI Penalties: The bank reportedly incurred penalties amounting to several lakhs of rupees due to RTGS bounces and failures in ATM dispute settlements. Records show that on December 19, 2025, a penalty of ₹10.18 lakh was paid to NPCI after office hours, followed by another ₹1 lakh the next day. Earlier, on September 30, 2023, a penalty of Rs 11.80 lakh was also paid. The AOCLA alleges these payments were made without the mandatory approval of the Management Committee. They also stated these penalties are being routinely adjusted under “Penalty GL Statements” without fixing responsibility.
Arbitrary Leadership: Since the Registrar of Cooperative Societies (RCS) is only managing the bank as a part-time Managing Director (per High Court orders), senior in-charge officers have allegedly been functioning with total lack of accountability. They are accused of drawing excessive remuneration and allowances that were previously rejected by the management.
Systemic Failures: This is not the first time OSCB has faced heat. Recent internal audits and NABARD inspections have highlighted:
Faulty banking software leading to massive account discrepancies.
Failure to reconcile branch adjustment accounts (with differences exceeding ₹100 crore) (on October 7-8, 2022).
Non-compliance with RBI directives, resulting in separate penalties for failing to transfer unclaimed deposits to the Depositor Education and Awareness (DEA) Fund.
The revelation follows a statement by the state Cooperation Minister, Pradeep Bal Samanta (on July 31, 2024), noting that financial irregularities across various cooperative banks in Odisha have reached a staggering ₹224 crore, with OSCB being a primary focus –
: ₹147.16 crore from OSCB and 17 Central Cooperative Banks (CCBs).
: ₹77.45 crore from 13 Urban Cooperative Banks (UCBs).
The state government has already suspended the management committees of OSCB. With the latest representation to the Chief Minister, pressure is mounting for a high-level criminal investigation into the “arbitrary” financial decisions made by the bank’s current top brass.
OSCB is the apex body for cooperative credit in Odisha. Regulatory experts warn that such “penalty payments” for operational failures like RTGS bounces indicate a deep-seated rot in the bank’s digital infrastructure and internal control mechanisms.
