Port Blair Oct, Oct 6: Once the financial lifeline for farmers, fishermen and small traders across the Islands, the Andaman & Nicobar State Cooperative Bank (ANSCB) now stands mired in controversy — burdened by a mountain of unpaid loans and haunted by an ongoing ED probe that has peeled back layers of mismanagement, unauthorised lending and alleged corruption. What was meant to empower the people of these remote islands has, in the eyes of many, turned into one of its biggest financial scandals.
The Andaman & Nicobar State Cooperative Bank (ANSCB), once hailed as a pillar of rural credit, is now fighting to salvage both its finances and its credibility. At a high-level review meeting chaired by the Chief Secretary of the A&N Administration on Monday, the bank’s leadership revealed that it has recovered ₹27.16 crore from Non-Performing Asset (NPA) accounts since April 2025. While this recovery offers a glimmer of progress, it barely scratches the surface of the massive NPA pile the bank has been grappling with for years. The Chief Secretary urged the bank’s management to “intensify loan recovery efforts” to bring NPA levels down to prescribed norms, underscoring the gravity of the situation. But behind the official figures lies a deeper story — one that has rocked the cooperative banking sector in the Islands. Over the past decade, the ANSCB, meant to serve low-income communities, allegedly became a conduit for distributing huge sums of loans to unauthorised beneficiaries. Investigations revealed instances of loans being disbursed without adequate collateral or due diligence, raising suspicions of political influence and internal collusion. The situation worsened to the point where the Enforcement Directorate was brought in to probe the irregularities. The inquiry has since led to the arrest and interrogation of several senior officials of the bank, including the ex- Member of Parliament and some in top management positions. According to sources, the probe unearthed a web of fraudulent documentation, inflated valuations of assets, and favoured lending to select individuals and groups who defaulted en masse — pushing the bank deeper into crisis. A retired banker familiar with the matter said, “The cooperative bank was meant to uplift rural livelihoods. Instead, it became a cash cow for a few, and now the entire cooperative movement here is paying the price.” For ordinary customers — small farmers, fishermen and self-help groups — the revelations have come as a shock. Once trusted as a local institution safeguarding their savings and providing affordable credit, the bank’s reputation has been badly bruised, shaking public confidence. Despite the ongoing clean-up efforts and recent loan recoveries, activists say trust cannot be restored until accountability is fixed and every rupee of misappropriated funds is traced back. As the investigation continues, the ANSCB’s saga serves as a cautionary tale: when transparency and oversight fail, even institutions built for the common good can spiral into scandal.
