MUMBAI: Amid shrinking fixed deposits in cooperative banks, the Maharashtra State Cooperative Bank (MSCB)—the state’s apex cooperative bank—has written to the Reserve Bank of India (RBI), alleging that private lenders are using CSR funds to offer local self-government bodies inducements to attract fixed deposits.
Anaskar has also sought an independent investigation into the matter.
These allegedly unethical banking practices, which have created an “uneven playing field”, have been flagged in a letter written by MSC Bank administrator Vidyadhar Anaskar, to the RBI governor on November 2.
In his letter, Anaskar has alleged that some private sector banks are using their CSR funds to gift zilla parishads, municipal corporations and other local bodies, as well as government and semi-government agencies, air-conditioners, office equipment, vehicles, computers, furniture and financial assistance. The apparent objective, he alleged, is to secure large deposits from these institutions in return. Air-conditioners and vehicles were gifted by the private bank to secure deposits,” the letter states. A political leader linked to the cooperative banking sector in Marathwada claimed similar inducements were being offered to government agencies, including municipal corporations. In several instances, political leaders heading these bodies were allegedly the beneficiaries of such facilities. Anaskar, in his letter to the RBI, has questioned the legality of such CSR spending.
“In a recent instance, a zilla parishad in a Marathwada district suddenly withdrew ₹ 80 crore from the district cooperative bank. “Section 135 of the Companies Act, 2013, and the CSR Policy Rules, 2014, do not permit activities undertaken primarily to secure marketing benefits. Citing the growing competition in the banking sector, Anaskar said the State Bank of India’s annual expenditure on business acquisition and development increased to ₹ 6,493 crore in 2025-26 from ₹ 4,106 crore in 2021-22.
The letter is based on reports received by the apex cooperative bank, which says district cooperative banks are among the worst-hit. When the bank sought an explanation, zilla parishad officials said they had received CSR assistance from a leading private bank for the anganwadis run by them. The legality of such expenditure needs careful examination, and genuine social welfare activities must be distinguished from spending intended to obtain business advantages,” his letter said. “This reflects the intensity of competition in the banking sector and the resulting disadvantage faced by smaller banks,” his letter states.
