Mumbai Round-Up

Reserve Bank of India has imposed some embargo on banking operations of Memon Co-Operative Bank and Development Credit Bank Ltd (DCB), both Muslim managed.

Memon Co-operative Bank ‘s operations headquartered at Mumbai have been put under restriction by the Reserve Bank of India (RBI). There were some rumors about the closure of the bank. Due to this, recently the bank faced a substantial withdrawal of money by its customers. RBI has put some restrictions on premature withdrawal of fixed deposits while all the customers of the bank will be allowed to operate their savings and current accounts, this was notified by a senior RBI official to media.

The RBI official remarked, “The bank is quite liquid. But there were some under-statements of financial data in the balance sheet and its net worth is not fully reflected. So we have put in some operating directions’’.

According to a top bank official the withdrawals were provoked because its major customer base is concentrated in the lower income Muslims with average deposit size of about Rs 8,000. Approximately 45% of the bank’s deposits were in current accounts and savings accounts. The bank is carrying out its operations through 19 branches spread over Maharashtra and Gujarat and had a deposit base of Rs 345 crore.

Development Credit Bank Ltd (DCB) may be the first Indian bank to pay the price for aggressive retail lending over the past few years and is being closely monitored by the banking regulator, Reserve Bank of India (RBI), even as its quality of assets deteriorates and its profitability comes under strain. The bank’s chairman Nasser Munjee admitted that bad loans were a problem, but denied that DCB was under RBI’s scanner.

DCB’s gross non-performing assets, or NPAs (bad loans), have risen more than threefold in the first three quarters of the current fiscal year—from 1.5% in April to 4.7% in December 2008.
The reason behind rising NPAs, analysts say, is aggressive lending in the unsecured personal loans space. Interestingly, DCB’s deposit base shrank by at least 17% in the three months ended December, from Rs. 6,006 crore to Rs. 4,979 crore.

Two rating agencies, Standard and Poor’s Indian arm Crisil Ltd and Fitch Ratings Ltd have recently downgraded the bank’s credit rating, citing its high exposure to “the vulnerable retail and small business segment” and increasing credit losses.

This is not the first time that DCB, promoted by the Aga Khan Fund for Economic Development (Akfed), is in trouble. In September 2005, it appointed Gautam Vir as managing director and chief executive officer and gave him a mandate to clean up a pile of stressed assets and turn the bank around.

Let-down, deceived and exploited. That’s the predominant feeling within Maharastra’s 1.25-crore-strong Muslim community

Low representation of Muslims in the Lok Sabha has become a serious issue after the lone Muslim MP from Maharastra, A R Antulay from Raigad, announced that he will not seek re-election. Muslims constitute 20% of the electorate in Mumbai; their share of votes in the state is 12%.

Let-down, deceived and exploited. That’s the predominant feeling within Maharastra’s 1.25-crore-strong Muslim community, which has the ability to influence the electoral scales in as many as 30 of the 48 parliamentary constituencies.

Muslim organisations and activists in Maharastra have geared up to put pressure on the political parties and candidates and warned them not to take Muslim votes for granted.

Ironically these pressure groups most of the times are unable to go beyond issuing press statements with no ideological ground work to show at the grass root. In fact in the past, like pre-poll surveys, their dictates or suggestions to the voter’s turned out to be ineffective.

“We need to have one Muslim candidate from Mumbai who will voice our issues in Parliament,’’ said Maulana Syed Ather Ali, president, All India Ulema Association, the organization (AIUC).

Ulemas across Maharastra have asked Muslims to support the secular parties in the parliamentary elections. The Ulema Association and other Muslim organization, at a recent meeting in Mumbai, passed a resolution urging the Congress and the Nationalist Congress party to accommodate the smaller parties to prevent the votes of the secular supporters from being During a meeting held at the Islam Gymkhana in south Mumbai and attended by the All-India Ulemas Association, Quam-e-Majlis-e-Shura and other Muslim organisations, concern was expressed about a divide in the secular support in the general election.

“The Republican Party of India , Samjwadi Party, Bahujan Samajwadi Party have support in some pockets in the state that could damage the possibility of the victory of the candidate of secular parties such as the Congress and the NCP. The divide in the secular vote could mean a loss of 15 to 16 seats,” said Maulana Sayyed Athar.

In Mumbai the assorted groups and individuals pressurized All India Ulema Council (AIUC) to issue a statement that “No longer Muslim will vote on the basis of “Secular parties or Communal parties”. AIUC has decided not to support any political party blindly but guide Muslim voters to elect candidates only on the basis of their past performance”.

AIUC had resolved that the community would no longer allow itself to be used as a vote bank and be exploited by raising superficial and emotional issues. The anger of the ulema was aimed at the ruling combine, which the Council feels, has let the community down.

According to the statement, AIUC would study each candidate and recommend only those who had served the citizens and maintained social harmony. “We are not appealing to Muslims to vote for any political party or a coalition. Only individual candidates matter to us”, said Maulana Sayyed Athar.
“It has been observed that blindly supporting any single political party is harmful for people as the previous records and experiences prove. We appeal to the people to recognize the power of the vote and its full and collective utilization after consulting the wise. Otherwise, useless candidates will reach the assembly,” Maulana Ather said.

“Muslims, over the past 50 years have become politically mature and ‘now they can not be misled by election propaganda. The Muslim populace has calmly elected those who can solve their basic problems and their wisdom and tactical voting has proved the political pundits completely wrong.”
This may be true of the Muslim voters, but not of a section of Muslim Intelligentsia who wakes up during election times. It seems that they have not learnt their lessons. The basic shortcoming with these assorted Muslim pressure groups is that many a time there is a wide gulf between words and practice. This impairs the credibility of the Muslim pressure groups.

Thus in spite of having a slew of pressure groups and organisations, Muslim voters have to find their own ways and vote, keeping in mind their local and regional socio-political equations and that they are doing a good job.

In Maharastra the common Muslim voter is very clear in his mind. In Mumbai Muslims have dumped the Samajwadi party, which claimed to represent the community, as it has no work to support its claims except raising the issues for the obvious reason. In Konkan Muslims are with the Shiv Sena as it suits their regional socio-political equations. In other parts of Maharastra Muslims have rejected the third front and are supporting Congress-NCP alliance.

Amongst the slew of factors responsible for the swing in favor of Congress and NCP in Maharastra is the lack of a suitable alternative. The third front is practically non-existent in the State. Samajwadi Party had made significant inroads in Mumbai and could have provided a sound alternative. But Abu Asim Azmi SP Mumbai president failed to consolidate the party as he failed in raising a second line leadership in the city. Mere intentions are not going to help. If Muslim organisations and pressure groups have to play any defining role in the election process and help the community then it must work all year round every year instead of waking up during election time like the politicians.