The Maharashtra State Cooperative Bank (MSCB) has approached the Reserve Bank of India (RBI), alleging that some private sector banks are using Corporate Social Responsibility (CSR) funds to provide facilities and financial assistance to local government bodies in an effort to secure large fixed deposits from them.
In a letter dated November 2 to the RBI Governor, MSCB administrator Vidyadhar Anaskar sought an independent investigation into the alleged practices, arguing that they could create an uneven competitive environment for cooperative banks. The allegations have not been independently established.
According to the letter, certain private banks have allegedly provided air-conditioners, vehicles, computers, furniture, office equipment and financial assistance to zilla parishads, municipal corporations, municipal councils and other government and semi-government institutions under the CSR framework. Anaskar has questioned whether such support is genuinely intended for social welfare or is being used as an indirect commercial incentive to attract deposits.
₹80 Crore Deposit Withdrawal Cited in Complaint
The MSCB letter refers to an incident involving a zilla parishad in the Marathwada region that allegedly withdrew ₹80 crore from a district cooperative bank.
When the cooperative bank sought an explanation, officials reportedly said that the zilla parishad had received CSR assistance from a leading private bank for the anganwadis it operated. The assistance allegedly included air-conditioners and vehicles.
The apex cooperative bank cited the incident as an example of how CSR-funded support could potentially influence decisions about where public institutions place their deposits.
A political leader associated with the cooperative banking sector in Marathwada also claimed that similar arrangements were being offered to government agencies, including municipal corporations. The allegations have raised questions about transparency in decisions involving public funds.
Questions Raised Over CSR Compliance
Anaskar has questioned whether such expenditure complies with Section 135 of the Companies Act, 2013, and the Companies (CSR Policy) Rules, 2014.
The complaint argues that CSR spending should support genuine social welfare and public-interest activities rather than initiatives undertaken primarily to secure commercial or marketing benefits.
The administrator has called for the legality and purpose of the alleged expenditure to be examined, with a distinction made between legitimate CSR initiatives and assistance that may be linked to expectations of deposit transfers.
The letter also warns that if personal benefits, commissions or kickbacks were offered to officials responsible for deposit-related decisions, the matter could attract action under applicable laws.
Earlier Deposit-Related Allegations Also Highlighted
The complaint refers to another alleged arrangement involving a private bank and a state-owned agency. According to the account cited by MSCB, the bank secured deposits from the agency at higher interest rates while bearing ₹45 crore in advertising expenses for it.
A political leader associated with the cooperative banking sector said complaints about the arrangement had been made to the RBI. The leader also stated that the regulator subsequently made it mandatory for banks to announce their bulk deposit interest rates every morning.
Cooperative Banks Cite Uneven Competition
MSCB has argued that district cooperative banks are among the institutions most affected by the movement of deposits towards larger private lenders.
Cooperative banks generally rely on member participation, competitive interest rates, financial stability, customer service and established institutional relationships to attract deposits. The complaint argues that they do not have CSR resources comparable to those available to large private banking institutions for providing additional facilities to local bodies.
The alleged use of CSR assistance to influence deposit decisions could therefore place cooperative banks at a disadvantage, according to Anaskar.
SBI Spending Figures Reflect Banking Competition
To underline the intensity of competition in the banking sector, Anaskar cited State Bank of India’s annual expenditure on business acquisition and development. According to the figures included in his letter, SBI’s spending increased from ₹4,106 crore in 2021–22 to ₹6,493 crore in 2025–26.
The complaint presents the increase as an indication of the growing competition among banks to attract business and deposits.
MSCB Seeks Independent Investigation
The Maharashtra State Cooperative Bank has asked the RBI to examine the assistance provided by private banks to local government institutions and verify the deposits held by those bodies before and after receiving such support.
It has also sought an investigation into sudden transfers of local-body deposits and whether indirect incentives, commissions or other benefits were involved in the transactions.
The allegations place the spotlight on the relationship between CSR spending and deposit mobilisation, particularly where public institutions are involved. The RBI’s examination of the matter, if initiated, would be important in determining whether the reported arrangements were legitimate social welfare initiatives or involved commercial considerations inconsistent with the purpose of CSR.
The report does not establish that the RBI has begun an investigation or that any private bank has been found to have violated the law.
Disclaimer: This report has been editorially prepared using publicly available information and official statements. Readers are advised to refer to official announcements for further details.
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