Sunday, June 30, 2019

Fraud and Forgery in Award of Contract for computerization to VSoft Company by OSCB



“Fraud, Forgery and Financial Irregularities in Odisha state Cooperative Bank, Bhubaneswar”

-An Extract from  Statutory  Inspection  Report submitted by NABARD-
(Exposed   under RTI on 27.4.19 from the PIO, office of Registrar of Cooperative Societies, Odisha)

1.      Introduction

OSCB scam  is not  new  for the  people as well as  RTI Activists  of Odisha  who are  spearheading  campaign  for effective  implementation of RTI  and  to  fight out  corruption in the state. Earlier,  huge  corruption and irregularities  in Odisha State  Cooperative Bank , Bhubaneswar  has been exposed under RTI several times  and put in public domain for knowledge  of the public  at large. The expose of corruption and misappropriation of fund  started with revelation of statutory audit Report  of Odisha State  Cooperative Bank presented  by Auditor General, Cooperative Societies, Odisha on 30.9.2011. Armed with  this  Report  and  information obtained  under RTI , many RTI Activists  like Sri Ashok Nanda, Sudhir Mohanty, Biswajit Mohanty have  filed   series  of complaints  starting from to Chief Minister  to State  Vigilance. But astonishingly, no inquiry  has been  conducted  since 5 years. Rather it  has been suppressed  and  corrupt  officers  being   awarded with  promotion time and again  to suppress scams. ( For details , visit  link https://odishasoochana.blogspot.com/2018/08/inquiry-into-oscb-scam-worth-rs500.html.)

Recently, NABARD, Regional Office, Bhubaneswar  has presented its statutory inspection report of the Odisha State Cooperative Bank Ltd. to   State  Government  which was  conducted from 14th February to 6th  March,19 with reference to its  financial position  as on 31st March 2018 under Section 35(6) of the Banking Regulation Act, 1949 ( As Applicable  to Cooperative Societies).  All the  issues  pointed out  by NABARD  in their Inspection Report  has justified  earlier  allegation of RTI Activists  and  complaints  filed  several times  in this  regard. 


Fraud and Forgery in Award  of Contract for computerization to VSoft Company
Pursuant to a number  of complaints  received on computerization relating to CBS ( Core Banking Solution) in OSCB, DCCBs  and PACS ( Primary Agriculture Cooperative Societies) ,  NABARD  had  conducted inspection about it. It was as follows.

The Tender  process  started  with RFP in September 2010.  The technical bids were  collected  on 14 January 2011. In terms of the Special Committee Proceedings  ( 10 February 2011), Technical  and Commercial bids were  given weightage  and approved  after deliberations  at 80:20 ( 80 % for Technical and 20% for commercial), which was considered  to be quite robust  as against industry standard at 70:30.  To ensure  quality CBS. It  was suggested  to refer the decision  to consultants. A CBS  software ( Core Banking Solution Software)   demo  was organized  on 8 July 2011 with participation  from 14 selected  officials  of the Bank. VSoft  company along with two others  had failed  to demonstrate  as per tender  documents and there  were very serious shortcomings  raising queries / questions  on their CBS modules.  Only TCS  and Polaris demonstrated  satisfactorily  as per specifications  in their  tender  documents. Without express reasons, the  views  of the  committee  was  overlooked  and VSoft , on the other hand , were  handed  the committee’s’ shortcomings  chart in respect  of the  company for improvement  instead of the bank rejecting  the tender outright on technical grounds as per Bid evaluation Criteria( at B6 of RFP). Meanwhile , the commercial bids were opened  on 30 August 2011. The Evaluation of weighted techno-commercial score was changed from 80:20 to 30:70 ( 30% Technical, 70% Commercial) resulting in VSoft becoming L1. There was  no pre-announcement of the revised techno-commercial matrix. The drastic modification giving primacy to price  and relegating  the technical  to secondary status in evaluation parameters  had no basis and the consultants’ detailed opinion / views  on the subject were out of the record except  a cursory statement  in the proceedings  of the special committee  dated 30. August 2011.  As per  technical evaluation conducted by Technical Committee on 21.7.2011, VSoft, Polaris  and TCS were awarded 146, 150 and 175 out of 200 points respectively. On the aspect of technical presentation marks awarded  were  15,16 and 18 respectively, though as per the presentation minutes while TCS  and Polaris  came out satisfactorily , VSoft failed  to convince  the committee as the software  was not as per  the tender documents. However, for completeness of overall solution marks awarded  were 33, 37 and 42 respectively in the matrix. There was apparently inconsistency between  the  Committee’s assessment  and the  proceedings  of the 8th July 2011  demo. At 14-member CBS Committee  which treated  the software  of TCS  and Polaris  as “ satisfactory”. There was no convincing effort in the Technical Committee proceedings  to justify  the  counter view. The marks awarded  to VSoft is , therefore a kind of window dressing.

A  group of 10 members  of the Management  Committee (MC)   had submitted dissenting note  with respect to  MC  RESOLUTION  ON MEETING DATED 25.1.2012  bringing to fore a series of issues  on CBS implementation. But  the bank had never examined or considered  for redressal of their  complaints , although  the issues  pointed out  in their dissenting note  were  quite serious. Even  TCS and Polaris  had  also complained  vide letters  dated 13 September 2011 and 30 November 2011  respectively  against irregularities  in award of contract. Allegations were  serious but no action  had been taken  on the complaints  in question.

Questionable Advance  Payments  to VSoft Company- The VSoft was  provided  advances  of money amounting to Rs. 1,00,00,000 on 2 July 2014  and Rs. 19,85,000 for VSAT and Rs. 13,44,000 to Trend Micro  on unknown dates  ( during 2013-14 )  as per the records  of payment available  with DIT. The advances  had no other details  and no one in the  bank  had any knowledge  as to their  final settlement. On different dates between  the period  7 April 2018 to August 2018, the bank had paid advances  of  Rs. 8,69,43,913 to VSoft  as advance  over and above  CBS contract amount  and outside the agreement. The details of payments  and purpose   is   not available  with the  vouchures and DIT  is  also not aware  of the most of the purpose  of payments.

Pradip Pradhan
M-9937843482
Date- 30.6.19 

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