In face of growing frauds, bank staff under CBI lens

NEW DELHI: As the noise around bank frauds increases, it emerges that at least a dozen former and serving chairpersons and managing directors (CMDS) of stateowned banks have been and are being probed by the Central Bureau of Investigation (CBI).

The process has accelerated in 2018, with the government as well as banks trying to get their hands around the vexing issue of nonperforming assets, or bad loans, with eight serving or former CMDS being either booked or having formal charges filed against them.

Those who have been booked thus far this year include Indian Bank chairman and managing director Kishor Kharat and Syndicate Bank managing director and chief executive officer (CEO) Melwyn Rego. Among former chairpersons and managing directors booked this year are: MS Raghavan (IDBI Bank), Archana Bhargava (United Bank of India), PS Shenoy (Bank of Baroda) and Arun Kaul (UCO Bank).

Kharat, Rego, Shenoy and Raghavan (while they were associated with IDBI Bank) have been named as suspects in the same case, an alleged loan fraud that took place at IDBI Bank involving companies of serial entrepreneur C Sivasankaran. IDBI Bank’s deputy managing director GM Yadwadkar too has been booked.

An email sent to IDBI Bank’s current CMD remained unanswered. Rego and Kharat too didn’t respond to e-mails. United Bank of India and UCO Bank too didn’t respond to queries on FIRS registered against Bhargava and Kaul. Last month, the government told Parliament that the CBI is probing 292 cases of bank cheating or fraud involving 44 banks across private and public sectors. Last year alone, the CBI was given sanction to prosecute 22 bank officials in cases of frauds and cheating, said a Central Vigilance Commission (CVC) report.

The agency hasn’t spared senior executives at banks, even independent directors. Three current and former independent directors of IDBI Bank have been booked in the Sivasankaran case: PS Shenoy, S Ravi and Ninad Karpe. As have former IDBI Bank deputy managing director BK Batra. Ravi is currently the chairman of Bombay Stock Exchange (BSE) Ltd. A BSE spokesperson declined to comment.

That 2018 hasn’t been kind to public sector bankers is also evident in the fact that charge sheets in a bank loan fraud case dating back to January 2016 were filed last month in Delhi against two former senior executives of Canara Bank, RK Dubey and VS Krishna Kumar.

The chief vigilance officer of Canara Bank didn’t reply to an email seeking comment.

And completing the circle, two current bank chiefs, Sunil Mehta of the Punjab National Bank (PNB) and Usha Ananthasubramanian (former CEO and MD of PNB and serving CEO and MD of Allahabad Bank) have been questioned by the CBI in connection with letters of undertaking and foreign letters of credit fraud involving diamond dealer Nirav Modi and Mehul Choksi. Both were examined in February. A former bank chief, MD Mallya of Bank of Baroda, was also questioned by CBI in the loan default case of ₹3,695 crore involving makers of Rotomac pens that was registered on February 18 this year. Usha Ananthasubramanian said she was busy and couldn’t respond to queries.

Early last year, CBI charged former IDBI Bank CMD Yogesh Agarwal along with fugitive businessman Vijay Mallya in a loan default case involving the latter’s defunct Kingfisher Airlines. Agarwal was charged along with another former IDBI Bank executive, BK Batra (who has now been named in case ofthe loan default involving Sivasankaran too) .

Former Syndicate Bank CMD SK Jain was arrested by CBI in 2014 and chargesheeted the following year in an alleged bribefor-loan scam.