Action against BOM chief dents industry morale, say bankers
MUMBAI: The arrest of Ravindra Prabhakar Marathe, CEO of Bank of Maharashtra, on Wednesday has come as a jolt to the banking industry, prompting bankers to call a meeting on Friday to discuss their future course of action.
Bankers claim such action by investigative authorities will dent the morale of the banking industry, forcing bankers to stop lending.
The Economic Offences Wing (EOW) of Pune city police arrested top officials of Bank of Maharashtra, including Marathe, on charges of illegally sanctioning a loan of ₹100 crore for a real estate project of a DSK Group company.
State bank of India, United Bank of India, Syndicate Bank, Vijaya Bank and IDBI Bank were part of the consortium of banks which had lent to the DSK group.
Quoting Pune police’s statement to the local court, a newspaper report said that these officials had sanctioned the loan without the approval of the other banks that were part of the consortium.
Bank of Marashtra, however, maintained that the loans were sanctioned to the firm as per the bank’s lending norms.
“The bank’s total outstanding exposure to M/S D S Kulkarni Developers Limited is to the tune of ₹94.52 crore, which is fully secured by primary and collateral securities. Recovery process like SARFAESI action has already been initiated by the bank and some of the properties are due for auction. Bank has also declared M/S DSK Developers Limited and its promoters as wilful defaulters,” the statement said.
Most bankers who know Marathe stand by him and claim that such actions will malign the reputation of bankers going forward.
“This looks like a breakdown of law and order situation. It could be a local political issue against the developer and the Bank of Maharashtra chief got caught off-guard,” said the MD and CEO of a public sector bank.