IBA condemns arrests of bankers on fraud charges

Mumbai: Indian Banks’ Association (IBA) CEO V.G Kannan on Friday condemned the arrests of the Bank of Maharashtra’s Managing Director and others, saying it was unwarranted as all due procedures were adhered to.

For those unversed, the Pune Police on June 20 arrested four Bank of Maharashtra officials for wrongful disbursement of money to the Pune-based DSK Group.

Addressing a press conference in Mumbai, Kannan said, “Due processes were followed and the loan was fully secured. Hence, we feel that the entire unfortunate incident of arrests of the officials was unwarranted causing major concerns for the bankers.”

Kanna claimed that the arrests by the Pune Police were not legitimate, quoting the section 197 of the Code of Criminal Procedure. He also highlighted the Reserve Bank of India’s (RBI) guidelines, as per which any fraud case amounting to over Rs 25 crore were to be handled only by the Central Bureau of Investigation (CBI).

“Assuming that there has been a fraud in the case, we are unable to understand how the matter has been taken by the state police,” he added.

He stated that the bankers had decided that the IBA should lead a delegation and make a representation to the highest authority through a memorandum where senior bankers would meet and present their issues, seeking to put a stop to them.

Kannan confirmed that the memorandum was being prepared, and they were hoping to schedule an appointment with an appropriate authority sometime in the next week.

The arrests of high-profile BoM officials included the Chief Managing Director, Ravindra Marathe, Executive Director, Rajendra Gupta, Zonal Manager, Nityanand Deshpande and former chief managing director Sushil Muhnoot.

As per the sources, the accused officials allegedly conspired with Kulkarni’s company D. S. K. Group and had been siphoning money under the garb of a loan.

Chartered Accountants of the D. S. K. Group, Sunil Ghatpande and Rajiv Newaskar, along with the vice president of the Engineering Department have also been arrested.
The accused have been sent to police custody till 27 June. (ANI)