Bank of Baroda denies it delayed action in Rotomac case
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Updated: Feb 22, 2018, 11.03 AM IST
MUMBAI: Bank of Baroda (BoB) has denied the Central Bureau of Investigation (CBI) assertion that it had not acted in time in the Rotomac fraud. The bank has said that it spent months in legal battles to declare the borrower a wilful defaulter and in investigations to establish fraud.
The CBI had alleged that the lender, which had an exposure of Rs 435 crore to the Vikram Kothari-promoted Rotomac Global, waited for two years after declaring the account a non-performing asset (NPA) before it approached the agency with a criminal complaint. The CBI said that BoB had filed a first information report (FIR) on Sunday only after the Nirav Modi swindle came to light.
BoB MD P S Jayakumar said, “The process of declaring an account as fraud requires forensic audit and a strong proof. Therefore, the statement that we waited for two years from the date of loan becoming an NPA to lodge a complaint of fraud with the CBI is not true.” He also said that the process of initiating a criminal complaint against the borrower had started before the Nirav Modi fraud came to light.
Public sector banks have collectively lent Rs 2,919 crore to the Rotomac group with Bank of India as the lead lender. Other large lenders are Indian Overseas Bank, Union Bank of India, Allahabad Bank, Oriental Bank of Commerce and Bank of Maharashtra, besides BoB.
While BoB declared the company an NPA in February 2016, the account was not an NPA with other lenders as the borrower was repaying only some banks. It was only after a lenders’ meeting in June last year that Bank of India filed a suit in the Debt Recovery Tribunal - Allahabad and initiated the process of declaring the borrower company, directors and guarantors as wilful defaulters.
Jayakumar said, “A wilful defaulter is someone who has sources of funds to repay a loan but does not. A borrower who had provided personal guarantee but had two businesses, one of which he is losing money while the other venture is profitable, will be an example of a wilful defaulter.”
The CBI had alleged that the lender, which had an exposure of Rs 435 crore to the Vikram Kothari-promoted Rotomac Global, waited for two years after declaring the account a non-performing asset (NPA) before it approached the agency with a criminal complaint. The CBI said that BoB had filed a first information report (FIR) on Sunday only after the Nirav Modi swindle came to light.
BoB MD P S Jayakumar said, “The process of declaring an account as fraud requires forensic audit and a strong proof. Therefore, the statement that we waited for two years from the date of loan becoming an NPA to lodge a complaint of fraud with the CBI is not true.” He also said that the process of initiating a criminal complaint against the borrower had started before the Nirav Modi fraud came to light.
Public sector banks have collectively lent Rs 2,919 crore to the Rotomac group with Bank of India as the lead lender. Other large lenders are Indian Overseas Bank, Union Bank of India, Allahabad Bank, Oriental Bank of Commerce and Bank of Maharashtra, besides BoB.
While BoB declared the company an NPA in February 2016, the account was not an NPA with other lenders as the borrower was repaying only some banks. It was only after a lenders’ meeting in June last year that Bank of India filed a suit in the Debt Recovery Tribunal - Allahabad and initiated the process of declaring the borrower company, directors and guarantors as wilful defaulters.
Jayakumar said, “A wilful defaulter is someone who has sources of funds to repay a loan but does not. A borrower who had provided personal guarantee but had two businesses, one of which he is losing money while the other venture is profitable, will be an example of a wilful defaulter.”
(This article was originally published in The Times of India)
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