Marathe's predecessor Sushil Manhot too was held in connection with investigations into the Rs 2,043 crore economic fraud said to be carried out by the real estate developer. The stock which opened at 12.75 level fell to a fresh 52-week low of 12.50 level in trade today.
The Bank of Maharashtra stock fell in early trade today amid reports that the Pune police arrested bank MD and CEO Ravindra Marathe, executive director Rajendra Gupta and two other bank officials for allegedly clearing loans to real estate developer DSK bypassing rules and in violation of RBI guidelines.
Marathe's predecessor Sushil Manhot too was held in connection with investigations into the Rs 2,043 crore economic fraud said to be carried out by the real estate developer.
"Bank officers colluded with DSKDL by misusing their power and authority with dishonest and fraudulent intention," the police said in a statement.
The bank said in a statement on Wednesday the loans were sanctioned to DSKDL as per the bank's lending norms. The bank's statement said it was in the process of recovering the loans. It also said its total outstanding exposure to the DSKDL was Rs 94.52 crore ($13.89 million).
In a filing to the stock exchange, the bank confirmed the arrest of Marathe and Gupta, saying they would be in police custody until June 27.
The stock which opened at 12.75 level fell to a fresh 52-week low of 12.50 level in trade today.
The bank's market capitalisation on the BSE fell to Rs 3,346 crore.
The bank stock fell over 7% intra day. Later, the stock pared losses to close 1.19% lower at 13.31% at BSE. The stock has been losing for the last two days and has fallen 4.22% during the period.
It has fallen 56% during the last one year and is down 44% since the beginning of this year.