A Special Court for the Maharashtra Protection of Interest of Depositors (MPID) Act on Friday granted bail to three Bank of Maharashtra (BoM) officials who were recently arrested for allegedly flouting banking norms while extending loans to fraud-accused realtor D.S. Kulkarni.
Special Judge, R.N. Sardesai directed BoM Executive Director Rajendra Gupta, Zonal Manager N.S. Deshpande and former BoM Chairman and Managing Director (CMD) Sushil Muhnot to furnish bail bonds of ₹. 50,000 each.
All three, along with BoM CEO and MD Ravindra Marathe, were arrested on June 20 by the Economic and Offences (EOW) wing in connection with the ₹. 2043-crore fraud allegedly committed by DSK Developers Ltd (DSKDL).
Earlier on Thursday, Special Public Prosecutor (SPP) Pravin Chavan had objected to the three BoM officials being given bail. He pointed to a “common design” between the arrested BoM officials and the DSK Developers Ltd (DSKDL).
Under the consortium, ₹. 600 crore was sanctioned to DSKDL of which ₹. 50 crore was doled out by BoM in violation not only of RBI norms but of the bank’s internal policies as well, argued Advocate Chavan.
“Why did BoM hand out ₹. 50 crore in loan by modifying loan conditions without waiting for the tie-up of other banks in the consortium?” questioned Mr. Chavan.
The consortium to offer loans to DSKDL was led by the State Bank of India (SBI) with ₹. 200 crore of the lending amount, followed by BoM, the Union Bank of India (UBI) and Syndicate Bank, each with ₹.100 crore, IDBI Bank Ltd. with ₹. 75 crore and Vijaya Bank with Rs.25 crore in total loan amount of ₹. 600 crore.
Likewise, the SPP observed that Vijaya Bank and IDBI had stopped lending to DSK group on being aware of its parlous financial state.
“All decisions had to be taken jointly in the consortium, but this was not done by BoM which disbursed loans to DSKDL in face of opposition by other consortium members,” he observed.
In his counter-arguments, defence counsel Harshad Nimbalkar reiterated that the MPID Act under which the arrested BoM officials were being prosecuted did not apply to them at all, while submitting that the police machinery had exceeded their orders in this case.
“The decision to extend loans to the DSK Group was a purely business decision on part of BoM. All requisite procedures were followed and no banking norms were flouted. Further, the depositors have not entrusted their amounts with the bail applicants and neither have they misappropriated it,” said Advocate Nimbalkar.
The court on Wednesday had granted bail to Mr. Marathe after the EOW allegedly submitted that it had completed its investigation against the BoM CEO and MD.
The arrests of the four BoM authorities elicited sharp criticism from the Indian Banks’ Association (IBA) as well a number of politicos like Sharad Pawar and Raj Thackeray, all of who condemned the ostensible ‘high-handedness’ of the probe agencies.
On June 22, Chief Minister Devendra Fadnavis held a meeting of EOW officials in Pune regarding the probe against the arrested officials. Later, he expressed concern over the Pune police’s handling of the case, while ordering a high-level independent probe into the affair.