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Former State Bank of India Chairman Pratip Chaudhuri was arrested on Sunday from his Delhi home in an alleged loan scam case related to a hospitality group in Jaisalmer.
He was sent to 14-day judicial custody after being produced before the Chief Judicial Magistrate Court at Jaisalmer on Monday, sources said.
Interestingly, this move to arrest Chaudhuri came just two days after the Finance Ministry issued broad uniform guidelines for staff accountability in public sector banks for NPA accounts up to ₹50 crore. The guidelines were framed to provide a comfort to bankers that all their bonafide business decisions will be protected.
₹24-crore loan
The Chaudhuri case related to ‘Garh Rajwada’ —a hotel project in Jaisalmer financed in 2007 by State Bank of India. The SBI loan amount involved for this project is reportedly ₹24 crore.
Meanwhile, SBI in a detailed statement issued on Monday clarified that the bank was not a party to this case and, therefore, there was no occasion for the views of SBI being heard as part of this proceedings.
“SBI would like to reiterate that all due process were followed while making the said sale to ARC. The bank has already offered its cooperation to the law enforcement and judicial authorities and will provide further information, if any that may be called from their side,” the SBI statement said.
Detailing the events related to the case, the SBI statement said the hotel project remained incomplete for over 3 years and the key promoter passed away in April 2010.
The account slipped into NPA in June 2010. Various steps taken by the Bank for completion of the project as well as recovery of Bank’s dues didn’t yield desired results. Hence as part of Bank’s recovery efforts, the dues were assigned to an ARC for recovery in March 2014. This sale to ARC by the Bank was done through a laid down process as per the policy of the Bank. “We further understand that the borrower was subjected to IBC process by the said ARC and the asset has been acquired by an NBFC in Dec. 2017, again through due process under the orders of NCLT, Delhi,” SBI statement added.
As recovery efforts failed, approvals for sale to ARC were taken in January 2014, the assignment to ARC was completed in March 2014.
It transpires now that the borrower had initially filed an FIR with the State Police against the sale of asset to ARC. Aggrieved against the negative closure report filed by Police authorities, the borrower had filed a ‘Protest petition’ before the CJM Court.
“Incidentally SBI was not made a party to this case. All the directors of that ARC including Chaudhuri, who joined their Board in October 2014, have been named in the said case. Incidentally, Chaudhuri retired from the Bank’s service in September 2013”, the SBI statement added.
“It appears from the copies of the proceedings now accessed by us that there have been some factual inaccuracies in the complainant’s version submitted to the Hon’ble court," the SBI statement added.
It maybe recalled that Chaudhuri had assumed charge as SBI Chairman on April 7, 2011 and retired on September 30, 2013.