DSK Scam: Bank of Maharashtra chief Ravindra Marathe gets bail
A Special Court on Wednesday granted bail to Ravindra Marathe, managing director (MD) and chief executive officer (CEO) of Bank of Maharashtra (BoM). Last week, Marathe, along with five others were arrested by the Pune Police in the DS Kulkarni fraud and cheating case.
 
SN Sardesai, Special Judge for Maharashtra Protection of Interest of Depositors (MPID) Act, granted bail to Marathe on a surety of Rs50,000. 
 
The arrest of Marathe and other top executives from Bank of Maharashtra had sparked a row with Bank employees and Indian Bank Association (IBA) accusing police of high handedness and overreach. However, According to the investigators, the bank executive and officials colluded with the DSK Group "with dishonest and fraudulent intentions to sanction and disburse the amount of the bank (BoM)" under the garb of loans and the money was later siphoned off.
 
Besides Marathe, those arrested include Sushil Muhnoot, the bank’s former chairman and MD; Rajendra Gupta, executive director, and Nityanand Deshpande, the bank’s zonal manager, who was taken into custody from Ahmedabad. Also arrested were Sunil Ghatpande, DSKDL’s chartered accountant, and Rajiv Newaskar, chief engineer of the company.
 
All India Bank of Maharashtra Employees Association and BoM Officers Association, both affiliated with All India Bank Employees Association (AIBEA), felt the police have been overzealous while arresting top executives of BoM. In a statement, they say, "As a union, we are for accountability of the top management including MD and Executive Directors, but here in this case, investigative agencies have overstepped looking to the way in which they (the top executives) were taken into possession and ultimately kept in custody. This has happened a day early to the annual general body meeting of Bank's shareholders. This coincidence is inexplicable."
 
All India Bank Officers' Confederation (AIBOC) also condemned arrest of senior management. In a statement, DT Franco, General Secretary of AIBOC says, "It is known that most of the loans which have become non-performing assets (NPAs) are large advances, sanctioned at board level of the Banks consisting of representatives from Reserve Bank of India (RBI) and members nominated by Government as well. Hence, it is not in order to punish the bank officials alone if at all the government thinks of such an action."
 
As per the statement issued by BoM, its exposure in the consortium lending to DS Kulkarni Developers Ltd (DSKDL) is only Rs94.50 core as against sanctioned amount of Rs139 crore. The Consortium is led by State Bank of India (SBI) with 33.33% of the lending, followed by Union Bank of India (UBI), Syndicate Bank and BoM, each with Rs100 crore or 16.67%, IDBI Bank Ltd with Rs75 crore or 12.50% and Vijaya Bank with Rs25 crore or 1.46% stake in the lending of Rs600 crore. 
 
Bank of Maharashtra said its exposure to DSKDL is Rs94.52 crore and is fully secured by primary and collateral securities. It says, "Recovery process like action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act has already been initiated by the Bank and some the properties are due for auction. Bank has also declared DSKDL and its promoters as wilful defaulters."
 
Pune-based DSK Group's owners DS Kulkarni and his wife Hemanti were arrested in February on charges of cheating over 4,000 investors of over Rs1,150 crore and diverting bank loans of nearly Rs2,900 crore.  
 
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    COMMENTS

    darsh kkka

    1 month ago

    Marathe made report failed claims of crop insurance, and he is paying its price..govt dont want to accept blame..the scam happening in crop insurance..

    Deccan Whack

    1 year ago

    Government should remember that elections are around the corner. Government's all-out effort towards saving scamsters and tainted bank officials will not go down well with senior citizens and middle class investors who lost their lifetime savings. Investors will have to agitate on the street to wake up the government.
    Indeed, DSK FD Holders & Flat Buyers should now get ready to fight against the corrupt Indian banking industry

    Alok Industries: Bank union questions liquidation value and demands investigation
    Lenders to Alok Industries Ltd took a haircut of 84% in approving Reliance Industries Ltd (RIL)-JM Financial Asset Reconstruction Company (ARC)’s resolution plan to take over the bankrupted textile company. However, in a statement, DT Franco, General Secretary of All India Bank Officers' Confederation (AIBOC) says, "The RIL-JM combine has offered just Rs5,050 crore for the acquisition of Alok Industries, which owes close to Rs30,000 crore to a consortium of banks and operational creditors. We wonder how the National Company Law Tribunal (NCLT) allowed only one bidder in this case. How Reliance Industries, which is the biggest borrower in the country, allowed to become a bidder? This requires a thorough probe."
     
    AIBOC says as per the 2017 balance sheet, Alok Industries had tangible assets of Rs16,762.93 crore, while current assets were Rs14,459.18 crore. "If its total assets were Rs32,708.99 crore and total current liabilities were Rs21,717.59 crore, how in just one year, its value can become Rs5,050 crore?" the union asks.
     
    Alok Industries was started in 1986 and is a ISO 9001:2000 certified textile manufacturing company. It has 250 stores in India under the brand name H&A. It also has 100% owned subsidiary in Czech Republic. 
     
    RIL-JM Financial ARC had emerged as the sole bidder for the Alok Industries in the first round of auction held in March 2018, but lenders baulked at accepting the resolution plan which required them to take 85% haircut. RIL-JM FARC later raised its offer price by Rs100 crore. But lenders again rejected the resolution plan. The resolution plan was finally approved with 72% of lenders voting in its favour. 
     
    The resolution has been facilitated with the assistance of the government by the amendment in the Insolvency and Bankruptcy Code (IBC) that requires the approval of only a minimum of 66% of lenders as against 75% earlier. It is quite clear that IBC has been amended with the only objective to allow the RIL-JM taking over Alok Industries and in the process the banks have to endure the haircut of 83%.
     
    "At a time, when the banks are already struggling to cope up with the rise in non-performign assets (NPAs) and decline in their net profits, such a step on the part of the government to further weaken the banks is very unfortunate, " AIBOC says adding, "Our Confederation condemns such a pro-corporate and anti-public sector banks approach on the part of the government and RBI. In the name of cleaning up the balance sheet, now the banks are forced to allow 83% haircut and benefit the corporate and again when the net profits will come down, it will be the same bankers who are to be blamed for the same."
     
    The bank officer's union had asked the government not to move ahead with the sale of Alok Industries. "AIBOC demands that the government does not move ahead with this plan of benefitting the RIL-JM Financial ARC and thereby destroying the Indian public sector banks. We further clarify that our Confederation has also been monitoring all these developments which will jeopardise the existence of the PSBs and we will not remain silent spectator to all these for an indefinite period of time," the union warned.
     
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    Ashok Mane

    1 year ago

    Banks should have sold all assets in part at market rate and adjusted loans.
    Instead of taking loss by banks. They should have taken over assets and lease out it in small parts to small business houses.

    Ashok Mane

    1 year ago

    Banks should have sold all assets in part at market rate and adjusted loans.
    Instead of taking loss by banks. They should have taken over assets and lease out it in small parts to small business houses.

    Bplvvarma

    1 year ago

    So what is the future of Alokindustries. Is it stands by profit coming out from insolvency in business

    BV SUDHANVA

    1 year ago

    If the deal was so attractive then why no one else bid for alok?

    Ramesh Poapt

    1 year ago

    very well done by union. they must strongly take up the issue otherwise
    there will be repetition of the same!

    Amar Kunal

    1 year ago

    Where this Franko has been hiding while his banks were giving loans to Alok Industries and it was in bad debt, now while the employees of Alok Industries are safe and planning for the future course of action such elements are questioning about the deal? AIBOU is always unethical and acts against the interest of people, your main business is to call strikes for your unethical demands and harass people. If you will do such thing the same thing will come to you. Investigation should be carried on against corrupt bankers who give money to Videocon, Nirav Modi etc and elements like AIBOC and their mentors may be among them.

    Dr.Dhananjaya Bhupathi

    1 year ago

    https://www.moneylife.in//article/alok-industries-bank-union-questions-liquidation-value-and-demands-investigation/54499.html via @MoneylifeIndia
    1. HATS OFF TO COMRADE D.T.FRANCO. ENTIRE BANK EMPLOYEES & THE RETIREES ARE HAPPY TO NOTE YOUR PROMPT REACTION. WE ARE WITH YOU SIR!
    2. HOW SHAMELESS ARE IBA BOSSES & PSB MANAGEMENTS OFFERING HAIR CUT OF 84% OF DUES, AS IF PUBLIC DEPOSITS IN PSBs ARE THEIR GRAND FATHERS' PROPERTIES.
    3. WE NEVER MIND, IF THE PROLIFERATERS OF SUCH DUBIOUS IDEAS INDULGE IN '84% HAIR CUT THEMSELVES' AND ATTEND RESPECTIVE BANKS.
    4. I REPEAT MY ALLEGATION THAT THE EPICENTER OF ALL PSBs' SCAMS IS IBA EXECUTIVE MEMBERS. NO ELECTIONS, NO REGISTRATION UNDER ANY INDIAN ACT, NO AUDIT OF 'RECEIPTS & EXPENDITURE STATEMENTS.
    5. ACTION MAYBE INITIATED AFTER PERUSAL OF CURRENT ACCOUNT WITH OBC, CUFFE PARAADE, WTC, MUMBAI .
    6. EARNEST ENDEAVORS OF GOI WITH A POLITICAL WILL, ARE APPRECIATED BY ENTIRE 125 CRORE INDIANS. UNLESS & UNTIL THE ROT IN PSBs IS ADDRESSED @ THE RIGHT EARNEST, MODIJI CAN NEVER REALIZE HIS 'WONDERFUL VISION + DREAM TO PUT INDIAN ECONOMY ON "HIGH GROWTH TRAJECTORY" FOR THE BENEFIT OF TEAMING MILLIONS OF YOUTH.
    7. I, EARNESTLY, APPEAL TO ALL BANK EMPLOYEES + BANK RETIREES TO REACT ON FB,TWITTER & INSTAGRAM.
    ALL BANKMEN MAY KINDLY APPRECIATE COMRADE D.T.FRANCO'S INITIATIVE EXPRESSING OUR SOLIDARITY.
    SATYAMAEVA JAYATHE!!!

    Lakshminath Mocherla

    1 year ago

    Obviously Govt wants to do a favour to the purchaser they coaxed the lenders not to pursue further.

    RBI’s propaganda on basic saving account falling flat
    Every day for the past two months, even existing customers of Axis Bank have received a promotional mailer captioned - "Get Your Zero Balance AXIS ASAP Savings Account in 3 Easy Steps”. For the first time in its history, the Reserve Bank of India’s (RBI) has also woken up to the need to promote financial safety and options. Among the messages it has sent out to our mobile phones is one promoting the Basic Savings Bank Deposit Accounts (BSBDA), which has no minimum balance requirement and no additional cost. The RBI is also promoting this through emails and advertisement in newspapers and on websites.
     
    Does this mean that banks are now bending backwards to promote basic, no-frills accounts where they cannot lop off a punitive charge for not maintaining average minimum balance? Has banking suddenly turned more consumer friendly? Moneylife decided to investigate by visiting dozens of bank branches to try and open a BSBDA account in banks around our office at Shivaji Park at Dadar in Mumbai. The industry calls it “mystery shopping’. It should be no surprise, that the reality, but for a few notable exceptions, was vastly different for the person on the street who wants to open a basic account. 
     
    The Basic Savings Bank Deposit Account –BSBDA- is an account, which offers basic banking facilities at almost no additional costs, says the RBI’s advertising blitzkrieg. However, the reality is startlingly different. Not many banks even offer this BSBDA facility to customers. When I posed as a potential customer and asked to open the account, some bankers feigned ignorance while other discouraged me by saying that there are no real benefits offered in such accounts. 
     
    State Bank of India (SBI) Ranade Road, Dadar (W), Mumbai - 400028
     
    I approached State Bank of India (SBI) for a BSBDA account. The bank officials claimed they were unaware about these accounts. Upon persisting with my request and showing them the RBI SMS, I was told that though this facility is not available with their branch, it may be available with some other branch of the Bank. This is contradictory to claims made by SBI on its website, which says BSBDA facility is available at all branches.  
     
     
    Axis bank, Ranade Road, Dadar (West), Mumbai - 400028
     
    When contacted Axis bank, which has been very aggressive in promotion of BSBDA their reply was that the account can be opened in any branch located nearest to permanent address mentioned in the ID card (Aadhaar).
     
    In addition, only the person who had received their advertorial e-mail or SMS can open the BSBDA account after submitting details online through the link available on the messages. There is no offline facility for opening this account and one can only connect through a link in their promotional mailers. This is rather strange because the bank is sending out mass emails that are also spamming its regular account customers, including those who are its ‘priority’ customers and unlikely to be opening a BSDBA account.
     
    Incidentally, the bank continues to send out an email every single day pushing this no-frills account. Considering the cost involved in mass emails, we wonder what the purpose of such spending. The BSBDA asks for mandatory Aadhaar details, which even the Supreme Court has not decided yet since the UIDAI judgement in pending.
     
     
    Cosmos Bank, Gokhale Road, Dadar (W), Mumbai - 400028
     
    After checking with nationalised banks, I then headed to Cosmos Bank which is multi-scheduled co-operative bank. However the employee there was too quick in replying me that no such BSDBA facility is available with the Bank. “It may be available with the nationalised banks,” he replied. 
     
    Shamrao Vithal Co-operative Bank, Ranade Road, Dadar (W), Mumbai – 400028
     
    In other scheduled bank, SVC Co-operative Bank, I found that BSBDA facility was available with them. However, the bank employee was very discouraging towards me from opening such account saying that BSBDA does not offer cheque book and there are several restrictions on BSBD account intimating me to open a savings account with them. 
     
    Here is feedback from some other banks in and around Shivaji Park…
     
     
    The Reserve Bank of India’s (RBI) circular of BSBDA issued on 10 August 2012 is here
    Some of the salient features of BSBD Account are-
     
    • No requirement of maintaining a minimum average balance.
    • Facility of ATM card or ATM cum Debit card.
    • No charges for non-operation/ activation of inoperative ‘BSBDA’
     
    An academic study by Prof Dr Ashish Das, from Department of Mathematics at Indian Institute of Technology Bombay (IITB), has found that banks are quietly converting a no-fee basic savings bank deposit account (BSBDA) to a fee-based regular account with high minimum balance requirements or charging a fee, the moment such customer carries out fifth digital payment transaction in a month. In such scenario, the account remains converted as regular saving account making the customer liable to pay for several services besides keeping minimum balance amount in her account all the time.  
     
    According to the study, while India is working hard to bring about ease in digital transactions, State Bank of India (SBI) has debarred its 13 crore BSBDAs to carryout debit transacts more than four times in a month, even if it constitutes only digital transactions. Given that volumes of such accounts have been opened (under PMJDY) with an intention of financially including the excluded, such a scenario lacks the desired spirit of digital financial inclusion.
     
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