On PMO intervention, RBI Seeks Response From Kotak Mahindra Bank To Santosh Bagla’s Complaint

Moneylife Digital Team 16 October 2019

Economy & Nation

Mumbai based businessman Dr. Santosh Bagla has sent out a press release on how the Reserve Bank of India (RBI) has asked Kotak Mahindra Bank to examine and redress the grievance within a time-bound manner. Mr Bagla had earlier complained to the Prime Minister’s Office (PMO) about vindictive action by the bank which was passed on with routine instructions to examine the matter. An article in this regard had gone viral on social media. At that time Kotak Bank’s communication department had issued a statement about ‘certain persons’ having ‘distorted’ a simple communication and made ‘damaging statements’.

The case pertains a ten year old matter where the Bagla family which acted as guarantors to Cogent Ventures India Ltd. The bank claims that it started routine recovery proceedings. However, according to Dr Santosh Bagla, the process obviously went bad. Dr Santosh Bagla claims a a ‘criminal conspiracy’ to falsely impliate his son Bhupendra, leading to his arrest, even when he had secured anticipatory bail. Mr Bagla claims that a Rs 50 lakh loan to Cogent Ventures (India) Limited was an “unsecured loan” and this was “admitted and confirmed by the advocates of Kotak Mahindra”, which led to Buphendra Bagla securing bail.

The Bagla family has since been fighting for justice and has written to the President’s Office, and the Union Home Ministry demanding a CBI probe against the bank and its senior management as well as the police offiicals involved in the arrest. They have also filed a complaint against the six Delhi police officials for “malafide arrest”.

Mr Bhupendra Bagla says he suffered enormous social humiliation, huge business losses and even a breakdown of his marriage due to the actions unleashed by the bank. “It took my family eight long years to come out clean, but we lost prestige, business respectability and faced social humiliation, besides suffering huge monetary losses in fighting the case. I will now file a defamation suit against Kotak”.

Interestingly, Mr Rohit Rao, Chief Communication Officer of Kotak Bank claims that “the borrower entered into an out-of-court settlement and repaid the bank’s dues” and that the “bank always acts in accordance with the prevailing law and regulations. We shall be dealing with the matter appropriately".

It remains to be seen what the bank says in response to RBI and whether Mr Bagla goes ahead with the litigation he has threatened; it is also a fact that banks are often over zealous in the means that they adopt for recovery, especially when borrowers are not big businesses.

Comments

User

Kavi Tulasi

7 years ago

Last year Dec my dad joined as agent they gave some limited period of time to make people to join under him so dad joined us under him he do not know computer knowledge just they(dads senior member) took Xerox copy of gov IDs and signature from pan card they themselves created 5 policies totally 5 lakhs took. My question is... Whether it is safe or scam please anyone help me under this bef Dec 2019

Mataprasad Dubey

7 years ago

This necessary to examine elegation and follow public observation which always have truth. After that take action to prevent people to suffer due to the fraud.

Asokkumar Rathnam

7 years ago

The article does not appear to give all facts. Kotak's side of the story is not known. When a facility from a bank is not secured, it simply means there is no tangible security. If the facility has been guaranteed by third party, the Bank has got every right to proceed against the guarantor. Persons guaranteeing Rs. 50 lakhs can, by no stretch of imagination, be considered as small guys. Are we going to adopt the principle that small and medium-sized borrowers/ guarantors should not be approached for recovery since big borrowers have disappeared with liabilities of thousands of crores?

ROSHAN AGARWAL

7 years ago

I am also fighting same case with kotak bank since 2015. The kotak bank has feaduently mortgaged our HUF property for third party loan to a stranger on the basis of bogus forged and fabricated documents without checking its legal validity. The CEO , directors and senior officrr are directly responsible for money laundring of public money snd hsrrasment to a innocent senior citizens. The RBI and CEO of kotak of directly responsible for increasing loan frauds innpublic system as they donot act when matter reported to them.

Praveen Sakhuja

7 years ago

Interesting story to read. HAS any media pubished any such story where any medium class or lower bissiness has faced such action, and voice has been raised in his favor? Certainly not, then why for this family? I leave put to the readers to decide, whetehr it is fair or motivated action under any selfish motives. Bolo Jai Shree RAM

Sucheta Dalal

Replied to Praveen Sakhuja comment 7 years ago

Interesting point. We see the hand of digital teams here. But let me explain why this is a story -- it is because the small guy does not have resources to fight such a battle. You also seem to be a new visitor to moneylife -- we are full of stories about little Davids fighting Goliaths -- google our website you will fund plenty. Two heart warming ones are Mangelal Sharma and Injamuri a retired ticket checker. Suchitra Krishnamurthy's case is similar.

Mr Jitendra

Replied to Sucheta Dalal comment 7 years ago

I doubt if any other common man would be able to take on the fight with the mighty banks even in 2019. The system is not much supportive to lower middle class and middle class victims of frauds.

Newme

7 years ago

Maybe it\'s just me but I couldn\'t understand the issue. Report is mix up of he said they said interlaced with some editorial statements.

mahendra kumar

Replied to Newme comment 7 years ago

The point raised here is how far a bank can go and whether the bank is empowered by rule of law I.e to proceed against the guarantor if at all there is one and secondly can right of set off be applied where thereâ€™s a lien i.e on the basis of a simple undertaking?
If the answer is no then government represented by its authorities will definitely catch hold of bankers in question. There should not be any doubt at all. RBI is the regulator. It will look into it as well.

mahendra kumar

7 years ago

Itâ€™s true.