Media reports about a first information report (FIR) registered by the Pune police against Saraswat Bank’s top executives and allegations about a bogus loan account worth Rs13 crore had worried depositors of the lender.
However, Mumbai-based Saraswat Cooperative Bank Ltd clarified that the FIR filed against its chairman, managing director (MD) and other executives is an attempt to create hurdles to prevent the Bank from recovering outstanding loans, for which the Bank has initiated the process of taking possession of the mortgaged property. Pune-based Smita Sameer Patil, a director of Orange Medicare & Research Centre Pvt Ltd (OMRC), had filed the FIR at the Kothrud police station.
In a release, Saraswat Bank says, "It has been a trend for some defaulting borrowers nowadays to create all sorts of hurdles including criminal charges against banks which are trying to recover their legitimate unpaid dues...the FIR has been filed by a director of OMRC with the intention to create hurdles and to avoid loan recovery action of taking possession of the mortgaged property as per the latest order issued by the tahsildar in December 2021."
Ms Patil, the director of OMRC, has registered an FIR against Gautam Thakur, chairman of the Saraswat Bank, Smita Sandhane (MD), Anand Chalke (chief manager), Pallavi Sali and Ratnakar Prabhakar (zonal managers), Abhishek Bhagat (branch manager, Vishrantwadi) and others.
According to Saraswat Bank, OMRC is a defaulter and the bank needs to recover around Rs16 crore, plus updated interest from the company as per the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act.
"In this regard, the securitisation officer of the Bank has initiated the recovery process by issuing a notice of taking possession. We wish to further state that the borrower tried to enter into a one-time settlement (OTS) with the bank but failed to repay the agreed amount and hence the OTS failed. Apprehending thereafter that the bank would take possession of the property, the borrower has filed this false case against its chairman, MD and officials of the bank.
"We deny all the allegations made in the complaint and we will also ensure that the bank will take all the steps to defend its action, its officials and take this case to its logical end," Saraswat Bank says.
According to local media reports, officials of Saraswat Bank allegedly made a bogus loan account and then, on 13 August 2018, sent a proposal to OMRC for an OTS of Rs13 crore. The Bank allegedly misused cheques given as security for a term-loan account by paying Rs2.5 crore for the fake loan account, the report says.
Saraswat Bank, however, says, “The cheque of Rs3.66 crore given by the company was returned unpaid (bounced), hence the bank issued a notice under section 138 of the Negotiable Instruments Act to OMRC.”
Saraswat Bank is India's largest urban co-operative bank with operations spread across six states – Maharashtra, Goa, Gujarat, Delhi, Madhya Pradesh and Karnataka.
According to the lender, five doctors set up OMRC and were granted a loan in 2011 to construct hospitals and procure medical equipment. However, the directors could not complete the project in time. This increased project cost, and to meet the increased costs, in 2013, Saraswat Bank granted an additional loan to OMRC.
OMRC could not complete the project over the next three years and, in 2016, Saraswat Bank declared the loan account of OMRC as a non-performing asset (NPA).
Next year, OMRC sold its 71% stake to Sameer Patil group of companies to tide over the financial crisis and inducted Ms Patil, who has filed the FIR against Saraswat Bank, as a director on the company's board.
"The group cleared only the overdue amount in the account while the principal remained unpaid; hence the account was upgraded as a standard account. Due to failure in honouring the repayment commitment, the account was classified again as NPA and securitisation proceedings were initiated," the lender says.
In 2018, the district magistrate at Pune issued a court order for physical possession of mortgaged property of OMRC. However, Saraswat Bank says, "The physical possession was not taken as the company submitted a cheque of Rs3.66 crore, along with a proposal for OTS. The OTS was approved by the bank. Directors individually paid Rs2.50 crore. The physical possession of the property was postponed on the company's request."
According to Saraswat Bank, the tahsildar’s office issued various dates for taking possession of the OMRC property; however, it was never executed by the tahsildar office.
"A contempt petition filed by OMRC in the Bombay High Court against the bank was also disposed of by the court. OMRC tried to delay the bank’s action taking possession of the property on various frivolous grounds," it added.
On 27 December 2021, the tahsildar issued an order for permitting possession of the OMRC property by the Bank.
"Saraswat Bank will not succumb to such pressure tactics and will pursue all legal remedies to take possession of the property of the defaulting company," the lender says.