Saradha Effect On Banks

Saradha effect: Banks in probe mode- Times of India 

TNN | May 23, 2013, 03.55 AM IST

KOLKATA: With Saradha Kolkata turning into a hot spot for frauds in connivance with a section of bank employees, the banks in the state have stepped up vigil. Some banks have already started probing the alleged involvement of its employees into the Saradha muddle.

Indian Overseas Bank has started a probe to get to the base of the allegations. A former employee of the Ballygunje branch of the bank was mentioned by Saradha Group chief Sudipta Sen for having close link with the group. M Narendra, chairman and managing director of IOB, said, "We are looking into it. We will not spare anyone found guilty." In the annexure D of his letter to CBI, Sen has given a list of officials closely linked with the group. The Saradha CMD alleged that officers in the rank of assistant general manager of State Bank of India, Industrial Finance Branch, Mid Corporate Group, U N Brahmachari Street, Andhra Bank, Mid Corporate Group, U N Brahmachari Street, Indian Overseas Bank, Ballygunje Branch, State Bank of Bikaner and Jaipur, Ballygunje Branch and State Bank of Patiala, Camac Street Branch, in his letter.

He has also named officers of the credit department of Indian Bank, Strand Road branch, Hare Street and the asset recovery management branch of Punjab National Bank at CR Avenue for having links with his group.

Meanwhile, officials of the economic offences wing have located over 40 frauds above Rs 1 crore and more than 300 above Rs 25 lakh each committed in recent past.

According to sources, the list of wilful defaulters in Kolkata has run into couple of hundreds by December this year and all of which have been committed in last two-three years. While not all of them are habitual offenders, most of them have been evading payments to the banks, willingly, despite their ability to pay off the debt.

Investigating agencies come into the scene after a company refuses to pay deliberately despite of the fact it is in a position to clear the dues. According to officials, many of them have either siphoned off money or have not purchased any asset against the loans taken. Eventually, these firms go for forged documentation to dupe banks and keep them at bay as long as possible.

According to data available with multiple investigating agencies, more than 46 Kolkata-based companies have taken loans more than Rs 1 crore and did not pay it back. The amount of loans taken by them ranged between 1 and 20 crore on an average. A senior bank official said that the companies which are in trouble go for corporate debt restructuring route. "The willful defaulter appears only when there is a tendency to usurp the money," said a banker of the state.

Deepak Narang, executive director of the United Bank of India, said: "The fly-by-night companies which manage to get loans from the banks generally start defaulting and marked as wilful defaulters. If a company of repute is in bad shape for some reason, it would rather go for the corporate debt restructuring route," he said.

T R Chawla, executive director of Allahabad Bank, believes that non-performing assets (NPA) have gone up for the banks in the recent past but not only for the wilful defaulters. "There are macroeconomic factors that have pulled down the economy across the nation. But it is not easy to dupe banks, get loans and fly away. The banks have a system of due diligence and it is difficult to bypass them," Chawla said.

http://timesofindia.indiatimes.com/city/kolkata/Saradha-effect-Banks-in-probe-mode/articleshow/20217894.cms