‘Bank of Maharashtra arrests an aberration, state should have taken nod of Centre’https://indianexpress.com/article/business/banking-and-finance/bank-of-maharashtra-arrests-an-aberration-state-should-have-taken-nod-of-centre-5233438/

‘Bank of Maharashtra arrests an aberration, state should have taken nod of Centre’

On Monday, the finance ministry official said the IBA did not protest but only highlighted their concerns.

BoM’s senior officials were arrested for alleged criminal conspiracy and for violating the provisions of the Maharashtra Protection of Interest of Depositors in Financial Establishment Act of 1999.
BoM’s senior officials were arrested for alleged criminal conspiracy and for violating the provisions of the Maharashtra Protection of Interest of Depositors in Financial Establishment Act of 1999.

A senior finance ministry official on Monday said the arrest of the top officials of Bank of Maharashtra (BoM) in the DSK Group loan default case by the Economic Offences Wing (EOW) of the Pune Police is an aberration and will be set right.

The official who did not want to be named said there is a proper mechanism in place if action has to be taken against any central government employee then it should be referred to the CBI. Any state official on whom the Central government wants to take action then they need to take the permission of the state, said the official at the sidelines of an event organised by Asian Infrastructure Investment Bank in Mumbai.

“That is the strength of India’s federal structure. Sometimes there are aberrations but it helps the system become better,” said the official. The official said it should not be construed that “bankers are being hounded”.

Read | Bank bosses’ arrests: what now?

On June 20, the EOW arrested BoM MD & CEO Ravindra Marathe, BoM Executive Director Rajendra Gupta, Zonal Manager Nityanand Deshpande, and former CEO and MD Sushil Muhnot for their role in sanctioning the allegedly ‘illegal’ loan of about Rs 100 crore to DSK Developers Ltd for the company’s Dream City project. BoM’s senior officials were arrested for alleged criminal conspiracy and for violating the provisions of the Maharashtra Protection of Interest of Depositors in Financial Establishment Act of 1999.

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After their arrest, the Indian Banks’ Association (IBA), the apex body of commercial banks called for an emergency meeting and proposed to approach the government for remedial action and forming an independent committee to give clearances to initiate criminal proceedings against senior bankers.

“The entire banking community is with the BoM management and the IBA has decided to approach the highest authority.” “We feel that the arrest of BoM officials is unwarranted and unfortunate, and has left the entire banking industry concerned and anguished. Bank officials are now worried that genuine banking decisions are being questioned by law enforcement agencies,” VC Kannan, chief executive of IBA had said after an emergency meeting of the IBA.

On Monday, the finance ministry official said the IBA did not protest but only highlighted their concerns.