sbi arrest: Pratip Chaudhuri’s arrest: SBI’s Dinesh Khara says former banker wasn’t given a chance to be heard

sbi arrest: Pratip Chaudhuri’s arrest: SBI’s Dinesh Khara says former banker wasn’t given a chance to be heard

State Bank of India (SBI) chairman Dinesh Khara said that executives at the top level in the bank don’t get involved in small ticket loans or resolutions as he expressed anguish over the arrest of one of his predecessors Pratip Chaudhuri by the Rajasthan police on a complaint from a defaulter.

“Issues of this magnitude are invariably dealt at local level and the top management of the bank including chairman are not involved in such kind of decision making,” Khara said.

The Indian banking industry is in a state of shock after Jaisalmer police arrested Chaudhuri following a complaint from a defaulter who lost his property during a resolution process. Chaudhuri was SBI chairman between April 7, 2011 and September 30, 2013.

The case refers to the ‘Garh Rajwada’ hotel project in Jaisalmer, financed by SBI in 2007. Since the project was not completed for three years and a key promoter passed away in April 2010, the account slipped into the non-performing asset (NPA) category in June 2010. Subsequently, the ₹25-crore loan was sold to Alchemist Asset Reconstruction Co (ARC) in 2014 of which Chaudhuri became a director on superannuation from the bank.

Khara said the banking industry is working with the government to correct the position.

“The banking community through the IBA has taken up the matter with government authorities and I hope this matter will be behind us very soon. As far as SBI is concerned, we adhere to the best practices and corporate governance and I can assure you there has been no irregularity in the said case and prescribed rules and processes were followed by the bank in dealing with this account. We have got the structure in place and we are quiet confident that our people across the hierarchy can take decisions in such matters,” Khara said.

He described the arrest as “unfortunate” and expressed confidence that his predecessor will be released unconditionally without any charges. Khara was speaking to media persons in a post results conference call.

“This arrest of Pratip Chaudhuri is extremely unfortunate…. I would say that it appears that the individual was not given an opportunity to be heard before issuing the arrest warrant. We have utmost faith in the country’s judicial system and are confident that Shri Chaudhuri will be released unconditionally,” Khara said.

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