EOW arrests Bank of Maharashtra CEO for disbursing loans by violating RBI guidelines

June 21, 2018

Ever since the whole PNB- Nirav Modi loan fiasco arose, the Economic Offences Wing (EOW) has been extremely pro-active in their investigation. As a result, the EOW, Pune has alleged that crores of rupees have been disbursed in loans to DSK Developers Limited (DSKDL) without following proper procedure and in violation of RBI guidelines by Bank of Maharashtra. The EOW has, therefore, arrested MD and CEO- Ravindra Marathe, Executive Director- Rajendra Gupta and 2 other bank officials, including Marathe's predecessor. The Police said these arrests have been made as part of the current investigation into the Rs. 2,043 crore economic fraud alleged to have been committed by Pune developer D. S. Kulkarni and his group of companies here. The Rs 2,043 crore fraud relates to syphoning of money raised by the DSK group through investors as well as loans from banks and financial institutions, non-convertible debentures and money collected from home buyers in housing projects. In an official statement, the bank said its total outstanding exposure to DSKDL was Rs. 94.52 crore. The statement further read, “ Recovery process like SARFAESI action has already been initiated by the bank and some of the properties are due for auction. Bank has also declared DSKDL and its promoters as willful defaulters.” In addition, the appointed Special Public Prosecutor Pravin Chavan said, “ The EOW is also looking into the role of officials from 5 other nationalized banks which were part of a 6-member consortium that had sanctioned a Rs. 600 crore loan to DSKDL's & lsquo Dream City' mega housing project in 2016. A total of Rs. 337 crore of this sanctioned loan was actually disbursed to the borrower by the consortium. The Bank of Maharashtra's commitment was for Rs. 100 crore and its officials actually disbursed Rs. 50 crore of this amount in one go on March 15, 2016, in violation of the Reserve Bank of India's (RBI) guidelines.”

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EOW arrests Bank of Maharashtra CEO for disbursing loans by violating RBI guidelines

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