CBI Files FIR Against Many Bank Officials

CBI files FIR against bankers in Deccan Chronicle case-Indian Express

After the Reserve Bank of India has imposed fines on 12 banks for lapses in the loan account of Deccan Chronicle, the Central Bureau of Investigation has now registered a first information report (FIR) against some of them.

While the FIR does not name any bankers as offenders, the investigations, in the wake of the urgency being shown by the regulator in several cases of bank loans which have gone sour, have unnerved the banks.

The new FIR is separate from the inquiry the investigative agency had launched in 2012 against the promoters of Deccan Chronicle.

A banking sector source said that this week’s decision to go for a forensic audit of Bhushan Steel’s loan portfolio has consequently become fraught as it comes before the Deccan Chronicle chapter has been closed.

The CBI, it is learnt, had asked for the names of bank employees who were allegedly involved in the loan negotiations in the Deccan Chronicle portfolio and had asked the banking division of the finance ministry for details.

But the banks had argued with the finance ministry and the CBI that the slippages were not malafide and have asked the ministry to refuse permission to prosecute officials. The banks had stated that the loans were not given to a new entity but to one which enjoyed a ‘double-A’ rating.

If, at all, there was an error of judgment, the bank officers can be hauled up within the organisation but there is no case made out for a collusion with the lenders.

Canara Bank CMD RK Dubey told The Indian Express that he, too, was asked by the CBI to give some details since his bank was the lead arranger for the loans, but he said he could not divulge those with the media. “These are confidential exchanges with the CBI,” he said.

The finance ministry, a government source said, too had concurred with the assessment made by the banks but the CBI, armed with the permission given by the Supreme Court recently, has registered the FIR against “unnamed bank officials”.

The inquiry will proceed along with a further forensic audit asked for by the RBI in the case, this time through PricewaterhouseCoopers. The earlier forensic audit was conducted by Deloitte on the basis of which the RBI imposed a cumulative fine of Rs 1.5 crore on the 12 public and private sector banks.