Police arrested Bank of Maharashtra CEO, director over loans

Vastavam web: The police arrested the chief executive and an executive director of state-run Bank of Maharashtra on Wednesday, accusing them of misusing their authority in making loans to a property developer. Bank of Maharashtra Chief Executive Officer Ravindra Marathe and an executive director, Rajendra Gupta, were among six people arrested, police said. “Bank officers colluded with DSKDL by misusing their power and authority with dishonest and fraudulent intention,” the police said in a statement.

The bank said in a statement on Wednesday the loans were sanctioned to DSKDL as per the bank’s lending norms. The bank’s statement said it was in the process of recovering the loans. It also said its total outstanding exposure to the DSKDL was 945.2 million Indian rupees ($13.89 million). In a filing to the Indian stock exchange, the bank confirmed the arrest of Marathe and Gupta, saying they would be in police custody until June 27. It did not comment on arrest of Munhot, who could not be reached for comment.

Authorities have stepped up scrutiny of the state banking sector after a more than $2 billion fraud unearthed in Punjab National Bank, the second-largest state-run lender, this year. Current and former officials at some other state lenders, including IDBI Bank, Indian Bank, Syndicate Bank and Canara Bank have been investigated over alleged loan fraud cases.

At the same time, rising global trade tensions due to the imposition of import tariffs by the United States could moderate global trade growth, tempering Indian exports, analysts say. “Arvind has made a significant contribution in economic policy analysis. It would be a challenge for his successor to fit in his shoes,” said N.R. Bhanumurthy, an economist at National Institute of Public Finance and Policy, a Delhi-based think-tank.