Pune police arrested the MD of Bank of Maharashtra Ravindra Marathe on Wednesday in connection with the Rs 3,000 crore DSK Group loan default case. Executive Director of the bank, RK Gupta, was also arrested by the economic offences wing of the Pune police.
The top executives were charged with cheating, forgery and criminal conspiracy. Former CMD Sushil Muhnot was also arrested, with investigators closing in on another massive bank scam after the PNB loan fraud.
The police said the officials had connived with DSK Group for fraudulently creating documents that were used for sanctioning loans. The irregular loans were later siphoned off, the Economic Times reported.
Others arrested in connection with the case were DSK Group's chartered accountant Sunil Ghatpande and DSK's Vice President Rajiv Newaskar. The police statement said the arrested officials misused their authority to sanction fraudulent loans to the DSK Group.
The arrests followed investigation into loan irregularities that started with the arrest of Pune-based builder DS Kulkarni and his wife in February 2018. They were in the dock for allegedly cheating more than 4,000 investors of Rs 1,154 crore. The police also found that Kulkarni had diverted bank loans worth Rs 2,892 crore.
The loan trail eventually led to the top echelons at the Bank of Maharashtra.
The top level arrests were carried out in different cities simultaneously.
Hot pursuit by RTI activist
RTI activist Vijay Kumbhar, who led the fight to unravel the nexus between the bank and the developer, hailed the move. He said banks are fastidious about advancing loans to ordinary customers, but they wilfully flout norms while advancing loans to privileged customers.
"BOM advanced loans to the developer [D. S. Kulkarni] despite the latter furnishing improper documentation. The end use of the loan was never checked. One such loan was sanctioned under the phoney rubric 'to meet temporary mismatch in cash flows'", Kumbhar told the Hindu.
Last month, the Maharashtra government had ordered attachment of more than 120 properties, 275 bank accounts and four dozen vehicles belonging to the owners and the company, invoking the provisions of Maharashtra Protection of Interests of Depositors Act, 1999, IANS added.
