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Windfall for State Bank

Calcutta, April 10: State Bank of India (SBI) received Rs 500 crore in cash last month, which would add straight to its net profit for the fiscal 2002-03. It also received along with the sum, securities worth hundreds of crores.

State Bank received the amount from the custodian appointed by the special court dealing with the securities scam in the early nineties, following an order of the Supreme Court.

The custodian had seized from SBI, shares of different companies and other securities for its suspected involvement in the scam.

Senior officials in the custodian’s office said State Bank received “over Rs 500 crore in accrued dividend and interest” along with securities that were returned on instruction from the apex court. The custodian had held these securities for over ten years.

State Bank, the country’s largest nationalised bank, was reported to have missed its business targets — both in mobilisation of deposits and credit growth — in 2002-03.

Coming at the end of the financial year, the Rs 500-crore exceptional income would prop up the bank’s net profit and bridge the gap between its targeted and actual performance.

In the first nine months of the year, the bank had registered a net profit of Rs 2,367.45 crore, some Rs 64 crore short of its full-year profit in the previous fiscal. Its profit for the first three quarters had grown over 30 per cent year-on-year but its management had aimed higher.

The custodian, of late, has been selling securities and properties seized from “notified persons” — or those found guilty of manipulating the market — in large volumes.

The Income Tax department was one of the key beneficiaries of the ongoing liquidation of assets. The department got a windfall of around Rs 540 crore last month that the custodian had raked in by selling assets confiscated from Fairgrowth Financial Services.

The Chennai-based firm, promoted by B. Ratnakar, was one of the key accused in the securities scam. Confirming the payment, an official in the custodian’s office said, “We have paid around Rs 990 crore to the Income Tax department so far. Most of it, over the last five years.”

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