The Telegraph
Thursday , August 21 , 2014
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Scam cloud over bank duo

Mumbai, Aug. 20: The finance ministry has ordered a forensic audit at two PSU banks — Oriental Bank of Commerce and Dena Bank — following separate incidents of alleged misappropriation of funds by employees.

Disciplinary action has been taken against the employees involved, and the banks have suspended a few officials. Complaints have also been lodged with the CBI.

“Persons responsible are being taken to task, there have been some suspensions, transfers and the investigations are on,” financial services secretary G. S. Sandhu said on the sidelines of an event here today.

He, however, said these two incidents were aberrations by individual officers and were not systemic.

“These are instances which have happened at the lower level — at the branch level — because of lack of due diligence or non-adherence to the norms and procedures,” Sandhu said.

The development comes within a fortnight of the arrest of Syndicate Bank chairman and managing director S. K. Jain in a corruption case for allegedly receiving Rs 50 lakh from Bhushan Steel and another company for extending their credit limits.

In a communication to the stock exchanges, Dena Bank said it had suspended the manager of its Malabar Hill branch in Mumbai and transferred the staff.

The bank’s Malabar branch had received bulk term deposits from various state-owned organisations between January 30 and May 5. It was seen that term deposits worth Rs 256.69 crore were pledged to the bank to obtain overdraft facilities of Rs 223.25 crore, but for a third party.

Oriental Bank’s Malwani branch in Mumbai received around Rs 180 crore from the Jawaharlal Nehru Port Trust (JNPT). However, no term deposit receipt was issued to the JNPT. Instead, the amount was transferred to the current account of another entity, Padmavati International. Thereafter, the amount was remitted to seven banks and 12 clients, according to the mandate given by Padmavati International.

Meanwhile, Sandhu said the finance ministry was weighing a number of measures to improve governance in PSU banks, such as making it compulsory for general managers and deputy general managers to pass a risk management course.