Cuttack, Aug. 25: Vigilance today arrested Nilakantha Das, general manager (recovery) of Urban Cooperative Bank, Cuttack, for allegedly showing undue favours while granting loans.

Das, while working as the chief executive officer, had recommended for a loan of Rs 1.26 crore to one Ravindra Khuntia, managing director of M/s Shiva Chrome Chemicals Pvt Ltd, Chandikhol, in 2000.

Khuntia had applied for a cash credit loan of Rs 75 lakh and term loan of Rs 46 lakh for setting up a carbon ferro alloys vanadium plant at Bari.

Following this, the then branch manager of Jagatpur branch, Ravindra Sahu, had recommended sanctioning a loan of Rs 46 lakh after a site inspection. However, Das, misutilised his power and had recommended a Rs 1.26 crore loan to Khuntia.

“Today, we arrested Nilakantha Das for sanctioning the loan without the necessary documents. Due to the irregularity, the bank has incurred a loss of Rs 3.14 crore as the loanee is yet to pay back the amount,” said vigilance cell SP S.B. Mishra.

Mishra said Khuntia had again applied for a cash credit of Rs 35 lakh and a term loan of Rs 65 lakh for setting up a sodium dicromate plant on September 15, 2004.

Later, the then branch manager Kalpana Palit sanctioned a loan of Rs 1 crore to Khuntia without following the prescribed norms.

Vigilance sleuths said a loan of over Rs 2 crore was sanctioned to Khuntia without inadequate tangible security including fixed deposits and land documents.

A case was then registered against six persons, including four officials of the Urban cooperative bank — Ravindra Sahu, Kalpana Palit, Nilakantha Das, Rangadhar Dhuria, managing director of Shiva Chrome Chemicals Pvt Ltd Ravindra Khuntia and director Sunil Khuntia on June 30, 2011.