DGM of Indian Overseas Bank sentenced to one year jail for Rs. 5 crore fraud

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Indian Overseas Bank: A special Central Bureau of Investigation (CBI) court last week sentenced a former deputy general manager of Indian Overseas Bank to one year imprisonment and imposed a fine of ₹6 lakh for abusing his official position, while sanctioning credit facilities worth ₹5 crore to an export firm.

M/S KR Commodities Export Pvt Ltd, through its directors, Chandan Lunawat and Pratibha Lunawat, had obtained packing credit facility from the Fort branch of the bank for export of maize. According to the CBI, the then branch head Pradeep Saha had sanctioned the credit facilities without verification. Besides, the money was not used to procure maize as per supply order and false information of stock statement was submitted.

It was contended that the entire process of sanctioning the credit facility was completed within a day based on the application faxed by the firm on October 25, 2010. The loan was sanctioned on October 28, 2010. The CBI registered an FIR on June 13, 2014 and when the case reached the trial stage, Chandan Lunawat died, while Pratibha Lunawat was declared absconder and therefore only Saha was put to trial.

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In his defence, Saha had contended that he never received any monetary gain from the said deal, hence, he cannot be prosecuted for the charges of corruption. The court, however, held that he had been charged for conspiracy to facilitate the accused obtaining the credit facility. The court accepted that the charges of corruption could not be proved against him.

While holding him guilty, the special court said, “Saha knowingly not checked and not verified the observations made by his subordinate officers and disbursed ₹5 crore public money. So, he played the role of facilitator in the loan fraud relating to the public money causing enormous monetary loss to the public exchequer.”

Besides sentencing Saha to imprisonment for a year and imposing a fine of ₹6 lakh, the court also asked the company to pay a fine of ₹5 lakh.

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2 COMMENTS

  1. The action of CBI in this case is commendable. When pre sanction was not done, subordinate staff/ officers had put adverse comments, financials were not checked and even after disbursement the end use was not verified, stock statement was also casually received and just filed all these are signs of serious irregularities in sanction , supervision and monitoring of credit facility. The sanctioning authority is rightly held responsible for such measure lapses.

  2. Is that DGM not experienced? Or Did he never appraise the remarks from his sub ordinates? Do you suspect there may be the pressure from the higher ups? Who knows? Ultimately Bank has lost this money . Each and every employee has to think about the reputation of this esteemed bank. Please remember you are paid to serve the bank and not to loot .

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