Veteran bankers and State Bank of India (SBI) officials have taken to social media to condemn the arrest of former SBI chairman Pratip Chaudhuri.
Former SBI chairman Pratip Chaudhuri
Veteran bankers and State Bank of India (SBI) officials have taken to social media to condemn the arrest of former SBI chairman Pratip Chaudhuri. Jaisalmer Police arrested Chaudhuri for his alleged role in a Rs 200 crore hotel project which was sold at Rs 25 crore to Alchemist ARC in March 2014. Former SBI Chairman Manju Agarwal, who was also instrumental in rolling out the SBI YONO platform, said that Chaudhuri had an impeccable reputation as the SBI chairman and that his arrest is “most horrific” and “absolutely shocking”. She further added that SBI is a process bound institution and decisions are taken on the basis of merit.
Other bankers also condemned the sequence of events around Chaudhuri’s incarceration. “What was eminently evident to the Jodhpur HC was invisible to the lower courts at Jaisalmer, why? Is there a lack of capacity building in our legal system or is it something which is not so evident, healer heal thyself, we as a nation rely on you, Kiren Rijiju,” veteran banker Sunil Srivastava tweeted.
Former Deputy Managing Director of SBI Sujit Varma also condemned Chaudhuri’s arrest and stated that anyone who has worked closely with him can vouch for “his unimpeachable integrity.” He also mentioned in his LinkedIn post that Chaudhuri is “not the one to shy away from taking tough decisions when required, he always backed others to take decisions based on merit.”
A former Assistant General Manager at SBI Nawalji Sahay also vouched for Chaudhuri’s reputation and said that action against Chaudhuri seems to be taken “at the behest of highly influential and crooked borrowers, who are apparently using their local influence to instigate such senseless and unjustified action.”
Current SBI chairman Dinesh Khara and Kotak Mahindra Bank Managing Director Uday Kotak also denounced the former SBI boss’ arrest. “Well of course this recent incident regarding the arrest of Mr Pratip Chaudhuri is extremely unfortunate. I will only say that it appears that the individual was not given an opportunity to be heard before issuing the arrest warrant,” Khara said.
SBI also said that “there has been no irregularities in the said case and prescribed rules and the processes were followed by the bank in dealing with this account.” Kotak stated, “I don’t know anything more than what I have read from the newspapers this morning. And based on what I have read, what I fell is that we really need to have a criminal justice system that protects bonafide banking/lending decisions.”
What is the case against Pratip Chaudhuri?
For the unversed, a case was registered against Chaudhuri in 2015 for seizing the hotel property in a loan settlement case and allegedly selling it at a throwaway price. He became a director on the board of the company which purchased the hotel. The Hotel Gaudavan project was financed by SBI in 2007 and it was not completed for three years and one of the promoters passed away in April 2010.
The account gradually moved to the non-performing asset (NPA) category in June 2010. SBI had even invoked the SARFESI Act under the Debt Recovery Tribunal (DRT) against the borrower in July 2013. Two months after this development, Chaudhuri retired from SBI in September 2013 and took over the Directorship of Alchemist ARC. SBI sold the loan to the same ARC in March 2014.
Promoter of the reported hotel Harendra Singh Rathore accused Chaudhuri of conflict of interest and an FIR was filed. All the directors of Alchemist ARC were made party to the case but not the SBI. Eventually, a Rajasthan court issued an arrest warrant against all the Alchenmist directors including Chaudhuri and CEO Dhir.