Women bankers headed, when ABGSL fraud detected

Mumbai: Top women bankers headed the private ICICI Bank and public-sector State Bank of India (SBI) when the Gujarat-based ABG Shipping Ltd (ABGSL) mega scam of Rs 22,842 crore was quietly brewing.

While ICICI Bank was helmed by the high-profile Chanda Kochhar till October 2018, when she quit in a cloud of allegations, the SBI was captained by Arundhati Bhattacharya, who retired in October 2017.

Of the reported Rs 22,842 crore frauds, the ICICI Bank took the biggest hit of Rs 7,089-crore and SBI ranks third with an exposure of Rs 2,925 crore, with IDBI Bank Ltd. sandwiched in the second slot and duped of Rs 3,639 crore.

Interestingly, the SBI's Forensic Audit Report (January 18, 2019) - on which the CBI finally lodged its complaint - covers the period April 2012-July 2017, when the ABGSL scam took place -- and said the accused "colluded together and committed illegal activities, including diversion of funds, misappropriation, criminal breach of trust and for purposes other than for which the funds are released by the Bank."

However, the banking unions and experts fume at the manner in which massive public monies have again been blown off in the scam and how the banks are now "shifting the entire blame on the borrowers".

"Was the entire banking system sleeping during these goings-on. The Reserve Bank of India conducts audits and also has its representative on the bank boards. What were they doing at that time and what was their exact role in the scam," demanded United Forum of Banking Unions ConvenorDevidasTuljapurkar.

Trade Unions Joint Action Committee (TUJAC) Convenor and banking expert Vishwas Utagi wondered how can the CBI ethically take at face value the SBI's contentions that the bank officials are not involved, particularly when it has been duped of huge public funds, and whether the other consortium members have also adopted a similar stand.

"In such gigantic frauds involving a big banking consortium, all persons above the GM level are definitely responsible. Will the CBI investigate or connive with SBI? We demand the CBI should honestly investigate from the top -- probe Chairpersons, Managing Directors, Directors, etc. to unravel the murky truth," said Utagi.

Referring to the SBI's purported 'accommodating' stance vis-a-vis AGBSL, All India Bank Officers Association (AIBOA) General Secretary S. Nagarajan said the banks are not sympathetic when it comes to even small Education Loans by needy students.

"Whenever such huge loans are cleared at the Consortium leader's request, did the other banks cross-check, monitor the accounts or seem enhanced security? If not, then there is something fishy," Nagarajan pointed out.

Virtually defending ABGSL, the SBI alluded to its glowing past performance of 165 vessels built in 16 years, how the global shipping industry crisis hit with a fall in commodity demand, prices, cancellations and no fresh orders even from defence post-2015.

"The company was finding it very difficult to achieve milestones, as envisaged in CDR. Thus, the company was unable to service the interest and installments on the due date," said the SBI note to CBI, sounding like a tear-jerker.

Utagi said that since the fraud has been established, even the Enforcement Directorate (ED) and other agencies must also join the investigations to track the money trail and the ultimate beneficiaries of the public funds, as was done in the Punjab National Bank scam by diamantaires Nirav Modi-Mehul Choksi five years ago.

Tuljapurkar feels that since banks have made 100 per cent provisions for NPAs, there will be no new losses accruing from this, and called for a thorough probe despite the huge delays.