Finance ministry terms BoM arrests as 'aberration', not hounding bankers

Mumbai: A senior finance ministry official on Monday described the arrests of top officials of state-run Bank of Maharashtra (BoM) last week as an "aberration" and said it should not be construed that "bankers are being hounded".

The economic offences wing of the Pune police last Wednesday arrested BoM's managing director Ravindra Marathe, executive director Rajendra Gupta, zonal manager Nityanand Deshpande, former chairman Sushil Muhnoot and three other officials in a cheating case lodged against real estate developer DS Kulkarni and his wife.

The arrests had riled the entire banking sector so much that national bankers' lobby IBA held an emergency meeting last Friday here and called for setting up an external panel to give clearance to arrest senior bankers. It also had decided to make a representation to the government.

Stating that the BoM incident should not be taken as bankers are being hounded, the official said the state police action is not fair as well.

"It seems to be a bit of an aberration. It should be set right; there is a proper mechanism in place. In the normal course, the state police do not have any jurisdiction on Central government employees," the official said.

The finance ministry official further said being a vast country such aberrations do happen, but they only help make the system better for the future.

The official pointed out that under the country's federal structure if any action has to be taken against a central government employee, the state concerned has to refer it to the CBI. Similarly, if the Centre wants to take action against a state government official, it needs the permission of the state concerned.

On the IBA proposal to set up an external committee to permit the arrest of senior bankers for alleged wrongdoings, the official said, "One aberration should not become sensational news. Sometimes, over sensationalising something is harmful."

The official also said the IBA did not protest but only highlighted their concerns.

The arrests came a day ahead of the annual general meeting of the bank, wherein the entire shareholders backed the management.

The move also drew the ire of the bank unions, which wrote to the banking secretary protesting against the arrests.

BoM's managing director Marathe was arrested even though the around Rs 100 crore loan was extended when he was not heading the bank at all and that the Rs 94.52 crore outstanding amount is fully secured.