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We will professionalise PSB management, asserts Jaitley

Concerned over instances of corruption in the PSU banks, Finance Minister Arun Jaitley on Thursday said that government is taking steps to professionalise the management and help them strengthen their risk management system.

‘Professionalising the management of the banks, we have taken some decisions in this regard. We expect banks to have better risk management. The Department of Financial Services has been actively working in this regard’ Jaitley said at a function organised by Indian Bank here.

Without specifying names of banks, the Finance Minister said ‘some recent incidences have been disturbing. I only hope that they are drop in the ocean. We have all learnt the lessons from such incidents, and there will be no repetition of them.’

His statement assumes significance in the light of scams in the state-owned banks. Earlier this month, Syndicate Bank Chairman and Managing Director (CMD) S K Jain was arrested for allegedly receiving a bribe of Rs 50 lakh to enhance credit limits of Bhushan Steel and Prakash Industries.

Besides, some officials of Oriental Bank of Commerce and Dena Bank were suspected of misappropriating funds worth Rs 436 crore from their fixed deposit customers. The government has initiated a forensic audit in the alleged scam.

Finance Minister, however, expressed hope that an enhanced level of professionalism will further strengthen and improve credibility of the banking system. ‘Credibility is of extreme importance as far as banking system is concerned. We must endeavour improved standards of credibility,’ he added.

Meanwhile, a Delhi court on Thursday dismissed the bail pleas of Chairman-cum-Managing Director (CMD) of Prakash Industries Ltd Ved Prakash Agarwal and its Director Vipul Agarwal, who along with others were arrested in the Syndicate Bank bribery case.

Special CBI judge Swarana Kanta Sharma rejected the bail applications of both the accused who are currently in judicial custody along with other co-accused, including Syndicate Bank CMD Sudhir Kumar Jain.

During the arguments on the bail applications, advocate Vijay Aggarwal, appearing for both the accused, asserted that CBI’s case against both his clients was merely on the basis of recorded conversations allegedly intercepted by the agency.

Regarding Vipul Agarwal, the lawyer contended that his client had resigned from the post of Director of Prakash Industries Ltd on 31 October last year and was now nowhere associated with the company. Countering the contentions of the defence counsel, CBI’s prosecutor Akshay Gautam said that probe into the case was still underway and if released on bail at this stage, the accused may try to tamper with the evidence.

The accused arrested in the case are in judicial custody till 29 August. On 2 August, CBI had arrested six accused in connection with the case.

CBI had claimed to have recovered Rs 21 lakh in cash from Jain’s residence besides gold worth Rs 1.68 crore and documents of fixed deposits of up to Rs 63 lakh.

CBI has filed two cases against Jain, accusing him of receiving a bribe of Rs 50 lakh through conduits and abusing his official position to enhance the credit limits of some companies in violation of laid-down procedures.

Bhushan Steel Ltd Vice-Chairman Neeraj Singal, co-accused in the case, was arrested by CBI on 7 August, hours after the court had issued a non-bailable warrant against him and an alleged middleman, Purushotam Totlani in the case.

In two FIRs, CBI has named Singal, Ved Prakash Agarwal, Vipul Agarwal, Pawan Bansal, chartered accountant, Vineet and Puneet Godha (relatives of Jain), Vijay Pahuja, Totlani and Pankaj Bansal.

They have been booked under the Prevention of Corruption Act and criminal conspiracy under the IPC.
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