State Bank of India on Monday clarified that the bank had followed all due processes in the sale of asset, which led to the arrest of former SBI chairman Pratip Chaudhuri. This is the first instance where the chairman of the country’s largest bank has been arrested in an alleged loan scam.
On November 1, Jaisalmer Police arrested Chaudhuri in an alleged loan scam, The Times of India reported. The case is related to properties owned by Godawan Group, which took a Rs24 crore loan from SBI in 2008 to construct a hotel. According to the report, allegations against Chaudhuri include properties worth ₹200 crore being sold for ₹25 crore after the bank seized them for defaulting on the loan.
“Garh Rajwada was a hotel project in Jaisalmer, financed by the Bank in 2007. The project remained incomplete for over three years and the key promoter passed away in April 2010,” SBI said in a statement.
It further said that the account slipped into a non performing asset (NPA) in June 2010 and various steps taken by the bank to complete the project did not yield results.
Subsequently as part of the bank’s recovery efforts, the account dues were assigned to an asset reconstruction company (ARC) in 2014, and it was done through a laid down process of the bank’s policy, the SBI statement said.
“As recovery efforts failed, approvals for sale to ARC were taken in…