Inspection under way at Syndicate Bank: Raghuram Rajan

Aug 06 2014, 01:50 IST
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SummaryThe CBI arrested Syndicate Bank CMD SK Jain on August 2 for allegedly accepting a bribe of R50 lakh. On Monday, the ministry of finance and department of financial services placed Jain under deemed suspension

The RBI has commenced an inspection of Syndicate Bank following the arrest of its chairman & managing director, SK Jain, by the CBI on charges of accepting a bribe to increase the credit limits of certain private companies, governor Raghuram Rajan said on Tuesday.

Rajan said, “There is an inspection under way at Syndicate Bank and, I think, that one has to be very careful in extending this issue to the entire banking system. This particular situation does raise troubling issues and it is important for law enforcement agencies to ensure that full investigation is done and they are doing that.”

He cautioned that this incident should not be understood to be the reason for problems in the entire public sector banking system.

“One should not assume that all problems in the banking system are because of criminality rather than other factors. While we do a thorough investigation, it should not become a witch-hunt that stalls the entire credit process,” Rajan added.

The CBI arrested Jain on August 2 for allegedly accepting a bribe of R50 lakh. On Monday, the ministry of finance and the department of financial services placed Jain under deemed suspension, the bank said in a notification to the BSE.

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