The Syndicate Bank bribery case allegedly involving CMD S K Jain has for the first time exposed the role of top echelons in public sector banks in worsening the non-performing asset (NPA) figures which are crippling the financial sector.
The case against Syndicate Bank CMD Sudhir Kumar Jain also comes at the time when the CBI has put companies with NPAs to the tune of thousands of crores of rupees under the scanner.
CBI officials handling the Syndicate Bank case said that it is evident that S K Jain was receiving payoffs from the two implicated companies, Bhushan Steel and Prakash Industries for an extension of their credit facilities despite them defaulting on repayments.
“The companies did not want (their accounts) to be declared NPAs and the CMD kept giving them credit extensions, in the case of Bhushan Steel the CMD has allowed loans of over Rs 100 crore,” said an official.
Agency officials said that following the questioning of the arrested bankers, they will make an assessment of weather non-declaration of NPA by extension of credit line despite default was done in other cases too.