January 23, 2020
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Liberal Banker

Between 1991 and 1996, Indian Bank blatantly ignored RBI guidelines and sank over Rs 10 crore in sponsoring events and donations to private individuals, trusts and institutes.

Liberal Banker
outlookindia.com
-0001-11-30T00:00:00+0553
IF Gopalakrishnan aimed to win a popularity contest, he was moving in the right direction. The only problem was that he seemed to consider Indian Bank's money as a free commodity that could be distributed at whim. Documents with Outlook, which include a report submitted by the RBI's Department of Supervision to the CBI, show a maze of violations.

The RBI report dated April 22, 1997, shows that between 1991 and 1996, Indian Bank blatantly ignored RBI guidelines and sank over Rs 10 crore in sponsoring events and donations to private individuals, trusts and institutes.

  • On August 1, 1992, Gopalakrishnan donated Rs 3.5 lakh to his alma mater, Pachaiyappa College, Chennai. Purpose? Provision of tables and chairs for the college (where MVR also studied).
  •  On July 1, 1992, Gopalakrishnan sponsored a nameplate outside the then Tamil Nadu director-general of police Sripal's office. The cost: Rs 90,000.
  • In 1995, the deputy commissioner (traffic), Tamil Nadu police, was given Rs 2 lakh for furnishing his conference hall.
  • In December 1992, the Tamil Nadu Sports Stadia Society was given Rs 25 lakh to set up a pavilion at the multi-purpose Nehru stadium.
  • On November 19, 1992, Rs 5 lakh was donated to the G.R. Vishwanath Benefit Fund for a dinner at the cricket test centre.
  • On February 25, 1994, Rs 6.99 lakh was donated for the provision of watches to the delegates at a Rotary District Conference.
  • In 1995, Rs 30,000 was donated for the laying of a garden at the Evergreen Nursery, Chennai.
  • In 1991, the District Collector at Chingalpattu was donated Rs 4 lakh for affixing floodlights outside his office.
  • During 1992-95, Rs 3 lakh was donated to the editor of Savi magazine for publicity/propaganda for Indian Bank.

Further, a perusal of the amounts incurred under sponsorship shows that the disbursal was bunched on specific dates; this became even more pronounced in 1995. The RBI report is scathing on this: "It is difficult to believe that all the beneficiaries under sponsorships made applications on the same dates." Little wonder that the RBI, which curiously kept silent during the six years when the former CMD ran amuck with his loan mela, is now recommending a CBI probe into at least 200 instances of such unauthorised grants. The agency will have to ascertain whether these amounts were actually utilised for the intended purposes. An embarrassing exercise, indeed.

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