Nine days after they were arrested in connection with the Rs 2,043 crore DSK group scam, the Bank of Maharashtra (BoM) on Friday divested its Managing Director and CEO Ravindra P Marathe and its Executive Director R K Gupta “of all the functional responsibilities of the bank with immediate effect”.

In a disclosure made to the Bombay Stock Exchange ltd, the BoM stated that its Board of Directors’ meeting held earlier on Friday, it had decided to divest Marathe and Gupta of their functional responsibilities as the CEO/MD and Executive Director of the bank respectively, with immediate effect.

Following its decision, BoM decided to entrust AC Raut, Executive Director of the Bank with all the functional responsibilities as the Managing Director and CEO and other Executive Director of the bank.

In a simultaneous crackdown, the Economic Offences Wing (EOW) of the Pune Police had on June 20 arrested Marathe, Gupta, BoM’s former Managing Director and CEO Sushil Muhnot and three others in connection with the Rs 2,000 crore DSK group scam case.

The bank executives and officials have been charged with advancing huge sums of loans to the fraud-accused developer Kulkarni and his companies in alleged violation of bankingnorms.

Marathe was later granted bail by a special court on Wednesday last on health grounds.

Masterminded by Pune-based DS Kulkarni and his family members and companies operating under

the banner of GSK group, the scam involves a sum of Rs 2,043 crore. Kulkarnis and their companies had defaulted on loans secured from various banks including Pune-headquartered BoM.

They had also not paid thousands of depositors who had put in money in the company schemes and fixed deposits.

“During the investigations it has come to light that the Bank of Maharashtra (BoM) officials colluded with DS Kulkarni Developers ltd (DSKDl) and disbursed amounts under the garb of loans to the company,” Deputy Commissioner of Police Sudhir Hiremath, who heads the EOW, had said.

According to the charge-sheet registered in the scam, the bank executives and officials had colluded with the DSK Group “with dishonest and fraudulent intentions to sanction and disburse the amount of the bank (BoM)” under the garb of loans and the money was later siphoned off.

The arrested accused have been booked under Sections 120 B (criminal conspiracy), 406 (criminal breach of trust), 409 (Criminal breach of trust by public servant, banker, merchant or agent), 420 (cheating), 465 (forgery) and other relevant sections of the Indian Penal Code and the Prevention of Corruption Act.

While extending loans to the DSK group of companies, the bank officials had allegedly violated the norms of the BoM and the Reserve Bank of India. 

DSK and his companies face at least five FIRs in Mumbai, Pune and Kolhapur.