Former SBI chairman Pratip Chaudhury was arrested by the Rajasthan Police in Delhi on Sunday in a case of loan default and sale of properties to asset reconstruction company (ARC) has been sent to 15 days of judicial custody by a Jaisalmer court. The arrest has baffled banking fraternity prompting some sharp responses from former bosses of SBI, including Arundhati Bhattacharya who succeeded Chaudhury after his retirement in September 2013.
The case relates to a hotel project in Jaisalmer in 2007, which slipped into NPA in June 2010 after which, as part of recovery efforts, the bank assigned the dues to an ARC for recovery in March 2014. It is alleged by the hotel group that their assets valued at Rs 200 cr were confiscated by the bank for default on Rs 24 cr loan and sold to Delhi-based Alchemist Asset Reconstruction Company (AARC) in a wrong manner. The borrower had initially filed an FIR with the State police against the sale of asset to ARC. They later on filed a protest petition before the CJM court in Jaislamer after a negative closure report filed by the police. The SBI in a statement said that all the facts of the case were not presented properly before the court.