The loan scam-hit Bank of Maharashtra (BoM) has announced a closure of 51 branches across the country as part of a cost-cutting measure.
The BoM, which was in the news for the wrong reasons in June this year after its CMD Ravindra Marathe, his predecessor Sushil Muhnot and four others in connection with the Rs 2,043 crore DSK group scam case, has begun to tighten its belt fiscally.
Through an advertisement published in a Marathi newspaper on Monday, the Pune-headquartered BoM stated that it had either closed or merged 51 branches across the country and by December 31,2018, it would annul the IFSC and MICR codes of these branches.
According to informed sources in the bank, all the 51 branches are in urban centres and have been identified for the action as they were declared unviable and incurring huge losses.
While the BoM is in the process of cancelling IFSC and MICR codes of these all the Savings, Current and other bank accounts have been transferred to the branches with which these have been merged.
The BoM has, meanwhile, directed all customers to deposit their cheque-books issued from the closed branches with the old IFSC/MICR Codes by Nov. 30, and collect their payment instruments bearing the new branch’s IFCS/MICR Codes.
Simultaneously, the BoM cautioned that since the old IFSC/MICR Codes have been spiked and shall be discontinued permanently from Dec. 31 this year, henceforth customers should conduct all their banking transactions only with the new IFSC/MICR Codes.
It may be recalled that nine days after they were arrested in connection with the Rs 2,043 crore DSK group scam, the BoM had on June 29 this year 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”.
Simultaneously the BoM entrusted A C Raut, Executive Director of the Bank with all the functional responsibilities as the Managing Director and CEO and other Executive Director of the bank.
The reshuffle in the upper echelons of the BoM had come after 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 2,043 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 banking norms.
Masterminded by Pune-based D S Kulkarni and his family members and companies operating under the banner of GSK group, the scaminvolves 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.
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.
In a 36,875-page charge sheet filed before a special court in Pune on May 17, the EOW of the Pune police had pegged the scam amount at Rs 2,043 crore.