Bank of Maharashtra chief arrested for bad loans

In a major development, the Economic Offences Wing of the Pune police arrested Bank of Maharashtra MD and CEO, Ravindra Marathe and other for allegedly disbursing crores of rupees in loans to DSK Developers Ltd, without following the proper procedure.

The agency also arrested, executive director, Rajendra Gupta and two others. The bank officials allegedly colluded with DSK, the group's flagship company, to sanction and disburse the amount under the barn of loan which was siphoned off.

The fraud amounting to Rs 2,043 crore relates to siphoning off money raised by the DSK group through investors as well as loans from banks and financial institutions, non-convertible debentures and money collected from home buyers in housing projects.

The bank in an official statement said that its total outstanding exposure to DSKDL was Rs 94.52 crore. "Recovery process like SARFAESI action has already been initiated by the bank and some of the properties are due for auction. Bank has also declared DSKDL and its promoters as wilful defaulters," the statement also read.