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DNA Investigation | Pangs: State Bank of Bikaner and Jaipur pains still sting SBI

While PNB scam is still hitting headlines, frauds worth crores happened in erstwhile State Bank of Bikaner and Jaipur is still out of the limelight

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The performance of the largest lender State Bank of India has been badly stung by the accumulated Non Performing Assets (NPAs) of five subsidiary banks it had merged with last earlier. Our own bank State Bank of Bikaner and Jaipur (SBBJ) is of the main culprit behind the SBI’s poor show. According to a study the total NPA of SBBJ when the merger happened was around Rs 8,000 crore.

Even after four quarters, the bank has not been able to come out of red. In the third quarter of this fiscal it has reported a massive Rs 1,886.57 crore net loss due to bad loans it inherited from its subsidiaries. On the contrary, it had reported net profit of Rs. 2,152.14 crore for the October-December quarter of the last fiscal, 2016-17. SBI, which accounts for more than a fifth of India’s banking sector assets, said for the merged entity, gross bad loans as a percentage of total loans rose to 9.97 per cent at the end of June, 2017 from 9.11 per cent three months earlier and 7.40 per cent at the end of June 2016.

SBBJ fraught with frauds

Before merger happened, PNB like fraud was feared to be simmering in SBBJ also. Had merger not happened, the only nationalised bank having allegiance with Rajasthan could have been in financial coup. According to official data presented by RBI in Rajya Sabha, there has been 213 fraud cases reported involving swindling of whopping Rs 1,0005.17 crore. In some of the cases staff was found involved while in most the bank was duped by ‘Natwarlals’ of business. These staggering figures reflect the sorry state of banking operations, especially in public sector banks where checks and balances are intruded on whims and fancy.

“There are some political interferences also. Knowing that the loan will turn bad, we have to sanction as we are under pressure from our superiors. And some time it’s just error of judgement,” said Sunil Sharma, a retired public sector banker.

There are also cases where loans are disbursed to ‘frauds’ in connivance with banking staff. A case in point is again a report presented before the Rajya sabha which says that Public Sector Banks in Rajasthan reported 38 cases involving stashing of Rs 1,096.39 crore from April 2013 to June 2016.       

Table showing details of active frauds involving Rs 1lakh and above in SBBJ:

Year         Cases        Amount (In crores)

2012-13    46            139.97

2013-14    43            136.07

2014-15    41            453.60

2015-16    45            146.00

2016-17    38            129.53

Total        213            1005.17

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