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    Home / News / Business News / Syndicate Bank premises under CBI raid
    Syndicate Bank premises under CBI raid
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    Business 2 min read

    Syndicate Bank premises under CBI raid

    By Vaneet Randhawa
    Mar 08, 2016
    07:18 pm
    Syndicate Bank premises under CBI raid

    The CBI began probing an alleged scam at the state-run Syndicate Bank. It has been argued that the scam involves a sum of almost Rs.1,000 crores. CBI spokeswoman Devpreet Singh told Reuters that the CBI was rummaging 10 locations that included homes of bank employees and bank branches. After the news broke out, the bank's shares were down by 3.4% at Rs.59.70.

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    The Syndicate Bank scandal

    The Syndicate Bank scam involved the bank's CMD S K Jain preventing loans of approximately Rs.100 crore on Bhushan Steel and Prakash Industries from being reported as non-performing assets (NPAs). Further, he accepted a bribe of Rs.50 lakh to raise the credit limit of certain companies. Others involved included Pawan Bansal, Purushotam Totlani and Neeraj Singal, Vice-President and Managing Director of Bhushan Steel.

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    How does an NPA affect a borrower?

    Once a loan is declared as NPA, the borrower faces problems in day-to-day transactions and then the bank begins 'adjusting money' deposited against the overdue. Moreover, the borrower's market credentials get negatively affected when declared a non-performing asset.

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    CBI registers case against Syndicate MD and 11 others

    The CBI arrested Sudhir Kumar Jain, the Chairman & Managing Director of Syndicate Bank, and 11 others including CMD & Directors of 2 private firms based in Delhi. A case of corruption against them was also registered. The case was registered under Prevention of Corruption Act, 1988 and criminal conspiracy. Following the arrest, Syndicate Bank sacked Jain as it CMD.

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    CBI seizes cash, gold, FDs from SK Jain's house

    The CBI claimed to have seized Rs.21 lakh in cash from the residence of SK Jain along with gold worth Rs.1.68 crore and fixed deposits of up to Rs.63 lakh.

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    CBI finds links of other's banks' involvement

    CBI investigations revealed that the nexus of bribe-for-loan scandal went further than Syndicate Bank, linking UCO Bank, Bank of Maharashtra and Canara Bank to the scandal. The key player, Pawan Bansal got several loans sanctioned at his behest including "loan of Rs.600 crore to Era Infra, Rs.500 crore to Tayal Group, and Rs.Rs 1,300 crores to Arshiya International".

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    Pawan Bansal: The scam's mastermind

    According to reports, Pawan Bansal, the Managing Director of Altius Global Finance Private Ltd allegedly used his company "as a front to collect money from various companies he helps and then passes on the money to bank officials."

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