Date:26/06/2007 URL: http://www.thehindu.com/2007/06/26/stories/2007062651901700.htm

Business

‘Recast board of Punjab and Sind Bank’

‘Loans were sanctioned without collateral’

NEW DELHI: The management of Punjab and Sind Bank on Monday asked the Union Finance Ministry to restructure the bank’s board by replacing ‘political’ directors with ‘professional’ ones.

“We have asked the Finance Ministry to restructure the board of directors and replace the present five non-official directors with persons of professional background and integrity,” the bank Chairman and Managing Director R. P. Singh told reporters here.

Mr. Singh said, “The non-official directors are running a virtual campaign against the bank management to defend certain defaulters, whose properties have been put on auction.” Earlier, five directors, led by Harcharan Singh Josh, had written to Prime Minister Manmohan Singh, alleging favouritism by Mr. Singh in sanctioning loans without collateral and at lower interest rates.

Mr. Josh and the other four directors — K. K. Sharma, U. K. Sharma, Krishna Mohini and Kamal Maan — alleged that Mr. Singh sanctioned a Rs. 150-crore loan to Akali leader and Punjab Chief Minister Parkash Singh Badal’s son Sukhbir Singh Badal for his Orbit Resorts project at a low interest rate.

Denying the allegations, Mr. Singh said many banks were competing to sanction loans to the resort, which is among the best properties in the National Capital Region. The bank sanctioned only an in-principle loan of Rs. 137 crore, but Punjab National Bank gave a formal sanction for a loan of the same amount. — PTI