A new government rule aimed at protecting public sector officials and bankers from law enforcement redundancies has come into limelight after the Rajasthan police arrested India’s former on Monday.State Bank Of IndiaChairman Pratip Choudhary in a decade-old bad loan case. The arrest appears to have irked bankers, especially state-run lenders.

The circular of the Department of Personnel and Training was published about two months ago and after the arrest

In another NPA case, the authorities had prescribed standard operating procedure (SOP) for action against government officials. He specified that the police would have to take prior approval under the newly inserted section 17A in the Prevention of Corruption Act (2018).

The amendment also includes a checklist along with step-wise processing of information by the concerned police officer and an application under Section 17A.

‘Banking industry’s confidence shaken’

Bankers told ET that none of these procedures were followed in this case. Arundhati Bhattacharya, former chairman of SBI, told ET, “When something like this happens, it strikes at the core of our credit culture. “Financial institutions operate according to laws and regulations laid down by law makers and regulators. How are the people working in these institutions supposed to act when agencies act unilaterally in this matter? With someone like Mr. Choudhary, this is the case. To, that which is known to be sincerely honest, is very unfortunate.”

bankers say

• Amendments to the Prevention of Corruption Act, 2018 are meaningless if police brutality against government officials continues
• Arrest of former SBI chief against both statutory laws and natural justice
• The move will damage the credit culture, prevent decision-making
• This can have a cooling effect on the lower levels of the banking hierarchy.
• Time of arrest, when High Court is on leave, raises suspicion

Chaudhary was arrested by the Rajasthan Police from his Delhi residence and was taken to Jaisalmer on Monday. The matter pertains to the ‘Garh Rajwada’ hotel project in Jaisalmer, which was financed by SBI in 2007. Since the project was not completed for three years and a key promoter passed away in April 2010, the account went under the NPA category in June 2010. Subsequently, the loan was sold to Alchemist ARC, of ​​which Choudhury became a director upon retirement from the bank.

UBI CEO Rajkiran Rai said, “When a senior banker, not less than the (former) SBI chairman, is arrested, it is very disturbing.” “Judicial and police officers have to understand how bankers take decisions in these matters. It is just a loan of Rs 25 crore that we are talking about, which may not have even gone to the Speaker’s desk. When such an unfortunate When things do happen, they shake confidence, especially at lower levels in the hierarchy.”