The government’s eye on the arrest of the former president Pratip Chowdhary People with knowledge of the matter told ET that in a non-performing loan settlement case, however, no official intervention appears to be possible at this stage as the matter is in court.

Further, the arrest is on a complaint filed by a loan defaulter and not by government investigative agencies, he said.

In this case, due process of law has to be followed and there is little the government can do. On the larger issue of protecting bankers on genuine business decisions, officials said the new accountability framework, which will come into effect next April, will further strengthen their security.

Choudhary was arrested by the Rajasthan Police on Monday in a more than a decade-old sour-loan case on a complaint by a loan defaulter. He was arrested from his Delhi residence and taken to Jaisalmer on Monday. The local magistrate rejected his bail application.

“The government is aware of the matter… but nothing can be done as the matter is sub-judice,” an official said. He said that due process of law has to be followed.

Also, no government agency is directly or indirectly involved in the matter, government sources said. The arrest was made by the local police on the complaint of a borrower.

The arrest is related to the ‘Garh Rajwada’ hotel project in Jaisalmer, which was financed by State Bank Of India in 2007. The account became a non-performing asset category in June 2010. SBI sold the loan to Alchemist Asset Reconstruction Company (ARC) in March 2014. Chieftain had retired.

Choudhury later became the president of the Alchemist ARC.