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SK Jain, CMD of Syndicate Bank Arrested  -  Ugly Face of Top Management of Banks Once More Exposed.  Will Modi Government Expose More Who Have Become CMDs by Greasing Previous Government Officials  ?



Rajesh Goyal 

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Raids and Arrests :

In terms of newspaper reports (on internet) today (2nd August 2014) afternoon, CBI arrested  CMD of Syndicate Bank alongwith five others  (including his brother in law) for allegedly taking bribe of Rs50 lakh for enhancement of credit limit to some companies (reported to be embroiled in the coal block allocation scam) by passing rules and regulations.    Interestingly the reports indicate that the arrested brother in law of Syndicate Bank CMD is a senior lawyer and former Congress spokesperson Vineet Godha who is alleged to be  accepting a bribe of Rs 50 lakh on behalf of his brother-in-law (CMD of Syndicate).


CBI conducted raids across 20 locations in at least four cities including Bangalore, Bhopal, Mumbai and Delhi today after registering a case in the matter.    The initial reports indicate that CBI confiscated an amount of Rs 50 lakh allegedly received by Jain as bribe. CBI spokesperson said, "Searches so far have led to recoveries of several asset papers and incriminating documents."  During searches, the CBI allegedly seized Rs.21 lakh in cash and gold worth Rs.1.68 crore from the premises of the Syndicate Bank CMD, besides fixed-deposit receipts for about Rs.63 lakh.


How CMD of Syndicate Bank Was Trapped :

CBI acting on a tip-off that the Syndicate Bank CMD had allegedly been demanding bribes, directly or through middlemen, for extending credit limits of companies, mounted surveillance and zeroed in on his brother-in-law Vineet and Mr. Bansal, a Madhya Pradesh-based chartered accountant who is in the business of facilitating loans for top corporates.

CBI finally  laid a trap and arrested the two when they were receiving the bribe amount from representatives of the companies who have been named in the FIRs,” said the official. Simultaneous raids were carried out at 20 places in Delhi, Bangalore, Bhopal and Mumbai.


Career of SK Jain :

Mr S K Jain became CMD of Syndicate Bank on July 8, 2013. Prior to assuming charge as CMD, he was Executive Director of Bank of Baroda.  Jain, a qualified as a chartered accountant started his banking career in June 1987 as a Credit Manager in Dena Bank and got elevated to various positions thereafter over the years.


Public Perception About Bank Top Management:

I have served in PS Bank for over three decades and have been witness to the internal discussions about the corruption level in bank.  Such talks are usually in hushed tones as the honest people are afraid to openly discuss as they are sometime aware of the dubious credentials of the person working as his colleague or as his boss.   Usually the caucus of dishonest group will create so many hurdles in the way of honest person that he is termed as non- performer and forced to either take transfer or that group ensures that they are shunted and do not get the desired promotions.  Some of them meet the fate of Mr Ajay Sehgal of PNB who was forced to commit suicide.

My close friends and relatives, knowing about my clean credentials, avoided talking about the people in banking sector, who they knew were involved in dubious means.   I too had no interest in such talks.   However, after taking VRS, I was shocked to listen from my friends and relatives, to the level of corruption prevalent  across the banking industry.    Some of them even wonder how I did not have that in depth knowledge about such things.   I think, may be dishonest people are really scared of honest people and talking about their modus operand.  Thus,  the public perception about corruption in banks in much worse than what I have faced in the banking industry.


You talk to an industrialist or a Chartered Accountant who arranges loans, he will candidly admit that the above is only a tip of iceberg.    Some of them will be frank to admit that the present state of  PSBs, with unmanageable NPAs are purely on account of the  inefficiency of  CMDs and EDs of various banks, who are more concerned about collection of the funds for themselves and for their political bosses.   I have already written a detailed article on how the qualifications and cut off criteria are changed in appointment of CMDs and EDs on year to year basis just to romp in their favourite candidates.   


Former DG of RBI has openly admitted in one of the interviews that CMDs and EDs manage their Board meetings even at places where they have their son or daughter’s marriage.   This forces the DGMs, GMs / EDs and top most corporate bosses to attend the marriage and give costly gifts.   Can RBI claim its ignorance of such acts when its own DG has admitted to this in his interview.    If GoI and  RBI  are aware of such anomalies, why no action was taken against such banks / CMDs.



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Nexus Between Top Management and Agents (including Chartered Accountant) ;

It is not only in Syndicate Bank , such things are quite common, it is almost common in all PSU banks.  It is a known fact that almost all  the big proposals are sponsored by chartered accountants who are known to have paid regular cuts in cash or gold to Bank officials at each level .   I have been witness to a meeting called by FGM at Chandigarh way back in 2004 / 2005, exclusively for Chartered Accountants , where they were given grand party and cajoled to bring big ticket loans, with clear cut instructions that if any Manager is reluctant, let them approach the Regional Head or GM.   Great way of conducting business.   I was told by my colleagues that it is normal practice and prevalent across the banking industry.   I am sure my other colleagues will endorse this view.   Barring a few, most of such proposals were created based on the Balance Sheet jugglaring through computer tallying figures.


Fast Track Promoted Officers Needs to be Under Scanner :

Let me disclose some of my own practical experiences.   I along with some of my friends passed PO exams in mid 1980.  Each one of us were offered different banks depending open our ranking.  I got PNB, one friend got Dena Bank, another Indian Bank, and still someone got BoB.  I was considered as the luckiest as PNB was the largest nationalized bank and had the maximum potential for promotions.   Now after 34 years, people who joined much later than 1980 in small bankers have already become CMDs and EDs, whereas my batch of 1980 in PNB, no one has even become eligible for ED, forget about CMD.   Thus, what is the criteria for promotions ?  Are people at bigger bank are less intelligent and lesser experience? 

My perception after all these years is that smaller banks which manipulate their promotion processes for faster promotion and take the short cut root to grease the plams of GoI go faster and became CMDs by early 50s, whereas honest bankers, if lucky not to be charged sheet, become eligible for ED posts around 58 / 59 years of age.

Thus, there is a need for higher scanner for bankers who have shown extraordinary promotions and even reach the level of CMDs in early 50s and then become eligible for promotion to RBI or other institutions.

Sudhir Kumar Jain (DOB 21st July, 1960)  assumed charge as Chairman & Managing Director of SyndicateBank on July 8, 2013.   Thus, he became Chairman of the Bank within a service record of 26 years, at the age of 53 years, whereas in much bigger banks people with service record of over 34 years have not got a chance to get interview call for ED post.   Has anybody thought about this anomaly in the banking system?   He had 7 years of service left when he became CMD.

It is only time that we will know whether the charges are proved in the court of law and what punishment he gets, but there is a need to look into the present system of promotions.


Present System of Promotions – An Outsider’s Preview :

One of the comments on another website where this news appears, number of comments have aptly described  the general perception of promotions to the posts of CMDs and EDs, a perceived by lower level bankers as well as general public:-


“Plum posts are auctioned not only in Banks, But in almost every department. Railways, Police, Income tax. Every where. Shame. Hope Mr.Modi takes it seriously...

“Shame on this man. He should have got this post by bribing (which might have been to the earlier FM). Unqualified and those who do not deserve the position were parked by the earlier FM in plumb posts. Here is one such person. A CMD of the Bank has to be above board by his action, behaviour and thinking. Unfortunately he has been caught taking money below the table. There are number of such worms in the system till the state level administration.

“At the time of appointment the ministery conducts auction who can pay more bribe for the plum post, and clears those succeeded in the auctions naturally they have to recover thru bribes. All bad loans later written off and govt pumps more money to save banks under Basel norms. Mera Bharat Mahan


A System should be created for the appointment of Bank CMDs and stop such ugly news in future. Morale of the country is lost. HDFC Bank was caught in Money Laundering. Culprits were not booked. Because most of the personnel are the wards of RBI officials. It is a chain effect. Mr. Modi should make personal efforts to cleanse the Banking Sector"


Other Recent Cases, which are already buried :

"Some months ago, the news of open bribery against a top executive of the State Bank of India appeared in the press but, in the name of departmental action, the whole thing was hushed up," Venkatachalam, a union leader  said.   He further added that   "In the case of United Bank of India, where there are reports of huge bad loans on account of wrongful decisions of the top management, the then CMD has been allowed to take voluntary retirement and nothing has been heard thereafter”.



Impact of Such Incidents on Bankers :

The impact of such incidents on the general public is hugely negative about bankers as a whole.   As Congress is cursed in each and every corner of India, soon bankers as a class are also likely to get bashing from all corners of India.    Your demand for honourable wage revision too gets setback as banker as a community is losing its reputation.    There is a need for salvaging the already sagging reputation of bankers,


What lies in Future :

We may have more fireworks till the new Government also becomes corrupt.   If it stays above board, we will continue to have such exposes in next two to three years,  as banking industry is full of dubious elements. 



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