CVC accuses Ramnath Pradeep of violation of bank norms to favour some corporate houses in disbursal of loans and of granting undue favours. Asks finance ministry to seek explanation and take appropriate action

Moneylife Digital Team

The Central Vigilance Commission (CVC) has indicted Ramnath Pradeep, chairman and managing director of Corporation Bank, on a series of charges of corruption and abuse of authority to favour some corporate houses.

The CVC has said in a report that Mr Pradeep abused his authority and power by deliberately favouring some corporate houses in sanctioning big-ticket loans, despite them being in default of loans from other state-owned banks. He has also been charged with altering the bank's decision-making process for sanctioning advances to certain parties and granting undue favours in awarding consultancy, retainer ship as well as outsourcing of ATM activities.

According to a newspaper report, Mr Pradeep has been charged with eight offences, four of which concern irregularities in extending advances and the others are related to other issues such as management decisions.

The CVC has submitted its report to the department of financial services (DFS) in the Union Ministry of Finance, advising it to seek an explanation from Mr Pradeep on the "lapses noticed by the inquiry officer." It has asked the ministry to the report back to the CVC with its comments. The Commission has recommended that "appropriate measures may be taken by the department (DFS) to restrain the CMD from further abuse of authority."

According to sources, the vigilance commission has addressed the report to the ministry directly to ensure that it reaches on time in view of the seriousness of the charges and that Mr Pradeep is to retire from service on 30 September 2011.

Strangely, information sought under the Right to Information Act reveals that the report was received by the ministry after a delay of 26 days.

In its reply to an RTI query, the CVC said that the report was submitted by the inquiry officer on 9 June 2011 and that it was sent to the secretary of the DFS on 30 June 2011 to obtain the explanation of the CMD. It also said that the report was forwarded to the Central Bureau of Investigation (CBI) for further investigation and verification.

The Ministry of Finance in its reply to an RTI query said that it had received the "Direct Inquiry Report" of the CVC on 27 July 2011. It also said that, "The same (report) is being examined in this Department. No deadline has been fixed for completing the action in the matter."

According to a whistleblower, "DFS has sought the CMD's explanation on the report through a letter dated 1st August advising him to submit it at the earliest, without giving any timeframe. This indicates that the ministry is soft-pedalling the matter."

Meanwhile, Mr Pradeep has been quoted in the Mint business daily as saying that, "Some people in the bank had moved the CVC against me. I am preparing a reply to these charges. I have done everything as per the rules, there are no issues."