RBI's inspection into book of accounts is routine, says Syndicate Bank

The RBI is inspecting book of accounts under the AF-5 norms

The Reserve Bank of India's (RBI) inspection into the book of accounts of Syndicate Bank, which is currently underway, has nothing to do with the recent arrest of bank?s chairman and managing director S K Jain and it is a routine annual exercise, said two top officials of the bank.

"It is an annual process done by the Reserve Bank of India (RBI). RBI has been doing it for the last 15 days or so under the AF-5 guidelines. It is done for all the banks and there is nothing special about Syndicate Bank and it is in no way connected to the alleged bribery charges against S K Jain and his arrest," Anjaneya Prasad, senior most executive director of Syndicate Bank said.

The Central Bureau of Investigation (CBI) on August 2, 2014 arrested Jain and six others in connection with a bribery scam.

He said the bank has not received any special direction from the RBI to furnish the accounts. "There is no question of separate auditing of accounts by RBI because there is no scam in the bank. The bank is functioning smoothly and we have been getting good deposits and the deployment of funds is very healthy," Prasad told Business Standard.

The RBI on Tuesday said it has initiated inspection of the book of accounts of Syndicate Bank, following the arrest of S K Jain by the CBI for allegedly taking a bribe of Rs 50 lakh. The governor of RBI, Raghuram Rajan stated that there were governance issues in the public sector banks and had underlined the need for improving transparency in sanction of loans.

Admitting that the image of the bank was dented to an extent, T K Srivastava, executive director of Syndicate Bank said the Bank has issued a statement allaying fears of the common public. "I would like to assure the general public that the Bank is functioning normally and smoothly. There is no need for the common public to fear about the transparency in the bank's functioning. I would like to reiterate our commitment to provide satisfactory service to customers and they can avail all regular banking services from the bank," he said.

"We are a public bank with 89 years of history and the image of one man is affected rather than the entire bank. There is absolutely no problem anywhere and we have been talking to our managers within the bank for the smooth conduct of the bank. We have reviewed the performance of the bank with them. The bank is internally very strong and all the processes are in place," Srivastava said.

Stating that the Bank's exposure to Bhushan Steel was very small, he said the Bank is one of the consortium partners led by State Bank of India. "Out of Rs 32,000 crore lent by the consortium of 20 banks, our exposure is limited to less than Rs 1,500 crore," he added.