Syndicate Bank brass in damage control

Tells employees to shun loose talk and get on with business; says internal processes fine

The Reserve Bank of India's (RBI) ongoing inspection of the book of accounts of Syndicate Bank is unconnected with last week's arrest of S K Jain, its chairman and managing director.

The check was a routine annual exercise, said two top officials of the bank.

Battling the shock at the arrest of its chief on a bribery charge, the bank's brass has asked staffers to shun loose talk about the episode and get on with the business.

Anjaneya Prasad, the senior-most executive director, had an interaction with regional managers through video conferencing, to convey that business will run as usual. "The message going down the line is, avoid loose talk. Speak to customers based on facts and focus on transacting the business," said a staff member at a South Mumbai branch.

CAUTIOUS APPROACH

• On Tuesday, RBI had said it had initiated an inspection of the accounts of Syndicate Bank.
• The Reserve Bank of India’s (RBI) ongoing inspection of the books of accounts of Syndicate Bank is unconnected with last week’s arrest of S K Jain, its CMD
• Raghuram Rajan, RBI governor, had stated there were governance issues in public sector banks and had underlined the need for improving transparency in sanctioning of loans

Prasad said: "It is an annual process. RBI has been doing it for the past 15 days or so under the AF-5 guidelines. It is done for all banks and is in no way connected to the alleged bribery charges against S K Jain and his arrest." The Central Bureau of Investigation had on Saturday arrested Jain and six others.

Prasad said the bank had no special direction from 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," he told Business Standard.

On Tuesday, RBI had said it had initiated an inspection of the accounts of Syndicate Bank. Raghuram Rajan, the RBI governor, had also stated there were governance issues in public sector banks and had underlined the need for improving transparency in the sanction of loans.

Admitting the image of Syndicate Bank had been dented, T K Srivastava, executive director, said it had issued a statement to allay apprehensions.

"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 reiterate our commitment to provide satisfactory service," he said.

Adding: "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 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."

A senior official at a retail branch said Jain's arrest indeed came as a "shock", making some employees feel "let down" for a while. But that has not come in the way of business or addressing queries from customers.

Stating that the bank's exposure to Bhushan Steel (part of the controversy in question) was very small, he said the bank was 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.