Tmc Sections Want New Indian Bank Chief Out

Rajagopal is seen as an RBI man who, according to top bank sources, is out to expose the indiscriminate largesse of the previous management, headed by the controversial M Gopalakrishnan, who joined TMC a few days ago.

Rajagopal has clamped a total embargo on credit sanctions and loan disbursements by the bank have come to a virtual halt. The action is seen by some people as anti-Tamil Nadu and detrimental to the pace of industrialisation of the state.

TMC, headed by G K Moopanar, is an important constituent of the ruling United Front government at the centre where the party's other celebrity member, P Chidambaram, is the finance minister. TMC has been embarrassed by the disclosure that Gopalakrishnan has joined it. His formal entry into the party confirmed media speculation on his closeness to Moopanar.

In the political fallout of the Indian Bank collapse, some TMC activists feel that Rajagopal's continuation as Indian Bank chairman will further jeopardise the party's image. It will also rob the party of its "clean" image, party source say.

RBI, on the other hand, seems firm on backing Rajagopal. "Any move to remove him will do more harm than good, even to TMC," banking industry sources say. RBI, it is learnt, is determined that Rajagopal stays chairman.

It is pointed out that RBI had issued repeated warnings to the ex-chairman since as early as 1992 to restrict credit expansion. The central bank even went to the extent of curbing Gopalakrishnan's discretionary powers as CMD to sanction credit.

Loans given to certain companies like MVR Exports, headed by M Varadarajulu, an NRI with established close-links with the TMC top brass, are already proving hard to defend for the party.