PSB chairman under fire for favouritism

A virtual war has broken out in the public sector Punjab and Sind Bank with five non-official directors attacking the chairman, and the bank chief, in turn, calling for the removal of "undesirable directors".

It all started with five directors, led by Harcharan Singh Josh, writing to Prime Minister Manmohan Singh alleging favouritism by chairman R P Singh, a senior IAS officer, who was given charge of the bank in 2005.

Josh and four other directors - K K Sharma, U K Sharma, Krishna Mohini and Kamal Maan - allege that Singh sanctioned a loan of Rs 150 crore to Akali leader and Punjab Chief Minister Parkash Singh Badal's son Sukhbir Singh Badal for his Orbit Resorts project. They allege that the loan was provided at a low interest rate.

The PSB chairman, however, said the loan to Badal's Orbit Resorts had been approved only "in-principle" and on the basis of merit.

"The allegations are false. These directors are acting on behalf of defaulters of the bank, and are trying to defeat the process of recovery. The loan to Orbit had nothing to do with politics," he added.

The five directors said "the sanction of Rs 150 crore to (Badal's) Orbit Resorts Private Limited at a rate of 11.5% per annum is a clear indication of favouritism."