PSB chief asks govt to reconstitute board

Putting up a brave front over allegations by non-official directors, the management of Punjab and Sind Bank (PSB) today asked the finance ministry to restructure its board by replacing "political" directors with "professionals".

"We have asked the finance ministry to restructure the board of directors, and replace present five non-official directors with persons of professional background and integrity," R P Singh, chairman and Managing Director, Punjab and Sind Bank told reporters today.

He said: "The non-official directors are running a virtual campaign against the bank management to defend certain defaulters whose properties have been put on auction."

Five directors, led by Harcharan Singh Josh, had earlier written to Prime Minister Manmohan Singh alleging favouritism by chairman Singh in sanctioning loans without collateral and at low interest rates.

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

Denying the allegations, Singh said: "Many banks were competing to sanction loan to the resort, which is among the best properties in the NCR region. We sanctioned a loan of Rs 137 crore only in-principle, but Punjab National Bank gave formal sanction for a loan of the same amount."

He, however, admitted that the loan has been sanctioned by both banks without taking any collateral considering that the value of this prime property will be worth over Rs 1,200 crore after the completion of the expansion plan.