Bank Of Rajasthan Logs Rs 87.84-Crore Losses

The Keshav Bangur-owned Bank of Rajasthan (BoR) has slipped into the red with a net loss of Rs 87.84 crore during the financial year 1997-98 as against a net profit of Rs 3.32 crore in the previous fiscal.

According to sources, total income during the year under review dipped by 2.09 per cent to Rs 395.80 crore compared with Rs 404.26 crore in 1996-97.

The bank earned Rs 350 crore through interest income during the year as against Rs 361 crore in the previous year. BoR's other income stood at Rs 45 crore during the last fiscal as against Rs 43 crore.

 

In the last fiscal, total expenditure stood higher at Rs 483.64 crore as against Rs 400.94 crore in 1996-97. Total expenditure includes interest expenses totalling Rs 269.19 crore (Rs 266.27 crore), operating expenses aggregating Rs 97.79 crore (Rs 90.01 crore) and provision for contingencies amounting to Rs 116.66 crore (Rs 44.66 crore).

The total assets of BoR, which includes cash and balance with the Reserve Bank of India and fixed assets, has, however, increased from Rs 3405.98 crore in 1996-97 to Rs 3410.76 crore in the last financial year.

Cash and balances with the Reserve Bank of India dipped to Rs 301.25 crore in the last fiscal from Rs 392.78 crore in 1996-97. Investments, too, dipped to Rs 1089.34 crore in 1997-98 compared with Rs 1110.37 crore in 1996-97.

While the capital of the bank stands at Rs 17.94 crore, its deposits decreased marginally from Rs 2938.93 crore in 1996-97 to Rs 2826.73 crore in the last fiscal. Borrowings during the year increased to Rs 40.40 crore from Rs 31.35 crore in 1996-97.

Bank of Rajasthan, the largest private bank in northern India, has been in the midst of a controversy last fiscal as its director, Keshav Bangur, is believed to have borrowed heavily from the inter-corporate deposit market at high rates of interest and subsequently defaulted in repaying the debts.

On the basis of `certain irregularities' entailing diversion of funds from Bank of Rajasthan to four other group companies, including Bangur Finance and Bangur Foundation, a probe was initiated by the Reserve Bank of India.

Citing procedural lapses in the running of the bank, the apex bank asked Keshav and his father, Sree Niwas Bangur, to step down as BoR directors.

According to RBI, the move was a result of alleged interference by the Bangurs in the day-to-day affairs of the bank and certain alleged violations of the Banking Regulations Act.

Meanwhile, unable to repay the loans borrowed because of the financial crunch pervading the industry at the time, Keshav sold of his entire holdings of nearly 25 per cent in the software company, BFL Software, to ING Barings to meet his commitments.

With the sale of BFL Software, Bangur is now left with Bank of Rajasthan in which he continues to remain equity holders without a say in the management of the bank and the publication,