Pratip Chaudhuri: Banker in the dock

Former SBI chief Pratip Chaudhuri’s arrest raises uncomfortable questions about how bank officials deal with loans gone bad and also the judicial oversight of bank actions

The Union finance ministry, on October 29, issued key norms to protect public sector bankers whose bona fide decisions could go wrong and lead to bad loans, or non-performing assets (NPAs), often inviting investigations from government agencies. The idea was to help public sector bankers take faster decisions on loans, especially to corporates, at a time when the economy needs huge investments in projects to shake off the impact of the pandemic. Two days later, the Rajasthan police arrested Pratip Chaudhuri, a former chairman of the State Bank of India (SBI), the country’s largest bank, with assets worth over Rs 5 lakh crore, in New Delhi on charges of alleged complicity in undervaluing and aiding the sale of two hotels belonging to a business group whose loan from the bank in 2008 had turned into an NPA.