Patil was aware of her bank mess, top defaulters her kin

These include: disbursal of “illegal” loans to relatives that exceeded even the bank’s share capital; loans to relatives who then defaulted; loans to Patil’s sugar mill which was recently sealed; recruitment of directors’ relatives instead of SC/ST candidates as per Government norms.

Speaking from Jalgaon, P D Nikam, the liquidator appointed by the Government, told The Indian Express: “The fact that relatives of the founder chairperson (Pratibha Patil) were among those indiscriminately granted loans and that some illegal loan waivers were done has come up in our audit. All this is being looked into as part of the liquidation proceedings which may take two to three years.”

When contacted, Congress spokesman Abhishek Singhvi said: “This is a revival of stale allegations. Pratibha Patil was not linked to the bank in any official capacity since 1994.”

However, documents with The Indian Express show that Pratibha Patil, the founder chairperson of the Bank who has also served as one of its directors, was very much involved with the bank’s functioning in the run-up to its liquidation. Not only was she present at negotiations between the union and management until 2002, settlements prior to the bank’s liquidation in 2003 were done in her presence.

The show-cause notice, sent to the bank on February 1, 2003, asks the bank to explain several irregularities. Within a month after this notice, the bank’s licence was revoked. Key points raised in the notice:

• Six of the top 10 defaulters of the bank who received loans without proper sureties were linked to relatives of Pratibha Patil: four relatives got loans (including her nephew Kishor Dilipsingh Patil and niece Anjali Dilipsingh Patil) while in two cases, her relatives stood guarantee for loans given to others.

• Two loans to her relatives added up to more than the bank’s total share capital of Rs 37 lakh. A loan of Rs 36 lakh was granted to Rajeshwari Kishorisingh Patil (daughter-in-law of Pratibha Patil’s brother, Dilipsingh Patil) and another Rs 20 lakh to Ritu Randhisingh Patil (also Dilipsingh Patil’s daughter-in-law).

• The notice states that these specific loans violated RBI rules since they crossed the 20% ceiling of the bank’s capital which was then only Rs 37 lakh.

• “Illegal” loans amounting to over Rs 40 lakh were granted to the Sant Muktabai Cooperative Sugar Mill which was also set up by Pratibha Patil near Jalgaon. As mortgage, the sugar mill offered fixed deposits but the loans matched the deposits which were not encashed. According to the notice, this contributed to the deterioration of the bank’s fiscal performance, leading to its liquidation.

• Instead of meeting SC/ST reservation norms in recruitment, bank employed members of Patil’s family.

• A bank telephone, used for trading in the stockmarket, ran up a bill of Rs 12 lakh. A writ petition in the Aurangabad bench of the Mumbai High Court alleges it was being misused by Dilipsingh Patil, who was also the bank’s legal advisor. Dilipsingh Patil was not available for comment tonight but when contacted by The Indian Express on Sunday, he had confirmed that his relatives got loans from the bank denying that this led to the bank’s downfall.