Complaint No.1 related to Delhi Zone of MYBANK, which on account of excesses committed is now endowed with the maximum quantum of NPA within the Bank, to crown the glory of being the Leader (more appropriately "the Ring-Leader") for this qualification within entire Institution. To give a free hand to Chief Managers, the loaning powers delegated to officers were liberalised in 1989. A chief Manager, who can sanction on the spot to a borrower without reference to any senior officer, an aggregate of not more than Rs.18 Lacs earlier, can henceforth sanction Rs.38 Lacs. On the one hand powers were enhanced on the other hand accountability was watered down, by diluting substantially the scope of inspection of Zonal Offices, by Head Office in 1992/93. A main beneficiary of this dilution was the zonal manager at Delhi. The report of this zone for 1991/92 was the bulkiest volume. Nothing was done towards compliance of the observations made in the report. No such report was either called for or submitted. The next inspection in 1994 was a dummy or tame affair, as the scope of the audit is reduced.

Complaint No.1 also related to the 52 fraud accounts investigated by me in 8 branches all in Delhi Zone (Amount Involved Rs.8 Crores). These 52 advances were made in the period from 1985 to 1991. In all cases stereo-type (almost identically worded) project-reports all prepared by a common chartered accountant was furnished. In 51 out of 52 accounts Term Loans were sanctioned, on the basis of quotations/performa invoices of non-existing (spurious) Dealers, all addressed within the same locality (Shadhara). The Branches sanctioned these term loans and handed over religiously the pay order for the Term Loan amount made out in the name of "supplier" to the respective borrowers. These borrowers thereafter themselves illegally opened current accounts in the name of such "suppliers". They deposited the pay orders in these accounts and managed to withdraw and misuse the funds lent under the term loan. This feat was performed not in one case, but in 5l cases, in eight branches.

Many of units deemed to have been financed did not exist. It is all a clever device to siphon or money-launder bank's funds on large scale and still remain undetected for several years. Units financed are not identifiable.In many cases borrowers selected closed units and produced rent agreements(photo-copies). The power connections were in the name of the landlords and borrowers produced an NOC from the landlord (not from Delhi Electricity Board) for use of the power connection. Units did not have MCD permission, i.e. permission from Delhi Municipal Corporation for running units in non-industrial estates. No Sign-boards (Name boards bearing unit's name in many cases). All units always remained locked from outside, even when activity was going on inside. Quite a few units obtained loans for the same units from different banks.

Borrowers/middlemen arranged all formalities at their end left no formality to be attended by the CM. They secured legal opinion from advocates themselves, after showing as having carried out search in the Registrar's Office. So also they produced valuation certificates for the bank. In many cases properties said to have been mortgaged did not bear proper title. In other cases these cannot be located. Cheating thus extended both with reference to the principal and collateral securities.

In all cases bulky loan files with arranged-material were created to suggest and to claim the units as genuine enterprises. Borrowers deposited Rs.1001/- or similar amounts in SBI in Government A/c. towards income-tax and produced the challan receipt, to show they are assessees. Fictitious balance sheets were provided in all cases. Dozens of pirated letter heads and rubber stamps were used to create trade enquiries and willing buyers eagerly seeking supplies of the product. Many borrowers contended that they hold sufficient orders already for the product they proposed to manufacture for which they sought finance. There were fictitious certificates from past employers of the promoters, on the basis of which they claimed "experience" in the line of activity proposed. All this conveyed the picture that indicated that fraud and cheating was developed as a wholesale trade or profession, but reduced to the level of cottage industry and executed so easily and openly, that detection was not made only because persons who dealt the processing within the branches were tainted and choose to close their eyes.

Borrowers selected dummy units (units which are closed and defunct), and could in short notice flood such units with stocks and keep some junk machinery therein, when inspection of bank officials are to be arranged.

Complaint No.2 is named "Mini-Bag". It was titled "Perversion & Fraud in Discipline Management & Conducting Departmental Enquiries - Sample Case". It was pointed that how the systems of charge-sheeting and conducting disciplinary inquiries were rendered fake and empty, through total abuse of the system-processes, and how corrupt officials were regularly patronized and dishonestly sheltered. Principally the complaint related to five borrowal accounts of "M-Branch". The advances relating to the 5 borrowal accounts were made by a CM at "M-Branch" in 1990-91. It caused a sticky NPA of over Rs.2 Crore. No action on the CM all through from 1992(when the investigation was done and these were reported) to 1996.A charge sheet was issued leisurely in 1997 or 98 just at the verge of the retirement of the CM. This charge sheet did not cover the allegations and drafting of the charge sheet was purposely done in an obscure and deficient manner. A committed inquiry officer was selected and dummy inquiry was conducted. The CM was awarded a (token) punishment of reduction of 2 increments (or it was only one increment?) after his retirement! With graphic details and illustrative examples the manipulation in charge sheeting process committed were pointed out in my complaint.

Originally "M-Branch" was the principal business centre of MYBANK at New Delhi up to 1957, when its own building in "P-Street was constructed and "P-Branch became the main branch. M-branch had a hoary tradition and several national leaders including Pandit Jawaharlal Nehru had dealings with this Branch. As a result of this scam, the present scam epi-centered first from this branch, it was totally ruined with almost near 100% bad advances. It was a VLB(Very Large Branch) all-through, but as a result of the scam it has since 1996 been converted(downgraded) into large branch.

1. First omission is putting matters in cold storage for a span of 6 to 7 years and diluting seriousness of current events into dullness of past history.

2. DE cases were split, diluted, rushed through in haste in respect of Mr.BDL and Mr.DSS (both Scale IV) - charge sheeting by General Manager (Personnel) just at verge of the retirement from service of the respective officers.

3. DE cases on several technical officers were conducted in the ordinary course since 1996,and generally they were awarded penalty of reduction by 2 increments. These DE cases were conducted by their Disciplinary Authority, who is the Zonal Manager.

4. No case was initially conducted against Mrs.AK, who happened to be working in the Zonal Office. When a note was pertinently put up by the Manager deputed to "M" Branch to complete the process of staff side cases of officers pertaining to that Branch, highlight her role in Account "K"-Cables, initial instinct was to issue merely issue caution to her without charge sheet and enquiry. On better wisdom later she was charge sheeted under minor penalty procedure and awarded without enquiry penalty of censure. It is true the quantum of punishment given represents an administrative act and cannot be judicially reviewed. But when basically bonafides are lacking, it is to be condemned. Every officer is not only to act bonafide, but also seen to have acted bonafide

5. No enquiry or punishment to another lady officer Mrs.SS

6. No charge sheet/enquiry against Sr.Manager directing handling Loans in 1990/91 Mr.IJG so far.

7. But his Loans Asstt. Mr.SSK was charge sheeted and punished with reduction in existing scale by 3 increments. It is a fact that Mr.SSK retired from service in 1997/98, while Mr.IGB is still in service. So the policy is to settle discipline as a handshake at the time of retirement. It makes it possible to shower compassion and acquiescence easier and award token punishment with minimum damage.

8. Five major irregular advances were all disbursed and damage process initiated by Mr.DSS. He was left with token punishment of reduction by one increment (or two). His DE case was inquired by a committed enquiry officer Mr.BMS, CM. Regional Office, Delhi. But the successor Mr.BDL, who merely inherited the mettle and himself had not released such controversial advances was charge sheeted. His DE was conducted by the CDE of CVC and he was removed from service. Why at least a combined inquiry of both CMs not conducted commonly by the same CDE of CVC? Is it that the GM(personal) and DGM(Personal) did not want to face the risk of enquiry through CDE for Mr.DSS?