IBA in trouble for helping former SBI Chairman Pratip Chaudhuri

The reason for the dilemma is that the lawsuit was filed against Chaudhuri as director of Alchemist Asset Reconstruction Company and not as a former banker.

“We don’t know exactly what role IBA can play. He was arrested for an ARC case and not directly related to the bank. Within banks, we have a policy to protect our directors and employees when such cases arise. As this has been intelligently classified as an ARC matter, we cannot intervene directly, ”said the person cited above, speaking on condition of anonymity.

IBA has 244 members: public sector banks, private banks, foreign banks, cooperative banks, regional rural banks and financial institutions across India.

Chaudhuri was arrested on November 1 by police in Rajasthan after a court in Jaisalmer issued a warrant following a request from a borrower. He was released on bail on November 9.

“Everyone talks about it, but it’s more of an emotional reaction. The matter is the subject of informal discussions among IBA members. While all the banks think something needs to be done, they don’t know what, ”the person said.

The case concerns a ??Loan of 24 crores granted by SBI to the hotel Gaudavan Pvt. Ltd in installments from January 2008. The loan was restructured in January 2009 and repayments were rescheduled. The loan was sold to Alchemist ARC in March 2014. It was then referred to the National Company Law Tribunal (NCLT) for resolution and was taken over by JFC Finance (India) Ltd in December 2017.

On November 3, IBA requested a meeting with Chief Minister of Rajasthan Ashok Gehlot and wrote to the Chief Secretary, expressing concern, the Economic times reported.

Former senior SBI officials denounced the arrest on social media. Former deputy managing directors have posted on Twitter and LinkedIn to vouch for Chaudhuri’s integrity and recount their experiences working with him. Chaudhuri was its president between 2011 and 2013.

An email sent to IBA went unanswered until going to press.