Published On : Mon, Mar 12th, 2018

RBI tightens noose around Bombay Mercantile Bank over ‘loan loot’

Mumbai: Acting on the media reports on the large scale corruption indulged in by Chairman of Bombay Mercantile Co-operative Bank Zeeshan Mehdi and other responsible officials of the bank, the Reserve Bank of India (RBI) has tightened the noose around the erring bank and its Chairman.

According to sources, after the RBI pressure, the Bombay Mercantile Bank has phoned all its branches and directed them not to extend loan to anybody. The branches have even been directed that the loan files present with them be deposited with the head office with signatures of back dates. The move is aimed at “looting” the bank in the cover of clearing of all loan files with back dates as soon as possible. The RBI has also curbed powers of Bank Chairman Jeeshan Mehdi alias Nirav Modi and all Directors for curbing further loot of the bank.

Although the RBI had imposed stringent conditions on the bank’s operations in the past and stopped the bank from sanctioning fresh loans, media reports allege that the management is alienating assets and weakening the bank, which employees over 2,000 persons.

Zeeshan Mehdi and Mohammad Shah Alam Khan were elevated as Chairman and Managing Director, respectively of Bombay Mercantile Co-op Bank in 2016. These directors had been disqualified by the RBI and Central ROC in January 2016 but have still been re-elected.