In a shocking revelation, it has been discovered that a loan of Rs 18 cr given to known actress Preity Zinta has been waived off by the bank without any recovery. The revelation has come as write-offs were given to notable people by the Indian Cooperative bank.
In January 2020, former employees of New India Cooperative Bank Ltd alerted the Reserve Bank of India (RBI) through a letter to significant financial irregularities and unethical practices within the bank, particularly under the leadership of Chairman Hiren Bhanu. Despite these warnings, the RBI did not take timely action, leading to further financial deterioration of the bank.
The whistleblowers highlighted that Bollywood actress Preity Zinta received a loan of ₹18 crore, which was subsequently written off without following proper recovery procedures. The Rajhans Group secured ₹95 crore in loans, while ₹210 crore in NPAs was repeatedly sold to Omkara Assets Reconstruction Pvt Ltd (ARC), raising concerns over fraudulent write-offs. Additionally, ₹7 crore was allegedly loaned to ACAIPL, Omkara ARC’s sister firm, without proper due diligence. Loans were granted to Mr. Bhanu’s associates using inflated valuations, while commission agent Manish Simaria, who defaulted on an ₹8 crore loan, earned hefty commissions for facilitating corporate loans.
Now to be clear about the status- Post- 2010, under Mr. Bhanu’s leadership, the bank shifted focus from small-ticket loans to large corporate loans, some as high as ₹25 crore. Many of these loans became non-performing assets (NPAs) within a year, with funds allegedly diverted through other banks.
According to the report from Indian Cooperative.com, on 29 January 2020, former employees of New India Cooperative Bank sent the letter complaint to the executive director of RBI’s Department of regulations. This letter also accused the management of promoting family members of senior executives, while over 80 experienced staff members were coerced into resigning in 2019. This created an environment of fear and compromised the bank’s operational integrity.