The State Bank of India has handed over a sticky loan account of its former managing director, Y Radhakrishnan, to the Central Bureau of Investigation. The bank moved the CBI in consultation with Reserve Bank of India.
According to sources, Radhakrishnan has taken a clean loan of around Rs 6.5 crore (Rs 65 million) from one of SBI branches in Secunderabad for an educational project. However, the project never took off and the borrower has no means to repay the money.
"The account has become ab initio a non-performing asset as the borrower is in no position to repay the loan," a source said. The source said the loan was disbursed in 2005 without any collateral.
"Till now there has not been any sign of the project. The irregularity was detected after an inspection and the bank immediately got in touch with the RBI," said sources.
Radhakrishnan, who retired on June 30, 2002, was not available for comment. Meanwhile, the bank branch manager concerned has been suspended.
As MD Radhakrishnan had steered the bank's technology drive.