HC notice to UCO Bank on Rs 269 cr fraud

The Delhi High Court on Wednesday issued notices to the finance ministry, the Reserve Bank of India, and UCO Bank and its four officers on a PIL alleging embezzlement of Rs 269 crore (Rs 2.69 billion) by certain bank officials in connivance with various blacklisted companies.

A division bench of Justice Vijender Jain and Justice Rekha Sharma asked the respondents to reply by April 25.

The PIL alleged that the officials, despite having full knowledge about the companies, which were blacklisted and declared as defaulters by other nationalised banks, granted them loans of Rs 269 crore without the mandatory collateral.

The petition said after six months of the disbursement of loans in October 2003, the officials allegedly filed a false report with the RBI declaring the amount as a non-performing asset and then wrote it off, without fixing accountability.

The petition alleged that the then UCO Bank CMD and its executive director, besides its general manager and deputy general manager, siphoned off the amount, thus amassing money at the cost of the exchequer.

It also accused some officials of the finance ministry and the RBI of helping in the alleged fraud.

The PIL has asked the court to direct the government to initiate action against the officials besides making public the names of the defaulting companies.