New Delhi: MD and CEO of Bank of Maharashtra RavindraMarathe, executive director Rajendra Gupta and two other bank officials including Marathe’sprecedessor have been arrested by the Economic Offences Wing of the Pune police for allegedly disbursing crores of rupees in loans to DSK Developers Limited (DSKDL) without following proper procedure and in violation of the RBI guidelines.

The police said that these arrests were part of the ongoing probes into the Rs 2,043 crore economic fraud said to have been committed by Pune developer D S Kulkarni, alias DSK, and his group of companies here,.

The bank’s former managing director and CEO, SushilMuhnot, zonal manager NityanandDeshpande, DSK’s chartered accountant and statutory auditor, Sunil Ghatpande, and DSKDL chief engineer and vice-president Rajiv Newaskar were the others arrested in the case. Muhnot and Deshpande were arrested from Jaipur and Ahmedabad respectively.

Bank of Maharashtra is the only nationalised bank which has its head office in Pune. Investigating officer and assistant commissioner of police (EOW) Nilesh More said , “The bank officers colluded with DSKDL, the group’s flagship company, to sanction and disburse the amount under the garb of a loan, which was siphoned off.”

The Rs 2,043 crorefraud relates to siphoning of money raised by the DSK group through investors as well as loans from banks and financial institutions, non-convertible debentures and money collected from home buyers in housing projects.

In an official statement, the bank said its total outstanding exposure to DSKDL was Rs 94.52 crore. The statement further read, “Recovery process like SARFAESI action has already been initiated by the bank and some of the properties are due for auction. Bank has also declared DSKDL and its promoters as wilful defaulters.”