<b>SBI lodges complaint against Classic Co-op

SBI lodges complaint against Classic Co-op Saturday, March 24, 2001

AHMEDABAD: The bullion scam that has landed several nationalised banks in trouble took a new turn today with the State Bank of India (SBI) lodging a complaint against the Classic Co-operative Bank Ltd (CCBL) and gold dealer K L Chowksi in the Economic Offences Wing (EOW) of the Central Bureau of Investigation (CBI).
Sources in the SBI said after the bouncing pay orders worth Rs 40 crore, which were issued by Classic Co-operative Bank, the bank carried out a detailed probe on the basis of which the complaint was lodged. Sources also revealed that the officers whose laxity landed the bank in trouble may face action. The officers had delivered gold worth Rs 40 crore before the realistion of pay orders.

Meanwhile, the Punjab National Bank (PNB), which is also entangled in the imbroglio, is also considering lodging a complaint against Classic Co-operative Bank.

It may be noted that the Reserve Bank of India (RBI), which is investigating into the case, has questioned CCBL on its decision to issue pay orders without checking cash in the client's account. The matter came to the knowledge of RBI officials on March 15, when cheques issued by Chowksi bounced as they showed an adverse balance in the name of the drawer.

Interestingly, these pay orders were issued `across the shelf' to Chowksi against cheques drawn on three major nationalised banks. Chowksi had drawn Rs 41 crore on the State Bank of India (Service branch), Rs 7 crore on the Punjab National Bank (Maskati market branch) and Rs 5 crore on the Bank of India (Bhadra branch) between March 12 and 14. The pay orders were in turn presented for purchase of gold from the State Bank of India.

Such was the goodwill commanded by Chowksi that the authorities of Classic Co-operative did not find it necessary to even check his financial standing while issuing the pay orders. On sending the cheques for clearance it was revealed that they are not in a position to be encashed. Even nationalised banks do not provide advances of such a high amount without checking the party's authenticity.

In another development, a meeting of leading bullion traders was held today to pressure Chowksi into paying the banks his dues. It is believed that bullion traders are ready to bail him out so as to save face for their market.

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