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In a significant development, the powerful All India Bank Officers Association (AIBOA) on Wednesday demanded a probe by the Reserve Bank of India (RBI) into the IDBI Bank Ltds recent disclosure of a diamantaire groups loan default.

AIBOA General Secretary S. Nagarajan has said that bank officers are "seriously disturbed" over the public notices issued by the IDBI Bank Ltd vis-a-vis the wilful defaulter diamantaire, Sanghavi Exports International Pvt Ltd, its group companies, factories, office, besides promoters/directors/guarantors.

In a letter to the RBI Governor, it has been pointed out how the IDBI Bank Ltd's first public notice (dated December 19) mentioned a huge amount of over Rs 6,700 crore, plus a foreign currency (USD) loan equivalent to around Rs 1.20 crore.

Earlier, the Bank of India, as the leader of a consortium, had taken over possession of the diamantaire's property for failure to repay loans worth Rs 468 crore in 2018, said Nagarajan, on the issue that was first highlighted by IANS (December 20-21).

"The wilful defaulter should not be a repeat action of the infamous Nirav Modi of Punjab National Bank. It is also intriguing that in 2018 itself, there was a recovery step made by another public sector bank, so how come the IDBI Bank was unknown of the developments," Nagarajan asked.

The senior banking professional pointed out that later, IDBI Bank informed the BSE and NSE that there are inaccuracies and that the loan account is fully provided with the NPA of only Rs 16.72 crore.

"The contradictory stand by IDBI Bank Ltd before various authorities is certainly intriguing and requires reporting of factual position to the public at large, who are directly or indirectly involved in the share market operations," urged Nagarajan.

Given the sequence of events and the stance of the IDBI Bank Ltd, in the best interest of the citizens, the AIBOA called upon the RBI to initiate an independent probe into the affairs at the IDBI Bank.

This would be for the benefit of the citizens who are also paying the premium to the LIC for their policies, and the profits earned by the Life Insurance Corporation of India (LIC) should be passed on as bonus to the policyholders.

The AIBOA's 2-pager said that the Centre had directed the LIC to acquire 51 per cent stake in IDBI Bank in which the government of India's share is 46 per cent, thereabout accounting for 97 ownership by the government and a PSU.

Meanwhile, banking circles have slammed IDBI Bank's clarification as "blatantly dishonest, without mention of the shocking, bumbling and wrong info in its public notice" dated December 21, and demanded a separate probe by concerned agencies to reveal the exact truth.

However, sources in the IDBI Bank insist that the goof-up in the public notice (December 19) was a genuine error, though a contrary impression of a ‘scam' was created in the public after the regulatory filing (December 20) and the fresh public notice (December 21), but remedial measures are being initiated.

The AIBOA has shot off copies of the letter to the RBI Governor to the LIC Chairman, the IDBI Bank MD & CEO, SEBI Chairman, the BSE and NSE. The association also hinted at further action in the matter.