PSB chief wants board reconstituted

The Punjab & Sind Bank management has sought the reconstitution of the bank's board by removing its five independent directors, who, it has alleged, are helping defaulters.

"We have written to the government for reconstitution of the board. We are hopeful of a response," PSB Chairman and Managing Director RP Singh said at a press conference called to counter allegations made by the independent directors.

The five directors, who are Congress workers, have accused Singh of selling NPAs in violation of norms and granting concessional loans for a hotel project of a Punjab politician's son.

Dismissing the charge, Singh said the loan for the Gurgaon hotel project was granted on commercial terms and at the same rate as charged by another public sector bank funding the same project.

With the connivance of non-official directors, pressure was put by a defaulter to settle an account for Rs 5.3 crore while the highest bid for the defaulter's asset was of Rs 59 crore, Singh alleged, countering one of the directors, who had alleged that the bank was selling the asset at Rs 59 crore when its market value was Rs 300 crore. Singh said the asset was valued at Rs 149 crore by a valuer.

The bank's management says a reconstituted board will help it double net profit this fiscal. The bank expects to recover Rs 400 crore from non-performing assets (NPAs) this year.

NPA recovery contributed significantly to the bank's net profit of Rs 108 crore in 2005-06 and Rs 219 crore in 2006-07. The bank was in the red for 5-6 years till 2005.