Government has shunted out Bank of Baroda executive director KV Rama Moorthy, as an investigation by Reserve Bank continues into granting 70 million dirham loan to the troubled Atlas Jewellery Group, when he was heading its Dubai branch.
In an unprecedented move, Moorthy has been shifted to a smaller state-run lender United Bank of India (UBI). He assumed his new job on August 29 as executive director.
Moorthy confirmed to PTI that he has been transferred to United Bank following a government notification.
RBI had recently initiated a probe into the operations of BoB's Dubai branch and had reportedly told the government that his continuance may lead to a conflict of interest.
The apex bank's investigation is still ongoing.
The Middle East-based Atlas Jewellery Group is promoted by the Kerala-born M Ramachandran and its founder is in judicial custody in Dubai following the default of around Rs 1,000 crore (520 million Dubai dirham) loan drawn from nearly 20 banks, including four domestic lenders.
At 70 million dirham, BoB has the largest exposure to the jewellery retail chain.
Others include ICICI Bank (50 million dirham), IDBI Bank (30 million dirham) drawn from their Dubai IFC branches, and State Bank of India which has exposure of 11 million dirham extended from its Bahrain branch, according to sources.
Sources said the transfer came after RBI ordered a probe into the operations of BoB's Dubai branch after Atlas Group's default case came to light late last month.
RBI had reportedly observed that continuance of Moorthy in BoB, who was chief executive BoB Dubai operations between 2011 and 2014, when the loan was given to Atlas, may lead to conflict of interest, they added.
On completion of his three-year term as CEO of BoB's UAE unit -- which is a GM level rank -- Moorthy was transferred as the head of the north Gujarat zone last year.
On March 10, this year, he was elevated to the post of ED at BoB.
Besides, the newly appointed Managing Director and Chief Executive of BoB, PJ Jaikumar is yet to assume his charge as acting Chairman Ranajn Dhawan is retiring on September 30.
When contacted, an SBI official said that the bank is busy recovering the money from Atlas and did not want comment on the issue.
