S Rajagopal, chairman and managing director of Indian Bank which ran up huge losses last year, is tipped to take over as the next chairman of Canara Bank, the third largest nationalised bank.
Finance ministry officials said the appointments committee of the cabinet (ACC) is all set to clear the decks for Rajagopal to takeover as CMD of the Bangalore-based bank.
Rajagopal edges out TS Sreedharan, managing director of SBI European Bank, and K R Ramamoorthy, chairman and managing director of Corporation Bank, in the race for the top post at Canara Bank. Sreedharans name had earlier been recommended by the State Bank of India. The post has been lying vacant since J V Shetty retired on September 30, 1996.
Rajagopals shift to Canara Bank, within less than a year of assuming the chairmanship of Indian Bank, will raise many eyebrows. Government sources say that by bringing to light the irregularities committed under the chairmanship of his predecessor, Rajagopal had annoyed influential sections within the United Front government. M Gopalakrishnan, whom Rajagopal succeeded, is considered close to the top leaders of Tamil Maanila Congress (TMC) which is a constituent of the UF government. As the CMD of the bank, Gopalakrishnan had sanctioned loans indiscriminately to the associates of top TMC leaders. The loans were sanctioned despite repeated warnings from the Reserve Bank that it might lead to huge losses. The bank subsequently went on to post a record loss
