MUMBAI, June 11: Following the investigations into the CRB scam and the role of State Bank of India (SBI) officials in allowing the bank to the swindled by Rs 58 crore, three officials of the Mumbai main branch were suspended today for ``procedural lapses''.

In retaliation, the SBI Officers' Association went on a flash strike in five major branches of the city, terming the move as one-sided and taken without calling for an explanation from the executives. The association has also called for a strike tomorrow in 130 SBI branches in Greater Mumbai.The suspension order followed the inquiry conducted by general manager on special duty, R. Sundaraman. The three executives R L Walker (chief manager of the Mumbai main branch), V N Patil and M M Narang (both Scale II officers) were served the suspension order on Tuesday night at their residences.

While the officers' association claims that the three executives were not given a chance to give an explanation, the CBI has been interrogating Walker and Patil on a regular basis. Last month, the CBI had also raided the residence of V M Gokhale, the former deputy general manager in charge of the main branch. Gokhale has also been interrogated on a regular basis.The inquiry as well as preliminary investigations by the Central Bureau of Investigation (CBI) now give a fairly clear idea of how C R Bhansali managed to rob the bank. On the condition of annonymity, SBI officials confirmed details of Bhansali's modus operandi to The Indian Express.

Under an earlier arrangement with the SBI in June last year, Bhansali had got permission to issue dividend warrants which were encashable at all the branches of the SBI. Under the arrangement, Bhansali was to be allowed to issue warrants totalling Rs 50 lakh. No warrant was to be of an amount over Rs 25,000.

This is where the complicity of the SBI officials comes in. Despite a ceiling of Rs 25,000, the SBI inserted a special clause that allowed Bhansali to alter the warrant with his signature. As a result, he would cancel the amount himself and write the warrants in the name of shell companies of which he was the unltimate beneficiary. When questioned by The Indian Express, all that SBI officials had to say was that this ``manual override'' was permissible and that a few other companies have also been extended similar facilities.

What makes it worse is that in November 1996 and February 1997, even though CRB had defaulted on payments this facility was not withdrawan. SBI officials claim that this was not done since the amounts were small, relative to the company's turnover and that Bhansali made good the money later.

Till March 1, there wasn't too much of a problem. However, between then and till March 8, Bhansali made the most of the ``manual override'' facility. By March 8, the SBI discovered that Bhansali had overdrawn Rs 20 crore. Yet, the facility was not securities in the form of properties in Jaipur and equity shares.

Shendurnikar claimed that the chairman had expressed his helplessness regarding action against officials in the CRB case due to `pressure'. ``We requested him not to take any action against SBI officials till Bhansali revealed all the details of his dealings with SBI, but he said he had no other choice,'' the general secretary said.

He said the Mumbai main branch is an `ocean' and the officers had been demanding the framing of systems and procedures to fix responsibilities for several years now. The suspended officials have no authority to open an account or to give overdrafts, he said, adding all the top bosses were aware of defaults by CRB.

The dividend warrant section handles warrants amounting to over Rs 3 crore a day, but the management has not been heeding the association's demand to beef up staff strength, he said. Walkar, Patil and V M Gokhale (who retired from the bank on March 31) have been reporting to the CBI daily since the filing of the FIR.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.