Interestingly, OSCB managing director RN Das had admitted his failure to comply with the RBI directives while executing big-ticket deals, according to documents available with FE. The Orissa cooperative bank had purchased bonds/securities such as 0% ICICI bonds and zero-coupon bonds (ZCBs) of PFC, IIBI, and Nabard from various counter-parties aggregating to Rs 153 crore between April 2006 and October 2007. But the bank lost Rs 33 crore in the deal.
The clandestine deal came to light when Nabard was conducting a statutory audit of the bank. It was found during the audit that the bank had purchased the bonds/securities neglecting all the circulars and guidelines of the RBI.
The audit report pointed out that the bank did not ascertain the market value of the bonds/securities. They were purchased either through prices quoted on stock exchanges or through yield to maturity based prices. As a result, the bank had purchased bonds/securities at a price much higher than the market driven/derived prices.