By Mumtaz Alam Falahi, TwoCircles.net,
New Delhi: K Rahman Khan, Deputy Chairman, Rajya Sabha, has strongly refuted the charge that he along with other members of the Board of Directors of Amanath Co-Operative Bank Ltd of Bangalore siphoned off Rs 102 crore from the bank. He also rejected the charge that being president of the board he siphoned Rs 10 crore by giving fictitious loans to his relatives and then waiving interest and even principal amount. In exclusive interview to Mumtaz Alam Falahi of TwoCircles.net, he clears his position and blames his political opponents for the allegations.
Amanath Co-Operative Bank Ltd of Bangalore, which one time had deposits worth Rs 500 crore, is today in deficit by Rs 71 crore. It is alleged that former Members of Board of Directors including you and eight staffers have siphoned off Rs 102 crore from the bank. How will you defend this charge?
This allegation is totally false and baseless. I am the founder of Amanath Bank. I along with some other founder members of the board established the bank in 1977 with just Rs 3 lakh and worked hard and made it worth Rs 500 crore. Credit for this should go to the board and people of Karnataka. This is one of the top banks and only one scheduled co-operative bank in South India. Naturally this all is due to the hard work of the board members. If they were of bad nature the bank would not have reached such height.
In 2002, the General Manager of Amanath Bank along with another manager and an official gave certain benami loans. Through those loans they bought properties in the name of relatives. This fraud was detected by the board itself. The General Manager accepted his fraud and admitted he gave the loans without knowledge of the board. (Khan shows a letter in General Manager’s own handwriting in which he accepts he gave Rs 38 crore in benami loans without informing the board).
When the board detected the fraud in 2002, in their wisdom the board took those properties as security and transferred the benami loans to real borrowers to ensure safety of the bank. We at board had no role in the fraud. We detected it and filed criminal case against the General Manager. The state COD investigated into the case and filed charge sheet against the guilty officers. So it is completely false that the board siphoned off the money.
When the board detected the fraud and initiated action then why Registrar of Co-Operative Societies (state government body) ordered criminal action against board directors including you and eight staffers?
The enquiry officer held that you should not have transferred the benami loans to the original borrowers but our contention is that if we had not transferred the benami loans to the real borrowers then how could we have recovered that money. The government agency questioned our action. They did not say we took out money or we siphoned off money. They questioned our action which the board in their wisdom thought the only way to save the bank. The enquiry officer said you suppressed the fraud, he did not say you siphoned off the money. They questioned our methodology and we are contesting it.
It is alleged that the bigwigs of the bank siphoned off Rs 102 crore and you Rs 10 crore by giving fictitious loans and then waiving interest and even principal amount?
It is also totally false. I resigned from the bank in 2002. Four years later, the waiver was done to various account holders. One Time Settlement OTS was given to above 900 borrowers. True, my relatives (4 or 5) were among those borrowers. They settled the account by OTS system of the bank. At that time I was not the director nor I gave any concession then how can they allege that I have done it.
Rajya Sabha Dy Chairman K Rahman Khan talking to Mumtaz Alam Falahi, New Delhi Correspondent, TwoCircles.net
RBI/Registrar of Cooperative societies order to file criminal case against board members and other officials has not been executed allegedly because the former bigwigs of the bank are suppressing the action.
It is also totally false. The reports of the registrar are fudged. They gave two reports. But they are not able to explain which one is correct. In fact the first one is fudged while the second has been altered by the agency itself. We have questioned their conclusion. Our opponents are basing all allegations on the basis of altered report. In the first report, the enquiry officer said the board of directors should be given one year to recover the amount by selling the properties. We are contesting the reports in the court of law. The registrar has altered the conclusion of the enquiry officer in the second report that the board members should be criminally held responsible for the loss.
You hold a top post in the country. You are second to Vice President of India in the House. Who do you think are your opponents all out to malign your image and reputation?
We are in the field of politics. Definitely there are friends and foes. There are my political opponents who want to malign my image. My 40 years of social service and unblemished service are known to people. In 40 years we have built institutions – colleges, medical colleges and bank. The bank is our dream and vision. Even in the stretch of imagination how can I think to destroy it. We cannot kill our own created child. This is atrocious to think that Members of Board of Directors who contributed lot to the society will do it.
True our decision or method to protect the bank could be questioned. Our intention was to protect the bank. We have taken many decisions. Anybody can question these decisions. Bu to say that directors have committed fraud is atrocious. I feel bad that people would go to such extent to make such allegation. Nobody can prove that we siphoned off even one rupee from the bank. Our conscience is clear and law will take its course. They filed cases in consonance with my political opponents. The matter is subjudice.
Will you name your opponents? Are they from your own party Congress or BJP?
I won’t like to name them. They may be from my own party or may be from other party. This is one of the strong banks. They are not interested in saving it. They want to destroy it. Community should come out to save it. It is now in the hands of officials who have not contributed in establishing the bank.
History of the bank
In 1975 I and some of my friends thought of starting a bank when we saw the plight of poor Muslims at the hand of money lenders and there was no credit society. We started the bank in 1977 with just Rs 3 lakh. We struggled hard and built up the bank from 3 lakh to Rs 500 crore. It was not easy for a community to build a ban when there were no banks around. We made it a scheduled bank.
Rajya Sabha Dy Chairman K Rahman Khan showing letters he sent to General Manager Amanath Bank in 2002 enquiring about the benami loans.
Won’t you think such incidents in Muslim owned banking institutions will weaken the demand for introduction of Islamic banking system in India?
Two are different things. Hundreds of co-operative societies have sunk in India, only a few of them are Muslim run. They are based on interest. Take the Amanath case. The fraud is of Rs 38 crore which, with interest, has reached to more than 100 crore. Interests based transactions are bad for society.
As for Islamic banking, it is a concept and viable concept.
Is government willing to introduce Islamic banking?
People still have to accept the concept. We have not established the modalities. We are only saying such banks are functioning in different countries. We should work to convince the people saying that already some Islamic instruments are working like mutual fund and venture capital. We have to design a viable model suitable to India. This will have to be done by the community, nobody else will do.