A fixed deposit that floated to another bank
Amutha Kannan Share · print · T+
One of the four charges of irregularities that is being probed at
Bharathiar University by the Directorate of Vigilance and
Anti-Corruption (DVAC) is that of transfer of university fixed deposit
from one bank to another.
Charge
The charge is that the university fixed deposit totalling Rs. 14.61
crore was transferred from State Bank of India (SBI) to Bank of Baroda
(BOB) without Syndicate approval. There are conflicting views about
the latter offering a lower interest rate (9.65 per cent).
The deposit of Rs. 14.61 crore under four code heads had matured
between April 18 and May 14, this year.
SBI had written to the university on April 25 and June 28 requesting
for renewal of deposit on its maturity with effect from the value
date.
The bank quoted the “latest rate of interest at 9.70 per cent with
annualised yield of 10.06 per cent at a special rate offered for Rs. 1
crore and above”, in the letter dated June 28.
The university did not respond for a long time, subsequent to which
SBI came to know that the university was planning to transfer the
fixed deposit to BOB.
Higher officials from the bank visited the university and requested
for renewal, but in vain.
Claim
The other claim is that SBI submitted the interest rate of 9.70 per
cent on June 28 to counter one submitted by BOB submitted at a rate of
interest of 9.65 per cent on June 3. However, the transfer /
reinvestment was done only on July 8.
Deposit
The specific irregularity cited in this case is that the deposit was
transferred without the approval of the Syndicate, which is said to be
serious in the light of the university statute: “The corpus and all
monies of the fund shall be invested in interest-bearing securities by
the Syndicate, on the recommendations of the Finance Committee”.
However, the deposit was transferred in July and it was placed before
the Syndicate for its ratification at a special meeting held in
Chennai on August 5, which was attended by Principal Secretaries to
various departments.
Not ratified
The university was told that the transfer was ‘not ratified' and that
funds of Government-run institutions should be invested in finance
corporations of the Government.
Sources say that when the provisional minutes of the meeting was
prepared and circulated among the Syndicate members and various
Secretaries, the ‘not ratified' part had appeared as ‘ratified'.
Letters
The Secretaries and a few Syndicate sent letters to the university
asking the ‘ratified' part to be changed to ‘not ratified'. But that
did not happen.
Following this, a letter from the State Government was sent stating
‘the minutes of the Syndicate meeting held on August 5 is rejected'.
Syndicate members say, the critical irregularities are, the fact that
the deposit was transferred without the approval of the Syndicate, and
that the minutes of the meeting was manipulated.
Amutha Kannan Share · print · T+
One of the four charges of irregularities that is being probed at
Bharathiar University by the Directorate of Vigilance and
Anti-Corruption (DVAC) is that of transfer of university fixed deposit
from one bank to another.
Charge
The charge is that the university fixed deposit totalling Rs. 14.61
crore was transferred from State Bank of India (SBI) to Bank of Baroda
(BOB) without Syndicate approval. There are conflicting views about
the latter offering a lower interest rate (9.65 per cent).
The deposit of Rs. 14.61 crore under four code heads had matured
between April 18 and May 14, this year.
SBI had written to the university on April 25 and June 28 requesting
for renewal of deposit on its maturity with effect from the value
date.
The bank quoted the “latest rate of interest at 9.70 per cent with
annualised yield of 10.06 per cent at a special rate offered for Rs. 1
crore and above”, in the letter dated June 28.
The university did not respond for a long time, subsequent to which
SBI came to know that the university was planning to transfer the
fixed deposit to BOB.
Higher officials from the bank visited the university and requested
for renewal, but in vain.
Claim
The other claim is that SBI submitted the interest rate of 9.70 per
cent on June 28 to counter one submitted by BOB submitted at a rate of
interest of 9.65 per cent on June 3. However, the transfer /
reinvestment was done only on July 8.
Deposit
The specific irregularity cited in this case is that the deposit was
transferred without the approval of the Syndicate, which is said to be
serious in the light of the university statute: “The corpus and all
monies of the fund shall be invested in interest-bearing securities by
the Syndicate, on the recommendations of the Finance Committee”.
However, the deposit was transferred in July and it was placed before
the Syndicate for its ratification at a special meeting held in
Chennai on August 5, which was attended by Principal Secretaries to
various departments.
Not ratified
The university was told that the transfer was ‘not ratified' and that
funds of Government-run institutions should be invested in finance
corporations of the Government.
Sources say that when the provisional minutes of the meeting was
prepared and circulated among the Syndicate members and various
Secretaries, the ‘not ratified' part had appeared as ‘ratified'.
Letters
The Secretaries and a few Syndicate sent letters to the university
asking the ‘ratified' part to be changed to ‘not ratified'. But that
did not happen.
Following this, a letter from the State Government was sent stating
‘the minutes of the Syndicate meeting held on August 5 is rejected'.
Syndicate members say, the critical irregularities are, the fact that
the deposit was transferred without the approval of the Syndicate, and
that the minutes of the meeting was manipulated.
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