Two days ago, Ravindra Marathe was granted bail.
In an abrupt move, the Board of Directors of the Bank of Maharashtra on Friday resolved to remove arrested CEO and Managing Director Ravindra P Marathe from all functional responsibilities with immediate effect.
According to a statement, Executive Director AC Rout has been appointed in his place at the bank, which has headquarters in Pune.
The development came nine days after the Pune police's Economic Offences Wing (EOW) swooped on the bank and arrested Ravindra Marathe and six others in a case of around Rs 2,43 crore fraudulent loans extended to the Pune-based DSK Group.
The EOW has also arrested the public sector bank's Executive Director Rajendra K. Gupta, Zonal Manager Nityanand Deshpande from Ahmedabad and former CMD Sushil Muhnot from Jaipur.
The 83-year-old bank is ranked among the leading public sector banks in India, and the arrests of high-ranking officials had sent shockwaves in industry and corporate circles.
Besides, two officials of the DS Kulkarni Group, chartered accountant Sunil Ghatpande and Vice President, Engineering, Rajiv Newaskar, were also arrested in the case.
Two days ago, Ravindra Marathe was granted bail and some others were enlarged on bail on Friday, even as the issue snowballed into a major political controversy.
Several political parties including the Nationalist Congress Party and Maharashtra Navnirman Sena (MNS) raised questions over the arrest of Ravindra Marathe and other BoM officials, ostensibly without the knowledge of the state government.
MNS President Raj Thackeray demanded why no action was taken against top officials of Punjab National Bank, ICICI Bank and the Ahmedabad District Cooperative Bank Ltd Director and Bharatiya Janata Party President Amit Shah - whose ADCB collected the highest amount of spiked Rs 500 and Rs 1,000 currency notes five days after the November 8, 2016 demonetization.
Following a complaint by Jitendra N. Mulekar, an investor who is a senior citizen, 19 people have been arrested by the EOW sleuths for misusing their powers to sanction huge amounts of loans to shell companies.
According to the investigators, the bank's top executive and other officials colluded with the DSK Group "with dishonest and fraudulent intentions to sanction and disburse the amount of the bank(BoM)" under the garb of loans and the money was later siphoned off.
The accused have been charged under various provisions of the Indian Penal Code and Prevention of Corruption Act, pertaining to cheating, forgery, criminal conspiracy and breach of trust.
The Pune-based mega group's owners DS Kulkarni and his wife Hemanti were arrested in February on charges of cheating over 4,000 investors of over Rs 1,150 crore and diverting bank loans of nearly Rs 2,900 crore.
Among the charges are false papers showing purported loans received from other banks like State Bank Of India, Union Bank Of India, Syndicate Bank, IDBI Bank, Vijaya Bank and others, clearing loans without following due procedures or exercising due diligence.
Last month, the Maharashtra government ordered attachment of more than 120 properties, 275 bank accounts and four dozen vehicles belonging to the owners and the company invoking the provisions of Maharashtra Protection of Interests of Depositors Act, 1999.