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The State Bank of India (SBI) on Monday issued a clarification in a case related to Bank's former chief Pratip Chaudhuri, saying the assets were sold with due process in March 2014, after Chaudhuri retired from the bank in September 2013.

The case relates to a Godawan Group's hotel project in Rajasthan's Jaisalmer, which took 24 crore loan from SBI in 2008.

Multiple news outlets reported that the Rajasthan Police has arrested Chaudhuri on November 1 from his Delhi residence in an alleged loan scam involving a hotel in Jaisalmer.

Reacting to the news, former SBI deputy managing director said the system is being gamed again by defaulters despite all efforts by Modi govt. "It is absolutely pathetic and a time for overhaul of judicial processes to improve transparency and introduce accountability," Srivastava said.

"Garh Rajwada was a hotel project in Jaisalmer, financed by the Bank in 2007. The project remained incomplete for over three years and the key promoter passed away in April 2010," SBI said, adding that the account slipped into an NPA in June 2010 and various steps taken by the Bank to complete the project did not yield results.

The State Bank said the account dues were assigned to ARC in 2014 and it was done through a laid down process of the Bank's policy.

“As recovery efforts failed, approvals for sale to ARC were taken in Jan 2014, the assignment to ARC was completed in March 2014. It transpires now that the borrower had initially filed an FIR with the State Police against the sale of asset to ARC," SBI said in a statement.

India's largest lender further said that all the directors of that ARC including Chaudhuri, who joined their Board in October 2014, have been named in the said case, however, incidentally, Chaudhuri retired from the Bank’s service in September 2013.

“It appears from the copies of the proceedings now accessed by us that there have been some factual inaccuracies in the complainant’s version submitted to the Hon’ble court. SBI would like to reiterate that all due process were followed while making the said sale to ARC. The Bank has already offered its cooperation to the Law Enforcement and Judicial authorities and will provide further information, if any that may be called for from their side."

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