ECONOMY

State Bank of Sikkim: The Tiny Mountain Bank That Continues To Beat RBI’s Powers

Knocking At The Courts

In 2017, Member of Parliament Sushil Kumar Singh wrote in a letter to Piyush Goyal, who was the power minister at the time, regarding instances of corruption and mismanagement at a public-sector entity, Damodar Valley Corporation. In his letter, Singh alleged that a senior official at the company had amassed wealth through corrupt practices and deposited it at the State Bank of Sikkim.

A copy of the letter was reviewed by BloombergQuint.

That prompted Ashok Kumar Jain, a Right to Information activist and a former employee at DVC, to file the above cited PIL regarding SBS with the Bombay High Court in 2017. In his petition, Jain alleged that the bank was a “safe haven for ill-gotten wealth”, which refused to disclose the identity of its depositors akin to “Swiss Bank sort of secrecy”.

Instances of misuse of the bank’s special status came to light during demonetisation as well. The CAG report noticed cash withdrawals exceeding the permissible limit during that time.

There were 40 instances of cash withdrawal from SBS beyond the prescribed weekly limits of Rs. 20,000 and Rs 24,000 respectively during the period from Nov. 9-13, 2016 and Nov. 14-20, 2016, the CAG said. The withdrawals by the individual account holders during the said periods (9-20 November 2016) ranged between Rs. 25,000 and Rs. 1,48,000, it added.

Jain’s PIL has been admitted but the case has been pending before the court for the last three years and, just like the RBI, Jain hasn’t achieved much.

“This tiny bank is a ticking time bomb that neither the centre nor the state want to diffuse as they dread its immediate consequence on their own political standing. Nevertheless, something needs to be done. Because when this bomb explodes, it will not just severely harm the Sikkim public, but also take down the state government and become a big question mark on the centre that silently kept watching it tick away,” Jain said.

But Bhutia, who has headed the bank for the last nine years, seems unperturbed by all these concerns. On being asked about the future of the bank, Bhutia said that as a commercial organisation, the bank’s aspirations were no different from others and the plans for the future were “unlimited.”

“We want to grow. Let’s see how things take shape and it all depends on that. It all depends on the state government’s decision and the central government’s decision. As of now, we are a bank in the state outside the purview of RBI,” he said.

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