Gopalakrishnan was known as celebrity banker
Former Indian Bank CMD M Gopalakrishnan, now convicted to 14 years imprisonment for fraud was a celebrity banker.
By TNN |
CHENNAI: Former Indian Bank CMD M Gopalakrishnan, now convicted to 14 years imprisonment for fraud was a celebrity banker. Dubbed as 'Ribbon Cutter Gopalakrishnan' in industry circles, he was known to have a fondness for inaugurating or presiding over functions in the city while at the helm of affairs in the bank.
Banking industry sources attribute his downfall to his closeness to politicians. "They influenced him to lend money to various people and companies and he did it at their request," says a leading financier in the city who did not want to be named.
In 1995-1996, Indian Bank which was reeling under NPAs and sticky loans reported a huge loss of Rs 1,336 crore; the scandal rocked Parliament. Industry observers say the crisis came about because under Gopalakrishnan, the bank liberally and in some cases ''recklessly funded'' ill-timed projects including films and serials, causing NPAs to substantially erode the bank's capital.
The damage to the bank's balance sheet was so severe that it took 12 long years (2005-06) for it to declare a dividend. The bank had last declared a dividend of Rs 50 lakh in 1992-93. It took a rigorous restructuring exercise following his exit for it to regain stability. Indian Bank achieved a turnaround by posting a net profit of Rs 33.22 crore in 2001-02 against a net loss of Rs 274 crore the previous year.
Ironically, the former chairman was convicted on a day when the bank's earnings for the year ended March 2009 was released. It earned Rs 1,245 crore as net profits for the year 2008-09, a handsome rise of 23.45%.
Gopalakrishnan who started his career as a probationary office rose from the ranks to head the Indian Bank.
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