This is almost a three-fold rise over its NPA of SGD 23 million for the last year. And even though the Singapore branch has claimed the highest ever gross profit of SGD 41.24 million and a gross profit of SGD 28.10 million (excluding extraordinary gains of SGD 13.14 million), the head office in Mumbai is not impressed.

The head office (HO) has replied in a communication to the Singapore branch that, in fact, the branch has made a notional loss of SGD 11.496 million. The HO has had to make a specific provision of SGD 12.096 million in four accounts -- ITC Global, Patheja Brothers, Patheja Forgings and P T Bringin -- which went bad.

The Singapore branch has doubtful assets of US $ 7.75 million (around Rs 30 crore) on account of one Greatwin International Limited alone. The company was owned by oneNavratan Kothari, now stationed in Canada. The branch is poorer by $ 2.714 million in the margin trading account and about $ 5 million in the trade finance account, mainly by way of Letters of Credit which Greatwin defaulted. When contacted, P R Yagnik, GM, International operations of BoI, refused to comment.

A visit by S A Bhat, AGM from Delhi, to the Singapore branch in August-September last year to examine the deficiencies in the margin trading scheme, found that the branch CEO (Nayak) had raised the sanctioned limit for Greatwin from $ 4 million to $ 10 million at a margin of five per cent. ‘‘The note put up for sanction made a mention about informing HO about the enhancement, but this was not done, Bhat recorded. He has also noted that Greatwin was not a AAA rated customer. The margin given is also five per cent instead of the usual 10 per cent.

In fact, the entire forex dealing department came under scrutiny and the bank is reviewing the margin trading scheme, it is learnt. (In forex trading, apercentage of the limit is deposited with the bank, and the position of the borrower/customer is monitored by the back up section. As soon as the customer incurs losses over 50 per cent of the margin, his position should be immediately cut off).

While putting the blame for the losses on Greatwins account collectively on the chief executive, the backup room and the dealers, Bhat has observed: ‘‘The branch, while instructing the dealers not to initiate any fresh position in the a/c on 17.12.96 could have reviewed the situation about cutting the position. Not instructing the dealers to cut the position after the review of 17.12.96 has resulted in further losses amounting to $ 911,000 and possibility of further losses of about $ 2.037 million as per the revaluation done on 29.8.97.

Bhat has also observed that the manual of instruction for the branch was contradictory to the provisions of the scheme approved by the HO in 1993. The HO has called for Nayak's response to the report as also demanding explanationsfrom the other staff in margin trading with a view to fix responsibility, it is learnt.

Greatwin defaulted on the payments on February 12, 1997 and declared itself unable to pay up.