The Reserve Bank on Saturday asked controversial lender Bank of Rajasthan, set to be acquired by ICICI Bank, to remove its Deputy Managing Director Deepak Saruparia and banned him from managing any bank for five years.

“Reserve Bank of India ... has directed that Deepak Saruparia shall stand removed from the post of Deputy Managing Director in Bank of Rajasthan with immediate effect,” BoR said in a communique to the Bombay Stock Exchange.

RBI also directed that Mr. Saruparia “shall not in any way either directly or indirectly be concerned with or take part in the management of any banking company for a period of five years from June 12, 2010.”

RBI’s directive to remove Mr. Saruparia comes a few months after it slapped a show-cause notice on him.

When contacted, Mr. Saruparia told PTI that imposing charges only against him were not proper as the decisions were not taken by him individually but collectively as they were approved by BoR’s board. He added that the alleged transactions were executed prior to his taking over as the DMD of the bank.

RBI’s move follows its order imposing a Rs 25 lakh penalty on the Jaipur-based bank for violation of a host of norms like the acquisition of immovable properties, deletion of records, non-adherence to KYC norms and anti-money laundering guidelines amongst others.

Market watchdog SEBI also came down heavily on the bank by banning around 100 entities, including promoter Tayals from accessing the stock market.

“All the decisions were taken unanimously by the Board ... there were RBI nominees also on the Board that time ... singling me out therefore is not proper,” Mr. Saruparia said.

RBI is understood to have charged Mr. Saruparia with irregularities in property transactions during 2002-2004 including that of an office building at Lower Parel.

RBI is also understood to have found irregularities in handling of certain corporate accounts during Mr. Saruparia’s tenure. Mr. Saruparia, who joined BoR in August 2004 was elevated to the post of Deputy Managing Director in 2007.

A senior BoR official, on condition of anonymity, said “The charges (against Mr. Saruparia) are mainly in relation to the acquisition of immovable properties and certain corporate transactions.”

Last month the boards of both ICICI Bank and BoR had approved a proposal of merger in an all-stock deal and approved the swap ratio at 1:4.72, according to which shareholders of BoR would get 25 ICICI Bank shares for every 118 BoR shares they held.

The proposal will now be taken up at the Extra Ordinary General Meetings of both banks on June 21.

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