The Story of Patna Nagarik Bank: A 50-Year-Old Controversy
The establishment of Patna Nagarik Bank, 50 years ago, took place in a two-story building not far from the women’s charkha committee residence at Kadam Kuan, where Jayaprakash Narayan once resided. The first and only president of the bank was Nawal Kishore Sinha, a Congress member of the legislative assembly. The promoters included Chief Minister Dr. Jagannath Mishra and his political secretary, Shri Jeevanand Jha.
From its inception, the bank was embroiled in controversy. A sensational disclosure was made in the annual report of the Legislative Assembly's estimation committee, which was presented on the assembly floor and distributed among members and journalists. The report included several annexures that revealed shocking details.
Collateralizing Public Property for Loans
The committee found evidence of severe irregularities in the bank’s operations and violations of financial management. Several fictitious individuals had been granted loans, some of whom did not even exist, and others were not even members of the bank. Some large public properties in Patna, including Gandhi Maidan, Patna Junction, and even platform number one of the railway station, were pledged as collateral for loans.
I published a report on the front page of The Searchlight, revealing how public assets were being used as collateral for loans. The Bihar Secretariat Employees' Union filed a memorandum to then Home Minister Chaudhary Charan Singh, demanding an investigation. At that time, Dr. Jagannath Mishra was the Chief Minister, and his close associate, Nawal Kishore Sinha, was the bank’s president.
Government Intervention and Withdrawal of the Case
After the investigation began, some pay-in slips from the Patna Central Bank were found, revealing that money had been deposited into savings accounts from Patna Urban Bank on various occasions.
Soon, the Janata Party government fell, and Dr. Jagannath Mishra became Chief Minister again in 1980. On June 10, 1980, the state cabinet decided to withdraw the case being heard by the Chief Judicial Magistrate in Patna. A government lawyer, Lallan Prasad Sinha, filed a petition to withdraw the case, which was accepted by the CJM.
Shivanandan Paswan, an administrative officer and Deputy Speaker of the Assembly, challenged the CJM’s order in the Patna High Court on the direction of Karpoori Thakur. The court ruled in his favor, and the CJM’s order was overturned.
In the meantime, the Congress government came to power in Delhi. Justice Baharul Islam’s bench overturned the Patna High Court decision, clearing Dr. Jagannath Mishra of all charges.
Vigilance Police Action and Conviction
Subsequently, the Bihar government’s vigilance police filed charges against seven individuals in Patna’s court. The Vigilance Police’s Deputy Director-General, S.K. Chatterjee, personally oversaw the case. Nawal Kishore Sinha, a Congress MLA, was arrested and brought to the police station. The bank’s secretary, manager, loan officer, and two unnamed members were also arrested. All were convicted in 1986 under the Indian Penal Code and the Prevention of Corruption Act.
Following this, the process of liquidating the bank began. The Reserve Bank of India revoked the bank’s license, issued in 1974. T. Nand Kumar, the Registrar of Cooperative Societies in Bihar (who later retired as Secretary of the Government of India), was appointed as the bank’s liquidator. Since then, the bank has remained closed.
