(representational image)Reuters

The CBI arrested the Chairman of Syndicate Bank on Saturday, for allegedly taking ₹50 lakh bribe to extend credit limit of two private companies.

The bureau arrested the bank's Chairman and Managing Director Sudhir Kumar Jain from Bangalore, after one of his relatives - a chartered accountant - was captured taking ₹50 lakh as bribe from a private company, in Malviya Nagar on Friday, reports The Times of India.

The two companies for which Jain raised the credit limit are Prakash Industries and Bhushan Steel, according to the report.

"It is alleged that the said public servant has been indulging into negotiations for illegal gratification directly as well as through middlemen for extending undue favor to private companies by granting sanction to various financial proposals," Reuters quoted a CBI statement.

Apart from Jain and his two relatives, the CBI has named Prakash Industries Chairman Ved Prakash Agarwal and Bhushan Steel Vice President Neeraj Singhal in the FIR.

Jain has allegedly been giving undue favour to Prakash Industries and Bhushan Steel, by illegally extending the companies' loan terms. The companies are also being investigated in connection with the coal block allocation scam, popularly known as Coalgate scam.

After conducting raids at 20 different locations across Bangalore, Delhi, Mumbai and Bhopal, CBI seized ₹21 lakh cash, fixed deposit receipts of ₹63 lakh and gold jewellery worth ₹1.68 crore. The bureau also found evidences, documents and computer records which suggested involvement of other banks as well.

"We will probe the larger conspiracy involving other banks as we have recovered huge amount of incriminating material," The Times of India quoted CBI Director Ranjit Sinha.

"Jain's arrest is a solid example of how senior functionaries are themselves misusing their positions and taking wrong decisions for personal benefits affecting businesses in their field," he added.

Jain, who joined Syndicate bank a year ago, and the other accused arrested in connection with the scam would be presented before the Delhi court on Monday.