Despite bleak financial position, IDBI Bank buys 600 apartments for senior staff in Mumbai

"The apartments cost Rs 40-50 crore each, which is at the cost of the exchequer. Only private bank founders and CEOs stay in such homes," a person with knowledge of the development told the Business news daily.

Public sector lender IDBI Bank is in news again after a change at its top deck and worsening financial position. According to a Business Standard report, the bank has purchased close to 600 apartments in high-end Jolly Maker towers in Mumbai for its assistant and deputy managers.

"The apartments cost Rs 40-50 crore each, which is at the cost of the exchequer. Only private bank founders and CEOs stay in such homes," a person with knowledge of the development told the Business news daily.

The report comes days after the government, which owns more than 70 per cent in the lender, replaced IDBI Bank chief Kishor Kharat with Indian Bank Chief Executive Officer (CEO) MK Jain, to revive the troubled public sector lender. Jain has taken over the top position at IDBI Bank.

The bank has been reeling under losses off late with its Q3 net loss widening to Rs 2255 crore and net non-performing assets (NPAs) rising to 9.61%.

In Q2 also, the bank reported 53 percent fall in net profit at Rs 55.50 crore.

"The bank's performance was worsening under Kishor Kharat, prompting the government to replace him," another official told the newspaper.

Jain was brought in from Indian Bank, which had posted a stellar performance under him.

Kharat, who was with the Union Bank of India from March 2015, was elevated as the Managing Director and CEO of IDBI Bank, in August 2015.

In his brief stint at IDBI Bank, Kharat served IDBI Capital Market Services, IDBI Asset Management Ltd and IDBI Trusteeship Services Ltd, as its Chairman.

Jain, who is now IDBI Bank chief and earlier headed the Indian Bank since November 2015, turned around the performance of the Chennai-based lender. Indian Bank's net profit rose eight times to Rs 374 crore in the third quarter of 2016-17, year-on-year. The earnings per share improved to Rs 7.8 a share from Rs 0.8 a share in the third quarter of 2015-16.