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Sarbajeet K. Sen

New Delhi , Dec. 10

THE Telgi stamp paper scam is forcing public sector banks on a state of alert to avoid getting trapped in the muddle.

Shunning their earlier practice of allowing outsiders to source stamp papers for executing loan agreements, banks are now advising their officials to ensure that the purchase of such papers are made by its own staff directly from the treasury.

Earlier, it was common practice for most banks to ask the customers, with whom loan agreements were to be signed, to source the stamp paper on which the deed were to be executed.

However, revelation of the magnitude of the scam is now forcing them to exercise caution.

"The practice of bank managers asking customers to bring the stamp paper has to end. We have advised our officials to ensure that our representatives themselves purchase the stamp papers from the treasury," the Chairman and Managing Director of a bank said.

A senior official of another bank agreed. "We were not very particular about where the stamp paper was purchased and mostly left it up to the customer to bring them for signing the loan agreement. After the scam we have to be more careful," he said.

However, despite being a heavy user of stamp papers, the banking sector has managed to remain unaffected by the several thousand crore parallel fake stamp paper market that has been in existence for several years now.

In fact, the Government has recently given a clean chit to the banks over speculations that some of them had been holding fake papers with them.

In a reply in Parliament last week, the Government has said "according to information received from the Reserve Bank of India, no bank has reported about seizure of fake stamp papers from them."

However, bankers said that they are not unduly worried over the possibility of previous agreements having been executed on fake stamp papers. "The opinion we have got is that even if the transaction had been executed on fake paper it does not negate the legal validity of the transaction. It was in any case difficult to identify a fake stamp paper since even the security features had been copied," the bank chief said.

The Ministry of Finance had recently said that it was studying the legal implications of such transactions. The Ministry has also said that it has recently decided to introduce a set of new security features in non-judicial stamp papers that would make it difficult to counterfeit.

The Government has also asked States to verify the stocks of stamp papers with authorised vendors so as to ensure that the fake ones are not put into circulation.

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