Union Bank’s controversial book purchase exposed bureaucratic misuse.
NEW DELHI: The entrenched influence of bureaucracy, or “babudom,” within India’s system ensured that the multiple checks and balances designed to uphold propriety in Indian banks were undermined last year. Union Bank of India, one of the country’s largest public sector banks, spent Rs 7.25 crore to purchase a book authored by K.V. Subramanian, the then Executive Director for India at the International Monetary Fund. Subramanian was dismissed from his position on April 30 of this year. In August 2022, Subramanian was appointed the Executive Director for India at the International Monetary Fund, for a period of three years. At that time, he was also teaching finance as a professor at the Indian School of Business. His termination came six months before his three-year term was set to conclude, following orders from the Appointments Committee of the Cabinet, led by Prime Minister Narendra Modi. This move signalled that the government’s top office would not tolerate impropriety, regardless of the influence wielded by the individual in question. Subramanian had stepped down as Chief Economic Advisor to the Government of India in 2021 after his threeyear term ended and returned to academia. But 11 months later, he moved to Washington to take up the role of IMF Executive Director. The book, Bharat@100: Envisioning Tomorrow’s Economic Powerhouse, was launched in August last year by Union Minister of Commerce & Industry, Piyush Goyal. On April 6, Union Bank of India, while responding to a clarification sought by the Bombay Stock Exchange regarding the matter, acknowledged that the bank had procured the books and stated that there were certain lapses in the procurement, which it was examining. The bank further clarified that the development had not had any material impact on its operations or financials, nor did it affect the movement of the bank’s securities. However, an analysis of the bank’s share movement on May 6 and 7 contradicted this claim. On May 6, the bank’s market capitalisation declined by approximately Rs 6,085 crore, representing a 6.3% drop from an estimated Rs 96,429 crore to Rs 90,344 crore. This drop was attributed by experts to weak Quarter 4 business updates and negative sentiment stemming from the book purchase scandal. The following day, the bank saw a loss of about Rs 81 crore, or a 0.09% decline, as its market cap fell from Rs 90,344 crore to Rs 90,263 crore, indicating stabilisation. Overall, the total market loss from May 6 to May 7, 2025, amounted to approximately Rs 6,166 crore, reflecting a cumulative 6.39% decline in market capitalisation over the two days. The Sunday Guardian sent a detailed questionnaire to Union Bank, including to its CFO and MD, but received no response. Similarly, Rupa Publications did not respond to a comparable set of questions. Sources in the bank told The Sunday Guardian that Union Bank of India is understood to have paid 50% in advance, amounting to Rs 3 crore, to Rupa Publications for the bulk order of over 2 lakh copies of Subramanian’s book. Accordin to bank officials, in June and July last year, the corporate centre of the bank wrote to the heads of 18 zones, informing them that the top management had decided to procure the book. After the books were delivered, they were to be redistributed to the regional offices so they could be given to customers, corporate clients, and local schools, colleges, and libraries. Sources told The Sunday Guardian that the bank management had instructed the regional heads to pay the remaining amount to the publisher. Significantly, this was kept under wraps until December last year, when one of the bank’s top officials declined to ratify the entire transaction, questioning the need for the purchase and the fact that he had been kept in the dark. When the matter escalated further, a General Managerlevel officer was identified as the person who had authorised the payment to Rupa Publications. It later emerged that Union Bank Managing Director and Chief Executive A. Manimekhalai had instructed the General Manager to purchase the book. On December 26, the GM was suspended by the same officers who had authorised the purchase. Later, the bank appointed a private auditing company to identify the lapses in the matter. Bank officials told The Sunday Guardian that the top management of the bank, aiming to stay on good terms with Subramanian, who was expected to be given a crucial government role in the coming months, ordered the purchase of his books. However, when this impropriety came to light, they decided to sack the GM, who had played the least role in the entire affair and had merely followed instructions from top management. Bank staff have questioned the failure of the Union Finance Ministry to hold the top levels of Union Bank’s management accountable for this financial misappropriation.