KPMG Investigates Union Bank’s Rs 7.25 Cr Book Order Amid Management Heat

NEW DELHI (India CSR): In a move that has sparked controversy and raised eyebrows, Union Bank of India, one of India’s leading public sector banks, is facing intense scrutiny over its decision to purchase nearly 200,000 copies of a book authored by former Chief Economic Adviser Krishnamurthy V Subramanian for a staggering Rs 7.25 crore. The bulk order, placed ahead of the book’s publication, has led to internal dissent, the suspension of a senior official, and an ongoing investigation by consulting firm KPMG. As employee unions demand transparency and accountability, questions are being raised about the propriety and necessity of such a large expenditure by a state-owned bank.

The Book at the Center of the Storm

The book in question, India@100: Envisioning Tomorrow’s Economic Powerhouse (Book Details), was penned by Krishnamurthy V Subramanian, who served as India’s Chief Economic Adviser from 2018 to 2021. Subramanian, a respected economist, later became India’s nominee executive director at the International Monetary Fund (IMF). However, his tenure was cut short in April 2025, six months ahead of schedule, with reports suggesting that allegations of impropriety related to the promotion of his book played a role in his recall (IMF Exit).

A Massive and Unusual Purchase

Internal bank communications, as reported by The Economic Times (ET Report), reveal that Union Bank’s top management decided to procure 189,450 paperback copies at Rs 350 each and 10,422 hardcover copies at Rs 597 each in June and July 2024, before the book’s August 2024 publication. The total cost amounted to Rs 7.25 crore. The bank’s support services department instructed its 18 zonal heads to distribute these books among customers, local schools, colleges, libraries, and other institutions across India.

This purchase is extraordinary, given that English-language books in India typically sell in far smaller quantities. A title selling over 10,000 copies is often deemed a bestseller, making the bank’s order of nearly 200,000 copies highly unusual. The bank paid a 50% advance to Rupa Publications, with the remaining payment to be covered by regional offices from their “miscellaneous” revenue budget.

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Internal Dissent and Suspension

The expenditure came under scrutiny during a December 2024 board meeting, where Executive Director Nitesh Ranjan, responsible for marketing and publicity, expressed surprise and stated he was unaware of the purchase. The board questioned the authority of General Manager Girija Mishra, who oversaw the support services department, to authorize such a significant payment without broader consultation (Board Meeting).

Managing Director and CEO A Manimekhalai informed the board that she had instructed Mishra to make the purchase but emphasized that he should not violate any rules. Despite this, Mishra was suspended on December 26, 2024, just a week after the meeting. Mishra has not responded to requests for comment, and unions have suggested he may have been made a scapegoat (Union Criticism).

KPMG’s Investigation

In January 2025, Union Bank appointed KPMG to investigate procedural lapses in the transaction. KPMG submitted its report by the end of January, but the findings have not been made public. It remains unclear what recommendations were made or whether the bank has taken further action beyond Mishra’s suspension (KPMG Probe).

Employee Unions Demand Transparency

Employee unions have been vocal in their criticism of the bank’s handling of the situation. On May 4, 2025, the All India Union Bank Employees’ Association wrote to Manimekhalai, demanding a thorough investigation into what they described as “wasteful expenditure” and potential “impropriety.” The letter, as quoted by The Economic Times (Union Letter), stated:

“With the news item of alleged impropriety over promotion of the book purchased by the bank… it has become the responsibility of the bank to ascertain how far the authority who has approved the expenditure for purchase of books has colluded in promoting the alleged impropriety to damage the bank and its image.”

The union questioned the benefits of purchasing and distributing such a large number of books and whether proper procurement procedures were followed. They also called for accountability at higher levels of management, arguing that Mishra’s suspension alone does not address the root issues (Union Demands).

Bank’s Official Response

Union Bank has acknowledged lapses in the procurement process. In a stock exchange notification on May 6, 2025, the bank stated that it is examining the matter but emphasized that the incident has not had a material impact on its operations or financials at this stage (Bank Statement). However, this response has not quelled concerns, with critics arguing that the bank must provide greater transparency on the decision-making process and the rationale behind the expenditure.

Market and Financial Impact

The controversy has affected investor confidence, with Union Bank’s shares dropping by 4% on May 6, 2025, following the news reports (Share Drop). Union Bank, valued at Rs 96,298 crore, is India’s fourth-largest public sector bank, with a loan book of Rs 9.5 lakh crore and total deposits of Rs 12.2 lakh crore. While the bank claims no significant financial impact, the reputational damage could have longer-term consequences.

Broader Implications for Governance

This incident raises critical questions about corporate governance in public sector banks and the need for robust checks and balances. The lack of clear justification for the expenditure, coupled with the involvement of a high-profile figure like Subramanian, has led to accusations of favoritism and potential conflicts of interest. Public sector banks, funded by taxpayer money, are expected to uphold the highest standards of transparency and accountability, and this case highlights the risks of deviating from established procedures (Governance Concerns).

You Learn

As Union Bank navigates this controversy, the focus will be on how it addresses the concerns raised by its employees, investors, and the public. The undisclosed findings of the KPMG investigation and any subsequent actions will be pivotal in restoring trust. For now, the bank faces the challenge of balancing accountability with the need to maintain its reputation as a responsible institution.

(India CSR)