NEW DELHI: For the past six months, whenever the chairman and managing director of Syndicate Bank, SK Jain, spoke on the phone, eavesdropping on him was none other than CBI Director Ranjit Sinha.Finally, on Saturday, Sinha says he heard Jain directly demanding Rs 50 lakh from a private firm to grant it a credit extension. That’s when the CBI director decided to end the six-month operation and order the arrest of Jain and 11 others. “The timing was correct.We wanted to strike when the actual transaction takes place so that there are no allegations of targeting the CMD. I was shocked at the brazenness of such a senior banking officer who was directly negotiating for the bribe,” Sinha told ET.“I was myself listening in on his conversations after we took permission to tap his phone,” Sinha said. Sinha says the investigation against Jain would not have been possible but for a Supreme Court ruling in May this year which struck down Section 6 (A) of the Delhi Police Special Establishment Act, the legislation which governs CBI.Before this, CBI needed sanction from the government before lodging an FIR against an officer of the level of joint secretary and above, compromising secrecy in such operations. “I must thank the Supreme Court for removing the provision or this case would not have been possible. It is primarily due to this that CBI can now go after big fish like the chairman and managing director, which is the first such big arrest in nearly two decades,” Sinha said.He said the phone-tapping indicated that Jain had also allegedly taken a bribe a few months ago but CBI failed to nab him as the exact time of the bribe exchange could not be determined given Jain’s circuitous ways of accepting cash. “Nobody takes money directly. We played the waiting game. I could also hear the CMD intimidating his subordinates at the bank to not object to extending the credit extension to the said company,” Sinha said. The companies in question, Bhushan Steel and Prakash Industries, are being probed after their conduits were caught allegedly passing on the bribe to Jain’s chartered accountant-cum-relative, Pawan Bansal.The FIR by CBI, in fact, alleges this was not the first time that Jain was accepting a bribe and many of his other decisions are also under the scanner.Jain is currently in CBI custody. The number of officials above the rank of joint secretary against whom CBI has lodged cases has declined in the past two years. Twenty-eight such officials were booked in 2011. The number rose to 38 in 2012 before falling to 18 in 2013, and nine till May this year. “CBI’s hands have been strengthened now to check corruption in high places. We do not want to be an agency that only goes after the small fry when it comes to corruption cases.We can now directly move in against the big fish,” Sinha says. He adds that bureau was tracking certain middlemen, known in the agency’s parlance as Undesirable Contact Men, when they stumbled upon Jain, who is the alleged kingpin. “But we did not need the government’s permission to put him under probe,” Sinha points out. He, however, does expect a backlash from the banking sector after this case, though he insists that all precautions have been taken to build a fool-proof case.“When we booked senior bureaucrats in coal scam or other cases, CBI was accused of perpetrating policy paralysis. When we acted against top IB officials in the Ishrat Jahan case, we were accused of compromising the country’s security structure. Now, people may say we are discouraging the banking sector from doing its business with the arrest of the CMD. But I know the facts as I have listened to the CMD’s incriminating conversations.CBI is not saying that banks should not give loans...we are only questioning why PSU banks are deliberately giving bad loans on extraneous considerations. The companies in question here were failing to repay their loans worth crores and still a credit extension was being promised to them in exchange for a bribe. After all, this is taxpayers’ money. The non-performing assets of PSU banks due to bad loans are at an all-time high.What are the reasons for this?” Sinha said. He added that bureaucrats have “created a bogey” of policy paralysis against CBI to prevent it from checking corruption at high places. “That won’t last now,” Sinha added. CBI’s FIR says Jain “has been indulging into negotiations for illegal gratification directly as well as through middlemen” for extending undue favour to private companies by granting sanction to various financial proposals.“In one case, Jain was directly negotiating with a private company for an illegal gratification of Rs 50 lakh in lieu of granting credit extension to the said company as it had defaulted on the payment of loan instalments amounting to crores of rupees to the bank. The officials of the said company allegedly agreed to pay the said illegal gratification and the money was transferred to the middlemen who are also relatives of the public servant.CBI laid a trap and recovered the illegal gratification of Rs 50 lakh on the spot after the said delivery was made,” the FIR says.Among those booked by CBI are Neeraj Singhal, vice-chairman of Bhushan Steel, Delhi, Ved Prakash Agarwal, CMD, and Vipul Agarwal of Prakash Industries, Delhi. CBI has seized Rs 21 lakh in cash, gold worth Rs 1.68 crore and fixed deposits worth Rs 63 lakh from the CMD. “We will now interrogate him at length,” Sinha told ET.