New Delhi:
With mounting evidence that top executives at public sector banks accepted bribes to grant large loans to companies, the CBI has issued notice to 17 corporate groups who allegedly benefitted from the collusion.
Among them, companies like the Adani Group, Pantaloons, the JP group and Lavasa.
Finance Minister Pranab Mukherjee has asked banks, foreign institutional investors and insurance companies to look into their exposure in these 17 companies, to check if they have been compromised in any way.
"The law will take its course against bank officials involved in the scam," said Mukherjee.
On Thursday, eight people - including top executives of the Central Bank and Punjab Bank were arrested, along with the men who headed Money Matters, a private financial services firm that allegedly acted as a middleman to pass on the bribes in exchange for loans for its clients.
Money Matters specialized in getting loans far beyond what its clients were entitled to from public sector banks. Sources say the men at Money Matters had forged such close partnerships with the top executives at banks, that firms who applied directly for loans were turned away till they returned with Money Matters involved.
CBI sources tell NDTV that they were first alerted to the scam a year ago when the Economic Intelligence Wing was studying sharp fluctuations in the stock markets, which were hitting real-estate prices.
The 17 companies on the CBI's radar include several real estate companies. Five of them illegally invested loans worth Rs. 1,000 crores in the stock market.
CBI sources say LIC officials emerge as the most culpable - they sanctioned the largest loans. Arrested director of LIC Housing Finance... Ramchandran Nair, the former Director of LIC Housing Finance who was among those arrested yesterday, has allegedly told the CBI that the LIC board, of which he was a member, was aware of the loans being granted. LIC says the damage is limited. "A scam means a huge loss to a company. That has not happened. This is an individual case. The CBI has alleged something. It has not affected the company," said the company's chairman, T. S. Vijayan.
Public outrage over the collusion is not matched by the government's take. "It's a very, very insignificant amount...It's a case of individual greed, not a systemic failure," said Banking Secretary R. Gopalan.
But banks say the news of the swindle is hitting home. "Every lender will be more cautious after this incident in lending to real estate," commented Deepak Parekh, chairman of HFDC bank.
Among them, companies like the Adani Group, Pantaloons, the JP group and Lavasa.
Finance Minister Pranab Mukherjee has asked banks, foreign institutional investors and insurance companies to look into their exposure in these 17 companies, to check if they have been compromised in any way.
"The law will take its course against bank officials involved in the scam," said Mukherjee.
On Thursday, eight people - including top executives of the Central Bank and Punjab Bank were arrested, along with the men who headed Money Matters, a private financial services firm that allegedly acted as a middleman to pass on the bribes in exchange for loans for its clients.
Money Matters specialized in getting loans far beyond what its clients were entitled to from public sector banks. Sources say the men at Money Matters had forged such close partnerships with the top executives at banks, that firms who applied directly for loans were turned away till they returned with Money Matters involved.
CBI sources tell NDTV that they were first alerted to the scam a year ago when the Economic Intelligence Wing was studying sharp fluctuations in the stock markets, which were hitting real-estate prices.
The 17 companies on the CBI's radar include several real estate companies. Five of them illegally invested loans worth Rs. 1,000 crores in the stock market.
CBI sources say LIC officials emerge as the most culpable - they sanctioned the largest loans. Arrested director of LIC Housing Finance... Ramchandran Nair, the former Director of LIC Housing Finance who was among those arrested yesterday, has allegedly told the CBI that the LIC board, of which he was a member, was aware of the loans being granted. LIC says the damage is limited. "A scam means a huge loss to a company. That has not happened. This is an individual case. The CBI has alleged something. It has not affected the company," said the company's chairman, T. S. Vijayan.
Public outrage over the collusion is not matched by the government's take. "It's a very, very insignificant amount...It's a case of individual greed, not a systemic failure," said Banking Secretary R. Gopalan.
But banks say the news of the swindle is hitting home. "Every lender will be more cautious after this incident in lending to real estate," commented Deepak Parekh, chairman of HFDC bank.
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