Banks scandal: Finmin looking into possibility of dept inquiry
New Delhi: Finance Ministry today said it would explore the possibility of instituting a departmental inquiry into the housing finance racket that led to arrest of senior officials of the LIC Housing Finance and public sector banks.
"If there is provision (of departmental inquiry), we will set up inquiry. Otherwise banks at individual levels will set up inquiries" a senior official said here.
The official was responding to a query on the possibility of the Finance Ministry instituting an inquiry to look into the housing finance racket. Describing the episode of arrests of bankers as incident of "bribery", the official said, it will not have any impact on the asset quality of the banks.
"We have inquired from individual banks about the asset quality and banks have said there will not be any increase in NPAs (Non-Performing Assets) due to this episode", the official said.
Earlier in the day, Central Bureau of Investigation (CBI) arrested CEO of LIC Housing Finance Ramachandran Nair and seven others senior bankers in connection with a housing finance racket. Apart from Nair, those arrested are Naresh K Chopra, Secretary (Investment), LIC, R N Tayal, General Manager of Bank of India (Delhi), Maninder Singh Johar, Director (Chartered Accountant) of Central Bank of India, Venkoba Gujjal and Dy General Manager of Punjab National Bank (Delhi).
Rajesh Sharma, CMD of Mumbai-based firm Money Matters Ltd and two of its employees -- Suresh Gattani and Sanjay Sharma-- were also among those arrested.
The bank officials allegedly colluded with the firm to sanction large scale corporate loans, overriding mandatory conditions for such approvals along with other irregularities.
These arrests, according to senior banker and HDFC chairman Deepak Parekh, reveals bribery and corruption by public officials in sanctioning home loans.
"These are cases of bribery. These are cases of corruption. Bribery by public officials, by people working in public sector organisations and facilitating and sanctioning loans by taking money", Parekh said.
"They (CBI) have zeroed in real estate sector and certain developers who must have paid money to get loans sanctioned", he said.
The CBI earlier said that it had busted a racket wherein 'a private financial services company, its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans'.
Searches were conducted at various locations in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar, which have resulted in seizure of incriminating documents, the investigating agency said. The agency said it registered five separate cases and that investigations were in progress.
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