Ministry of Finance Calls for Reports from PSBS and FIS Raided by CBI Today

CBI in its press release has stated that it has arrested CEO of LIC Housing Finance Limited(LICHFL), Mumbai, Secretary (Investment), LIC, Mumbai, General Manager, Bank of India, Mumbai, Director (Chartered Accountant), Central Bank of India, New Delhi, DGM, Punjab National Bank, New Delhi, Chairman & Managing Director and other officials of a Mumbai-based private financial services company in a bribery case. 

CBI has further said that it has 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. They were also gathering confidential business information from Financial Institutions. Officers of top and middle management of PSBs and FIs viz. Bank of India, Central Bank of India, Punjab National Bank and LIC Housing Finance Limited were receiving illegal gratification from the private financial services company who were acting as mediators and facilitators for corporate loans and other facilities. Searches were conducted by CBI at Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar and five separate cases have been registered by CBI and investigations are in progress. 

Reports have been called by Department of Financial Services, Ministry of Finance from these institutions and the details as made available are as under: 

LIC of India : The CEO of LICHFL Shri Nair and Shri Naresh Chopra, Secretary (Investment), LIC have been arrested. Senior executives of a financial services company private limited have also been arrested in this case. LICHFL has issued a press release assuring its investors, customers and business associates that all necessary steps would be taken to ensure that interests of various stake holders are fully protected. It has also said that all procedures and due diligences consistent with Board approved guidelines have been adhered to in approving the loans by the competent authority. It has also indicated that all loans have been secured by underlying assets to the full satisfaction of the appropriate authority. 

Bank of India: The CBI at Chennai had enquired about particulars of Shri Tayal, General Manager, Mumbai Large Corporate Branch who was earlier working in Chennai Large Corporate Branch and sought information on three accounts viz. OPG Power, BGR Energy and Ashapura Minechem, Mumbai. Of these three accounts, Bank of India has reported that only one is at present NPA on account of derivative losses. Shri Tayal was interrogated by CBI in Delhi on 23.11.2010 on the above three accounts. He has been arrested by CBI. 

Central Bank of India : The Chartered Accountant, Director on the Board of the Bank Shri M.S. Johar has been arrested by CBI in this case. No official of the bank has been arrested. CMD, Central Bank has confirmed that as per information available there is no impact of the above development on asset quality

Punjab National Bank: Shri V.K. Gujjal, DGM of the Bank has been arrested. Mr. Gujjal is working as Chief Operating Officer of PNB Investment Services Limited, a merchant banking subsidiary set up by the Bank and headquartered in Delhi. Prior to this he was working as DGM in-charge of Large Corporate Branch, Delhi from 30th May, 2009 to 22nd May, 2010. CMD of PNB has said that there is no information linking the above incidence to any loan account of the bank.