LIC Housing Finance Company, whose Chief Executive was arrested by CBI on bribery charges for sanctioning loans, said that it had adhered to all rules while approving loans.
“All procedures and due diligences consistent with Board approved guidelines have been adhered to in approving the loans, as has been followed in the past, by the Competent Authority,” the company said in a statement.
Accusation
According to CBI, Mr R.R. Nair, the LIC Housing chief, allegedly received a bribe of Rs 45 lakh from Money Matters, a Mumbai-based finance company, who acted as the facilitator for loans to developers.
Mr Nair is accused of providing undue favours to companies such as DB Realty, Mantri Realty, Entertainment World Lucknow, Indore City Treasures and Pashmina Developers.
LIC Housing Finance said loans to builders constitute 11.34 per cent of the total loan portfolio for LIC HF as on October 31, 2010 with gross NPAs from this portfolio at 0.08 per cent.
“All the loans are secured by the underlying assets to the full satisfaction of the approving authority. All the loans have been approved in compliance with relevant regulatory norms. As on date all the loans in question are performing assets”, the company said. All necessary steps would be taken to ensure that interests of various stakeholders would be fully protected, the release added.
Another accused Mr Naresh Chopra, Secretary (Investment), LIC has been allegedly providing insider information on dealings of investment matters of Life Insurance Corporation of India related to Adani, J P Hydro, JSW Power and Pantaloons. He is alleged to have received a bribe from Mr Rajesh Sharma, CEO of Money Matters to provide this insider information.
A director in Central Bank of India, Mr Maninder Singh Johar has been accused of receiving a bribe of Rs 30 lakh to provide undue favour to Lavasa's, a project he was handling at that time.
However, while speaking to news channels, Mr S. Sridhar, Chairman and Managing director of Central Bank of India, said that Mr Johar is not a bank employee. “It may have nothing to do with the Central Bank of India. He is a chartered accountant member of the board and a part-time director. The CBI hasn't come to us and asked us for details,” he said.
One official each from Bank of India and Punjab National Bank were also arrested. The bank management and LIC officials were not available for comment.
According to banking sources, this is a purely a bribery case and not a housing loan scam. It is unlikely to have any systemic implications, they said.
A bank official said loan facilitation charge is a normal practice in sanctioning large loans among banks and financial institutions.
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