FAKE HOUSING LOAN SCAM

Fake housing loan scam: High profileLIC, Bank officials arrested
Updated on Wednesday, November 24, 2010, 19:28
Zeebiz Bureau
Mumbai: Inwhat can be termed as a major fake housing loan racket, the Central Bureau ofInvestigation (CBI) Wednesday arrested many high profile officials of LifeInsurance Corporation (LIC) of India and several senior bank officials.
CBI, in a press conference, said that raids have been conducted on the premisesof LIC Housing Finance in Delhi, Mumbai, Kolkata and Chennai.
The CBI, which was said to questioning a slew of people involved in the scam,included CEO of LIC Housing Finance Ramachandran Nair and seven othersincluding three top officials of public sector banks in connection with analleged 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 andDeputy General Manager of Punjab National Bank (Delhi).
Rajesh Sharma, Chairman and Managing Director of Mumbai-based firm MoneyMatters Ltd and two of its employees- Suresh Gattani and Sanjay Sharma-- wereamong those arrested, CBI said.
Confirming the development, P Kandaswamy of CBI’s Economic Offence Wing, saidthat as many as eight high profile Banking officials have been arrested in theFake housing loan scam so far. More arrests in this connection are likely.

"The CBI has busted a racket wherein a private financial services company,its CMD and other associates were allegedly bribing senior officials of publicsector banks and financial institutions for facilitating large scale corporateloans," CBI spokesman R K Gaur said in a statement.

"Officers of top management and middle management of various public sectorbanks and financial institutions viz. Bank of India, Central Bank of India,Punjab National Bank, LIC and LIC Housing Finance Ltd were receiving illegalgratifications from the private financial services company who were acting asmediators and facilitators for corporate loans and other facilities fromfinancial institutions," he said.

"They were also gathering confidential business information from financialinstitutions," Gaur said.

The CBI has registered five separate cases in this regard and investigation isin progress, the spokesman said.

Reacting to the development, Deepak Parikh, Chairman Housing DevelopmentFinance Corporation said, “It may be the tip of an iceberg, but I don’t thinkwe need to be utterly surprised over this development. I think it’s a normalpractice. It’s a part of the game. It’s a part of business in India.”

Parikh further added, “It should not come as a surprise to anyone, but RBI willcertainly be worried and concerned that some people, especially the buildersare in the practice of paying huge money for facilitating fee for getting theirloans sanctioned’.