All procedures were followed while approving loans: LIC Housing | india | Hindustan Times
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All procedures were followed while approving loans: LIC Housing

india Updated: Nov 24, 2010 21:20 IST

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Hours after the CBI arrested its CEO in connection with an alleged housing finance racket, LIC Housing Finance on Wednesday said it had followed all necessary procedures while approving loans.

"All procedures and due diligence consistent with Board approved guidelines have been adhered to in approving the loans, as has been followed in the past, by the competent authority," LIC Housing Finance Ltd said in a statement.

CBI arrested the company's CEO Ramachandran Nair and seven others, including three top officials of public sector banks, in connection with an alleged 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 Deputy 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 among those arrested, CBI said.

The officials allegedly colluded with the firm to sanction large scale corporate loans, overriding mandatory conditions for such approvals along with other irregularities.

LIC Housing Finance said, "All the loans are secured by the underlying assets to the full satisfaction of the approving authority. All the loans have been approved with relevant regulatory norms."

It said that steps would be taken to ensure that interests of various stakeholders including investors, customers and business associates are protected.

"As on date all the loans in question are performing assets," LIC Housing Finance said.

It added builders' loans constitute 11.34 per cent of the total loan portfolio as on October 31 this year and the gross non-performing assets of the organisation was 0.08 per cent.

"Gross NPAs on the individual loans stood at 0.84 per cent as on October 31, 2010," the company said.

Earlier in the day, CBI spokesperson R K Gaur said, "Officers of top management and middle management of various public sector banks and financial institutions viz. BoI, Central Bank of India, PNB, LIC and LICHF were receiving illegal gratifications from the private financial services company who were acting as mediators and facilitators for corporate loans and other facilities from financial institutions".

He added, "They were also gathering confidential business information from financial institutions."

CBI conducted searches in Mumbai, Delhi, Chennai, Jaipur, Kolkata and Jalandhar, resulting in seizure of incriminating documents. It has registered five separate cases.