SC asks CBI to probe role of public sector banks

The Supreme Court was today "astonished" to know that the public sector banks provided loans to the tune of Rs 10,000 crore to the 2G spectrum licencees, which included some real estate firms, on the basis of the hypothecation of their licences.

The Supreme Court on Wednesday asked the CBI to examine the role of several public sector banks, including the State Bank of India, in the 2G-spectrum scam for lending thousands of crores of rupees to real estate companies merely on the basis of hypothecation of their spectrum licences.

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Other banks that allegedly ignored the risk factor in giving loans to 2G licencees are Corporation Bank, Allahabad Bank, Canara Bank, Central Bank of India, Punjab National Bank, Oriental Bank, South Indian Bank, Standard Chartered Bank and Yes Bank.

HT was the first to report on November 26, 2010 about housing finance loans possibly being used to buy 2G spectrum.

Maintaining that it has wider ramification for public sector banks, justice GS Singhvi and justice AK Ganguly said, "It needs to be covered under the CBI investigation."

Maintaining the CBI has not examined this aspect, counsel KK Venugopal said a fresh FIR would have to be registered by the Securitisation and Fraud Cell of the agency for a probe.

The court's comments came after advocate Prashant Bhushan submitted on behalf of petitioner Centre for Public Interest Litigation, quoting a newspaper report that said public sector banks provided loans to some licencees on the basis of hypothecation of their 2G licences. The SBI gave a loan to the tune of Rs 2,500 crore to Unitech Ltd, a real estate company, he added.

According to documents submitted in the court, public sector banks allotted Rs 10,000 crore to Unitech and Rs 1,538 crore to Stel. The loans were given to the licencees after the CBI registered an FIR in the 2G scam. Out of the Rs 10,000 crore loan to Unitech, Rs 8,050 crore was made available by SBI.