Top officials of Indian banks, lenders and financial firms have been accused of taking bribes to grant corporate loans. While the size of the scandal is not known, local media have reported it could run into millions of dollars.
The CBI, India’s federal investigative agency, arrested eight people in November, including the chief executive of LIC Housing Finance and senior officials at state-run Central Bank of India, Punjab National Bank and Bank of India.
The bribes were allegedly paid by private finance firm Money Matters Financial Services, which acted as a “mediator and facilitator” for the loan beneficiaries, the CBI said.
Three Money Matters executives, including the managing director, have been arrested for offering bribes.
Several leading Indian firms were named in court documents filed by the CBI, including wind turbine maker Suzlon Energy, infrastructure company HCC’s Lavasa unit and real estate firm DB Realty (DBRL.BO). All three have denied any wrongdoing. A CBI source has said the probe will widen to look if other banks were involved.
Finance Minister Pranab Mukherjee has asked investors not to panic over the case, following up on comments by other officials that this is a case of individual wrongdoing and not a widespread scam and that the banking sector will not be affected by it.
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