The Central Bureau of Investigation (CBI) today examined documents of some public sector banks, including State Bank of India (SBI), that had given loans to real estate firms allocated 2G licences in 2007-08.
A team from CBI’s bank securities & fraud cell in Delhi visited SBI's offices in Mumbai and Delhi and held discussions with senior officials of the bank. The CBI office, however, said no ‘search’ operations have been conducted so far.
Banks were asked about loans given to companies such as Uninor and STel.
Agency reports said that while widening its probe into the 2G spectrum allocation scam, CBI registered a preliminary enquiry to probe certain public sector banks that furnished loans to 2G licensees. Under the preliminary enquiry, CBI can only examine documents, not seize them.
SBI Chairman O P Bhatt told reporters in New Delhi that “there were no searches; it was only a probe”. All banks, including SBI, have a rigorous system to assess proposals, Bhatt said. He added that while giving loans, SBI looks at a borrower’s cash flows, tangible assets, promoters and ability to repay, among other aspects.
Public sector banks had given Rs 10,000 crore to the Unitech-Telenor consortium and Rs 1,538 crore to STel, based on licence papers issued by the department of telecom (DoT). Of the loan to Uninor, a joint venture between Unitech and Telenor of Norway, SBI sanctioned Rs 8,050 crore in 2009-2010. The company had picked up only Rs 500 crore so far.
Other banks that gave Uninor money were South Indian Bank, Corporation Bank, Allahabad Bank, Canara Bank, Oriental Bank, Central Bank of India, Punjab National Bank, Standard Chartered Bank and Yes Bank.
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STel received its loan from IDBI and IDBI Trusteeship Services in July-November 2009. A senior IDBI Bank executive said due diligence was conducted and regulatory norms adhered to while extending loans to telecom companies. He did not wish to comment on the CBI action.
The Supreme Court had directed CBI to investigate allegation of huge loans advanced by public sector and other banks to some companies and determine whether DoT officers were signatories to the loan agreements. The apex court has asked CBI to ascertain why and with whose permission the banks did so.
CBI has also sought legal opinion on whether it needs to register a fresh or additional first information report in the 2G case to comply with the court's directions.
The court has also asked CBI and Enforcement Directorate for status reports on their investigations into the 2G case by February 10, when the case will come up for further hearing.
Reports about the CBI action impacted banking stocks. The Bankex, the BSE benchmark for sectoral stocks, dipped in intra-day trading, but recovered to end 2.7 per cent higher.