Global Trust Bank (GTB) had loans of Rs 463 crore to group companies of Himachal Futuristic Communications Ltd and the Zee group with the amount remaining outstanding on its books as on March 31, 2001.
The Department of Company Affairs is been already seized of the matter and will soon be launching independent investigations, the Reserve Bank of India (RBI) informed the JPC.
According to the figures furnished by the Reserve Bank of India, loans of Rs 88.35 crore to HFCL, Rs 84.42 crore to HFCL Infotel and Rs 40.21 crore to HFCL Satellite Communications Ltd remained outstanding as on March 31. The total loans to the HFCL group outstanding was Rs 212.98 crore, RBI said.
With regard to the Zee group, GTB had advanced Rs 50 crore to Zee Telefilms, Rs 100 crore to SitiCable Network Private Ltd, Rs 100 crore to E.City Entertainment Pvt Ltd - making a total of Rs 250.48 crore.
According to the central banking authority, it has not been possible to ascertain how much of these funds have gone into the capital market and whether such diversion had inflated the stock prices.
RBI has also added a rider that diversion of funds is not a violation under the Banking Regulations Act and in case the funds are put to use other than the stated intention, it is up to the particular bank to make the judgement as to whether the funds were misutilised.
GTB is also said to have extended fund-based facilities worth Rs 219.52 crore to the Ketan Parekh group of companies and another Rs 26.25 crore in non-fund facilities.
Incidentally, the central bank has given a clean chit to GTB so far as its transactions with overseas corporate bodies is concerned.
The bank, which was the authorised dealer to undertake foreign exchange transactions, conducted transactions for six OCBs - Brentfield Holdings Ltd, Wakefield Holdings Ltd, Kensington Investment Ltd, Far East Investment Corporation Ltd and Almel Investments Mauritius Ltd.
In the course of its investigations into the bank's accounts, the RBI found that the bank had set relatively higher ceilings for financing individuals, brokers against the security of shares and guarantees.
But the bank exceeded even this high ceiling. As on January 31, 2001, the bank's overall exposure to the capital market stood at Rs 1,016 crore amounting to 31.6 per cent of the advances as on January 31, 2001. But by the end of May this level had gone down to Rs 795 crore - 19.4 per cent of advances.
