FM asks lenders to check exposure to firms named by CBI

Board of directors of lenders asked to carry out a fresh assessment of their non-performing assets


Prasanna Mohanty | November 25, 2010

Finance minister Pranab Mukherjee today directed public sector lenders and insurers to look into their exposures to various companies mentioned in the CBI application filed in court in connection with housing finance racket busted by the investing agency yesterday.

At a review meeting with officers of the department of financial services on the situation arising out of the CBI case involving top officials of LIC housing finance company and some banks, the finance minister also asked board of directors of lenders to carry out a fresh assessment of their non-performing assets.

Among the companies named by CBI yesterday are financial services firm Money Matters, D B Realty, Pashmina Ltd, Mantri Realty, Sigrun Ltd, Entertainment World and Indore City Treasures.

The department of financial services (DFS) said that the racket was an isolated instance of alleged gratification.

"DFS also conveyed that as per information available with them, the asset quality in these cases have not been impaired," a finance ministry statement said today.

Mukherjee said while CBI will take necessary action as per its mandate, banks and financial institutions should be instructed to take appropriate action against these individuals as per established procedure.

He also directed banks and financial institutions to strengthen the NPA monitoring and management in their institutions to ensure that advance action is taken to identify incipient sickness and take appropriate action thereon.

The finance minister asked these lenders to be ensure that all procedures and due diligence consistent with board approved guidelines have been followed while approving loans by the competent authority.

He wanted the DFS, regulatory authorities and institutions to take immediate action to review and strengthen the procedures further in this regard.




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