The CBI has stepped up its vigil in the banking sector after an alleged Rs 114 billion-scam hit PNB related to the letter of undertakings having been fraudulently issued to a group of companies belonging to diamantaire Nirav Modi and his uncle Mehul Choksi.
In the latest case, PNB sanctioned Mudra loans “without conducting meaningful pre-inspection or physical verification of spot of business or residence and without ascertaining end use of the loan amount or creation of assets from the loan amount,” according to CBI.
The NDA government launched the Mudra scheme to give unsecured loans of up to Rs 1 million to small enterprises with the objective of boosting self-employment. Under Mudra, the rate of interest of the loans is relatively low compared to other loans and the borrower is not required to submit collateral to banks
at the time of availing the loan facility.
However, after sanction or disbursement of loan, the borrower is required to create an asset using the money that acts as a security to the bank against the sanctioned loan. In this case, no assets were created out of the loans sanctioned under Mudra.
The CBI has found major lapses on the part of PNB. Inder Chand Chundawa, the then senior branch manager at PNB Barmer, did not conduct a pre-loan inspection and physical verification of the spot of business and did not verify if assets were created out of the sanctioned loan.
Field verification was done only in one of the 26 loan cases that “appears to be fake and prepared on table at office,” the CBI noted. Some borrowers were found to be residing 100 kilometres away from Barmer, whereas, the bank can only sanction loans to people residing within 25 kilometres radius of the branch.
Five out of the 26 loan accounts have turned into non-performing assets as the loans were not utilised to create assets.
“The bank cannot recover the outstanding amount of R.6.2 million as no security is available with the bank. Thereby, the suspect public servant caused wrongful loss of Rs.6.2 million to the bank and corresponding wrongful gain to himself and other unknown persons,” the investigative agency said.
CBI further found that PNB’s deputy general manager at Jodhpur had conducted an enquiry into the matter and the section officer of the branch was also suspended “but later on he had been revoked” and presently he is posted at PNB Abu Road branch in Rajasthan.