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CBI to begin probe on IDBI Bank loan to Kingfisher

India TV Business Desk 09 Aug 2014, 17:30:10 PM IST
India TV Business Desk
New Delhi: The Central Bureau of Investigation has registered a preliminary enquiry to enquire into the role of IDBI Bank and Kingfisher Airlines in a loan sanctioning matter.

The agency is looking into IDBI Bank's decision to sanction Rs 950 crore to Kingfisher Airlines at a time when Kingfisher had a negative net worth and negative credit rating.

The enquiry into IDBI Bank's dealings comes within few days of the CBI arresting S.K. Jain, chairman and managing director of Syndicate bank for allegedly taking a bribe of Rs50 lakh for increasing the credit limit of some companies in violation of banking rules. Several others, including Ved Prakash Agarwal, chairman and managing director of Prakash Industries Ltd and Neeraj Singhal, vice chairman of Bhushan Steel Ltd have also been arrested in connection with the case.

CBI sources say: “IDBI Bank did not need the exposure when other bank loans were stressed.” “It was the first exposure to the bank,” they add.

Kingfisher Airlines stopped operations from October 1, 2012.