The Ministry of Finance has said that no irregularities have been revealed in the statements submitted by banks that gave funds to operators who were awarded 2G licences in 2008. These documents highlighted the total sum of the loan, the outstanding amounts and a detailed company background.
Nevertheless, the ministry said the Central Bureau of Investigation (CBI) could still conduct a probe in this regard. In fact, the ministry is more concerned about the losses banks may suffer if some of the licences are cancelled, as the companies may find it difficult to repay the required sum.
Prior to this, the Supreme Court had asked the CBI to broaden the scope of its investigation of the 2G issue and scrutinise banks providing funds to the sector. Thereafter, the CBI had registered a PE on grounds that some banks had allegedly violated the prescribed norms and provided finances to two real estate companies who made forays into the telecom market by procuring the spectrum auctioned during the said period.
According to the PE, the banks provided loans worth over Rs 115 billion to two real estate companies while discounting the risk factors, given that the Central Vigilance Commission (CVC) had already registered a case in the 2G scam and the CBI had begun its probe.
The public sector banks allotted Rs 100 billion to Unitech and Rs 15.38 billion to STel, based only on the licence papers issued by the Department of Telecommunications (DoT).
A major part of the Rs 100 billion loan to Unitech was disbursed by the State Bank of India, which provided a loan of Rs 80.50 billion to the operator during 2009-2010.
The other banks which provided funds to Unitech were Corporation Bank, Allahabad Bank, South Indian Bank, Canara Bank, Oriental Bank, Central Bank of India, Punjab National Bank, Standard Chartered Bank and Yes Bank.
STel obtained the Rs 15.38 billion loan from IDBI and IDBI Trusteeship Services Limited between July and November 2009.
Meanwhile, the Indian Banks? Association, led by O.P. Bhatt, chairman, State Bank of India had approached the Reserve Bank of India (RBI), seeking intermediation in the Supreme Court-ordered probe.
The consortium put forward the arguement that business could get severely disrupted if the RBI does not co-ordinate with the CBI on this issue.
