The LIC has set up an internal enquiry committee to look into it and has registered five separate cases.
The CBI has unearthed a fake housing scam and has arrested the CEO of LIC Housing Finance, as well as top executives of certain public sector banks and financial institutions, for receiving illegal payment to facilitate large-scale corporate loans.
The scam involved a private financial services company, its Chief Managing Director and other associates, who allegedly bribed senior officials of public sector banks and financial institutions to facilitate the sanction of large-scale corporate loans.
They also reportedly gathered confidential business information from financial institutions.
The probe has resulted in the seizure of several incriminating documents. The officials under the scanner failed to follow several mandatory conditions for such approvals, and were involved in other irregularities as well. The CBI has yet to gauge the extent of the scam.
The LIC has set up an internal enquiry committee to look into it and has registered five separate cases in this regard; the investigation is in progress. The LIC has appointed V K Sharama, Zonal Manager, South Zone as the new CEO of LIC Housing Finance.
Sources: “LIC brings new CEO for housing finance arm, starts internal probe,” Indian Express website, www.indianexpress.com, accessed 26 November 2010; “CBI unearths LIC Housing Finance scam; arrests 8 top executives,” Newkerala website, www.newkerala.com, accessed 26 November 2010.