The multi-crore fraud came into light when some teachers discovered about personal loans against their names after the death of the chairman, management committee Dr Shyam Sunder Sharma (42) on January 15. According to bank reports personal loans against 30 staff members, including teachers and 297 students. But according to sources the names of all 297 such students mentioned in the list are not on the school rolls.
The case seems to be first of its kind in which the Chairman of the management committee of Doon Dhruva Public School, a well-known ICSE-affiliated residential school near here, has fraudulently took personal and educational loans worth crores from a nationalized bank in the name of staff members and students by forging their signatures and using bogus documents
In 2006 for this school a special scheme of educational loan was approved by the bank. According to the sources the total outstanding amount of both types of loans is estimated around Rs 8 crore even as the bank authorities claimed it to be around Rs 4-5 crore. Everything appeared to be okay as per the bank’s auditing report as repayments of the loans were being made regularly. After the untimely death of Mr Sharma the repayments stopped.
It is also bizarre that the branch manager concerned did not know that more than 500 signatures and documents were fake.
After the exposure, regional manager of the Central Bank of India J.R. Sharma personally supervised the investigation and removed the manager K.J. Rawat of the Sela Qui branch of the bank after discovering the grave lapses committed by him in executing the loans.
Sharma in his statement to The Tribune said, “As per a preliminary inquiry, we have found the branch manager prima facie guilty of not executing the loan documents in his own presence which he must have done as per banking rules. This cannot be possible without his connivance. The inquiry is on but I must tell you, this is the first case of its kind in my 35 years’ banking career”. The matter has been taken up to the higher authorities of the bank and all accounts operations with school have since been stopped.
The school was started four and half years ago, run by All-India Nilkanth Educational Society, Delhi, has 310 students from all parts of the country as well from Nepal and Bangladesh. It has 305 students on rolls, including 205 boarders. Its chairman Dr Sharma was a chartered accountant in Delhi before starting the school. His wife and vice-chairman Purnima Sharma, who has been personally looking after the school after her husband’s demise, pretended ignorance when asked for her comments on the whole matter.
Tuesday, February 26, 2008
Tuesday, February 19, 2008
Loan at low interest rate to Class III, IV staff to buy computer
The standing committee had approved the civic administration’s decision to extend the loan facility provided to its Class I and II employees as also to its Class III and IV employees for purchase of computers.
In a query by corporator Sunil Gogale, civic administration said, “The loan facility at cheaper interest rate to purchase computer for Class III and IV employees have received the standing committee and general body approval. However, there has been increase in the loan amount from Rs 25,000 to Rs 40,000 made by the general body meeting and it needs another approval for its implementation.”
But the civic administration’s much overvalued decision to give loan at lower interest to its class III and IV employees for purchase of computers remains wedged in the administrative process.
The civic administration said it has planned implementation of the proposal and is waiting for the go ahead indication.
According to the proposal, an employee can take loan up to Rs 40,000 or the maximum cost of the computer at an interest rate of three per cent. The loan should be repaid in maximum of 60 monthly installments.
However the loan facility have a condition attached to it that the Class III employees should have certificate in basic computer applications and should have completed service of minimum five years. The Class IV employees should have completed service of minimum 15 years.
In a query by corporator Sunil Gogale, civic administration said, “The loan facility at cheaper interest rate to purchase computer for Class III and IV employees have received the standing committee and general body approval. However, there has been increase in the loan amount from Rs 25,000 to Rs 40,000 made by the general body meeting and it needs another approval for its implementation.”
But the civic administration’s much overvalued decision to give loan at lower interest to its class III and IV employees for purchase of computers remains wedged in the administrative process.
The civic administration said it has planned implementation of the proposal and is waiting for the go ahead indication.
According to the proposal, an employee can take loan up to Rs 40,000 or the maximum cost of the computer at an interest rate of three per cent. The loan should be repaid in maximum of 60 monthly installments.
However the loan facility have a condition attached to it that the Class III employees should have certificate in basic computer applications and should have completed service of minimum five years. The Class IV employees should have completed service of minimum 15 years.
Tuesday, February 12, 2008
BOI slashes rates on retail loans
State run Bank of India (BOI) reduced interest rates on retail loans.
A senior official informed about reduction of interest rates on retail loans by between 25 basis points and 250 basis points which would be taken into consideration from February 1.
D. Krishnamurthy, general manager of credit at the bank told that the rates on auto loans and personal loans have been cut by 250 basis points whereas the rates on home loans of up to Rs 0.2 crore have been cut by 25 basis points.
Whereas he added the revised rate for home loans up to Rs 0.2 crore is 9.75 per cent and interest rates on educational loans have also been reduced by 100 basis points.
Bank of India has not touched 13.25 percent, its prime lending rate or the rate at which it lends to its best borrowers.
A senior official informed about reduction of interest rates on retail loans by between 25 basis points and 250 basis points which would be taken into consideration from February 1.
D. Krishnamurthy, general manager of credit at the bank told that the rates on auto loans and personal loans have been cut by 250 basis points whereas the rates on home loans of up to Rs 0.2 crore have been cut by 25 basis points.
Whereas he added the revised rate for home loans up to Rs 0.2 crore is 9.75 per cent and interest rates on educational loans have also been reduced by 100 basis points.
Bank of India has not touched 13.25 percent, its prime lending rate or the rate at which it lends to its best borrowers.
Thursday, February 7, 2008
Long queue of buyers for home and personal loan portfolios of GE Money
GE Money Financial Services had announced selling of personal and home loan portfolio of General Electric’s consumer finance company. There is a long queue of portfolio buyers. Around a dozen players, from India as well as foreign, have shown their interest in buying these divisions. The list includes Kishore Biyani’s Future Capital, the Tata group’s recently-floated financial services firm Tata Capital, private equity investors such as Carlyle Group, ChrysCap, Newbridge Capital, Cambridge Place and the Temasek subsidiary Fullerton. Amongst the large banks like HDFC Bank and Deutsche Bank also seems to be interested. It will take a few months to finalize the deal that might get GE Money a assessing close to Rs 1,000 crore.
According to sources GE Money’s advisor, Morgan Stanley is having talks with these players for the portfolio sell-off. But it is not clear whether GE will be offloading the entire portfolio. Other Indian entities interested in GE Money are Anil Ambani’s Reliance Money and Indiabulls.
When contacted, the GE Money spokesperson told that it was looking for a strategic partner for its “wholly-owned personal loans and mortgage portfolio only.” However, she declined to give out the names of bidders. She said: “It is too early for us to give a definite answer. GE Money will continue to build on its partnership in SBI Card and continue to invest in its fast-growing Wizard Home Loans JV, as well as to seek growth opportunities in other segments. GE Money remains committed to India as a market for growth and investment”.
As per sources, the deal is seen as a ‘complex transaction’. “The value of the operations lies in GE Money’s network since a large part of its business in India is mortgages and barely profitable,” said a source. Most of the players, who are interested in the deal, are quite new entrants keen to expand their operations in the country. HDFC Bank and Deutsche Bank are also said to be looking at the transaction.
Last year GE Money profit declined to Rs 10 crore as against Rs 50 crore in the previous year. It is having a Rs 6,000-crore loan book dominated by residential mortgages. In the loan book home loans is at the top accounting for over 50% of the portfolio while the remaining is personal, auto and consumer durables loans.
Dhanpal Zaveri, who has recently joined the Future Capital board, is negotiating on behalf of the Biyani group. Till last year he was associated with Sterlite Industries’s ADR. When contacted, officials at Future Capital and Tata Capital declined to comment on the development.
Picking up GE’s consumer finance business will be helpful for Future Capital to scale up its presence in the country. The company’s consumer finance business, Future Money mainly target at the middle and mass end of the consumption market with a retail credit plan that will cover every aspect of consumer finance from credit cards, auto and consumer durable finance, mutual funds, insurance, money transfer, financial planning, microfinance and mortgages.
It has started rolling out Money Bazaars across the country. Tata Capital too has ambitious plans. Six months ago the group had announced that Tata Capital will project into capital market services, merchant banking, housing finance and private equity investments, assets and vehicle financing and retail finance. Sources said acquiring of GE Money will give Tata Capital a major entry into the retail financing space.
According to sources GE Money’s advisor, Morgan Stanley is having talks with these players for the portfolio sell-off. But it is not clear whether GE will be offloading the entire portfolio. Other Indian entities interested in GE Money are Anil Ambani’s Reliance Money and Indiabulls.
When contacted, the GE Money spokesperson told that it was looking for a strategic partner for its “wholly-owned personal loans and mortgage portfolio only.” However, she declined to give out the names of bidders. She said: “It is too early for us to give a definite answer. GE Money will continue to build on its partnership in SBI Card and continue to invest in its fast-growing Wizard Home Loans JV, as well as to seek growth opportunities in other segments. GE Money remains committed to India as a market for growth and investment”.
As per sources, the deal is seen as a ‘complex transaction’. “The value of the operations lies in GE Money’s network since a large part of its business in India is mortgages and barely profitable,” said a source. Most of the players, who are interested in the deal, are quite new entrants keen to expand their operations in the country. HDFC Bank and Deutsche Bank are also said to be looking at the transaction.
Last year GE Money profit declined to Rs 10 crore as against Rs 50 crore in the previous year. It is having a Rs 6,000-crore loan book dominated by residential mortgages. In the loan book home loans is at the top accounting for over 50% of the portfolio while the remaining is personal, auto and consumer durables loans.
Dhanpal Zaveri, who has recently joined the Future Capital board, is negotiating on behalf of the Biyani group. Till last year he was associated with Sterlite Industries’s ADR. When contacted, officials at Future Capital and Tata Capital declined to comment on the development.
Picking up GE’s consumer finance business will be helpful for Future Capital to scale up its presence in the country. The company’s consumer finance business, Future Money mainly target at the middle and mass end of the consumption market with a retail credit plan that will cover every aspect of consumer finance from credit cards, auto and consumer durable finance, mutual funds, insurance, money transfer, financial planning, microfinance and mortgages.
It has started rolling out Money Bazaars across the country. Tata Capital too has ambitious plans. Six months ago the group had announced that Tata Capital will project into capital market services, merchant banking, housing finance and private equity investments, assets and vehicle financing and retail finance. Sources said acquiring of GE Money will give Tata Capital a major entry into the retail financing space.
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