CBI probing First Leasing case: IDBI ED

IDBI Bank’s exposure to the First Leasing case is over Rs 270 crore, the bank’s Executive Director, RK Bansal told CNBC-TV18. Bansal said the bank had marked the account as a non-performing loan (NPL) and had formed a provision for the same two years ago when the scam was unearthed by the Reserve Bank of India (RBI).  IDBI Bank had registered a case with the Central Bureau of Investigation (CBI) on First Leasing Company and its directors for cheating and causing monetary loss in 2014. The CBI has put charges on the accused people, then a part of the First Leasing Company of India Ltd, for using forged documents and falsification of accounts between 2005 and 2013.Below is the verbatim transcript of RK Bansal's interview with Latha Venkatesh and Sumaira Abidi on CNBC-TV18.Q: What exactly was IDBIs exposure to First Leasing and what was your compliant, to whom?A: This is not a new case, this fraud was unearthed by Reserve Bank of India (RBI) team while inspecting NBFCs account, First Leasing’s accounts. It was somewhere last year. We had filed somewhere in August 2014 but due to procedure and all that it took some time. The total exposure of the bank overall is about Rs 1,000 crore. Our exposure at that time was about Rs 250 crore. We had filed a case with CBI at that time against company and directors.  Q: Are you likely to get back any of the money? Your own exposure is Rs 250 crore, is it marked as non-performing loan (NPL)? A: It is marked as NPL. We had in fact fully provided because it was a fraud. Q: Is there any hope of getting anything back with this case? A: We have taken action, we have filed a case in Debts Recovery Tribunal (DRT) and all that but chances are very small amount can be recovered.Q: What was the total exposure you said, Rs 1,000 crore to how many banks? A: I don’t remember exactly, five to six banks or six to seven banks. This was one of the first leasing companies in the country and it has been doing well but certainly this fraud angle came to light. This was promoted by Muthiah and Farouk Irani was the MD. We have filed case against the company and directors. Q: You have filed the case in the courts or this is separate from the CBIs case? A: Any fraud which comes to our notice, the banks notice, and which was in fact pointed out by RBI in this case, so, we have to file a case with CBI any fraud in any case comes. Q: What future course will this case take, will it mean that the directors at that time will be brought to book? A: That depends after investigation. Whatever CBI does the investigation, so, they will take according action. Q: All the banks that were exposed to First Leasing have marked their loans as NPL? A: Yes, once RBI declares it a fraud there is no way. In fact you have to make it NPA and make 100 percent provision. Q: You think the directors were aware of what was happening because some very important people in the financial sector have been named by the CBI team for instance Dilli Raj of SKS Microfinance?A: It will be wrong on my part to say whether they were aware or no; that is a matter of investigation. I presume that if company there is something wrong, directors are supposed to be aware unless some independent director, they may not be fully aware because they may not be involved in day-to-day affairs.