Banks, city builder in mega scam?

NewDelhi:The Central Vigilance Commission (CVC) is finalizing disciplinary action against several bank officials allegedly involved in one of the biggest banking frauds in recent times. 

    The CVC is on the verge of recommending first stage advice for action against officials of 26 banks which together provided Rs 2,650 crore to Zoom Developers, a Mumbai-based construction company declared a non-performing account last year. Zoom was largely involved in big industrial constructions. Firm failed to carry out projects in UAE, Europe 
New Delhi: The CVC is set to recommend disciplinary action against officials of 26 banks in the Rs 2,650 crore fraud involving Mumbai's Zoom Developers. A consortium led by Punjab National Bank had provided Rs 2,650 crore of bank guarantees and credit facilities to Zoom for its projects. All those guarantees and facilities were revoked after the firm failed to execute its 
projects that were mostly in the UAE and Europe. 
    The firm was largely engaged in big industrial constructions and infrastructure ventures. The failure of the company's projects led to PNB and Canara Bank making a loss of Rs 537 crore and Rs 88.5 crore, respectively. Last year, the CBI filed separate cases into the two banks being defrauded. A third case of fraud is believed to have been registered with the agency by UCO Bank, which had an exposure of Rs 300 crore. Union Bank, too, had an exposure of Rs 300 crore. Over the past year or so, the CBI has questioned several Mumbai officials of these banks. 
    Suspicion abounds that a major criminal conspiracy may be in the works since several banks provided bank guarantees in the projects where the market norm does not require so. A minor part of these bank guarantees are covered with insurance from Export Credit Guarantee Corporation of India. But most of the money is lost. 
    Once the CVC gives its first stage advice for disciplinary action against the officials, the banks concerned will constitute departmental inquiry that will carry out a final examination of the evidence and counter arguments. Based on the findings, the officials could face action up to dismissal from service. The CBI investigation against them will be conducted simultaneously.