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CBI queries banks on Zoom Developers, RBI may also step in

BS Reporter  |  Mumbai 

The Central Bureau of Investigation (CBI) has begun preliminary examination of allegations of in loans worth Rs 2,500 crore disbursed to Zoom Developers, a Mumbai-based project developer.

Confirming the approach made by CBI, two senior public sector bank executives said the agency had questioned banks on the borrower (company), which is already being treated as a non-performing account (NPA). There is also a question about the use of funds.

is acting on a complaint made to the government. The Reserve Bank of India is also likely to get into act, since this is a case referred for debt restructuring, officials said.

Punjab National Bank is lead banker to Zoom. In all, 27 Indian banks, most of these public sector ones, have lent Rs 2,500 crore to the company. Its loans were admitted for corporate debt restructuring in the fourth quarter of last year.

Bank guarantees given for Zoom have been invoked. Punjab National Bank is the lead banker, with about Rs 450 crore of exposure of which nearly Rs 300 crore has been considered as an by the bank from the first quarter of this financial year.

A bank official said Rs 250 crore of the exposure is covered by insurance. The bank had taken insurance cover from Ltd. As for the defaults, all relevant departments, including vigilance and audit, are looking into the matter, he added.

The majority of Zoom’s projects are abroad, particularly in Europe and the UAE. It undertakes business and project development work, involving process plants, industrial and engineering projects, and energy, environment and infrastructure ones.

First Published: Thu, October 07 2010. 00:13 IST