VJAS demands CBI probe in First City Housing loan scam by VijayaBank-HITAVADA

VJAS demands CBI probe in First City Housing loan scam  by VijayaBank-HITAVADA

*90% Finance to First City is illegal, contrary to RBI norms

**Housing loans to outsiders flouting BoA decision is mega scam, alleges VJAS

Staff Reporter
After the bribe-for-housing loan was unearthed by CBI sleuths in which top finance executives were arrested, the Vidarbha Jan Andolan Samiti (VJAS) has requested the CBI to probe "highly improper loan scheme extended by Vijaya Bank to First City project of M/s Reatox Builders." The VJAS has also requested Union Finance Minister, Reserve Bank of India and Finance Secretary to probe the role of Vijaya Bank top officials and find out whether there was any unholy nexus between developer and Bank, since the builder was offering flats within SEZ area to general public, flouting all norms.
According to VJAS, the Vijaya Bank has agreed to finance upto 90% of the housing value, which is contrary to Home loan norms finalised by RBI. No bank can lend more than 80% of the total value of the housing unit, the guidelines issued on November 3 has stated. Already petitions have been filed before High Court alleging massive land scam in MIHAN-SEZ Nagpur promoted by Maharashtra Airports Development Company (MADC), Kishor Tiwari of VJAS pointed out while expressing surprise as to how a nationalised bank can show such a generosity towards First City project, which too is under cloud for selling flats to outsiders.
In fact, the Board of Approvals (BoA), the apex decision making body for SEZ, had consistently maintained that no developer or co-developer can sell the land or residential dwelling to any outsider and housing units can be leased only to the employees working with SEZ and extended this principle to First City coming up at MIHAN-SEZ promoted by MADC, the VJAS pointed out. But with help of free finance by Vijaya Bank this malpractice is continued hence we want RBI intervention, Tiwari demanded. By extending housing finance to purchasers other than employees of MIHAN-SEZ, even when the Centre has removed all ambiguity and has ruled that housing units within SEZ could be utilised only by persons directly connected with SEZ establishments and SEZ employees, Vijaya Bank has over-stepped its jurisdiction, the VJAS pointed out.
The Union Commerce Ministry (SEZ Division), in its latest guidelines for development of Special Economic Zones issued on October 27, 2010, has stipulated clearly that housing facilities created in non-processing area of SEZ could be used only by "persons who are working for establishments relating to SEZ developers, units and or are users of infrastructure facilities created in the SEZ," Tiwari stated.
Describing the housing finance by Vijaya Bank to First City project as another "mega housing loan scam," VJAS has requested CBI and RBI Governor to probe the role of
Albert Tauro, Chairman and Managing Director of Vijaya Bank. The complaint alleged that Vijaya Bank had extended credit to MADC on a condition that R C Sinha be continued as Managing Director and Vice-Chairman of MADC. This is very shocking and surprising as Sinha’s role in allotting land at a throwaway price to Satyam Computers when he himself was Chairman of Maytas- a sister concern of Satyam, VJAS complaint pointed out.
The VJAS has requested RBI to probe "Vijaya Bank housing loan scam in MIHAN-SEZ Nagpur promoted by MADC and stop ongoing mega finance to illegal housing and other projects in MIHAN-SEZ, Nagpur."