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IDBI, Vijaya Bank Say No RBI Norm Flouted In Loans Given To DSK Group 

IDBI Bank has an exposure of Rs 47.18 crore to DS Kulkarni Developers.



A pedestrian walks past an IDBI Bank Ltd. automated teller machine (ATM) branch in Jaipur (Photograph: Sanjit Das/Bloomberg)
A pedestrian walks past an IDBI Bank Ltd. automated teller machine (ATM) branch in Jaipur (Photograph: Sanjit Das/Bloomberg)

IDBI Bank Ltd. and Vijaya Bank today said they have exposures to Pune-based real estate developer DS Kulkarni, which is facing a multi-agency probe for illegal fund diversions, but the loans were sanctioned in compliance with Reserve Bank of India norms.

IDBI Bank, in a regulatory filing, said it has an exposure of Rs 47.18 crore to DS Kulkarni Developers Ltd. The exchange had sought clarifications from the two banks over reports that the Economic Offence Wing Financial Audit found five nationalised banks, including IDBI and Vijaya Bank, flouted RBI norms while sanctioning Rs 600 crore loans to realtor DS Kulkarni.

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"The bank is not in possession of the forensic report prepared by the Economic Offence Wing and hence the bank is not in a position to comprehend which specific RBI norms are alleged to have been flouted," IDBI Bank said.

Prima-facie there appears to be no flouting of norms while sanctioning and disbursing the loan by IDBI, it said.

The loan was sanctioned in compliance of all the Reserve Bank of India norms and in consortium with the State Bank of India as lead, it said that the disbursals were made to the escrow account maintained with lead bank, SBI, based on request of the company.

Vijaya Bank said loan facilities were sanctioned to D S Kulkarni in a conventional manner after duly complying with all the applicable RBI norms. "The facility is under consortium with the SBI as the leader bank and Vijaya Bank’s share in the consortium is 4.17 percent," Vijaya Bank said.

However, United Bank of India said it neither has or had any exposure in D S Kulkarni Developers Ltd.

The Economic Offence Wing of Pune police arrested Bank of Maharashtra's MD and CEO Ravindra Marathe and other top officials of the bank last week in connection with a cheating case lodged against D S Kulkarni and his wife Hemanti.