CBI reserves for DHFL promoters the creation of more than 2 fake loan accounts under the government housing program

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New Delhi: The Central Bureau of Investigation (CBI) has filed a complaint against Kapil and Dheeraj Wadhawan, directors of Dewan Housing Finance Limited (DHFL), for allegedly setting up “bogus and fictitious” mortgage accounts and sanctioning loans worth of Rs 14,046 crore under the Pradhan Mantri Awas Yojana (PMAY) for fraudulently claiming an interest subsidy on them.

According to CBI officials, DHFL created bogus 2.60 lakh home loan accounts in a non-existent “Bandra branch” between 2007 and 2019, and claimed to have sanctioned and disbursed a total loan of Rs 14,046 crore in under the PMAY program.

The company then deposited and routed Rs 11,755.79 crore of the total loan amount to several named shell companies.Bandra Book, masquerading as loans disbursed under PMAY.

According to CBI, for these fictitious loans, DHFL had already received an interest subsidy of Rs 539.40 crore and in addition was to receive an interest subsidy of Rs 1,347.80 crore, which represents a total of 1 Rs 887.20 crore from Indian government.

The duo reportedly took advantage of the government housing program and claimed a grant from the National Housing Bank, a government regulator for housing finance companies. This was allegedly done by conspiring with the banking authorities, causing a loss to the public treasury.

The case emerged during an audit of Grant Thornton, appointed by DHFL’s current board of directors, and an FIR was registered on March 15.

Read also : Why ordinary bankrupt DHFL FD holders will lose more money than the banks that backed it

Housing scheme

The PMAY Housing for All program was launched by the central government in October 2015.

Under this program, managed by the Ministry of Housing and Urban Development, loans are given to economically weaker sections, low- and middle-income groups and members of society, with the aim of purchasing land. to build a house, develop housing units under slum development programs and purchase housing from private and public sector housing companies.

According to a CBI official, under this program, housing finance companies that make these loans are eligible for a credit-linked interest subsidy that ranges from 3% to 6.5% per annum and the subsidy. is payable in advance with a ceiling of 2 rupees. , 30,156 to Rs 2.67,280 depending on the category in which the borrower is located.

The maximum loan amount eligible under the program is Rs 24 lakh.

The amount of the subsidy, the agent explained, must be claimed by the institutions from the National Housing Bank.

The government then reimburses the amount of the subsidy to the National Housing Bank from the budgetary provision of the Union budget.

DHFL is one such housing company, which has provided loans under PMAY.

Read also : DHFL bankruptcy saga shows India will struggle to fix financial system after Covid

Fake borrower accounts created

According to the FIR, a copy of which was viewed by ThePrint, during a call with the company’s institutional investors, DHFL claimed that until December 2018, it had handled 88,651 cases under the PMAY scheme.

In the same appeal, the company also claimed that it had received an interest subsidy of Rs 539.40 crore and was to receive an interest subsidy of Rs 1,347.80 crore.

The audit report, however, found that DHFL promoters Kapil Rajesh Wadhawan and his brother Dheeraj Wadhawan had opened a “fictitious Bandra branch of DHFL, where fake home loan accounts of these borrowers, who repaid their loans. housing loan earlier, were credited in the database ”.

“Several fake accounts in the non-existent Bandra branch of DHFL were opened under the PMAY and interest subsidies in accordance with PMAY standards were claimed from the National Housing Bank with the connivance of officials and the NHB and thus committed fraud on the public treasury, ”the FIR said.

The Wadhawan brothers are also under investigation in the Yes Bank case, for allegedly giving Rs 600 crore in bribes to former CEO and CEO Rana Kapoor for investing Rs 3,700 crore in short-term bonds between April and June 2018.

These bribes, according to CBI, were in the form of a loan that the company registered in the name of Kapoor’s daughters. The Enforcement Branch is also investigating DHFL’s role in the Yes Bank crisis.

Read also : DHFL Gets Big Bids As NBFC Sector Begins To Show Signs Of Recovery

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