MUMBAI: Indian federal police Wednesday arrested eight people, including senior executives of top state banks, over a suspected scam in which bribes were paid to secure large corporate loans. Senior figures from the Bank of India, the Central Bank of India, the Punjab National Bank and the chief executive of the housing loan arm of India's largest state-run insurance company, LIC, were all arrested. Police also swooped on the chairman of Mumbai-based financial services group Money Matters and two other executives from the firm, which specializes in advising corporate clients on how to borrow money. The Central Bureau of Investigation (CBI) said it had busted a racket in which Money Matters was “allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans.” P. Kandaswamy, inspector general at the CBI's Special Crime Branch, declined to disclose the size of the scam during a press conference called in commercial and financial capital Mumbai to announce the arrests. He said that police had conducted raids in six cities across the country including Mumbai, Delhi, Kolkota and Chennai, adding that the state bank executives “had received illegal gratification for issuing loans.” Shares in the targeted banks fell heavily on the Mumbai Stock Exchange, with those in LIC Housing down nearly a fifth.
