CBI, CVC MAY INVESTIGATE FIRMS DIVERTING WORKING CAPITAL LOANS

Companies that have diverted working capital loans from Banks for other purposes such as acquiring fixed assets face stiff penalties, as banks prepare themselves to comply with the Basel II Banking guidelines from April 1, 2009. Public sector banks have already started blacklisting companies that are diverting Funds. In cases where companies are found diverting working capital loans for purchasing personal effects such as property and vehicles, banks may also inform the Central Bureau of Investigation and the Central Vigilance Commission for further action.