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Loans availed by private power companies with captive coal mines have come under lens. The finance ministry has asked the coal and power ministries about details on loans to private power companies owning coal blocks and their recovery process.
This was triggered by a letter from Hansraj Ahir, Member of Parliament, to finance ministry saying there are irregularities in Rs 49,000 crore worth loans sanctioned by the Power Finance Corporation (PFC) to private companies.
The department of financial services has sought comments on Ahir's allegations from the ministries of coal and power and the Indian Banks' Association.
While the coal ministry has declined comments, the power ministry is yet to respond, a senior government official said. The official said the letter was part of a routine process as per which complaints and queries are forwarded to the concerned ministries for comments and action.
"We receive complaints regularly. We are looking into it and will do the needful, if required," the government official said. In its letter, Ahir alleged that many private companies inflated their balance sheets to avail loans above their eligibility.
PFC has given loans of Rs 49,000 crore to these companies, which have landed in trouble with the acceptance of the government that the coal blocks were allotted wrongly, he said. "The managements of the banks and also the management of the PFC had played a major role in the disbursement of the loan to these power companies," Ahir said.
There is a need to hold thorough inquiry in the matter and also take steps to recover the loan given to these companies which might surely come in trouble due to the cancellation of the coal blocks on which it has been taken," Ahir added.
"If the government delays and shows apathy in recovery of the loans it might give birth to a new scandal in the county. I think the issue is a major one and there is need to look into the matter and take action accordingly," he added. The CBI is looking into irregularities in coal block allotments.
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