MUMBAI/NEW DELHI: In a crahttp://www.karmayog.com/ngoarea/navimumbai.htmckdown on a multi-crore kickbacks-for-loan scam and trading insider information on companies, the CBI on Wednesday arrested the CEO of LIC Housing Finance, Ramachandran Nair, and seven others including three senior executives of public sector banks and a LIC executive. 

Nair and bankers - Bank of India general manager R N Tayal, Maninder Singh Johar, a chartered accountant and part-time director on the board of Central Bank of India, and Punjab National Bank deputy general manager Venkoba Gujjal - have been accused of pushing loans to companies in return for monetary benefits from executives of Money Matters, a Mumbai-based financial services company. 

In the remand application, CBI mentioned that the bank officials and Money Matters executives were working in tandem to provide loans and other bank facilities to real estate players such as DB Realty, Mantri Realty, Lavasa, 'Emaar MGH', the Jaypee group, the Krishna group, the Gold Souk project and Suzlon, among others. 

Rajesh Sharma, the head of Money Matters, and two of his colleagues - Suresh Gattani and Sanjay Sharma - were among those arrested. 

LIC Secretary (Investment) Naresh K Chopra, also held, has been accused of passing on insider information on several companies to Sharma. Among others, Chopra allegedly passed on information on Adani, Jaypee Hydro, JSW Power, Religare, DB Realty and Pantaloon. 

A special CBI court remanded the eight persons to police custody till November 29. Officials said more bank executives were being questioned as part of a nationwide probe into the multi-crore scam. 

Joint director of CBI in-charge of economic offences, K Kandaswamy, said the bank officials are yet to quantify the scam amount but officials pegged it at over Rs 1,000 crore. The CBI has been investigating the case for over a year and recorded conversations between the accused demanding kickbacks. 

Nair is alleged to have received funds to purchase a flat at a discounted rate at Satellite Towers, Goregaon (East) and also received Rs 45 lakh bribe. 

LIC's Chopra is accused of receiving Rs 16 lakh from Rajesh Sharma through his associates for providing insider information on several companies. 

The remand application also mentioned favours shown to Lavasa - a private township project undertaken by HCC Ltd near Pune. Johar allegedly demanded Rs 37.5 lakh from Sanjay Sharma and Rs 30 lakh was deliverd for the undue favour he extended for arranging loans for the Lavasa project. 

Kandaswamy said CBI has registered five separate cases and will have to scrutinise over a lakh transactions before coming to a conclusion on the involvement of others. 

* Incriminating documents, 28 hard disks, 189 gold coins, gift vourchers of Rs 4.97 lah and Rs 12.12 lakh were seized from the office of Money Matters at New Marine Lines. In another raid carried out by the income tax department on Tuesday, the department seized Rs 1 crore in cash. 

* Venkoba Gujal was paid Rs 7.5 lakh as reward for facilitating a loan of Rs 50 crore to one of the clients of Rajesh Sharma. 

* R N Tayal allegedly received Rs 25 lakh from Rajesh Sharma for purchase of a flat in New Delhi. Tayal had promised to help him in the matter of Ashapura Minechem, Rs 200 crore power project of BGR Energy and Rs 300 crore power project of OPG. 

* DB Realty and LIC Housing Finance on Wednesday said they were not involved in the multi-crore kickbacks-for-loan scam. 

* Following the raids, the finance ministry said it had called for details from financial institutions. 

* In a separate statement, LIC Housing Finance said all procedures and due diligence consistent with board-approved guidelines were adhered to while approving the loans. In addition, it said the loans were secured by assets and were in line with regulatory norms. 

* Vinod Goenka, chairman of DB Realty, said, "We were busy preparing for our IPO a year ago. At the same time we wanted to submit loans for four projects in Mumbai. These were all construction loans. Since my staff was busy with the IPO, we decided to hire Money Matters to arrange for this loan amounting to Rs 200 crore. DB agreed to pay a 1.25% fee to Money Matters to get the loan sanction from any financial institution or bank and synidicate this loan for us. The application for the loan was made in November 2009 to LIC Housing, the sanction came in January 2010 and the amount was disbursed in March 2010 with a rate of interest fixed at 13.5%." 

* He added, "We paid Money Matter's fee by cheque. How they dealt with the bank or whether they gave gratification, we don't know. There was no undue advantage given to us. There was no hanky panky."

Read more: CBI arrests LIC officials, bankers in multi-crore housing scam - The Times of India http://timesofindia.indiatimes.com/india/CBI-arrests-LIC-officials-bankers-in-multi-crore-housing-scam/articleshow/6983231.cms#ixzz1CzZWAoHX

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Loan scam: CBI arrests top govt officialsNDTV Correspondent, November 24, 2010

The CBI on Wednesday arrested CEO of LIC Housing Finance Ramachandran Nair and seven others including three top officials of public sector banks whose executives gave loans to private builders in exchange for bribes.

Apart from Nair, those arrested are Naresh K Chopra, Secretary (Investment), LIC, R N Tayal, General Manager of Bank of India (Delhi), Maninder Singh Johar, Director (Chartered Accountant) of Central Bank of India, Venkoba Gujjal and Deputy General Manager of Punjab National Bank (Delhi). (Read: The CBI statement)

Rajesh Sharma, Chairman and Managing Director of Mumbai-based firm Money Matters Ltd and two of its employees – Suresh Gattani and Sanjay Sharma – were among those arrested, CBI said. (Also read: Loan scam: Banking, realty stocks tank)

The officials allegedly colluded with the firm to sanction large scale corporate loans, overriding mandatory conditions for such approvals along with other irregularities.(Also read: Late selloff hits stocks, Sensex falls 231 points)

"Officers of top management and middle management of various public sector banks and financial institutions viz. Bank of India, Central Bank of India, Punjab National Bank, LIC and LIC Housing Finance Ltd were receiving illegal gratifications from the private financial services company who were acting as mediators and facilitators for corporate loans and other facilities from financial institutions," CBI spokesman R K Gaur said in a statement.

“A private financial services company, its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans.  They were also gathering confidential business information from financial institutions,” said the CBI.

"These are clear cases of bribery and corruption by people working in the public sector. Land

prices in urban areas have sky-rocketed and developers need large sum to buy them. So bribing officials for quick and huge loans is an easy option," said HDFC chairman Deepak Parekh.

The CBI has registered five separate cases in this regard and investigation is in progress, the spokesman said. Shares of LIC Housing dropped by Rs. 239, or 18.32 per cent, on Wednesday to close at Rs. 1,068.55.

Read more at: http://profit.ndtv.com/news/show/home-loan-scam-cbi-arrests-lic-housing-ceo-124034?cp3rd

New Delhi: The economic offences wing of the Central Bureau of Investigation on Wednesday

unearthed a major fake housing loan racket and arrested eight officials from various banks on graft

charges.

CBI arrested CEO of LIC Housing Finance Ramachandran Nair and seven others senior bankers in

connection with a housing finance racket.

Apart from Nair, those arrested are Naresh K Chopra, Secretary (Investment), LIC, R N Tayal,

General Manager of Bank of India (Delhi), Maninder Singh Johar, Director (Chartered Accountant) of

Central Bank of India, Venkoba

Gujjal and Dy General Manager of Punjab National Bank (Delhi).

Rajesh Sharma, CMD of Mumbai-based firm Money Matters Ltd and two of its employees -- Suresh

Gattani and Sanjay Sharma-- were among those arrested.

The bank officials allegedly colluded with the firm to sanction large scale corporate loans, overriding

mandatory conditions for such approvals along with other irregularities.

These arrests, according to senior banker and HDFC chairman Deepak Parekh, reveals bribery and

corruption by public officials in sanctioning home loans.

"These are cases of bribery. These are cases of corruption. Bribery by public officials, by people

working in public sector organisations and facilitating and sanctioning loans by taking money",

Parekh said.

"They (CBI) have zeroed in real estate sector and certain developers who must have paid money to

get loans sanctioned", he said.

The CBI earlier said that it had busted a racket wherein "a private financial services company, its

CMD and other associates were allegedly bribing senior officials of public sector banks and financial

institutions for

facilitating large scale corporate loans."

Searches were conducted at various locations in Mumbai, Delhi, Chennai, Jaipur, Kolkata and

Jalandhar, which have resulted in seizure of incriminating documents, the investigating agency said.

The agency said it registered five separate cases and that investigations were in progress.

The Finance Ministry said it would explore the possibility of instituting a departmental inquiry into the

housing finance racket that led to arrest of

senior officials of the LIC Housing Finance and public sector banks.

"If there is provision (of departmental inquiry), we will set up inquiry. Otherwise banks at individual

levels will set up inquiries" a senior official said here.

The official was responding to a query on the possibility of the Finance Ministry instituting an inquiry

to look into the housing finance racket.

Describing the episode of arrests of bankers as incident of "bribery", the official said, it will not have

any impact on the asset quality of the banks.

"We have inquired from individual banks about the asset quality and banks have said there will not

be any increase in NPAs (Non-Performing Assets) due to this episode", the official said.

Searches were conducted at various locations in Mumbai, Delhi, Chennai, Jaipur, Kolkata and

Jalandhar, which have resulted in seizure of incriminating documents, the investigating agency said.

The agency said it registered five separate cases and that investigations were in progress.

So should the consumers be worried?

"No," says Deepak Parekh, "there's no impact on retail loans."

News of the raids took housing finance stocks down, with LIC housing stocks plunging by 20%.

(With PTI inputs)

http://ibnlive.in.com/news/housing-loan-scam-top-lic-bank-officials-held/135758-3.html

video link

LIC Housing exposure in scam is Rs.380 crore

MUMBAI: The Life Insurance Corporation of India on Thursday initiated an exercise to check its risk management system, while asserting that its assets were not impaired by the housing finance scam involving some of its top officials.

Asserting that there was no systemic failure in the company, LIC Chairman T. S. Vijayan said “we are trying to have an internal enquiry into this matter. Our asset quality has not been impaired.”

The outstanding to the contentious real estate companies from LIC Housing Finance was Rs.380 crore, and LIC was providing all the relevant information to the Central Bureau of India for its investigation into the scam, he said.

Mr. Vijayan said he had already briefed the government about the latest developments within the company.

On Wednesday, the CBI arrested eight top officials from banks and financial firms on charges of taking bribes to grant corporate loans.

The insurer convened an urgent board meeting to take stock of the situation after arrest of Ramachandran Nair, CEO of its housing finance entity, and Naresh K.Chopra, LIC Secretary (Investment) on charges of involvement in the loan bribery case.

Officiating CEO

“Mr. Chandrasekhar, who is the senior most general manager at LIC Housing Finance, will be the officiating CEO of LIC Housing Finance,” Mr. Vijayan said after the board meeting, adding that he would be assisted by two other general managers.

“The process of finalising a new CEO is on. And will be appointed in the next 2-3 days,” he added. — PTI

CBI files chargesheet in LIC scam against Sharma, othersPress Trust Of IndiaMumbai, January 31, 2011First Published: 20:09 IST(31/1/2011)Last Updated: 20:11 IST(31/1/2011)share more...0 Comments         

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CBI on Monday filed its first chargesheet in one of the cases registered in the multi-crore kickbacks-for-loans scam against Maninder Singh Johar, a former director of Central Bank of India, and three others including alleged kingpin Rajesh Sharma, the Chairman of the firm 'Money Matters'.CBI, on November 24 last year, registered five cases and arrested LIC Housing Finance CEO Ramchandra Nair; Naresh Chopra, Secretary (Investment) LIC; R N Tayal, General Manager of Bank of India (Delhi); Maninder Singh Johar, Director of Central Bank of India; Venkoba Gujjal, Deputy GM of Punjab National Bank (Delhi).

Rajesh Sharma and two other employees of Money Matters - Sanjay Sharma and Suresh Gattani - were also arrested.

The agency today filed chargesheet before a special CBI court here against Johar, Rajesh, Sanjay and Gattani. All the four have been booked under various sections of IPC for conspiracy and fraud, and also under the Prevention of Corruption Act.

According to CBI, Johar received Rs 30 lakh from Money Matters for providing undue favours to M/s Lavasa.

The agency contends that officials of the LIC and the banks colluded with Sharma's firm to sanction large loans to housing firms, overriding mandatory pre-conditions. The accused were also engaged in gathering confidential business information from financial institutions, the agency said.

CBI is likely to file chargesheets in the other four cases soon.

Loan scam: LIC likely to suspend arrested officers pending probeNDTV Correspondent, Updated: November 25, 2010 09:52 IST

Read more at: http://www.ndtv.com/article/india/loan-scam-lic-likely-to-suspend-arrested-officers-pending-probe-68465?cpNew Delhi:  After two of its top officers were arrested by the Central Bureau of Investigation (CBI) for allegedly sanctioning loans in return for bribes, the LIC is likely to suspend them pending probe. The LIC board will meet on the issue soon.

A total of eight people have been arrested by the CBI.  Among them: Ramchandran Nair, the Chief Executive Officer (CEO) of LIC Housing Finance; RN Tayal , General Manager  of Bank of India;  and  Venkoba Gujjal , Deputy General Manager  of Punjab National Bank. (Read: Top bank managers arrested for loans-for-bribes scam)

"A private financial services company, its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans. They were also gathering confidential business information from financial institutions," the CBI had said.

The private company involved is Money Matters, and three of its senior-most officials, including Chairman and Managing Director Rajesh Sharma have been arrested.The men at Money Matters allegedly acted as middlemen, bribing officials at public sector banks to get loans worth crores sanctioned for private firms, mainly real estate companies. The bank officials are also accused of selling confidential information.

In another case, Naresh Chopra of LIC Mumbai has been accused of receiving Rs. 16 lakhs from Money Matters' Rajesh Sharma. Chopra allegedly traded confidential information on LIC investments into the Adani Group.

Meanwhile, LIC's Vigilance arm is also investigating the case independently. Sources in LIC have told NDTV that the frauds were committed in the officers' own capacity, and no norms were violated. In a statement released after the arrests on Wednesday, LIC had said, "All procedures and approved guidelines were adhered to in approving the loans. All loans have been secured by underlying assets to the satisfaction of approving authority. Steps will be taken to protect interests of various stakeholders." 

''These are cases of bribery. These are cases of corruption. Bribery by public officials,

by people working in public sector organisations, and facilitating and sanctioning loans by taking money. And they have zeroed in on real-estate sector and certain developers who must have paid money to get loans sanctioned,'' said Deepak Parekh, the chairman of HDFC Bank.

The government has sought to play down the episode. Speaking about the finance racket, Banking Secretary R Gopalan said it was a bribery case involving some individuals and not a large-scale scam. "It's a case of individual greed not a systematic failure," he added. (Watch)

The arrests came after a CBI investigation that covered five cities and lasted over a year.

Taped conversations referred to in the CBI's First Information Report (FIR) revealed incriminating details.

The CBI charges that Rajesh Sharma of Money Matters paid a Rs. 25-lakh bribe to RN Tayal at the Bank of India. In return, Tayal allegedly assured him of two loans worth Rs. 500 crore for two different companies.

"If you can't get a 300-crore project passed... what is the use of you being in this position?" asks Sharma brazenly.

CBI files chargesheet in LIC scam against Sharma, othersPress Trust Of IndiaMumbai, January 31, 2011First Published: 20:09 IST(31/1/2011)Last Updated: 20:11 IST(31/1/2011)share more...0 Comments         

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CBI on Monday filed its first chargesheet in one of the cases registered in the multi-crore kickbacks-for-loans scam against Maninder Singh Johar, a former director of Central Bank of India, and three others including alleged kingpin Rajesh Sharma, the Chairman of the firm 'Money Matters'.CBI, on November 24 last year, registered five cases and arrested LIC Housing Finance CEO Ramchandra Nair; Naresh Chopra, Secretary (Investment) LIC; R N Tayal, General Manager of Bank of India (Delhi); Maninder Singh Johar, Director of Central Bank of India; Venkoba Gujjal, Deputy GM of Punjab National Bank (Delhi).

Rajesh Sharma and two other employees of Money Matters - Sanjay Sharma and Suresh Gattani - were also arrested.

The agency today filed chargesheet before a special CBI court here against Johar, Rajesh, Sanjay and Gattani. All the four have been booked under various sections of IPC for conspiracy and fraud, and also under the Prevention of Corruption Act.

According to CBI, Johar received Rs 30 lakh from Money Matters for providing undue favours to M/s Lavasa.

The agency contends that officials of the LIC and the banks colluded with Sharma's firm to sanction large loans to housing firms, overriding mandatory pre-conditions. The accused were also engaged in gathering confidential business information from financial institutions, the agency said.

CBI is likely to file chargesheets in the other four cases soon.

Bribery scam: CBI arrests LIC Hsg CEO, PSB officialsPublished on Wed, Nov 24, 2010 at 16:11   |  Updated at Wed, Nov 24, 2010 at 21:28  |  Source : CNBC-TV18

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The CBI on Wednesday addressed a press conference regarding arrests of eight officials of public sector banks and financial companies.  Speaking to the press, CBI's EOW chief P Kandaswamy said the agency has busted a housing loan scandal racket and arrested CEO of LIC Housing, General Managers of Bank of India and Central Bank of India (New Delhi) and CGM of Punjab National Bank. Several other bank officials have also been arrested on bribery charges. The CBI said classified business information was also given out for favours.

Excerpts from After the Bell on CNBC-TV18 Watch the full show »

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See latest News about LIC Housing Fin See previous management interviews See what other Experts & Brokerages are saying about LIC Housing Fin

The CBI also said officials of Money Matters have been arrested for broking bribery deals. The LIC secretary (investments Mumbai) too has also been arrested on bribery charges.Reports suggest that the CBI has arrested Ramchandranan Nair (CEO, LIC Housing Finance Ltd, Mumbai), Naresh K Chopra (Secretary, Investment, LIC Mumbai), R N Tayal (General Manager, Bank of India, Mumbai), Mahinder Singh Johar (Director, Central Bank of India, New Delhi), Venkoba Gujjal (DGM, Punjab National Bank, New Delhi), and Rajesh Sharma, Suresh Gattani and Sanjay Sharma of M/S Money Matters.Shortly before the stock markets shut trade for the day, talks of LIC Housing Finance being involved in a multi-crore scam surfaced sending realty and banking stocks spiralling down. The CBI, which was said to be questioning a slew of people involved in the scam, included officials from LIC Housing, Central Bank of India and a real estate developer, whose identity was not disclosed. Meanwhile, CBI has clarified that though realty companies are named in the FIR but it is ‘not as accused.’ All the eight arrested will be in CBI custody for five days. CBI has said that 5 FIRs have been registered under prevention of Corruption Act.

Lic scam

Loan scam: This is individual misconduct, LIC HFL has not lost money says TS Vijayan, Chairman, LIC26th November, 2010  Source: The Economic Times

 

TS Vijayan, Chairman, LIC, in an interview with ET Now talks about the loan bribery scam involving LIC Housing

Finance and gives his views on it.

Loan scam: This is individual misconduct, LIC HFL has not lost money says TS Vijayan, Chairman, LIC

The Economic Times

TS Vijayan, Chairman, LIC, in an interview with ET Now talks about the loan bribery scam involving LIC Housing Finance and gives his views on it.

What was you initial reaction to what has come about? Did it come as a bit of a surprise to you as well?

Yes, it was a bit of surprise for us and allegations are about individual misconduct. We are taking proper action, that is it.

Some of the individuals named in LIC Housing Finance - or even in the other companies - were individuals at a fairly high post and probably had powers to influence decision making of the entire organization. Do you think it is a one of case of rotten egg or could there be more?

I think it is one off case. I agree that CEO of LIC HFL is in a senior position and he is a person who puts up the note to execute a committee for taking decisions. But I do not think that overall there is any systemic failure or any asset qualities impaired or any procedures have not been followed. Such a case is not there. We looked into our project loans which are a very small portion of the overall thing in the LIC Housing Finance - about 11% and NPAs are very small. It is a proper performing asset. So we do not think there is anything wrong in it.

A peculiar thing is the kind of or the lack of numbers that have come out with regards to the overall exposure that any of these individual entities have. Would you have a sense of how much would LIC Housing Finance as an institution would be having?

The entities’ name has not come off. If entity name is coming up, we will be able to respond to that in terms of how much is their exposure to that, what is the amount as portion. I have not seen entities’ names.

Could you also give us a little clarity with respect to succession plans for Mr RR Nair?

Mr RR Nair is in the rolls of LIC and he is governed by the staff regulations of LIC. We have to take action as per the staff regulations and we will be doing as early as possible and obviously if something happens, we will have to bring out there new person in place of Mr RR Nair. That process will be completed as early as possible, as early as next week itself. Till that time we have created a committee of general managers there to look into all these issues.

Do you believe that there would be increased or enhanced inquiring, red flags from the market regulator as well with regards to some of the practices that the lending agencies - or banks in particular - have been following?

Regulators sort of keep on investigating any of such things. If a new story comes like this, naturally regulator will check up whether there is some problem, whether risk management the efforts can be taken. That is natural.

A lot of market participants have expressed fears that how a lot of central bankers - particularly in the PSU banking space or lending agencies - would become a lot more cautious when they are lending loans to the real estate companies. Do you think that is a possibility at all?

If it’s an individual misconduct, I do not think there is anything to fear on that. After all, as portion to real estate is subject to so many controls and so many checks at various level, due diligence is slightly more when loan is given to the real estate companies. That will continue I suppose.

In spite of the fact that these practices were being followed even now, this scam has indeed happened.

I will disagree with you to call this is a scam. If it is a scam, then there will be loss to the company and overall loss. This is individual misconduct or as CBI says it is it guilt gratification for individual. If you look at, no company has loss and this LIC HFL has not lost money on that and the NPAs level is extremely good - 0.8% gross NPA. Our exposure to this wholesale loan - I will call it a wholesale loan or project loans – is hardly 11% of the total thing and 89% is going to retail. This indicates that there is no loss to the company. I would not agree with the term scam being used for such a thing.

Even though the overall exposure would be small and the NPA levels have not risen till now, out of the total exposure that LIC Housing Finance as an institution to real estate companies, do you think that any of that amount could become a potential NPA because there has been some bit of a lack of proper practices while going ahead with these loans?

I wish to tell you that there is no loss of proper practices in lending to these companies. Absolutely nothing, I can assure you and assure the investors that there is no extraordinary chance of anything becoming NPA in the end.

There has to be a reason why the CBI has done what it has done and it has to be some malpractice - if I can use that term - and the part of those individual people in terms of landing out the loans to the

corporates. I am sure there has to be some reason why the CBI did what it did, isn’t it?

I will wait for the completion of the investigations and the charge sheet to make a judgment on that.

Are you categorically saying that there have been no malpractices as far as the lending of money to any of the institutions is concerned?

No, nothing. But let me see what allegations charge sheet coming up. Probably at that time we will have more clarity on it.

Money Matters' Sharma moved up fast in shadowy world of bonds

The Economic Times

MUMBAI: Those who know him say Rajesh Sharma began his career in the financial market from a hole-in-the-wall office at Fort in the late 90s. A chartered accountant by profession, Mr Sharma’s expertise in those days was to find buyers for large blocks of shares of mid- and small-sized companies.

He is said to have been well-networked with important fund managers, a prerequisite for anybody looking to broker equity deals. In 2001-02, Mr Sharma is said to have befriended an official at a retail broking house which was then just beginning to spread its wings. Talk is that this official convinced some of his high net worth and re-tail clients to buy the shares that Mr Sharma was looking to offload. Yet, Money Matters, a non-banking financial company, promoted by Mr Sharma, specialised in helping firms raise money through debt is-sues.

A presentation on Money Matters’ website says it has placed $9.5 billion of debt in the past two years, and counts the Adanis, the Tatas, Reliance ADAG, HCC and Indiabulls among its key clients. LIC, the parent of LIC Housing , is also one of its top clients.

The loan and bond market, unlike equity, is a more shadowy world. In recent years, there has been a dramatic growth of little known, un-heard of brokers which have hogged the debt syndication league table. Money Matters is one

such firm. It became a big player in the bond market after Pawan Bansal, a former Axis Bank official and an old hand in the fixed income segment, joined it.

Later, Mr Bansal parted ways with Mr Sharma to set up his own firm, Altius Finserv. Some of the intermediaries are also involved in placing corporate bonds to domestic institutional investors like insurance firms, provident funds and banks