The Central Bureau of Investigation (CBI) is conducting raids on the liquor baron Vijay Mallya and his now defunct company Kingfisher Airlines in its probe into IDBI bank's Rs 950 crore loan, which was given to the company despite the airline's negative credit ratings and net worth. The raids are reportedly part of its banking NPA frauds probe, which was started last year.

CBI had alleged that "it was first exposure to the bank. There was no need for the bank to take the exposure outside the consortium when already other loans were getting stressed". During the preliminary enquiry, CBI has already examined some of the Kingfisher and IDBI officials questioning them to explain the reasons for extending the loan to the airline, ignoring its own internal report which had warned against such a move.

CBI had already registered a preliminary enquiry last year, after the bank failed to provide convincing answers on the reasons to extend the loan to the crisis-ridden airline.

The CBI has registered an FIR in the loan fraud, which was declared as a non-performing asset, few days back. The agency has been probing the loans provided by many public sector banks to several private companies.

By Premji