Thursday, November 24 2005 16:35 Hrs (IST) - World Time -

New Delhi: The Netherlands-based Rabo bank today (Nov 24, 2005) said it has not sanctioned any loan in violation of norms to a company owned by Finance Minister P Chidambaram's son and his nephew.

"The loan sanctioned is supported by a very strong security backing and is in keeping with the stringent credit and compliance procedures of Rabo India Finance (the Indian arm of the bank)", its Associate Director Sunher Thanawalla said in a statement.

RIF, a non-banking financing company, said that the information (an apparent reference to AIADMK memorandum to the President) was 'factually incorrect' and 'baseless'.

RABO's clarification came in the face of the AIADMK memorandum to President A P J Abdul Kalam and Prime Minister Manmohan Singh alleging that Chidambaram managed to get the loan from the bank for Halidon Marketing Services Private Limited, said to be owned by his son Karthi and nephew Palaniappan, without any security in violation of banking norms.

The RIF's statement also said no formal application seeking a license for banking activities has been submitted to the Finance Ministry or to the Reserve Bank of India as alleged in the memorandum.

Meanwhile, stepping up pressure the AIADMK MPs today met the Prime Minister demanding action against Chidambaram in the matter.

The Prime Minister said he would look into the matter, party MP N Jyoti said.