Govt owned NABARD gives clean chit to Reliance Commercial Finance (Ld)

New Delhi, Nov 3 : The government owned National Bank for Agriculture and Rural Development (NABARD), the second largest lender to Reliance Commercial Finance Limited (RCF) with over Rs 1,100 crore of secured loan exposure, has given clean chit to RCF and has removed its Red Flag.

NABARD is a part of the consortium of lenders and is signatory to an Inter Creditor Agreement (ICA) executed between the lenders of RCF under the June 7, 2019 circular of RBI on resolution of stressed assets.

NABARD had classified the account of RCF as Red Flag on 25 Feb 2020. Thereafter lenders conducted a detailed forensic audit by Grant Thornton (GT).

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At a meeting of the consortium of lenders led by Bank of Baroda held on September 25, 2020, NABARD informed the consortium of lenders that having examined the GT forensic report, it found no element of fraud and has therefore removed the red flag.

Earlier, Delhi High Court on August 14 had stayed a move by Bank of Baroda, the leader of consortium of banks, to classify the accounts as fraud, restraining from taking any other coercive action till the next hearing. Similar action of Punjab National Bank was also stayed by Delhi High Court on August 11, 2020.

As per information reported on Central Repository of Information on Large Credits (CRILC), the exposure of Indian Bank (Rs 120 crore), Federal Bank (Rs 100 crore) and State Bank of India (Rs 100 crore), each being less than 1 per cent exposure in total debt of RHFL, have classified RHF as a fraud account. SBI also classified its RCF exposure of Rs 440 crore (4 per cent of total debt) also as fraud account.

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Actions of Indian Bank, Federal Bank and State Bank of India are despite the Delhi High Court staying such action by the lead bank Bank of Baroda on August 14, 2020.

Disclaimer: This story is auto-generated from IANS service.

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