New Delhi, Sep 28 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 June 7, 2019 circular of RBI on resolution of stressed assets.
NABARD had classified the account of RCF as Red Flag on February 25, 2020. Thereafter lenders conducted a detailed forensic audit by Grant Thornton (GT).
At a meeting of the Consortium of Lenders led by Bank of Baroda, held on Friday 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 Bank, to classify the accounts as fraud, restraining banks from taking any other coercive action till the next hearing. Similar action of Punjab National Bank was also stayed by Delhi High Court on 11th August, 2020.
As per information reported on Central Repository of Information on Large Credits (CRILC), Indian Bank and Federal Bank have classified their exposure to Reliance Home Finance Ltd (RHFL) as a fraud account.
Indian Bank having an exposure of only Rs. 120 crore, made such classification on 29th August, 2020. The exposure of Federal Bank to RHFL is 100 crore out of the total RHFL debt of over Rs 10,000 crore.
Action of Indian Bank and Federal Bank is despite the Delhi High Court staying such action by the lead bank Bank of Baroda on 14th August, 2020.
( With inputs from IANS )
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