'Mistake of fact': CBI closes FIR against Repco Home Finance MD, 3 others

The FIR had been lodged against MD R Varadarajan, and other top execs of Repco Bank in relation to preclosure charges/penalty for loan accounts of a firm named Durga Agencies

Repco Home Finance Ltd said that the Central Bureau of Investigation (CBI) had closed a first information report (FIR) registered against the company's managing director, R Varadarajan, and three others labelling it a ‘Mistake of Fact’.

In a statement, Repco said the CBI had submitted its report to the court, requesting it to pass orders for the closure of the FIR under 'mistake of fact' as allegations in the FIR were not substantiated. The court accepted the request, it said.

The FIR had been lodged against Varadarajan, the then executive director V Raghu, the then chief manager K S Kannan and, and the then deputy general manager P Sekhar, Repco Bank, related to preclosure charges/penalty for the loan accounts of a firm named Durga Agencies. The FIR was registered on October, 2016, and sources from the company had then said the issue was related to a Rs 60-million loan taken by Coimbatore-based Divya Agency, which had closed the loan in advance, said sources. While earlier there was a prepayment charges applicable, the company did not levy the charge.

However, National Housing Bank (NHB) issued a rule in 2014 that companies should not collect prepayment charges on advanced loan closure. The processing fees were also waived off if the loan was availed of through special schemes, they said.