Crb Asked To Refund Dues By May 20 Or Face Windup

The Reserve Bank of India has threatened drastic action against CRB Capital Markets if the non-banking finance company is unable to ensure refund of its depositors legitimate dues by Tuesday. This implies that the central bank has drawn up plans to wind up CRB if it fails to clear its dues, sources point out.

Meanwhile, the Mumbai High Court has appointed a court receiver after attaching the assets of CRB to meet an estimated Rs 2.5 crore dues of Bank of Baroda. The book debts of CRB have also been attached to pay for the liabilities of State Bank of India, which has an exposure of Rs 58 crore in the NBFC.

 

Sources revealed that on Thursday, the RBI sent a letter to CRB asking it to produce month-wise cash-flow statements and sale of assets, if any, for paying back the depositors.

The company, which is said to be a registered NBFC, has to reply to the letter within three working days, failing which, the RBI will take action in tune with the RBI (Amendment) Act, 1997.

Sources say CRBs assets are less than its liabilities. Hence, all the debtors will not be paid off. However, RBI officials say the fixed deposits have been secured and hence such depositors will have a claim to the assets of CRB. This is likely to be a bone of contention between the banks which have the first charge on the assets and RBI, which will take up cudgels on behalf of the depositors. However, sources point out that even if all the assets are sold, the depositors might not be able get the full principal amount back.

The liabilities of the group are estimated at Rs 600 crore as against assets of a little over Rs 230 crore. CRB Capital and CRB Corporation are said to have collected fixed deposits of almost Rs 200 crore. The companies had floated bonds worth Rs 40 crore. Most of the companys assets were pledged with other finance companies to raise further funds.

Moreover, the group is said to have borrowed over Rs 60 crore from cooperative banks in Gujarat. The company has also borrowed from various finance companies.

CRBs Mumbai office in DBS House has been closed since Thursday. An official of the Central Bureau of Investigation (CBI) visited the premises yesterday morning. On Thursday, the companys cashier and some other senior officials were interrogated by the CBI. The cashier was arrested, but released on bail.

Meanwhile, C R Bhansali, promoter of CRB, is reported to be staying in a five-star hotel in Delhi and is expected in Mumbai today or tomorrow. His family has been reportedly shifted to Dubai.

Depositors gathered outside the DBS House office again yesterday. They plan to gather on Monday at 11 am outside the office and collectively present a petition to the RBI.

However, experts have expres-sed doubts about the RBIs proposed course of action. M R Pai, vice-president of Forum of Free Enterprise, a leading consumer guidance organisation, said: The RBI action normally begins and ends with circulars. However, it has got tremendous capabilities to intervene in a case such as this.