Dishonoured Cheques Trigger Run On Crb Capital Deposits

CRB Capital Markets, a high-profile non-banking finance company promoted by C R Bhansali, is reeling under a run on its deposits. In a scene reminiscent of the controversial Sanchaita investment fiasco in West Bengal in the late 1970s, a large number of depositors yesterday queued up outside the CRB head office at DBS House, Mumbai, and sought to withdraw their deposits.

Last month, the Reserve Bank of India barred CRB from raising fresh deposits for non-maintenance of reserve requirements and also withdrew its in-principle clearance given to the company earlier for setting up a bank. Panic gripped the depositors as several cheques issued to them by CRB had bounced, following which they had asked for cash payment. CRB did make cash payments on the interest components, but only to a few depositors. Unable to meet the rising demands, CRB closed its offices yesterday, leaving the depositors high and dry.

 

The RBI has asked CRB to explain how it plans to repay the deposits, which should be around Rs 139 crore as on March 1996.

But irate depositors told Business Standard that the RBI action was already late. The central bank should immediately initiate liquidation proceedings and pay off the debtors, they said.

According to reports, CRB is shifting assets out of its offices and unless the premises are sealed most of the movable assets will be shifted out. All sign boards of CRB have been removed from its Mumbai head office.

Depositors said CRB group vice-president A K Katiar told them that he was not responsible for CRB Capital Markets. I cannot offer you any guarantee that you will get back the principal component of your deposit, Katiar is said to have told them.

A depositor said: Whatever payments have been made so far must have been made out of the petty cash amounts. Now the money must have been over and so CRB has closed its office. The companys interest burden was around Rs 8-10 crore per week.

Depositors have also decided to approach various consumer organisations including the Forum of Free Enterprises and the Consumer Guidance Cell.

If the office remains closed today, the investors will approach the police and the Reserve Bank.

Sources say the State Bank of India and the Reserve Bank have initiated a CBI inquiry against the group. As a fallout, one senior official was reportedly arrested by the Cuffe Parade police station yesterday.

SBI, to which CRB owes over Rs 60 crore, has the companys property in Jaipur as collateral.

Up to March 31, 1997, investors faced no problems with regard to interest accruals. However, following the withdrawal of permission of the RBI to accept deposits, the post-dated cheques for interest payments issued to depositors have been bouncing.

The cheques were drawn on SBI, Bank of Baroda and UTI Bank, among others. Hence investors thronged the offices of CRB in various cities across the country.

Last week the investors received a communiqu