Finance Ministry Officials To Be Questioned On Crb Today

The Parliamentary standing committee on finance will question finance ministry officials today to establish the causes for the Rs 1,200-crore CRB Markets scam.

Apart from attempting to fix responsibility for the CRB Markets default, the committee is also expected to suggest measures to prevent similar defaults in future.

The Securities and Exchange Board of India brass, including chairman D R Mehta and senior executive directors, will also be present at the meeting.

The committee, which is headed by Sharad Yadav, will also seek depositions from ministry officials on the status and functioning of the Bank of Rajasthan. The issue has been included on the standing committees agenda following several public complaints to the committee. Committee sources said the complainants have alleged that the banks promoters are bleeding it dry, leading to the doubling of its non performing assets. The bank is promoted by the Bangur group.

 

The standing committee is also scheduled to consider the adoption of its report on capital markets today. The draft report has already been circulated and the final report is now set to come up for adoption.

However, given the fact that the committee proposes to seek statements from finance ministry officials on both the CRB and Bank of Rajasthan issues, the adoption of the capital markets report may not come up for consideration. ``Statements by officials on both these issues may take up a larger part of the day, said committee sources.

An internal exercise within the ministry has already identified systemic failures on the part of the Reserve Bank of India, the nodal regulatory agency for non-banking finance companies, which led to the CRB imbroglio.

However, the ministry is aware that with less than 800 of 45,000-odd NBFCs being registered with the RBI at the time of the CRB default, the apex bank is not up to the task of monitoring the mushrooming NBFCs. Even after registrations for NBFCs becomes compulsory under amendments to the RBI Act, not more than 3,000 NBFCs are expected to be registered with the RBI. This will still leave a large chunk of the NBFC sector unregulated.