, a wholly-owned subsidiary of Religare Enterprises Limited, recently witnessed a significant turn of events){kind=link}
Religare Finvest Limited (RFL), a wholly-owned subsidiary of Religare Enterprises Limited, recently witnessed a significant turn of events as the State Bank of India (SBI) removed the ‘fraud’ tag from the Central Fraud Registry database. This move followed a directive from the Delhi High Court, marking a crucial milestone in RFL’s journey after facing financial losses since 2017.
RFL has grappled with financial challenges, accruing a total loss of Rs 2,270 crore until March 2022. In January 2018, the Reserve Bank of India (RBI) imposed a Corrective Action Plan (CAP) on RFL due to large-scale fund siphoning reported from both Religare Enterprises Ltd (REL) and RFL. The non-bank subsidiary owed Rs 5,300 crore to a consortium of lenders led by the State Bank of India.
The Delhi High Court played a pivotal role in RFL’s narrative by ordering the removal of the ‘fraud’ tag. This decision came after RFL filed a writ petition, challenging the lead bank’s declaration of its account as a ‘fraud’ exposure. The subsequent formal communication from SBI to RFL signified the reversal of the fraud label.
In March of the previous year, RFL successfully completed a one-time settlement with 16 lenders, making payments exceeding Rs 9,000 crore through organic collections. This strategic move not only demonstrated the company’s commitment to resolving financial obligations but also showcased its determination to revive and rebuild.
About Religare Finvest:
Dr. Rashmi Saluja, Executive Chairperson of REL and CMD of RFL, expressed her satisfaction with the removal of the ‘fraud’ tag, considering it a testament to the commitment and dedication of the Company’s Board, management, and employees. Pankaj Sharma, Chief Executive Officer of RFL, highlighted that this development opens doors for a strategic path towards achieving growth.
The Central Fraud Registry, governed by the Reserve Bank of India (Frauds Classification and Reporting by Commercial Banks and select FIs) Directions 2016, played a crucial role in this episode. With the ‘fraud’ tag removed, RFL aims to move beyond its financial setbacks and work towards a strategic path for growth. Notably, the company, with a total loan book size of Rs 2,109 crore as of March-end, seeks to diversify its portfolio, with small and medium enterprises (SMEs) forming 53% of overall loans.
The removal of the ‘fraud’ tag marks a pivotal step in the revival of Religare Finvest Limited. As the company navigates the aftermath of the challenges it faced, the leadership’s commitment, legal interventions, and financial settlements position RFL on a trajectory of recovery and growth.