MCA Orders SFIO Investigation of DHFL, 5 Other Companies
The ministry of corporate affairs (MCA) has ordered an investigation by serious fraud investigation office (SFIO) into affairs of Dewan Housing Finance Corp Ltd (DHFL) and five other companies, says Anurag Singh Thakur, minister of state for finance and corporate affairs.
 
In his written reply in the Lok Sabha, the minister says, "The Ministry has ordered investigation of DHFL and five other companies, Immediate Real Estate Pvt Ltd, Tenancity Real Estate Pvt Ltd, RKW Developers Pvt Ltd, Darshan Developers Pvt Ltd and Rajen Skycrapers Pvt Ltd to be conducted by SFIO vide order dated 6 November 2019...the time for completion cannot be indicated as of now."
 
Members of Parliament (MPs) Asaduddin Owaisi and Imtiaz Jaleel Syed had asked the question about DHFL, borrowings of the company and involvement of bank officials. 
 
Quoting from a report submitted by the regional director (western region) under the  registrar of companies (RoC), the minister, stated as on 31 March 2019, DFHL had taken loans worth Rs95,615 crore. 
 
 
However, the inspection report submitted by the regional director of RoC has not gone into the involvement of banks and officials, Mr Thakur clarified.
 
Last month, the RoC regional office in Mumbai has recommended action by the SFIO against DHFL in its report submitted to the MCA. There is enough concrete evidence of financial irregularities by DHFL, while the report points to fund diversion and siphoning. 
 
As of 6 July 2019, DHFL had a total debt of about Rs1 lakh crore in which banks have an exposure of Rs38,342 crore.
 
In August, the DHFL board approved a proposal to convert its debt into equity, which will give banks control of the mortgage lender that has been struggling to meet its payment obligations.
 
Last week on Wednesday, the Reserve Bank of India (RBI) superseded the board and there were reports that they want to refer DHFL to National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC). An administrator has been appointed to take stock of assets and liabilities. A resolution plan will be accepted only if 66% of the CoC (Committee of Creditors) approve it. There has been a freeze on payment to creditors already.
 
Last Friday, the central bank appointed a three-member advisory committee to assist the administrator of DHFL. The members on the advisory panel are Dr Rajiv Lall, non-executive chairman of IDFC First Bank Ltd, NS Kannan, managing director and chief executive (CEO) of ICICI Prudential Life Insurance Co Ltd and NS Venkatesh, CEO of Association of Mutual Funds in India (AMFI).
 
DHFL has been facing a liquidity crisis since September 2018 and has so far paid Rs 41,000 crore of its financial obligations through a securitisation of assets and repayment collections.
 
DHFL had stopped paying all creditors after the Bombay High Court order on 10th October put a stay on payments. The company had earlier stopped accepting public deposits and renewals of existing deposits and pre-mature withdrawals of existing deposits on 21st May.
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    COMMENTS

    Badal Kumar De

    2 weeks ago

    Someone please suggest me how and when can I liquidate my FD from DHFL.

    Asokkumar Rathnam

    2 weeks ago

    I am surprised that the Digital Team which has authored this Article is confused between the loan portfolio of DHFL i.e. the loans extended by the Company and the borrowings of the Company to fund their assets in its write-up.

    REPLY

    MDT

    In Reply to Asokkumar Rathnam 2 weeks ago

    Thanks for your comment. This report is based on a reply given by the minister in the Lok Sabha. Before the table, the minister had stated, " As per inspection report, the company has taken the following loans as on 31.03.2019."
    You can check it for yourself. Here is the link to the LSQ http://164.100.24.220/loksabhaquestions/annex/172/AU1375.pdf

    Prachi Mishra

    In Reply to Asokkumar Rathnam 2 weeks ago

    Am not sure what needs to be done to get my FD liquidate. Could someone please help me with the same.

    IL&FS Case: NCLT Seeks Presence of Axis Bank, StanChart CEOs
    The Mumbai bench of National Company Law Tribunal (NCLT) has directed the chief executive officers (CEOs) of Axis Bank and Standard Chartered Bank to be present at the next hearing of the IL&FS matter on 16th December.
     
    Hearing a contempt petition against Amitabh Chaudhry and Zarin Daruwala, the CEOs of Axis Bank and Standard Chartered Bank, respectively, the tribunal on Monday observed that both the executives have not presented themselves before the bench.
     
    Axis Bank said that it would take 'appropriate' steps after receiving the order.
     
    "The matter pertains to operations of these accounts in the Bank's branch. The Bank has high respect for all court/tribunal orders. Bank denies the allegations and on receipt of the NCLT Order, Bank will take appropriate steps," an Axis Bank spokesperson said.
     
    A Standard Chartered India spokesperson said: "We are yet to receive the copy of the order. Upon review of the contents of the order, we will decide the way forward."
     
    The case pertains to the two banks allegedly allowing of Ramesh Chandra Bawa, former IL&FS Financial Services (IFIN) head and his family to withdraw money from their accounts in these banks and also to access the lockers even after the accounts were frozen by the NCLT.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Anurag Thakur: Bank NPAs have fallen by nearly Rs 98,000 crore to Rs 9.38 lakh crore by June end 2019
    The gross non-performing assets (NPAs) of scheduled commercial banks (SCBs) have fallen by nearly Rs 98,000 crore to Rs 9.38 lakh crore by June end this year, Minister of State for Finance Anurag Thakur informed the Lok Sabha today. 
     
    According to Reserve Bank of India (RBI) guidelines, banks do not have any Minimum Balance requirement for Basic Savings Bank Deposit accounts (BSBD), including accounts opened under Pradhan Mantri Jan Dhan Yojana (PMJDY). 
     
    As on March 2019, there were 57.3 crore BSBD accounts across the country, including 35.27 crore Jan Dhan accounts. There are no charges for not maintaining minimum balance for these accounts. BSBD accounts provide certain basic minimum facilities free of charge. For accounts other than BSBD accounts, as per RBI’s Master Circular on “Customer Service in Banks” dated July 1, 2015, banks are permitted to fix service charges on various services rendered by them, as per their Board approved policy, while ensuring that the charges are reasonable and not out of line with the average cost of providing these services. 
     
    As apprised by eighteen Public Sector Banks (PSBs), the amount collected through the levy of charges for non-maintenance of minimum balance in Savings Bank account, during the last three financial years, are as under: 
     
     
    This information was shared by the Minister of State in the Ministry of Finance Mr Anurag Thakur who was replying to an unstarred question asked by Shri Vasanthakumar H. in the Lok Sabha whether the ministry is aware that due to economy slowdown customers and firms failing to meet the Average Monthly Balance (AMB) requirements in a month have to bear penalty charges, if so, the details thereof including the average income through this penalty by the banks for the last three years area-wise like metro/urban/semi-urban/grameen. 
     
    NPAs have declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019 from Rs. 10,36,187 crore as on 31.3.2018. This information was shared by MoS Finance Anurag Thakur was responding to Congress MP Deepak Baij's query on the details of the amount of NPAs of various banks written off during the last five years and its impact on the Indian economy. Mr. Thakur added that the gross NPAs stood at Rs 3,23,464 crore on March 31, 2015 and increased to over Rs. 10,36,187 crore by the end of FY 2017-18 on March 31. 
     
    As per data of the Reserve Bank of India (RBI), aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia, aggressive lending practices, wilful default / loan frauds /corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance sheets revealed high incidence of Non Performing Assets (NPAs). 
     
    As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Further, all such schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of SCBs, as per RBI data on global operations, rose from Rs. 3,23,464 crore as on 31.3.2015, to Rs. 10,36,187 crore as on 31.3.2018.
     
    As per RBI guidelines and policy approved by bank Boards, non-performing loans, including those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. 
     
    Banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. 
     
    Banks claim that the recovery measures continue even after write-offs. Bank-wise details of NPAs written-off by SCBs for the last five financial years are at Annexure 1.The Gross Domestic Produce for the Indian economy has grown at an average annual growth rate of 7.5% over the last five years, with growth rate of 6.8% (provisional estimates) in the financial year 2018-19, enabled by growth in gross advances of SCBs of an average of 9.3% over the last five years and growth of 13.3% in the financial year 2018-19. Details in this respect are at Annexure 2.
     
     
     
    As per RBI data, the details of loans of SCBs in their global operations that were written-off and pertain to “Agriculture and allied activities” and “Services—Trade” are at Annexure 3.
     
     
    As per the list provided in Lok Sabha as response to unstarred question no. 1285, regarding writing off bank NPAs, the State Bank of India wrote off Rs 56,481 crore in FY 2018-19.
     
    Other major banks which wrote off large amounts in FY2018-19 include IDBI Bank Ltd (Rs 14,166 crore), Canara Bank (Rs 13,849 crore), Bank of Baroda (Rs 11,725 crore), Central Bank of India (Rs 10,375 crore) and Punjab National Bank (Rs 11,238 crore).
     
    The NPA write-offs of banks such as Axis Bank, Bank of India, Bank of Maharashtra, Corporation Bank, Dena Bank, HDFC Bank, ICICI Bank, Oriental Bank of Commerce, Syndicate Bank, Union Bank of India and United Bank of India ranged between Rs 4,000 crore and Rs 10,000 crore in FY 2018-19.
     
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