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Court orders SBI to remove ‘Fraud’ Tag from Religare Finvest in Rs 9,000 crore Loan Default


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State Bank of India (SBI) has taken action in response to a Delhi High Court order, dated December 18, 2023, to remove the fraud tag from Religare Finvest Ltd’s (RFL) record in the Central Fraud Registry database. In March 2023, RFL, a wholly-owned subsidiary of Religare Enterprises Limited (REL), completed a one-time settlement (OTS) with 16 lenders. “The company paid more than Rs 9,000 crore to the country’s banking system,” Religare Finvest Ltd said in a statement.

What is Religare Finvest Ltd?

Religare Finvest Limited (RFL) a subsidiary of Religare Enterprises Limited (REL), is a Small and Medium Enterprise (SME) financing focused NBFC.

REL, a Core Investment Company, provides a comprehensive range of financial services through its subsidiaries and operating entities. These services include loans for small and medium-sized enterprises, affordable housing finance, health insurance, and retail broking. Religare’s subsidiaries serve a wide range of market segments, including mass retail, affluent individuals, small and medium-sized enterprises (SMEs), and mid-sized corporations.

Communication to RFL:

SBI officially communicated the removal of the fraud tag to RFL, as of the latest statement released on Friday. In March 2023, RFL, a wholly-owned subsidiary of Religare Enterprises Limited (REL), successfully completed a one-time settlement (OTS) with 16 lenders, involving a payment exceeding Rs 9,000 crore to the country’s banking system.

Pending Corrective Action Plan (CAP) Removal:

RFL is currently awaiting the lifting of the Corrective Action Plan (CAP) imposed by the Reserve Bank of India (RBI) in January 2018.

Reactions from REL and RFL Leadership:

Rashmi Saluja, executive chairperson of REL and CMD of RFL, expressed that the removal of the ‘fraud’ tag reflects the dedication of the company’s board, management, and employees in resurrecting RFL from the aftermath of fraud. Pankaj Sharma, CEO of RFL, emphasized the significance of this announcement for the company’s growth path and eagerly awaits the removal of the RBI Corrective Action Plan.

What is Central Fraud Registry?

The Central Fraud Registry, established under the Reserve Bank of India (Frauds Classification and Reporting by Commercial Banks and Select FIs) Directions, 2016, is a searchable database containing information on frauds reported by commercial banks and select financial institutions.

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