SBI removes ‘fraud’ tag from Religare Finvest

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Mumbai: The State Bank of India (SBI) has formally removed the ‘fraud’ tag from Religare Finvest Ltd (RFL), following a Delhi High Court order from December, in a move that could pave the way for the non-bank financier to resume lending.

RFL, a wholly-owned subsidiary of Religare Enterprises Ltd (REL), has been under the Reserve Bank of India’s corrective action plan since January 2018. This followed substantial siphoning of funds from both REL and RFL.

SBI has removed RFL from the Central Fraud Registry database, started in 2016 by commercial banks and financial institutions to report fraud, REL told the stock exchanges in a filing.

Currently, RFL is awaiting the lifting of the corrective action plan.

“…The removal of the ‘fraud’ tag stands as a testament to the commitment and dedication of the company’s board, management and employees in resurrecting RFL and the group from the brink in the aftermath of fraud perpetrated by the erstwhile promoters and their affiliates…,” said Rashmi Saluja, executive chairperson, REL, and CMD RFL.

Religare’s erstwhile promoters Malvinder Singh and Shivinder Mohan Singh were charged with diverting funds in the form of loans through Religare Finvest between 2014 and 2017 to various other related entities. The brothers lost control of the company in 2018 after lenders filed cases and minority shareholders took action. Following which the board of Religare Enterprises was reconstituted. Rashmi Saluja took charge in 2020.

In March 2023, RFL concluded a one-time settlement with 16 lenders, managing this through organic collections. The company has repaid over 9,000 crore to the Indian banking system, it said in a statement.

Meanwhile, the Burman family, which is the largest shareholder entity, has moved to acquire control in the financial services entity, which has been met with resistance by the Religare board. On Thursday, however, the Competition Commission of India approved the Burman family’s plan to acquire additional stake in the company, along with an open offer.

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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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