The State Bank of India (SBI) has removed the ‘fraud’ designation from Religare Finvest Limited (RFL) following a directive from the Delhi High Court. RFL, a wholly owned subsidiary of Religare Enterprises Limited, faced financial losses since 2017, accumulating a total loss of Rs 2,270 crore until March 2022. The Reserve Bank of India (RBI) imposed a Corrective Action Plan (CAP) on RFL in January 2018 after reports of significant fund siphoning from REL and RFL.
The Delhi High Court mandated the removal of the ‘fraud’ tag after RFL filed a writ petition challenging the lead bank’s declaration of its account as a ‘fraud’ exposure. Last year, RFL completed a one-time settlement with 16 lenders, paying over Rs 9,000 crore to the banking system through organic collections.
Dr. Rashmi Saluja, Executive Chairperson of REL and CMD of RFL, expressed the removal of the ‘fraud’ tag as a testament to the company’s commitment to revitalizing RFL after fraud by the erstwhile promoters. Pankaj Sharma, CEO of RFL, sees this development as opening doors for a strategic growth path.
Religare Finvest, with a total loan book size of Rs 2,109 crore as of March, aims for removal from the stringent prompt corrective action (PCA) list, having approached the central bank for the same last year.
