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Sunday, Jan 11, 2009
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Business Daily from THE HINDU group of publications Sunday, Jan 11, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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RBI & Other Central Banks Money & Banking - Credit Market Info-Tech - Software RBI asks banks to furnish info on exposure to Satyam Group
Whenever there is an extraordinary event, the RBI usually calls for information about banks exposures and collaterals to assess. Our Bureaus New Delhi/Mumbai, Jan. 10 Reserve Bank of India (RBI) has asked banks to furnish information to the central bank on their fund and non-fund based exposure to Satyam Computer Services Ltd and associate companies in the Satyam Group. A communique to this effect had been sent to banks on Friday. ‘Spell out collaterals’Indications are that banks would be required to spell out the kind of collaterals that they had obtained from Satyam Group for any loans or overdraft provided to them. As a regulator of banks, RBI is keen to assess the exposure of the banking system to Satyam Computer Services in the wake of the confession of the Rs 7,000-crore financial fraud by its promoter, Mr Ramalinga Raju. Sources said that the RBI will be weighing the information provided by banks on their fund and non-fund based exposure to Satyam Group, including Maytas Infrastructure and Maytas Properties, as also the collaterals provided by these companies to assess the possible systemic impact of the fraud. ‘It’s public money’“In view of the revelations regarding Satyam Computer Services, RBI has sought details of banks’ exposure to the Satyam Group as a whole and rightly so. Notwithstanding the fact that we have lent against adequate security, we are obviously concerned as public money has been channelled into projects. We cannot allow them to go waste,” said a top SBI official. According to Dr K. Ramakrishnan, Chief Executive, Indian Banks’ Association, whenever there is an extraordinary event, the RBI usually calls for information about banks exposures and collaterals to assess their overall impact on the system. “We have a working capital exposure to only Maytas Infra. This exposure is covered by adequate collateral. So far, the company has serviced the loan on time. However, we will assess the company’s position in the light of new developments. We will update the RBI about our exposure,” said a top IDBI Bank official. ICICI Bank, in a statement, had said that it did not have any fund-based exposure to Satyam other than a marginal exposure of about Rs 3-crore on account of a forward contract. Satyam is also maintaining a deposit with ICICI Bank in a current account. The balance in this account is not material, the bank said. Meanwhile, Bank of Baroda’s Chairman and Managing Director, Mr M.D. Mallya, told a news agency that the bank had submitted to the central bank the details of its “insignificant” exposure to Satyam. More Stories on : RBI & Other Central Banks | Credit Market | Software | Corporate Governance
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