Anil Ambani-backed Reliance Commercial Finance Ltd (RCFL) has got a clean chit with regard to fraud allegations from the National Bank for Agriculture and Rural Development (Nabard).

The government financier has a ₹1,100-crore exposure to RCFL and an independent forensic audit report from Grant Thornton (GT) said that it had not detected any fraud in the books of RCFL. Nabard had now removed its ‘red flag’ against RCFL.

Nabard is a part of the Consortium of Lenders and is signatory to an Inter Creditor Agreement (ICA) executed between the Lenders of RCF under the June 2019 circular of the Reserve Bank of India (RBI) on resolution of stressed assets. Nabard had classified the account of RCF as Red Flag on February 25, 2020. Thereafter lenders conducted a detailed forensic audit by Grant Thornton (GT).

At a meeting of the consortium of lenders led by Bank of Baroda on Friday, Nabard told the consortium of lenders that having examined the GT forensic report, it found no element of fraud and has therefore remove the Red Flag. Other lenders too have removed the ‘red flag,’ against RCFL.

The Delhi High Court, on August 18, had stayed a move by Bank of Baroda to classify the accounts as fraud, restraining them from taking any other coercive action till the next hearing. RBI has also rejected a request by some lenders to RCFL to NCLT, considering the there was satisfactory progress towards resolution under its June 2019 Circular. In the resolution process initiated by the lenders, more than 15 investors have evinced interest and have submitted their EOIs.

Related Topics
comment COMMENT NOW