Delhi High Court’s order prompts State Bank to remove ‘fraud’ label from Religare Finvest

SBI removes RFL’s ‘fraud’ tag after Delhi HC order

The State Bank of India (SBI) has removed Religare Finvest Ltd (RFL) from the Central Fraud Registry database, previously designated as a fraud exposure. This decision follows the Delhi High Court’s December 18 order which overturned the declaration of RFL as a fraud by the lead bank. SBI, as the lead Bank of RFL, had previously placed the RFL’s account on the Reserve Bank of India’s Central Fraud Registry.

The Delhi High Court order came in response to a writ petition filed by RFL regarding the declaration of RFL’s account as a ‘fraud’ exposure by the lead Bank. In response, SBI communicated to REL on Thursday that the record of RFL has been removed from the central fraud registry, as per REL’s stock exchange filing.

Established by the RBI in 2016, the Central Fraud Registry serves as a Web-based and searchable database documenting frauds reported by commercial banks and select financial institutions per the Master Directions on the classification and reporting of frauds.

In March 2023, RFL entered into a One-Time Settlement (OTS) with 16 lenders through organic collections, making payments exceeding ₹9,000 crores to the country’s banking system. Currently, RFL is waiting for the lifting of the Corrective Action Plan imposed by the RBI in January 2018.

Executive Chairperson of REL and CMD RFL, Rashmi Saluja, commented on the development, stating that the removal of the fraud tag signifies the commitment and dedication of the company’s Board, management, and employees in reviving RFL and the group from the brink after the fraud perpetrated by the erstwhile promoters and putting it on the path of growth and development.

Pankaj Sharma, Chief Executive Officer of RFL, also emphasized the significance of the announcement for the company. The Central Fraud Registry was constituted under the Reserve Bank of India (Frauds Classification and Reporting by Commercial Banks and select FIs) Directions 2016.