Religare Finvest enters one-time settlement with 16 lenders
Religare Finvest Limited along with its parent company – Religare Enterprises — has entered into a One-time Settlement Agreement on 30 December 2022 with 16 Secured Lenders for full and final settlement with respect to all their outstanding dues.
These 16 banks include: 1) Bank of Baroda 2) Union Bank of India 3) Canara Bank 4) State Bank of India 5) Punjab National Bank 6) Bank of India 7) SIDBI 8) Central Bank of India 9) UCO Bank 10) IDBI Bank Limited 11) Punjab & Sind Bank 12) Bank of Maharashtra 13) South Indian Bank 14) Karnataka Bank 15) Karur Vysya Bank 16) Federal Bank Limited.
Religare Finvest had an outstanding dues of Rs 5,344 crore as on 31 March 2022 (Rs 3,296 as on 31 March 2021). During FY22, Religare Finvest had defaulted on interest payment on certain Non-convertible subordinated debentures.
Religare Finvest was put under the Corrective Action Plan (CAP) by the Reserve Bank of India (RBI) in January 2018 after financial irregularities committed by the erstwhile promoters and management. The CAP prohibited Religare Finvest from expansion of credit/investment portfolios and paying dividends.
RFL had proposed a debt resolution plan in 2019-20, but the same was declined by RBI. It then requested the RBI for restructuring of loans in 2020-21, but the same was also denied by the RBI saying that the proposed restructuring cannot be allowed with Religare Enterprises continuing as the promoters. The banking regulator also said that the lenders have declared their exposure to Religare Finvest as fraud.
Religare Finvest then moved Delhi High Court against the RBI stand, and got a stay order. In the meanwhile, RFL proposed One-time Settlement with the lenders and also deposited Rs 220 crore in a no-lien account with the lead lender.
After entering into OTS with the lenders, RFL said in a statement that it has been taking necessary corrective measures as advised by the Reserve Bank of India and it will seek removal of the CAP (Corrective Action Plan) in due course so that RFL can restart its lending business.
Speaking on this significant development, Dr. Rashmi Saluja, Executive Chairperson of Religare Enterprises Limited said, “This is a very positive and significant move in the history of our company. Our tireless efforts and representations to our lenders have shown positive results and we appreciate their backing and support at this critical juncture. This move takes us closer to our vision of turning the Religare Group into a 360-degree financial services conglomerate.”
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