NEW DELHI, June 11: The Finance Ministry has swung into action to expedite liquidation of the scam-tainted CRB Capital Markets Ltd to enable settlement of investors' claims in the wake of the arrest of the group's chairman C R Bhansali.

As a first step in this regard, a high-level review meeting, headed by Finance Minister P Chidambaram, was held yesterday which was attended by top RBI and CBI officials besides Finance Secretary Montek Singh Ahluwalia.

With more information pouring in on the Rs 1,200 crore financial scam during the coarse of the interrogation of C R Bhansali, the purpose of the review meeting was to coordinate activities with the official liquidator, Ahluwalia said.

Now that Bhansali has been arrested, it has become essential to coordinate activities to expedite the liquidation, he told PTI today. During the meeting, which lasted for over 90 minutes, the CBI officials briefed on the interrogation of Bhansali on Monday during which he was reported to have sought to drag in accomplices and adversaries into the scam.

He is reported to have named Lloyds Finance as being the cause behind CRB's downfall, a claim which has been described as ``absolutely false'' by a Lloyds Finance spokesman.

Meanwhile, the Finance Ministry has made it mandatory for all the 41,000 odd non-bank financial corporations (NBFC) to register themselves before July 8 as part of the government efforts to check recurrence of such financial scams in the future.

The government is firm on not extending the date beyond July 8. ``There is no likelihood of such a thing happening,'' asserted Ahluwalia.

The registration is important to ensure proper regulation of NBFCs which hitherto had operated in an unregulated system, he said. The finance ministry was also working on an action plan to tackle the situation arising out of the CRB capital markets fiasco, especially after meeting Prime Minister I K Gujral had with a BJP delegation last week.

One of the suggestions that emerged out of the meeting was to evolve a depositors insurance scheme which was being looked into by the Finance Ministry.

The Finance Ministry is also working in close consultation with the regulators, Reserve Bank of India and Securities and Exchange Board of India, to evolve a foolproof mechanism to regulate NBFCs functioning in the country.

The two bodies have also been asked to undertake a thorough internal review of the regulatory action in regard to these companies to see if there has been any lapse in application of regulations to CRB group of companies or in responding to warning signals.

This exercise was being carried to correct deficiencies in NBFCs regulation. Banking sources said the CRB fiasco was an eyeopener on the need to reorganise the State Bank of India whose size had become unwieldy.The commercial branch of SBI, which was allegedly involved in the CRB fiasco as well as the multi-crore securities scam, alone was much bigger than many public sector banks in the volume of transactions and money involved, making it difficult to regulate, the sources said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.