Religare Finvest, the non-banking finance company (NBFC) subsidiary of Religare Enterprises, has approached the Reserve Bank of India (RBI) to be removed from the stringent prompt corrective action (PCA) list, Religare Enterprises Executive Chairperson Rashmi Saluja told FE.
“We have requested RBI to consider our position wherein we have settled dues with all our secured lenders, therefore removing RFL from the corrective action plan. We expect that our request will be considered favourably and that the company can come out of PCA in the next couple of months,” Saluja said.
She added that Religare Finvest has acompleted the One-Time-Settlement (OTS) with all its 16 lenders on March 8 by making a full and final payment of Rs 400 crore, ahead of the three-month deadline as per the settlement agreement with the lenders dated December 30, 2022. A settlement with only one lender is pending, she says, for which talks are in progress.
Lenders under the PCA list are subject to stringent norms including restrictions on expanding their branch network, higher provisions for bad loans, restrictions in lending to certain sectors, including large industries, among others. Religare Finvest has a total loan book size of Rs 2,109 crore as of March end, of which small and medium enterprises (SME) formed 53% of overall loans. Saluja said as the NBFC was under RBI’s PCA list, it could not expand its credit and investment portfolio beyond government securities.
Religare Finvest had underwent a management change after its former promoters Shivinder Singh and his brother Malvinder Singh allegedly engaged in financial misappropriation of funds, among other illegal activities.
When asked whether there was any update on the planned Rs 600 crore-Rs 700 crore qualified institutional placement (QIP) for Religare Enterprises, Saluja said all that all company businesses are currently well capitalised and are growing to their potential. She, however, did not comment specifically on whether the company will go ahead with the planned qualified institutional placement.
On Dabur family’s additional 7.5% stake stake purchase in the Religare Enterprises through public market, will further invest in the company, she said that the company will not comment individual investors’ actions.
Saluja said that Religare Group has entered the web-aggregator ecosystem in insurance space following the acquisition of My Insurance Club and that its plans of entering other financial services businesses are also on track.
“We aim to be a 360-degree financial services group offering a gamut of services to our clients across the remotest part of our country. It will help us in creating a synergy with the overall national objective of financial inclusion,” Saluja said.