Axis Bank says reports on Srei exposure ‘grossly inaccurate’

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December 16, 2020 8:19 AM

Private sector lender Axis Bank on Tuesday said the report, issued by an Australia-based news platform, which alleged that the bank has provided loans to Srei entities without any due diligence and verification of end use of the loan amount is “grossly inaccurate and baseless”.

We are observing the movement of MDR to zero or near-zero levels. The materiality of that is getting reduced as there are a host of other payment options.In its clarification, Axis Bank said it has complied with its underwriting practices and approval processes for any exposure taken in relation to Srei Equipment Finance and Srei Infrastructure Finance (collectively “Srei entities”).

Private sector lender Axis Bank on Tuesday said the report, issued by an Australia-based news platform, which alleged that the bank has provided loans to Srei entities without any due diligence and verification of end use of the loan amount is “grossly inaccurate and baseless”.

“…the report is grossly inaccurate and baseless in so far as Axis Bank Limited’s outstanding to Srei entities or underwriting practices and processes are concerned. We are evaluating all remedies available to us against the author/publisher of the captioned report,” the bank said in a stock exchange filing, clarifying a press statement, issued by the Scams Breaking on its website breaking@scamsbreaking.com.

The news platform has alleged that, “As per the records maintained by MCA21 (a ministry of corporate affairs website) the Axis Bank etc. have provided loans to Srei Infrastructure and Finance to the tune of Rs 44,000 crore without any due diligence and verification of end use of the loan amount. This loan amount has been disbursed with sham receivables including related party transactions.”

In its clarification, Axis Bank said it has complied with its underwriting practices and approval processes for any exposure taken in relation to Srei Equipment Finance and Srei Infrastructure Finance (collectively “Srei entities”). The bank said its outstanding exposure to Srei group (including Srei entities) as on December 14 stood at Rs 800 crore as against Rs 44,000 crore alleged by Scams Breaking.

On the allegations, Srei said, “It has come to our notice that certain individual/group of individuals acting in collusion have hatched a pre-planned conspiracy whereby they have been circulating false, fictitious and imaginary content, by twisting facts and figures, through images, videos and article on the internet in a concerted manner through their website and on various other social media platforms with a view to cause wrongful loss in terms of reputation and business in the eyes of investors, creditors and public at large.”

“We have filed a police complaint, alerted authorities in cyber cell department and are pursuing legal recourse against the individuals/group engaged in this criminal conspiracy of intentionally distorting facts for pecuniary gains,” it added.

Notably, the Reserve Bank of India (RBI) has appointed an auditor to conduct a special audit of Srei Infrastructure Finance and its subsidiary Srei Equipment Finance(SEFL). In a stock exchange last month, Srei Infrastructure Finance, had said, “We would like to inform you that a special audit of the company and its subsidiary, Srei Equipment Finance Limited is being undertaken by an auditor appointed by Reserve Bank of India (RBI) in exercise of its powers under Section 45 MA(3) of the RBI Act, 1934.”

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