Reserve Of India’s Inspection Report Had Highlighted IFIN’s Stressed Accounts In 2017; SFIO Trying To Collect Documents

A central bank inspection of the books of IL&FS Financial Services Ltd (IFIN) in 2017 had highlighted 11 stressed accounts, most of which are now being probed by various government investigation agencies.

The Reserve of India’s (RBI) draft inspection report of IFIN in December 2017 had named 11 stressed accounts amounting to Rs 1,200 crore.

However, the RBI’s final inspection report dated June 2018 had named only four accounts, since the lender seemed to have held requisite loan collateral for the rest of the accounts.

The RBI had considered all these accounts as doubtful and sub-standard though the IFIN management had classified them as “standard”. In the Siva Group’s case, the RBI had flagged that account as a loss.

Incidentally, the Siva Group’s Rs 190-crore loan account also figured in the 800-page charge sheet filed by the Serious Fraud Investigation Office (SFIO) which is now in the process of unearthing more documents on companies which were labeled as stressed accounts by the RBI.

The SFIO charge sheet recommended that RBI should conduct an internal probe and take necessary action against erring RBI officials.

The SFIO charge sheet also stated that if the RBI had acted earlier, the situation would not have escalated.