Following the scam carried by the director of IT major, Stayam Computer Services Ltd, Reserve Bank of India has directed banks to provide information to it regarding the banks exposure to the company.
The central bank on Friday, January 9th sent a message to all the banks that they need to disclose all details of their fund and non-fund based exposure to Stayam Computer Services as well as associate companies in the Satyam Group that includes Maytas Infrastructure and Maytas Properties.
There are signals that RBI has ask banks to furnish full details of the collaterals against which they have given loans or provided overdraft facility to Satyam Group. Industry sources inform that RBI would evaluate the total probable impact of the fraud after examining the information provided by banks on their exposure with Satyam Group.
The director of Stayam Computer Services Ltd, Mr Ramalinga Raju has confessed to carry away a financial fraud Rs 7,000 crore in the books of IT industry.
A top official with SBI said, "In view of the revelations regarding Satyam Computer Services, RBI has sought details of banks' exposure to the Satyam Group as a whole and rightly so. Notwithstanding the fact that we have lent against adequate security, we are obviously concerned as public money has been channeled into projects. We cannot allow them to go waste."
Banks are following the regulator's command and working on the evaluation of their exposure. "We have a working capital exposure to only Maytas Infra. This exposure is covered by adequate collateral. So far, the company has serviced the loan on time. However, we will assess the company's position in the light of new developments. We will update the RBI about our exposure," said a top IDBI Bank official.
Bank of Baroda has already submitted its details of "insignificant" exposure to Satyam wit the RBI, informed it's Chairman Mr. M.D. Mallya.
ICICI Bank that has also been one of the bankers of Satyam stated that it does not have any fund-based exposure to Satyam except for a marginal exposure of about Rs 3-crore on account of a forward contract. Besides the company has maintained a deposit in a current account of the bank but this amount is not adequate.
Recently Citibank has frozen more than 30 trade receivable accounts of the company.
Chief Executive of Indian Banks' Association, Dr K. Ramakrishnan said that whenever there is an unusual occurrence in the economy, RBI ask banks to display all the information regarding their exposures and collaterals in order to evaluate the total impact upon the system.