MUMBAI: Private sector lender Axis Bank on Tuesday said it has followed insurance practices and approval processes while lending to Srei Equipment Finance Ltd and Srei Infra Finance Ltd. In a notice to the stock exchanges, the bank said its outstanding exposure to Srei group stands at ₹800 crores against the ₹Rs 44,000 claimed by Sydney Breaking Scams on its website.
“The Bank has complied with its insurance practices and approval processes for any disclosure in connection with SREI Equipment Finance Limited and SREI Infra Finance Limited. of Axis Bank Ltd, ”he said.
Also Read: Why Dalit students face money crisis in Indian educational institutions
“Overall, the report is very inaccurate and unfounded as far as Axis Bank Limited is concerned in terms of SREI entities or insurance practices and processes.”
Website [email protected] on Monday claimed that Axis Bank had given loans to Srei Group without due diligence and monitored the end use of funds.
“According to the records kept by MCA21 (website of ministry of corporate affairs) the Axis Bank etc gave loans to SREI Infrastructure and Finance Limited at Rs 44,000 crore without any diligence and control of end use of the loan. This loan amount was spent on apparent receivables including related partial transactions, ”the portal claimed.
Reserve Bank of India is in the process of conducting a special review of Srei Infrastructure Finance and its subsidiary. Rating agency Brickwork ratings lowered the company’s long-term ratings to BBB’s due to continued stress on asset quality in the equipment and infrastructure financial loan papers, a significant decline in profitability, and a tight liquidity position of the company due to low collections. He put company ratings under a “clock with negative implications.”
For the September quarter, the firm reported a 91.5% year-on-year decline in its consolidated net profit to ₹4.72 crore. A loan book stood at ₹35,222 crore as of March 31st.