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RBI, CBI effort to judge extent of CRB scam

The Reserve Bank of India is working towards collecting facts and figures regarding losses suffered by those who invested in the beleaguered CRB group.

At a meeting with a group of CRB investors, Reserve Bank Deputy Governor S P Talwar said he would set up a separate cell to deal with the grievances of those who invested in CRB, with details of investments. The RBI would issue a public notification in this regard in a few days, he said.

This, he said, would help the central bank know the exact magnitude of the CRB scam. The investors who met the RBI deputy governor to hand over a memorandum, was led by Bharatiya Janata Party city president and legislator Kirit Somaiya. The memorandum demanded that guilty RBI officials should be immediately punished and small investors with unsecured investments be totally compensated on the basis of arbitration award declared in the case of the RBI and National Housing Board versus Standard Chartered Bank.

The memorandum by the Investors Grievances Forum also demanded that why officials were not punished when, during the November 1996 audit, irregularities were observed in the company's functioning.

Earlier, addressing over 250 investors, Somaiya said a liquidator was appointed to to recover Rs 570 million of the State Bank of India. Why was the interest of small investors not taken up with the court, he asked. He said the RBI had failed to monitor the credit appraisal of Rs 570 million extended to the CRB group by the SBI.

Claiming the RBI governor being responsible for the CRB debacle, the investors shouted slogans and displayed placards against the RBI, SBI, the Industrial Development Bank of India and other financial institutions.

Meanwhile, former SBI chairman M K Sinha and senior executives from the bank as well as CRB group met again on Saturday with officials from the Central Bureau of Investigation since the investigative agency suspected that the SBI stood to lose more than the Rs 570 million estimated now.

CBI sources said such questioning of officials would continue till the actual financial damage caused to the SBI by the CRB group and its chairman C R Bhansali is assessed. CBI officers are also following Bhansali's movements. The CRB chairman reportedly met Sinha in Delhi last week.

CBI believed that Bhansali is in India and there is no urgency to alert Interpol at this juncture. However, it has alerted the airport and immigration authorities to ensure Bhansali does not flee the country.

Meanwhile, the city police made surprise raids on various CRB establishments in the city on the basis of complaints filed on Friday by investors against the CRB management.

Confirming the transactions between SBI and CRB as a genuine case of fraud, CBI sources said the SBI was still finding out the exact number of warrants issued by parties in the CRB for encashment and how many outstanding warrants remained unrealised.

Sources said some private parties might be involved in diverting SBI funds for the benefits of the CRB group. This possibility was considered because outside parties were engaged because the bank's Bombay main office could not handle the thousands of warrants that flowed in daily.

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