Sebi asks HDFC to deposit `158.68 cr in escrow account
The country's largest private sector lender HDFC Bank on Friday said Sebi has asked it to deposit Rs 158.68 crore along with interest in an escrow account with regard to BRH Wealth Kreators case.
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New Delhi: The country's largest private sector lender HDFC Bank on Friday said Sebi has asked it to deposit Rs 158.68 crore along with interest in an escrow account with regard to BRH Wealth Kreators case.
On Thursday, Sebi imposed a penalty of Rs 1 crore on HDFC Bank for invoking securities pledged by stock broker BRH Wealth Kreators in violation of the regulator's interim directions. The lender was also asked to deposit money in an escrow account. The instant proceedings have essentially arisen on account of non-conformity by HDFC Bank with the directions contained in the interim order issued by Sebi against BRH Wealth Kreators and other entities on October 7, 2019, as per the regulator.
"The bank has been directed... to transfer an amount of Rs 158.68 crore along with interest from October 14, 2019, till date, calculated at the rate of 7 per cent per annum to an interest-bearing escrow account in any nationalised bank, by marking a lien in favour of Sebi, until the issue of settlement of clients' securities (clients of the stockbroker) is reconciled," it said in a regulatory filing.
Sebi had found that HDFC Bank on October 14, 2019 invoked the pledge of securities to the extent of Rs 158.68 crore and thereafter, sold most of the securities and appropriated the sale proceeds towards the outstanding under the various credit facilities advanced by the bank to BRH. The private sector lender had granted credit facilities to BRH and BRH Commodities aggregating to Rs 191.16 crore and Rs 26.61 crore, respectively.
