MCA hints at RBI inaction on non-compliance of IFIN on key benchmarks

MCA hints at RBI inaction on non-compliance of IFIN on key benchmarks

A secret report of MCA notes that one of the auditors BSR had based its opinion on the discussion that the management had with RBI for reporting the CRAR as per the existing method adopted by the company despite RBI observation in inspection report from FY 2014-15.

When there is no sufficient and appropriate basis as to report the CRAR as per the method followed by the company in light of RBI not giving any relaxation in this manner, the auditor relied on the management discussion with RBI.

The Auditor was informed "the RBI had given time up to March 2019 to meet NOF criteria and also had asked for submission of plan to achieve the same for which the company had sought time till March 2018". The company was in active discussion with RBI on the said matter

RBI had repeatedly pointed out the non-compliance with the group exposure norms and wrong calculation of NOF in its Inspection Reports from 2015 onwards. Yet no penalties were imposed during the period and IFIN was allowed to continue its operations without any corrective action.

Udayan Sen, former CEO of Deloitte and statutory auditor of IFIN, said in response to SFIO in one of his statement that "the company did not submit the roadmap as requested in the RBI letter. We did not see any further correspondence from RBI on that topic until the letter of 1 November, 2017. In that letter while RBI asked the company to submit a roadmap , no time limit was indicated. In any case we did not perceive the non-submission of the roadmap until the date of adoption of financial statement as a significant non-compliance since there was a live dialogue between the company with RBI", he responded.