Religare arm sacks 5 staff | business | Hindustan Times
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Religare arm sacks 5 staff

business Updated: Mar 29, 2011 01:33 IST
Sandeep Singh
Sandeep Singh
Hindustan Times

In a fresh instance of employees breaking rules in financial company, Religare Housing Development Finance Corporation — part of Religare Finvest Limited—sacked five employees last week following irregularities in the disbursement of loans.

"The management committee and audit committee of Religare Finvest Limited — our NBFC (non-banking financial company) arm has decided to terminate five people with immediate effect owing to certain procedural lapses on their part," said the company in an e-mail response to Hindustan Times after it learnt of the incident from industry sources.

The company said that three of those sacked were frontline sales staff while the others were managerial supervisors.

"The move in no way affects us financially and also the day-to-day operations of our business as we continue to build out a strong SME (small and medium enterprise) focused lending portfolio," the company said.

The audit committee found that the sacked employees disbursed loans that were higher than what the customers in question were eligible for. In the process, they broke compliance norms and exposed the company to potential losses.

Religare says the audit committee meets every 15 days or so and the irregularities were spotted early.

Last November, the Central Bureau of Investigation (CBI) had arrested the CEO of LIC Housing finance and senior officials of some public sector banks following a bribes-for-loans scam.

In another incident, Citibank discovered in December 2010 that Shivraj Puri, a relationship manager with its branch in Gurgaon, duped its customers of over R300 crore by showing clients forged papers purported to be from the Securities and Exchange Board of India that promised returns of more than 15% per annum (nearly twice what fixed deposits currently offer). The funds landed in accounts of his relatives.