IDBI Bank awaits RBI nod to recover Binani’s dues from UltraTech

IDBI Bank awaits RBI nod to recover Binani’s dues from UltraTech

New Delhi, Dec 14: IDBI Bank is awaiting a green signal from the Reserve Bank of India (RBI) to recover Rs 1,600 crore of Binani Cement’s dues from UltraTech Cement, according to a report.
On November 19, the board of directors of UltraTech approved a proposal to incorporate debt-ridden Binani Cement as its wholly-owned subsidiary. UltraTech also promised to pay all of Binani’s dues.
The bank cannot receive money from UltraTech Cement or remit it to its Dubai branch without RBI’s permission. A delay in the central bank’s approval may be because of the way the loan was disbursed — through IDBI Bank’s Dubai branch to a Binani group company in Belgium, the news daily reported.
RBI has reportedly been sending questions to IDBI Bank on the same.
The loan was originally given to 3B-The Fibreglass Co, a Binani group firm in Belgium. Binani Industries, the holding company of the Binani Group, had acquired 3B-The Fibreglass Co in February 2012.
The loan was, however, guaranteed by Binani Cement, which is why IDBI Bank was allowed to recover its loan through the insolvency process, sources told the paper.
“We need RBI permission to remit the money to the Dubai branch where the loan was given in euros,” a source was quoted as saying. RBI’s approval may depend on whether the central bank is satisfied with IDBI Bank’s reply, the source said.
Senior IDBI Bank officials are planning to meet RBI Deputy Governor BP Kanungo to clarify its position on the transfer of funds.