MUMBAI, May 19:CRB Capital Markets has failed to submit its plan for settlement of Rs 180 crore worth of liabilites to fixed deposit holders by Monday as directed by the Reserve Bank of India. The RBI is now free to move court seeking the winding up of the erring non-banking finance company.Since the CRB Capital Markets is registered in Delhi, the central bank is expected to move the Delhi High Court in the next few days for the liquidation of the CR Bhansali-run company.The central bank issued the ultimatum on Thursday directing the NBFC to come out with a status report for settling the fixed deposit holders' liability withing 72 hours. The deadline expired on Monday.In a belated move, Credit Analysis & Research Ltd (Care) has further downgraded the rating for the fixed deposit programme of CRB Caps from Care C (FD) to Care D (FD). Instruments with this rating of the lowest category.``They are either in default or are likely to be in default soon,'' a Care press release said.The RBI had directed CRB Caps to submit a detailed plan for sell of assets and monthly cash flows. CRB Caps has failed to submit a plan to safeguard its fixed deposit investors interest.The Reserve Bank is now free to exercise its powers under Section 45MC of the RBI (Amendment) Act 1997 to file petition for winding up of the non-banking finance company.RBI deputy governor S P Talwar, who heads the central bank's department of supervision (DoS), held a closed door meeting with senior bank executives on Monday to take stock of the situation.CRB Caps is widely perceived as a test case for the NBFC sector - the maiden opportunity for RBI to exercise its powers under the amended RBI Act.The Reserve Bank issued the ultimatum on May 16 as depositors swelled outside CRB Caps' headquarters in Mumbai to withdraw fixed deposits.Every deposit accepted by an NBFC is required to be repaid, unless renewed, as per the terms and conditions of the deposit under the amended RBI Act. In case of a failure, the company law board (CLB) either on its own or on being approached by the depositors, may force the company to repay the sum.The Reserve Bank issued prohibitory orders banning fresh deposit mobilisation by CRB Caps, resulting in a run on the NBFC's deposits on April 7. The RBI also directed the NBFC not to sell its assets without its consent.The central bank is now empowered to direct an NBFC not to sell or transfer any of its assets for a period not exceeding six months from the date of the prohibitory order without its prior permission under the amended RBI Act, 1997.
