RBI inaction against Helios, JVG

CALCUTTA, June 4: Reserve Bank of India (RBI) has not taken any action against two non-banking finance companies (NBFCs) of the Helios grou...

CALCUTTA, June 4: Reserve Bank of India (RBI) has not taken any action against two non-banking finance companies (NBFCs) of the Helios group (Helios Finance & Investment and Helios Investment Corporation) and JVG Finance despite recommendations by its Patna office prohibiting them from raising deposits from the public.

Sources said the RBI’s Patna office had suggested to its head office that two companies should be debarred from mobilising public deposits.

It is almost a month since the advice was sent to the RBI head office in Mumbai, but no action has been taken so far. Sources said an inspection was conducted on the Patna-based Helios group earlier in the year. On the basis of the inspection report, RBI’s local office proposed prohibition.

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Helios Finance and Investment had a deposit base of Rs 40 crore at the end of March `97.

Finance apart, Helios group has been dabbling in many other ventures ranging from chemicals, hotels, constructions to plantations, exports, schools and even films. The group also plans to enter the consumer segment with the launch of toilet soaps and detergents.

Another finance company recommended for prohibition is JVG Finance. The RBI, in April, had issued a show-cause notice to the company on its asset-liability, liquidity position and other financial parameters. The notice came close on the heels of announcement of a Rs 45 crore public issue.

JVG Finance has replied to the show-cause notice but the central bank, apparently, is not satisfied with the response. The company faces a number of legal cases. It had been pulled up by the National Housing Bank.

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Meanwhile, the RBI has deployed available personnel from its various departments to meet the July deadline for NBFC registration. Even employees normally entrusted with the task of bank inspections have been asked to inspect the records of finance companies to speed up the process, sources said.