DCB Bank remains in red

DCB Bank opened almost 7% lower at Rs.172.50 but later, on getting clarification from the company, the stock price recouped a bit though it remains in the red.

There was unconfirmed news floating in the morning that  the Serious Fraud Investigation Office (SFIO) has asked for cancellation of banking licence on the back of its allege involvement in the NSEL scam.

The report further added that India Infoline Commodity (IICL) had tied up with the lender to ask its clients to enrol with IICL for trading on NSEL. The bank reportedly did not take clearance of the RBI for this deal.

The company issued a clarification and said, “we are not privy to communication between SFIO, MCA and RBI. Therefore, we are unable to comment on the same. As per industry practice and applicable guidelines, DCB Bank has referral arrangements with third parties for financial products.

On a day-to-day basis, customers were directly dealing with IICL for their investments / trade needs. The Bank categorically states that it had no direct dealings whatsoever with NSEL nor has the Bank provided loan or financing for any NSEL transactions done by its customers.

In respect of transactions conducted by customers on NSEL through IICL referred to in media report(s), the Bank earned a total fee income of INR 11 lakhs across the two years 2012 and 2013. The Bank is confident of its due diligence, documentation and compliance to applicable guidelines.

As on 31 December 2018, DCB Bank had 331 branches and Balance Sheet of INR 34,382 Crore. The Bank's Capital Adequacy Rati (CRAR) was 15.45%.