The ministry of finance and the Reserve Bank of India have approved the compromise formula for the recovery of dues owed by ex-broker Ketan Parekh to the Bank of India.
Parekh has sought for more time from the bank and the payment period is being worked out in consultation with the bank. The board is expected to finalise the repayment schedule soon.
BoI has already recovered Rs 28.40 crore (Rs 284 million) of the Rs 137 crore (Rs 1.37 billion) due from Parekh, excluding the interest component.
Of the amount recovered, Rs 11.55 crore (Rs 115.5 million) has already been credited in Parekh's loan account, and another Rs 3.32 crore (Rs 33.2 million) has been kept in a deposit, to be released after a year, as per the Bombay high court's instructions.
The remaining Rs 13.53 crore (Rs 135.3 million) was recovered last week through the sale of Balaji Telefilm's 22.87 lakh (2.287 million) shares.
These were Parekh's holdings and were sold in four tranches on May 30, June 2, June 6 and June 9, 2003. The deal was brokered by ICICI Securities.
The interest component on Parekh's liabilities will be paid after the principal amount is repaid. The interest is related to the prime lending rate of the bank.
All the money recovered will be deposited in a special account to be operated only by Parekh and a senior BoI official.
Sources said the need to get the finance ministry involved arose since the compromise scheme was not covered under the normal banking regulations.
The ministry had allowed the bank to enter into a compromise settlement in respect of the Ketan Parekh group in April this year subject to an inclusion of a clause in the compromise agreement that the agreement is without prejudice to the criminal cases against Parekh and the other involved in the case.
