MUMBAI, June 28: The State Bank of India has moved the Reserve Bank of India seeking relaxation in dividend/interest warrant payment norms. The Reserve Bank has imposed restrictions on the dividend/interest warrant facility offered by banks in the wake of CRB Capital Markets' scam in which State Bank lost Rs 58 crore.

"We are seeking certain relaxations on a case-to-case basis. For instance, for some corporates, we will seek a waiver on the cap on at-par facility at Rs 10,000. Then, the restriction on the number of branches which can offer the facility needs to be lifted," SBI chief financial officer PK Bhattacharjee said.

The bank has already sought an exemption from some the central bank's stipulations in regard to dividend payment of two corporates. "We are taking directions from the Reserve Bank on specific cases which require relaxation of these norms," Bhattacharjee said.

Following the CRB fiasco, the central bank had in the last week of May directed banks to tighten the procedure of granting `at par' facility relating to issue of dividend and interest warrant to companies through branches.

Some of the new measures like limiting the amount to be serviced and the number of branches that could be involved had put the banks and the companies using this facility in a quandry. The RBI had asked banks to limit the offer of `at par' facility to select branches, but numbering not more than 100. The central bank had also stipulated that no instrument payable `at par' at these select branches should be of a sum exceeding Rs 10,000 each. Payments exceeding this amount will have to be made by the party concerned with bank drafts.

The RBI move caused inordinate delay in the reciept of interest/dividend warrant by investors in companies availing of this facility. At present, there is no alternate system other than the `at par' facility offered by banks for despatching dividends and interest to investors by companies. The restriction on the number of branches also resulted in a breach of promise from the companies who had promised investors at the time of public issues and fixed deposit mobilisation encashment from the nearest branches of the designated banks.

Specific cases that SBI will take up to refer to the central bank will be of highly-rated corporates. "By and large, we would not go for all companies.

We will make a detailed analysis on the background of the applicant companies and if the particulars match, we would forward their case to the Reserve Bank of India for exemption,'' said Bhattacharjee. The exemptions sought would be specific to the need of the company and will not be a blanket one. "Whenever such a waiver is required, based on a client's need, we would be seeking specific permissions," he said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.