In Calcutta, nine employees have been asked to quit and eight are understood to have accepted the separation package. On an all-India basis, around 40 employees have been asked to quit. These employees are mostly from the fixed-deposit cell. There was no official response from the company, with the RPG group spokesperson out of town. When contacted by The Financial Express, one employee who has quit confirmed the development but refused to elaborate.

According to sources, the employees have been given three months' salary and gratuity irrespective of their period of service. The employees were told that they either resign or face termination of their service. The NBFC has been facing a liquidity crisis since last year. Its entire capital base of Rs 52.73 crore had been wiped out after it made a massive provision of Rs 78.12 crore for the 18-month fiscal to September 30, 1999.

It had posted a loss of Rs 95.59 crore (Rs 63.53 crore annualised) for the 18-month period to September 30 last year. The loss increased in the first six months of the current fiscal (to March 31, 2000) to over Rs 46 crore.The company has been facing problems repaying its deposit holders. The unsecured loan component of Rs 306.14 crore consists of Rs 243.63 crore in fixed deposits, Rs 12.47 crore deposits from others and Rs 50 crore under call money from banks and others.

President Ramesh Chandak, in a letter to the fixed-deposit holders late last year, had admitted that there are intended delays in making payment of deposits on maturity following a mismatch between asset and liability maturities and bunching of fixed deposit maturity.

It is gathered from sources that ICICI has advanced a loan to Ceat Financial with one of the RPG group companies as guarantor for the loan.

Chandak had noted that the company is expecting substantial cash support from the promoters in the next two months which will help to make the fixed deposit payment online.