MUMBAI, MAY 23: Small investors have blamed the regulatory bodies for the debacle of CRB group of companies, which has robbed them of their life-savings. At a meeting in Fort area, held under the aegis of Investors Grievances forum, they blamed the Reserve Bank of India (RBI), the State Bank of India (SBI), rating agency CARE promoted by the Industrial Development Bank of India and the Securities and Exchange Board of India (SEBI) for the losses they have suffered.

The Forum president, Kirit Somaiya, had to address the irate investors on the road as the original venue of the meeting could not accommodate them all. The crowd nodded in agreement as Somaiya singled out RBI for criticism.

He said RBI officials failed to take timely action, allowing the main accused, the managing director of CRB Capital Markets, C R Bhansali, to escape. He came down heavily on the RBI officials for issuing an `in principle banking' licence to the company.

Several investors also criticised the RBI for issuing the bank licence. ``I had invested Rs 55,000 in the CRB fixed deposit and esteem bonds after learning that the RBI has issued a bank licence to the company. "When the central bank of the country gives such a clean certificate, nobody gives a second thought to the company's financial health,'' said P Wagal, a retired government official. After his bitter experience with CRB, he is planning to withdraw his investments from other finance companies too.

``The RBI went to the High Court to get back Rs 58 crore lost by the SBI, not for the sake of small investors. RBI will have to give first priority to small investors. The RBI officer who was looking into the CRB affairs should also be punished,'' said Somaiya.

The investors were angry that the RBI did nothing to resolve the crisis even after getting sufficient information about the company's poor performance nearly six months in advance. Somaiya, a city BJP MLA, also urged the government to use the services of Interpol to trace Bhansali, amidst cheers from the crowds.

The investors will take out a morcha to the RBI headquarters here at 12 noon tomorrow to seek an explanation from its governor C Rangarajan.The speakers also accused CARE of misleading investors by gving an ``AAA'' rating to the company. When a finance company collects public deposits, the RBI stipulates that it obtain a rating (certificate). The triple A rating given by CARE to CRB implied that the company was in a position to repay the deposit and interest on maturity without any problems. The company had also approached other rating agencies, but they were unwilling to give a good rating to it.

The brokers, who collected the deposits on behalf of the company with attractive incentives, were also taken to task. ``My broker told me that CRB is a very good company. Now I have got only post-dated cheques for Rs 30,000 invested for my aged mother,'' said Fatima Baduri, a housewife. ``Small investors, especially retired people who comprise the largest group of investors in the company, should be given priority as we have no other means of survival,'' said K V Shah. Another investor, Venkateshwaran, who invested Rs 75,000 in the company said: ``The names of all CRB officials should be made public so that people in remote villages do not get cheated again.''

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.