SBI to get Rs 200 crore from securities verdict

The Supreme Court (SC) approved the settlement between state-owned State Bank of Saurashtra [SBS] and National Housing Bank [NHB] under which State Bank of India will receive around Rs 200 crore lying in securities with the special court in Mumbai.

The settlement was brought about by the Committee of Secretaries constituted last year by the finance ministry at the instance of the apex court.

The court endorsed the provision to go on with the prosecution of guilty bank officers in the terms of the agreement.

The deal , authorised by a bench consisting of Justice R C Lahoti and Justice Ashok Bhan, brings to a close one part of a slew of suits involving late Harshad Mehta, several public sector banks and some private banks like Grindlays and StanChart.

The apex court has been insisting on the settlement of the prolonged litigation as it would benefit only the lawyers financially.

The Committee of Secretaries has since been working on settling the disputes. This is the latest in the series.

Earlier, the apex court brought about a settlement between NHB and SBI over disputed cheques worth over Rs 707 crore involving the big bull. According to the settlement, NHB must pay half of the disputed amount to SBI.

Similarly, NHB and ANZ Grindlays had come to an agreement over a dispute involving more than Rs 2,000 crore.

It was stated that scores of cheques issued by NHB, a subsidiary of the Reserve Bank of India, in favour of SBI found their way to Mehta's account. Since almost all the banks involved are state-owned, the apex court favoured an amicable settlement.

In the present case, the SC had earlier directed that the amount lying with the special court be paid over the SBS on their undertaking that on the determination of the suits, SBS will bring in the amount with a 12.5 per cent interest.

SBI is now entitled to receive the amount withdrawn by SBS with an interest of Rs 196 crore. Since SBS is an associate of SBI, the amount deposited with the special court would be treated as held by SBS on behalf of SBI subsequent to the package approved by the ministry of finance.