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PNB HOUSING FINANCE IN THE NEWS I. Brief History: PNB Housing Finance (PNBHF) proposal to raise Rs.4000 cr. by way of preferential allotment of equity shares and share warrants to Carlyle  Group of companies and two others, hit a road block with the split decision given by SAT (Securities Appellate Tribunal), one annulling the decision of SEBI and the other upholding it . Sequence of events that  preceded the above decision is as under: Ø   31.05.2021: PNBHF board approves capital raise plan of Rs.4,000 cr. thro’ preferential issue of equity shares and share warrants to Carlyle group of companies (80% contribution) and two other existing shareholders namely, Ares SSG and General Atlantic  (20% contribution). Ø   The board also approves convening of an EGM of the shareholders on 22.06.2021 to pass a resolution on the above, along with other resolutions. Ø   08.06.2021: Stakeholders Empowerment Services (SES), a proxy advisory firm, raises concerns on th...

  Diversion of bank money borrowed: RBI closes one door, but other doors and windows still open: Lenders beware   Restrictions on current/operative accounts of borrowers with banks: Reserve Bank of India (RBI) has barred banks from opening current accounts for customers who enjoy credit facilities in the form of CC/OD with other banks. The regulator has made two other stipulations: A.    A bank, which has an exposure of less than 10 per cent of the total credit exposure of a borrower from the banking system, should not permit any debit from the CC/OD account of the borrower concerned, other than for transfer of money to the CC/OD account of the borrower with a bank which has more than 10 per cent of the total credit exposure of the borrower. B.     In respect of borrowers who enjoy credit facilities from the banking system other than in the form of operative accounts like CC/OD, (LC/BG, term loans etc.), the restrictions are as under: (i)   ...