August 14, 2013

Press Release No. 1

News about Canara Bank and Capital First Limited

The media had reports that “Canara Bank in talks with Capital First, other NBFCs to buy more retail loan”

The Exchange, in order to verify the accuracy or otherwise of the information reported in the media and to inform the market place so that the interest of the investors is safeguarded, had written to the company.

Canara Bank has vide its letter inter-alia stated that, "In terms of Monetary Policy Statement 2012-13 announced on April 17, 2012, the Reserve Bank of India had issued final revised guidelines on Securitization vide DBOD No. BP.BC-103/21.04.177/2011-12, dated 07-05-2012. These guidelines on securitization are applicable to Banks (excluding RRBs and Local Area Banks) and All India Term Lending and Refinancing Institution viz., Exim Bank, NABARD, NHB and SIDBI. The Policy Statement cover guidelines involving transfer of assets through Securitization and Direct Assignment of Cash Flows only and will be on without recourse basis. Accordingly, based on these guidelines, on obtaining the approval of the Board, the said policy has been put in place by the Bank. To begin with, the said policy has been implemented in Bangalore, Chennai, Delhi, Mumbai and Pune and from the Prime Corporate Branches / Extra-Large Branches designated by the Circle Offices situated in the said areas by approaching various Non-Banking Financial Services (NBFCs). Hence, it is the normal course of business being done by the Bank.

Capital First Limited has vide its letter inter-alia stated that, "We would like to state that Capital First Limited routinely undertakes funding in the form of borrowings from various banks and Mutual Funds, and does Direct Assignment or portfolio to various banks on an ongoing basis. Further, we would like to state that borrowing and assignment of loans on an ongoing basis is a normal business activity of an NBFC and the aforesaid information is not a price sensitive information."